NEW YORK (MainStreet)—Think you’re supporting a small business when you make the more “natural” or “organic” choice at the supermarket? Think again. Many of the sustainable brands at your local grocery store have broken into the mainstream thanks to their partnerships with big corporations — you know, the ones making that chemical-laden option on the next shelf.
For small brands like Honest Tea, Burt’s Bees, Kashi, Tom’s of Maine and Silk, getting enveloped into a larger corporation is usually the key to scaling out their business. Often, it’s a win-win situation. The small brand gains access to the corporation’s resources and distribution network. In return, the corporation learns lessons on how to operate as a mission-driven business.
But in other cases, corporate ownership taints the values of the organization. Take Silk, a soy milk company owned by multi-billion-dollar dairy conglomerate Dean Foods. In 2009, Silk quietly switched its organic soy milk formula to one utilizing conventional soybeans, with nary a notification to customers, save for a removal of the “certified organic” logo from its packaging. Then there’s Tom’s of Maine, which has slowly but surely reformulated its natural toothpastes and deodorants to include ingredients like aluminum and titanium dioxide.
Below are five examples of sustainable supermarket brands that are actually owned by big corporations and explanations of what those partnerships have meant for their missions.
1. Honest Tea
The Coca-Cola Company, which also owns Coca-Cola, Sprite, Minute Maid, Powerade, Vitamin Water, Odwalla, and Fuze
After lamenting the lack of flavorful, low-sugar beverages during a business school case study on Coke and Pepsi, Seth Goldman and his Yale School of Management professor Barry Nalebuff decided to create Honest Tea, a line of healthy and organic beverages. Ironically, it was The Coca-Cola Company that jumped on board to bring Honest Tea to the next level when it purchased 40% of the company’s shares in 2008. In 2011, Coca-Cola bought up the remaining shares, and Honest Tea is now a wholly-owned but independently-operated subsidiary.
Goldman is notoriously open about Honest Tea’s relationship with Coca-Cola to customers and the media. In 2010, he revealed to the New York Times that Coca-Cola executives had asked him to remove the words “no high fructose corn syrup” from Honest Tea’s juice packs, since the labeling was seen as a dig to other Coca-Cola products that contain the popular sugar substitute in abundance. Goldman flatly refused, and since Honest Tea is independently operated, Coca-Cola was forced to accept the decision.
Despite this hiccup, Goldman says that Honest Tea’s relationship with Coca-Cola has been more beneficial than not. In January 2013, he wrote an article for Inc. Magazine highlighting some of the pros of the partnership. For instance, Coca-Cola has invested several million dollars to develop innovative brewing systems that produce better tea with higher yields, saving water and waste. And then, of course, there’s the boost to sales and distribution; according to Goldman, sales have grown four-fold since the acquisition, and Honest Tea is now available in 100,000 stores.
The Clorox Company, which also owns Clorox Bleach, Pine-Sol, Glad, and Tilex
The “Burt” of Burt’s Bees was Maine beekeeper Burt Shavitz who lived in a turkey coop and sold honey-based products at the local farmers market. In 1984, he partnered with then-girlfriend Roxanne Quimby to develop a line of beeswax candles and personal care products. After several years, the relationship soured and Burt left, but Roxanne stayed on and grew the business to $164 million in annual revenue. In 2007, The Clorox Company acquired Burt’s Bees for a reported $913 million.
Shortly after the sale, the New York Times reported that Clorox planned to bring Burt’s Bees into the mainstream but that it also hoped to learn from the smaller company’s sustainability practices in order to expand its own eco-friendly product mix in time for the company’s hundredth anniversary in 2013.
“Don’t judge Clorox as much by where they’ve been as much as where they intend to go,” CEO John Replogle told customers at the time.
Today, Burt’s Bees continues to be independently run from its headquarters in North Carolina, where it employs 400 people between corporate offices in Durham and manufacturing facilities in Morrisville.
And to its credit, it appears that Clorox has expanded its sustainability efforts with its Green Works line of natural cleaning products, as well as its more conventional products like Clorox Bleach and Pine-Sol. Though some of its products are inherently toxic in large amounts, Clorox now offers an iPhone app that lets users scan UPC codes for instant access to ingredient listings and safety information.
Kellogg Company, which also owns Frosted Flakes, Corn Pops, Froot Loops, Coco Pops and Pop Tarts
In 1984, Phil and Gayle Tauber decided to conduct a kitchen experiment to create a new kind of health-conscious breakfast cereal. Soon after, Kashi Breakfast Pilaf, a special recipe featuring seven whole grains and sesame, was born. The Taubers grew the company slowly but steadily, expanding into cereal bars and shake packets. In 2000, Kashi sold to the Kellogg Company but continues to operate independently in La Jolla, Calif., where it was founded.
In 2012, Kashi found itself at the center of a social media firestorm after a Rhode Island natural grocer posted a notice informing customers that Kashi cereals contained genetically modified soybeans, despite claims of being all natural. A photo of the notice went viral, and angry customers spammed Kashi’s Facebook page with nasty comments. For many, it was the first time that Kashi’s corporate ownership came to light, and many blamed Kellogg for the misleading marketing.
At first, Kashi maintained that it had done nothing wrong. "The FDA has chosen not to regulate the term 'natural,’” David DeSouza, Kashi’s general manager, told USA Today. But after consumers refused to quiet, the company changed its tune and pledged that all of its new products would be Non-GMO Project verified by 2015. So far, 11 products have made the cut, including Kashi Puffs, Kashi Pilafs and a number of its fruit-flavored breakfast cereals. It should be noted, however, that Kellogg, Kashi’s parent company, donated $790,000 to the committee against California’s Proposition 37, which would have required mandatory labeling of genetically modified foods but ultimately didn’t garner enough votes to pass.
4.Tom’s of Maine
Colgate-Palmolive, which also owns Colgate, Palmolive, Speed Stick, and Irish Spring
In 1970, Tom and Kate Chappell decided to leave the corporate life in Philadelphia for a simpler existence in the forests of Maine. When they were unable to find natural personal care products, they decided to create their own, and Tom’s of Maine was born. The company branched from laundry detergent into toothpastes and deodorants, and in 2006 it was acquired by Colgate-Palmolive.
According to its website, Tom’s of Maine’s approach to business hasn’t changed since the merger: “We listen to what our customers want (and don't want) in their products, we learn how it can be done and we respond with effective natural (and sustainable) solutions.”
One thing that has changed, however, is the formulation of the company’s products. The Tom’s of Maine “Original Care Deodorant Stick,” for instance, was recently altered with new ingredients like aluminum to provide 24-hour odor protection. The change irked Tom’s of Maine loyalists, many of whom used the original formula because they suffered from skin allergies and sensitivity. Tom’s toothpaste has also been infused with new additives, like titanium dioxide, which is added to the toothpaste for aesthetic reasons, despite being recently classified as a “possible human carcinogen” by the International Agency for Research on Cancer.
One reason for these product changes may be the recent shift in leadership. Though Tom Chappell stayed on to manage the business for a few years after the merger, the Chappells have since returned to Maine and started Rambler’s Way, a new venture that produces high-quality wool garments.
Dean Foods, which also owns Dean’s, Land o Lakes, Meadow Gold, TruMoo, Tuscan, and Horizon Organic
With just $2000 in start-up funding, Colorado-native Steve Demos founded Silk in 1977 to promote a plant-based diet. Under parent company WhiteWave, Silk became one of the country’s largest producers of soy milk, as well as one of the biggest purchasers of organic soybeans. In 2002, WhiteWave was sold to agribusiness conglomerate Dean Foods, which owns more than 50 dairy brands around the country, most of which rely on factory-farmed cows.
For several years after the merger, Silk continued to operate as it had previously. But in 2009, the company quietly switched from using organic soybeans to using conventional soybeans, which are subject to pesticides and herbicides, in its soy products. According to Natural News, the only indication of change was the removal of the organic certification emblem; everything else – including the price – remained the same.
The news leaked to the public, and after months of boycotts and bad press, Dean Foods announced that although it would not be switching back to organic, it would be partnering with the Non-GMO Project to ensure that its entire product line was free from genetically modified soy – no small task considering that approximately 93% of all soybeans grown in the United States are genetically modified. Silk even created a traceability website so that consumers could see exactly where the soybeans in their products are coming from, and the company has partnered with Conservation International to develop a Responsible Soybean Sourcing and Production Program.
Dean Foods is clear, however, that these initiatives are limited to its Silk, Alpro and Horizon Organic brands; it has not yet extended similar sustainability efforts to its more conventional product lines.