Big Food Swallows Up Small Organic

There’s nothing ‘alternative’ about organic foods anymore.
The category is a $30 billion industry that accounts for 4.2 percent of all U.S. food sales, Whole Foods Market is in the Fortune 500, and most of your favorite brands like Bear Naked, Kashi, Health Valley, and Spectrum Organics are owned by global brands like Coca-Cola, Cargill, ConAgra, General Mills, and Kraft.

Organic goes global: a victim of its own success
It’s been years since organic food was the back-to-the-land ideal of blue skies over happy cows. We can lament our disillusionment, but growth is the result of a cycle of success.  And it’s not all bad news when corporate America comes knocking.

No love for multinational agri-business conglomerates
Make no mistake about it; organic food is a fast-growing, wildly lucrative business, and that’s why Big Food wants in. If a company doesn’t want to make the investment in improving the eco-friendliness of its heritage brands, it can acquire an organic business and ‘green’ its image by claiming improved environmentalism throughout its overall product line. It’s misleading, hypocritical greenwashing, but here’s why we’ll take it:

Organics for everyone
Big food brings economies of scale that allow organic brands to produce and deliver more products to more people at lower prices. Three-quarters of America’s grocers now carry organic products, and the growth necessary to achieve that kind of  mainstream success would have been impossible without corporate investment. We might view the developments warily and cry ‘sell-out,’ but it is possible that at least some of the conglomerates will continue to produce first-rate organic products and continue the commitment to the socially responsible values of the companies they now own.

The weight of marketing, the power of persuasion
Pepsi sells the heck out of bubbly, brown sugar water, and Kraft taught America that cheese is spelled K-R-A-F-T. Imagine what that muscle and expertise could do for organics. Imagine if just a small fraction of the half a trillion dollars spent on worldwide consumer advertising last year was used to persuade people to buy hormone-free milk, or to feed their kids organic breakfast cereals, or to buy compostable ketchup bottles. Big Food has the power to change consumer behavior in a way that Small Organic never could.

Heighten public awareness and you have a catalyst for further change.
As consumer interest turns toward organic foods, agri-businesses will no doubt seize the opportunity to capture market share by expanding their investments in the organic sector and perhaps over-hauling their heritage brands. Grow the market large enough and it won’t even matter if they share a commitment to environmentalism; the profit motive will propel Big Food into a greener future.

See who really owns the organics: Dr. Philip H. Howard at Michigan State University created the Organic Processing Industry Structure  charting the organic food chain of acquisitions by U.S. food processors.

 

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