5 Giant Corporations That Are Selling Your Organic Products

NEW YORK (MainStreet) – When General Mills swallowed up organic food maker Annie's for $820 million this month, it gave yet another large company a smaller, more natural face.

It happened to Seattle's Best fans when Starbucks bought its crosstown rival a decade ago. Beer drinkers who love Chicago-based Goose Island Brewing's Bourbon County Stout have been giving their money to Budweiser brewers after Anheuser-Busch InBev bought Goose Island in 2011. Even Ben & Jerry's ice cream has been under Unilever's control for more than 10 years.

While it's been noted that the $334 million in annual revenue produced by General Mills' organic foods — including brands such as the once-independent Cascadian Farm — is much greater than the $204 million a year produced by Annie's, the revenue numbers are somewhat beside the point. It's the trusted organic and natural food brands and the equity they've built with organic shoppers that companies covet.

In June 2013, for example, B&G Foods picked up Robert's American Gourmet Food, which makes the Pirate's Booty brand of snacks, for about $195 million in cash. In October, it bought Rickland Orchards and its Greek yogurt-coated granola bars from Natural Instincts for nearly $58 million.

Post Holdings, maker of Alpha Bits and Honeycomb cereals, scooped up the natural and organic food brands of Hearthside Food Solutions for $158 million in a deal last year. WhiteWave Foods followed that in December by buying Earthbound Farm for $600 million.

Just this August, Orrville, Ohio-based J.M. Smucker bought Seattle-based Sahale Snacks and its all-natural dried fruit and nut mixes. Terms weren't disclosed, but Sahale is expected to bring in roughly $50 million in sales this year with placement in big-box chains including Wal-Mart and Costco.

Tom's of Maine
Owned by: Colgate-Palmolive

Yes, Colgate-Palmolive now makes vegan toothpaste. Unfortunately, that toothpaste and Tom's other products are a bit less earthy as a result.

Tom and Kate Chappell started Tom's in Kennebunk, Maine, in 1970 with $5,000 in seed money. They made toothpaste, soap and deodorant without animal testing and without animal products. Back in 2006, the two decided to take $100 million from Colgate-Palmolive for an 84% stake in the company, while keeping the remaining 16% for themselves to ensure the products and formulas would remain intact.

That worked out for a while, but Tom Chappell left after seeing the company through the merger and returned to Maine with his wife to found Rambler’s Way, which makes wool clothing. Tom's namesake brand, meanwhile, was taking on a new identity of its own.

Colgate-Palmolive added aluminum to the formula of Tom’s of Maine deodorant to offer 24-hour odor protection. That basically undermined the entire reason Tom’s of Maine's regular customers with skin allergies and sensitivity used the product in the first place. Its flagship toothpaste, meanwhile, just got a dose of titanium dioxide, which makes toothpaste seem less granular and earthy, but is considered a “possible human carcinogen” by the International Agency for Research on Cancer.

Burt's Bees
Owned by: Clorox

Burt Shavitz lived in a turkey coop and raised bees to make the all-natural honey-based health care products he'd later sell at farmer's markets. In 1984, he and his lover/business partner Roxanne Quimby grew those products into a small empire of candles and personal care products. When the relationship soured in 1999, Quimby bought burt out. By 2002, it had become a $43.5 million business.

The next year, Quimby sold 80% of the company to a private equity firm. That firm then sold to Clorox for more than $900 million in 2007. Instead of slowly turning Burt's Bees into more palatable Pine-Sol and Liquid-Plumr, it let the company and its 400-person workforce continue independently in North Carolina. While there are still accusations of greenwashing elsewhere, Burt's Bees is helping the company with its pledge to be more sustainable.

Owned by: Kellogg

Back in 1984, Kashi thought it could fix breakfast with just seven whole grains and sesame.

By 2000, however, those grains became somewhat ubiquitous as competitors at Whole Foods and elsewhere got more creative. That year Kellogg bought Kashi and kept Kashi "independently operated." In every way but the packaging, however, Kashi is most certainly a Kellogg product.

Two years ago, a Rhode Island natural grocer called out Kashi cereals for containing genetically modified soybeans. That's not exactly “all natural,” and the company's Facebook followers let them know it.

It didn't help that Kellogg donated $790,000 to fight California’s Proposition 37, which would have required mandatory labeling of genetically modified foods had it passed. The grains and sesame are still there, but any of the higher-minded meaning behind them was lost.

“The FDA has chosen not to regulate the term 'natural,'” David DeSouza, Kashi’s general manager, told USA Today. When that didn't ease tensions, Kashi pledged that all of its new products would be Non-GMO Project verified by 2015. It's not quite there yet.

Stonyfield Farms
Owned by: Groupe Danone

It's been a long trip for Stonyfield Farm from a little organic farming school in Wilton, N.H., to a piece of a yogurt empire in France.

In 2001, Groupe Danone — makers of the Dannon yogurt and Evian water brands — bought 40% of the Stonyfield Farm and its organic yogurt. That stake increased to 85% in 2003, but the company maintained its healthy organic image by donating 10% of proceeds to environmental causes and maintaining a pesticide-free 130,000 acres of family farmland across America.

To this day, the company's products retain their down-home organic packaging and manifestos. But Stonyfield Farm has stumbled around the consumer landscape like a brand several times its size. In 2008, Stonyfield voluntarily recalled several batches of blueberry yogurt after consumers complained about finding plastic and glass bits in the mix. Little more than a year later, the company recalled containers of its plain yogurt because it could contain food-grade sanitizer.

Silk soy, coconut and almond milk
Owned by: Dean Foods

It's tough to make the company that owns Land O' Lakes, Meadow Gold, TruMoo, and Tuscan look small.

Colorado-native Steve Demos founded Silk in 1977 with just $2,000 in an effort to provide a plant-based alternative to the dairy diet. As the years passed, Silk and parent company WhiteWave became not only the country’s largest producers of soy milk, but one its biggest consumers of organic soybeans.

By 2002, WhiteWave had enough of that noise and sold to Dean Foods, a dairy giant with 50 brands and a love of factory-farmed cows. While that in itself didn't raise eyebrows, a switch from organic to conventional soybeans in 2009 got people's attention. Stripped of its organic certification and no cheaper than it was before the change, Silk angered its core demographic and created a huge headache for Dean Foods.

The company refused to switch back to organic, but announced it was partnering Non-GMO Project to ensure that its entire product line was free from genetically modified soy – which make up more than 90% of all soybeans grown in the U.S. A Silk website traces the soybeans' point of origin, but Dean has made it clear that the switch from genetically modified products applies only to its Silk and Horizon Organic brands.

— Written by Jason Notte for MainStreet.

>To contact the writer of this article, click here: Jason Notte.

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At the time of publication, the author held no positions in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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