So who’s really behind those hip organic food brands? And why are they hiding?
I’ve really come to admire those hip and healthy organic food brands that carve their own path to success despite crushing competition from giant established brands like Kraft, Kellogg’s or Nestle. I mean, who doesn’t love a startup with a great product, a dream to make the World a better place and the audacity it takes to get their boutique all-natural product onto the grocery shelf?
It just makes you feel good to buy it because you’re supporting something good and wholesome. Seriously, who can’t get behind Kashi’s “7 whole grains on a mission”? What an inspiring tagline. It makes me want to hit the trails on a mountain bike? And because it didn’t come from some big heartless multinational conglomerate, it must be good for me and the environment, right?
That’s what I used to think until a revealing trip to the organic grocery aisle. I discovered that you don’t have to look too far behind the organic curtain to see that healthy and sustainable food is big business. I bought a box of cookies from Back to Nature. As I marveled at the taste of these “all-natural” cookies in the natural-looking brown box, I decided to learn more about company behind the all-natural yumminess. I was sure it must be a mom & pop operation, powered by the wind, with solar-powered ovens and surrounded by rolling fields of organic wheat and oats.
To my surprise I discovered that Back to Nature is owned by Kraft Foods. Suddenly, the all-natural yumminess didn’t seem quite as yummy. What other international food conglomerates are lurking behind my favorite granola bar? What I discovered was eye-opening and thanks to this article on the Organic Processing Industry from Michigan State Professor, Philip Howard, it gave me a whole new outlook on the reality of these small, boutique organic food brands.
So What’s the Deal?
Is this some kind of organic food conspiracy? Why are big CPG brands seemingly hiding behind small boutique organic brands? Actually, this growing trend makes a lot of sense. And not surprisingly, it’s about money. Without access to a lot of capital, start-ups like Bear Naked Granola have to be nimble and work efficiently, putting their own money and time at risk in order to succeed. On the other hand, big CPGs like Kraft and Pepsico can’t move like that. It takes them millions upon millions of dollars to develop new product brands that might absolutely flop with consumers. Instead, why not let the little guys do all the work and take all the risk. If they actually manage to get to market and attract a loyal customer following, just buy them out.
Now to be fair, I don’t mean to imply that Kraft Foods or Nestlé are just giant corporations without a heart. A lot of big companies are great stewards of the environment. After all, taking care of Mother Nature costs money. So on one hand we should be glad that CPG (Consumer packaged goods) companies like Kraft care enough about the Earth (or their public image) to devote at least some resources toward making the world a better place.
Hip Organic Brands & Their Sugar Daddies
A list of organic food brands and their parent companies. Is your favorite healthy, organic food brand owned by big business? Does it matter?
In 2000, Fort Lauderdale based Boca Burger was acquired by Kraft Foods, moving operations to Madison, Wisconsin.
Back to Nature
In 2003, Kraft acquired Back to Nature cereal and granola, which was formerly part of privately held Organic Milling. In 2002 Back to Nature reported sales of nearly $10 million US.
Green & Black’s Organic Chocolate
Five years after British candy maker Cadbury gobbled up organic chocolatier Green & Black’s in 2005, Kraft Foods sealed a deal to buy Cadbury for about $19.6 billion, adding the line of organic fair trade chocolates to its brand portfolio.
Sharffen Berger Chocolate Maker
In 2005, Hershey’s formed Artisan Confections Comapny and acquired Berkley, California based Sharffen Berger after 10 years of building a loyal base of chocolate lovers.
Dagoba Organic Chocolate
In 2006, a year after buying chocolatier Sharffen Berger, Hershey’s acquired organic chocolate maker Dagoba, which was founded in Oregon in 2001.
In 2007, Bear Naked was purchased by Kashi, which became a subsidiary of Kellogg Company in 2000.
Kashi Company was created in 1983 to “empower people to achieve health and well-being by offering all natural foods.” In 2000 Kelloggs acquired Kashi for $32 million and expanded its offerings to include frozen dinners and pizzas.
In 1999, Kelloggs purchased Worthington Foods and the Morningstar Farms brand of meatless alternative and vegan products.
In late 2007, as part of the acquisition of Bear Naked, Kellogg’s also bought Wholesome & Hearty Foods which makes several frozen foods under the Gardenburger label, including The Original Veggie Patty.