Why is Corporate America Buying Healthy Brands?

Why Corporate America is Buying Healthy Brands

Small, local, organic brands that made a name by appealing to consumers who seek out natural products have been bought out again and again by large corporations with what would seem to be very conflicting values.

Just a few examples of corporate ownership that may surprise you:

  • Coca-Cola acquired Zico Coconut Water in 2013
  • PepsiCo acquired Naked Juice Co. in 2007
  • Campbell’s Soup Co. acquired Bolthouse Farms in 2012
  • Kellogg’s acquired Kashi in 2000

Why would these huge corporations show interest in the little, natural guys? The same reason huge corporations do most things: to make more money.

Consumers are finally catching onto how important it is to choose natural, whole-food and healthy alternatives to over-processed, sugar-laden snacks and drinks — and corporations are following the profits.


Consumers Want Healthier Foods

In one good example, sales of soft drinks have been dropping for the past decade as consumers increasingly choose what they believe are healthier alternatives.

These trends give corporations extra incentives to use labels and language that brand their food and drinks as “natural,” regardless of how natural (not to mention healthy) they actually are. Similarly, it gives them an incentive to purchase brands that have already established themselves as organic and socially responsible. This can be a big problem, as corporations don’t necessarily have to stick to the health-conscious practices of the previous ownership.

As Dr. Philip H. Howard of Michigan State University is quoted in Forbes:

“It’s very common that when an organic food brand is acquired, the new parent corporation reduces its commitment to organic ingredients and seeks out cheaper substitutes. […] Examples include Odwalla after it was acquired by Coca-Cola, Silk Soymilk after it was acquired by Dean, and Peace Cereal after it was acquired by Hearthside Foods (now Post Foods). Consumers have to be vigilant about scanning the ingredient lists as a result.”


Big Brand Ulterior Motives

Besides possibly opting to change the actual ingredients and production of the food and drinks in these natural brands, corporations may use the brands in another way that many organic consumers may find unpalatable: using the profits from these “natural” food brands in lobbying efforts that may be very opposed to their values.

Here are just a few ways that profits from brands purchased by Corporate America may have shaped public policy:

Unfortunately, this means even more work for consumers like us.


Do Your Homework and Buy Local When Possible!

If you don’t feel comfortable with your own dollars ending up being used for efforts like these, you’ll have to do some sleuthing to understand which companies are truly family owned and socially conscious, and which only used to be. For example, R.W Knudson’s natural and organic juice product line is now owned by J.M. Smucker Co. – the same company that produces super-sugary processed jams and jellies. Will anything change? Time will tell.

There are a few better alternatives to all this corporate investigation and reading of fine print in the grocery store aisles: seek out local farmers who you can meet face to face and who share your values. Many times, you can find these farmers at local farmer’s markets and even join food co-ops to get your own shares in their farms.

Photo credit: Lyza / CC BY-SA 2.0


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