Find Out Which Organic Food Companies Owned by Mega Corporations.

It may be shocking to you, but a large number of organic food companies are actually owned by mega corporations such as Pepsi and Kraft. These companies carelessly implant genetically modified ingredients into their food products and are environmentally destructive, but their organic food subsidiary companies are often toted as environmentally safe and health conscious. One such example is the Honest Tea company, which is actually owned by the Coca-Cola company. Perhaps it’s time to see if your favorite organic food company is actually owned by one of these mega companies.

“Organic” has undergone a transformation from a movement to a $20 billion a year industry in the United States. This project explores the changes in ownership and control that have accompanied the implementation of a federal organic standard. The transition began in the late 1990s, as the US Department of Agriculture moved to replace an existing “patchwork” of differing state/regional standards. Some of these changes are well-hidden, as few companies that have acquired organic brands make these ownership ties apparent on product labels. At least sixteen major organic brands have resisted enormous buyout offers, and remained independent. The overall trend, however, is increasing industry domination by large, transnational corporations.

Organic food has its origins in a movement to create a more sustainable food and agricultural system, which grew rapidly in the 1970s. Farmers and their allies eventually developed state and regional standards to certify that foods labeled as organic were actually grown according to the practices that they followed. By the 1990s these standards differed slightly from certifier to certifier. The development of the USDA National Organic Standard in place of this “patchwork” was widely predicted to accelerate trends of increasing corporate involvement in this sector. The first draft of the national standard was released in 1997; this project explores changes in ownership and control have since occurred.

Over the past decade many small organic food brands have been snapped up by giant corporations. Clearly, this can be bad for standards and quality.

Who owns your favorite organic food label? Think most organic products and companies are independent- think again. Odwalla = Coca-Cola; Green and Blacks Chocolate = Cadbury; Cascadian Farms = General Mills. The list goes on and on. In fact, if you see it at a chain grocery store, your favorite organic or natural foods product is probably owned by a big corporation.

It’s no secret that there’s been consolidation in the organic and natural foods industry over the past decade or so. And clearly, consolidation can be bad for standards and quality.

These  Who Owns Organics?  charts have been passed around The Internet for years. Most people are shocked the first time they see them (Hershey’s owns Dagoba?).

Organics have always been big money, even in a recession. This attracts well-capitalized companies who want to invest, and who can blame them?

Mega packaged food companies and investor groups buy successful organic brands that were started by visionaries who began the companies with a commitment to the organic ideal of family farms, a clean environment, and simple food without additives. But often, when the big companies buy in, this ideal flies out the window.

I’ve chosen ten of the more prominent organic and natural brands to survey. I’m comparing the stories they tell their customers to the  likely (and often proven) reality, based on who owns them.

I purposely put all of the prominent, still-independent brands in this list because I want to tell their stories. But this isn’t a story about small vs. big, small being good and big being bad.

All the independents listed below are big companies, but they have the ability to uphold higher standards and work within their missions because they aren’t beholden to the intense scrutiny of the money managers.

Just for fun, can you guess which ones they are?

Amy’s

Amy’s Kitchen is the real deal. Named after the actual daughter of the company’s founders, Amy’s mission was to create a line of vegetarian food products for busy families that would be healthier than typical convenience, frozen, and packaged foods. Started in Petaluma, Ca., the company remains an independent, family-run business to this day and Amy herself blogs about her life as a college student(including her organic agriculture classes at Stanford). The company headquarters is still in Petaluma where the founders live. All Amy’s foods are vegetarian, but not all are organic. I get a kick out of looking at the old photos of the early days on the company website. I try to cook everything from scratch, but if I’m going to eat a frozen meal, make mine Amy’s!

Arrowhead Mills

Owned by Hain-Celestial, which also owns many other natural and organics brands. The good thing about Hain-owned brands is that they don’t generally try to fool their customers. They come right out and say it. The story on Arrowhead’s website is a folksy one about founder Fred Ford in the Texas panhandle, but it clearly states when the company was purchased by Hain. The other good thing about Hain is they specialize in natural and organic foods, so I feel a bit better about buying their brands. But Hain is also partially owned by Heinz, so that’s the reality.

I like Arrowhead because their product line is not processed. They sell mostly whole grains, beans, and nut butters (high quality ones at that). I do wonder where they source their raw ingredients, especially with this line: “bringing deliciously wholesome choices from America’s Heartland to your table.” Though it may not be, that line sounds like pure marketing to me. It’s true that many of these crops can be more cheaply grown in China and I’m not saying that Arrowhead sources from China. I can’t find any evidence of it (or that they buy from anywhere outside the US), but then again, their website and none of the product packages I surveyed for this article state country of origin information. Your guess is as good as mine.

Cascadian Farms

If they have to tell you it’s a real place, there’s something not quite right. Oh, and General Mills owns Cascadian Farms. Founder Gene Kahn was featured in the excellent book, Organic, Inc. defending himself against those who would say that he sold out. General Mills also owns Muir Glen and Small Planet Foods, both of which are mentioned on Cascadian Farms’ website, while General Mills is not. General Mills is one of the largest packaged food companies in the world and has a joint operating agreement with Nestle. In the fourth quarter of 2009, General Mills posted revenues of $3.646 billion. Not that there’s anything wrong with it, but it sort of brings the pastoral image into question.

Eden

If you guessed Eden Foods as one of the independents, you guessed right. In this fantastic article the founder of the company tells his story about fending off the advances of multiple large corporations. Why? Because he wanted to run the company his way, with careful attention to the quality of the product and sustainability practices. Eden is probably my favorite organic food company, mostly for being pioneers in BPA-free cans. (Except for the tomatoes, for which they are looking for an option). According to the company’s website, they process their soybeans without toxic chemicals. All Eden soy products are made from multi-tested GEO free, USA family farm organically grown soybeans, with no refined sugar and no synthetic processing aids. They do not add isoflavone supplements or soy protein isolate. All of the above questionable additives and practices are routine in the industry. Plus, they employ people in Detroit, one of the country’s most economically distressed areas. What’s not to like?

Horizon

I’m not sure what the giggling children on the Horizon website have to do with organic milk, in fact, I’m not sure what Horizon has to do with organic milk either. The company is owned by Dean Foods, a huge conglomerate that is said to be in control up to 90% of the milk market in many states. The company has reported record profits this year as dairy farmers all over the country have gone under. The company is currently being sued by farmers and also being investigated by the Justice Department for monopolistic practices. In other news, Horizon has long been accused of selling “fake organic” milk by the Cornucopia Institute. Enough said.

Nature’s Path

I was surprised and delighted when I found out that this Canadian company is still family owned, because I like their products. The son of an ecologically-minded organic farmer, founder Arran Stephens believes in not expanding the company beyond the point where he can personally run it. The company does a lot to support organic farming, packages their products as sustainably as possible, and engages in many green business practices. While I don’t usually eat packaged cereal, if I were going to, I’d buy Nature’s Path over any other brand. There’s some interesting reading on their website about the family and company origins. At first glance the site looks like it was developed as a homey, “real” brand by a team of corporate image experts, but then you read the content and it’s too personal to be branding. So refreshing.

Newman’s Own Organics 

Privately owned by Nell Newman, this company is an offshoot of the original Newman’s Own company, started by Paul Newman. They make tasty snack foods that are less bad for you than the chemical laden non-organic foods, but they are still snack foods and should be used sparingly in favor of real, cooked from scratch food. The company is very transparent about the ingredients in their products. Although the original Newman’s Own company gives tons of money to progressive charities, I don’t see this as part of the Newman’s Own Organics branding.

Organic Valley

Organic Valley is a true cooperative of family farms, meaning all farms that sign on share in the management and the profits. The company is involved in advancing the organic movement through organizations like Rodale Institute. Their website is very interactive. You’ll find various community pages and a cool little calculator that lets users figure out how many pounds of synthetic nitrogen, pesticides and fertilizers they’ve prevented from being released into the soil, air, and water through buying Organic Valley products. I buy my dairy products from local-regional suppliers, but if I’m in a big national grocery chain store and I have a choice between the store brand, Horizon, or Organic Valley, I’ll always choose Organic Valley.

Stonyfield * Please see the response below from Stonyfield Farms.

Depending on whom you ask, founder and CEO Gary Hirshberg of Stonyfield Farm is a sell out or a visionary. French company Groupe Danone bought a huge ownership stake in the company, but Hirshberg is still CEO. Critics charge that companies like Stonyfield dumb down organics by engaging in questionable sourcing. A few years ago when the demand for organic milk outstripped supply, Stonyfield was under fire for buying powdered milk from New Zealand and shipping it here to make yogurt. This year, Stonyfield got into trouble with organic farmers because when demand for organic milk went down and the big companies (like Hood, Stonyfield and Horizon) stopped buying or lowered the prices paid farmers, dairy farmers were left holding the bag.

White Wave – Silk

White Wave, the company that makes Silk Soymilk, was once thought of as one of the most exemplary companies in the organic business. When Dean Foods bought the company in 2002 things slowly started changing. They introduced new flavors made with non-organic soybeans, and this year they did something unforgivable to many. They sneakily changed all the Silk soymilk products to natural from organic. They didn’t change the packaging, UPC codes or prices and they didn’t inform consumers or their grocery customers. All they did was very, very quietly change the word “organic” to “natural” on the front of the package. But then what do you expect from Dean Foods? See above.

People buy organic and natural foods for many reasons: their own personal health, the health of the planet, matters of taste and the desire to support family farms. When faced with the dizzying array of choices on the shelves, it’s satisfying to look behind the marketing hoopla and choose the products that are most likely to align with your own personal values.

Below is a response from Stonyfield Farms:

Every organic ingredient we purchase has been certified organic through a rigorous process using third-party certifiers and by meeting other requirements as outlined by the US Department of Agriculture’s National Organic Standards. Stonyfield was an active participant in the formulation of those standards, and we worked hard for their implementation in 1992. We’re also proud that our organic ingredient purchases support more than 100,000 acres of organic farmland, keeping toxins out of the air, water, soil and food.

We source all of our milk from family farmers in the US. We have not purchased milk from New Zealand. At one time, we did investigate getting organic milk from family farmers in New Zealand in the event that our US organic milk supply couldn’t cover our needs. This situation never came to pass.

Milk for our organic yogurts is sourced through Organic Valley/CROPP and the milk for our organic milk brand is sourced by HP Hood, so we don’t pay farmers directly. What we have done is worked behind the scenes with both these partners to try to lessen the impact on farmers due to an organic milk oversupply and softening consumer demand. Our efforts have included Stonyfield giving a group of Hood-terminated farmers in Maine $50,000 to support their efforts to get a Maine organic milk brand off the ground. It has also included ratcheting up our marketing to try to stimulate sales. We also work hard to communicate the health and environmental benefits of organic food to convince consumers that organic milk is worth the price.   We take our obligations to farmers seriously, and our sourcing practices are constantly reviewed and refined. We pride ourselves on “walking the walk” as well as “talking the talk” as a responsible business and an organic pioneer.

Unilever bought Ben & Jerry’s for $326 million in 2000

The ice-cream maker said Unilever was determined to nurture Ben & Jerry’s commitment to community values, and its commitment to donate 7.5 percent of profits to social causes.

However, in 2002 the company was accused of abusing its “All Natural” label by the Center for Science and Public Interest and in 2005 Ben & Jerry’s CEO Walt Freese admitted the company had grown soft on continuing its traditions of social consciousness.

Kellogg’s bought Kashi for $32 million in 2000

Kellogg’s bought the maker of natural cereal for an undisclosed amount.

After the acquisition, customers became afraid of Kashi using genetically modified organisms, or GMOs, known to be used in Kellogg‘s’ cereals.

ConAgra bought Lightlife Foods in 2000

Lightlife produces vegetarian and vegan meat substitutes like Smart Deli slices and Smart Bacon, which made it a logical acquisition target for ConAgra, one of the world’s largest packaged food companies.

But ConAgra has also fought against some natural food initiatives. In 2002, the company joined its competitors in stopping the state of Oregon’s Measure 27, which would have required it to label products that have genetically-altered ingredients.

Coca-Cola bought Odwalla for $181 million in 2001

“I think everybody is now chasing nourishment.” said Odwalla President Shawn Sugarma in 2004. “Obesity and its related health problems are a huge concern for anybody in the food business today.”

Known for blends such as C Monster, Mo’ Beta, Rooty Fruity and Viva Las Veggies, the juice and natural food bar makers stopped selling the fresh-squeezed orange juice that had made Odwalla famous since it wouldn’t last the days and weeks the juices are in transit or on the shelf.

Colgate-Palmolive bought Tom’s of Maine for $100 million in 2006

After the acquisition, Tom’s of Maine loyalists complained about the new toothpaste’s sweet flavor, the new plastic packaging, and the new smell of deodorant soap.

Basically, they complained about everything.

L’Oréal buys Body Shop for $1.1 billion in 2006

An index that tracked public perception of more than 1,000 consumer brands found that “satisfaction” with Body Shop had slumped by almost half since the deal by Body Shop founder, Dame Anita Roddick, to sell the company to L’Oréal for $1.1 billion.

Campaigners against animal testing and the Swiss multi-national Nestlé, which has a 26 per cent share in L’Oréal, also called for a boycott of Body Shop.

Clorox bought Burt’s Bees for $913 million in 2007

After the deal went through, scores of customers called Burt’s Bees and accused the company of selling out.

John Replogle, the chief executive of Burt’s Bees, says he personally responded to customers who left their phone numbers.

Mars bought Seeds of Change in 1997.  Seeds of Change was founded as a seed company specializing in organics back in 1989. After candy-giant Mars bought the company, Seeds of Change was allowed to keep running mostly as it did before.

In 2010, Mars decided to close the Seeds of Change Research Farm and Gardens, which boasted thousands of varieties of plants.The shutdown drew criticism because the farm had been synonymous with the brand and was a part of its marketing.

It is the natural progression of business. In 2005, US organics accounted for 2.6% of the food market, growing at a rate of 17-20% a year resulting in a $52 billion industry in 2008.

The plus side

• Organic food is easy to find, is plentiful and the costs are reasonable.
• The food is predictable in quality, flavor and taste. Often smaller producers have a smaller production line and work in small batches with less strict ingredient or quality controls. While this can add to the uniqueness, it occasionally can produce unexpected results.
• It can expand the organic market, adding and converting farmers and updating practices to the mainstream.

The minus side

• It is difficult for small labels to compete, or expand beyond their local distribution network.
• Often you will find less variety and more processing as these growing newly-corporate brands age.
• The companies may begin to change their values, altering and dropping expensive or non-growth-related practices.

What you can do
If this news is troubling to you, try shopping at smaller local stores and farmers markets. These are the best ways to find local organic producers and products. Be proactive- keep up on the practices of your favorite organic brands to ensure they don’t change once acquired by larger corporations. Many organic companies retain their management, values and practices and are managed as a ‘hands off’ brand. Since organic practices can vary from company to company (within the standards), it is always a good idea to know the practices of your favorite brands.

I am not suggesting you should avoid these brands just because they have corporate owners. But it might help you decide where to put your money if there are certain companies whose policies you disagree with. I’m curious, does corporate ownership affect your buying habits?

Organic Processing Industry Structure

The development of the USDA National Organic Standard in place of differing state/regional standards was widely predicted to accelerate trends of increasing consolidation in this sector. The first draft of the standard was released in 1997; what changes in ownership and control have since occurred?

For articles providing more detail on these graphics see:
Howard, Philip H. 2009. Organic Industry Structure. Media-N: Journal of the New Media Caucus, 5(3). [online]
Howard, Philip H. 2009. Consolidation in the North American Organic Food Processing Sector, 1997 to 2007. International Journal of Sociology of Agriculture and Food 16(1), 13-30. [PDF]

Related articles

• Organic Foods: Understanding Foods Labels, Benefits, Buying and Claims. (blissreturned.wordpress.com)