12 Natural and Organic Brands Owned By Big Food
A significant (and growing) number of shoppers have spurned traditional food and drink brands in favor of “better” choices. Instead of Tropicana and Tostitos, they’re reaching for Naked Juice and Garden of Eatin’ all-natural chips. Instead of Ball Park franks, they’re opting for Applegate Farms nitrite- and nitrate-free hot dogs. These alternatives cost more but people are willing to pay, in large part because they see these brands as being smaller, healthier, more responsible choices.
What many don’t realize, though, is that a lot of these “niche” companies are owned and operated by the very corporations many shoppers are trying to avoid. Healthy, environmentally aware brands have seen huge sales growth in recent years, and big names like Coca-Cola, General Mills and Perdue all want a piece of the action. Their ownership of once-independent brands isn’t a secret—but it isn't actively promoted either.
The natural question, of course, is whether or not this actually matters. Is the integrity of a smaller brand really compromised when it is bought by a big company? On the one hand, a Coca-Cola or a Campbell’s can increase the availability of natural and organic options. On the other hand, as experts like Philip Howard at Michigan State University have noted, big companies tend to tinker with formulas to make them easier to mass-produce. And then there’s the issue of a parent company reflecting negatively on its subsidiaries, as when General Mills, Kellogg’s and others funded opposition efforts to California’s GMO labeling proposition at the same time that some of their “natural” brands were promoting the non-use of GM ingredients.
As we ponder the answer to this and other related questions (such as: why doesn’t the “natural” label mean anything?), here are some natural and organic brands that have gone big in recent years.
1. ANNIE’S HOMEGROWN
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The brand best known for boxes of mac and cheese with the cute little bunny on them sold to General Mills for $820 million in 2014. Since then, Annie’s has branched out into additional product categories, including cereal, which it had struggled to develop as an independent entity. John Foraker, founder and president of Annie’s, says the company hasn’t had to compromise its values or ingredients under the new ownership. But consumers, and even some employees, are skeptical.
2. HONEST TEA
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Founded in 1997 by a Yale business school grad and one of his professors, Honest Tea has surged over the past several years to become one of the leading bottled tea companies in America. That’s due in large part to a big investment from soda giant Coca-Cola. In 2008, the company bought a 40 percent stake in Honest Tea, and then completed the acquisition three years later. The sale brought some accusations of “greenwashing,” but Honest Tea founder Seth Goldman has adamantly fought the idea that “big” equals “bad” in the organic world.
3. APPLEGATE FARMS
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Last summer, the natural and organic meat company—makers of preservative- and antibiotic-free deli meats, hot dogs and sausages—sold to Hormel, maker of that most unnatural of meat products: Spam. The $775 million deal incensed some customers, who regularly take to the company’s Facebook page to vent their frustrations. In response, Applegate says it operates independent from Hormel, and that its acquisition came with safeguards to maintain its focus on clean ingredients and animal welfare.
4. NAKED JUICE
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In 2006, the fruit juice company known for catchy flavors like “Blue Machine” and “Mighty Mango” sold to PepsiCo for a reported $450 million price tag. Pepsi filed the acquisition under its “better-for-you” brand portfolio, but recent years have seen Naked Juice come under fire for its high sugar content and “natural” labeling. In 2013, Pepsi settled a class action lawsuit brought by consumers who contested the label’s “100% Juice” and “All Natural” claims, among others. Pepsi paid out $9 million and agreed to stop printing “All Natural” on its Naked Juice bottles.
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The Kellogg Company bought this pioneering natural foods brand back in 2000, well before these sorts of acquisitions were trendy. The payoff came through several years of sustained growth as Kashi rode the wave of demand for natural and organic products. But Kellogg’s faltered as competition increased, and in 2012 Kashi faced major criticism over what consumers saw as its abuse of the “natural” label. Follow that with Kellogg’s financial contributions to defeat California’s mandatory GMO-labeling law—and this after Kashi promised to remove GMOs from its products—and the company has found itself backpedaling of late.
6. FOOD SHOULD TASTE GOOD
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Founded in 2006, the plainly named snack company hit a sweet spot with uniquely flavored chips like olive, sweet potato and chocolate. This success didn’t go unnoticed by General Mills, who bought FSTG in 2012. Since then, General Mills has increased its distribution to major supermarkets, club and convenience stores. Along with brands like Larabar and Cascadian Farm (yep, they’re in there too), General Mills projects its “better for you brands” could top $1 billion in sales by 2020.
7. EARTHBOUND FARMS
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The country’s largest grower of organic greens began as a 2.5-acre raspberry farm in Carmel, Calif. Since then, it has grown to include more than 50,000 acres and become what food-ag guru Michael Pollan called “industrial organic farming at its best.” Two years ago, Earthbound sold to WhiteWave Foods, formerly a subsidiary of dairy giant Dean Foods, for $600 million. The acquisition brings expansion opportunities, but organic advocacy groups are worried about WhiteWave’s integrity under CEO Gregg Engles, who oversaw Dean Foods during sourcing controversies involving its Horizon and Silk brands.
8. BEAR NAKED
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Two high school friends from Connecticut built up this granola company the old-fashioned way: through local sales and word-of-mouth. In 2007, Kellogg’s-owned Kashi bought them out for a cool $60 million. In the ensuing years, the brand has expanded to include energy bars, snack bars and trail mixes.
9. STONYFIELD FARM
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In 2001, France’s Group Danone (now known as Danone), whose brands include Dannon and Evian, bought a 40 percent stake in organic yogurt company Stonyfield, and completed the acquisition two years later. Stonyfield founder and CEO Gary Hirshberg had actively sought an investor, and the buyout came with demands that his company stay independent. In the ensuing years Stonyfield, now the country’s leading organic yogurt company, has gotten some flack for its sugar content, but Hirshberg has remained a very public advocate of the company’s “big with a purpose” ethos.
10. BOLTHOUSE FARMS
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Started in 1915 as a commercial farm in western Michigan, Bolthouse grew to prominence selling fresh carrots, including a ready-to-eat packaged variety that became incredibly popular in the ‘90s. In 2005, private equity firm Madison Dearborn Partners bought Bolthouse, then in 2012 sold the company to the Campbell Soup Company for $1.55 billion. Over the past few years, Bolthouse has expanded its lineup of fruit beverages and moved into categories like salad dressing.
11. COLEMAN NATURAL
The nation’s largest producer of organic chicken sold to Perdue back in 2011. This raised some eyebrows in industry and advocacy circles, especially considering Perdue’s checkered past with animal welfare. But Perdue, along with its main competitor, Tyson, has seen growing demand for natural, humanely raised meat. Last year, both companies agreed to severely limit or cut out the use of sub-therapeutic antibiotics on chickens. Perdue also purchased Niman Ranch, which has strict standards for animal welfare. Advocacy groups are keeping a close watch, meanwhile, and caution that the organic standard, despite its high price, is the only true, federally regulated guarantee for “better” meat.
12. GREEN & BLACK’S
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In 2005, the organic chocolate company sold to UK-based Cadbury. Five years later, Cadbury was bought by Kraft, which then funneled many of its global snack brands, including Green & Black’s, into a spin-off company it called Mondelez. Confused yet? Welcome to the global packaged foods economy. In the U.S., Mondelez is best known for brands like Triscuit, Chips Ahoy!, Tang and Sour Patch Kids—all of which may seem at odds with the gourmet, ethical-sourcing image Green & Black’s has cultivated. Mondelez seems to realize this, too, and doesn’t even list the chocolate company under its portfolio of brands. The company’s founder, meanwhile, wishes he’d never sold Green & Black’s in the first place.
For a full look at who owns who in the natural and organic food industry, check out this graphic from Philip Howard of Michigan State University.