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.