USA: Corporate consolidation in the organic sector

Gregg Engles, Chairman and Chief Executive Officer of WhiteWave Foods, explained that with the acquistion of Earthbound Farm, they would now provide the two most popular gateways for consumers to enter the organic category – produce and dairy – and have a significant foothold in the fresh foods category. With the Horizon, Silk, Alpro and Earthbound Farm brands, WhiteWave made nutritious, alternative food choices mainstream, according to company information. (Pictures:  Larger retailers often depend on large suppliers)
 

But there is another side to all of this: The company structure
is a threat to independent businesses. WhiteWave is a spin-off of Dean Foods, and Dean Foods is the former parent company of Horizon. According to the organic watchdog Cornucopia Institute's Mark Kastel, “WhiteWave CEO, and former Dean Foods CEO, Gregg Engles knows as much about vegetables as he knew about dairy when he orchestrated a global feeding frenzy in that market to build Dean Foods. The end result was the destruction of dozens of independently owned, regional dairy businesses and thousands of jobs. After they were done pillaging they jettisoned the WhiteWave division earlier this year.”

With the announcement of vegetables producer Earthbound Farm, the same management that built the Horizon dairy label in its early years with virtually all their milk coming from big "organic" factory farms, with as many as 10,000 cows living in their own filth, is taking over, according to Mr. Kastel. WhiteWave still depends on giant dairies in the desert west of the USA, some milking thousands of cows, for a large percentage of their milk production. Horizon Organic is the largest supplier of organic milk in North America. A fact sheet published by the Cornucopia Insitute reveals Dean Foods/WhiteWave’s involvement in the organic industry. (Picture: Large scale milk production in the USA)

WhiteWave took over the Silk soymilk product line earlier and converted it from 100% organic to virtually no certified organic products. A documentary aired by the CBC throughout Canada (The New Green Giants) interviewed Silk founder Steven Demos, documenting what Mr. Kastel calls “the betrayal by Mr. Engles and Dean Foods leadership”, who had assured Demos that the values that made Silk a successful business enterprise would be maintained. Not long afterwards Demos was summarily fired as Dean Foods began the transformation of Silk, initially by importing "organic" soybeans from China, to conventional soybean products bearing "natural" labeling. The two and half minute trailer for the film includes poignant quotes on the subject from Mr. Demos and Cornucopia's Kastel. WhiteWave also manufactures conventional products distributed outside the natural/organic channels. (Picture: The Non-Gmo Project is very active in educating consumers)

This is not a single case of corporate consolidation. In 1995 there were 81 independent organic processing companies in the United States. A decade later, Big Food had gobbled up all but 15 of them. Corporate consolidation of the food system has been largely hidden from consumers. That’s changing, thanks to tools such as Philip H. Howard’s widely circulated Who Owns Organic? infographic (see graph above). The chart provides a snapshot of the structure of the organic industry, showing the acquisitions and alliances of the top 100 food processors in North America. The chart empowers consumers to see at a glance which companies dominate the organic marketplace.

Major changes in the infographic of February 2014 (since the last version in May 2013) include WhiteWave’s acquisition of Earthbound Farm. Additionally, Coca-Cola acquired a 10% stake in Green Mountain Coffee for US$1.25bn, and Bimbo Bakeries (Mexico) purchased Canada Bread from Maple Leaf Foods (Canada) for US$1.7bn. The chart shows that many iconic organic brands are owned by the "titans of junk food", processed food and sugary beverages - the same corporations that spent millions to defeat GMO labeling initiatives in California and Washington. General Mills (which owns Muir Glen, Cascadian Farm and LaraBar) Coca-Cola (Honest Tea, Odwalla), J.M. Smucker (R.W. Knudsen, Santa Cruz Organic), and many other corporate owners of organic brands contributed huge amounts of money to deny citizens’ the right to know what is in their food. (Picture: Consumers still have a choice to buy from local, independent retailers)


“Consumers who want food companies that embody more of the original organic ideals would do well to seek out products from independent organic firms,” Howard advises. “Given the very uneven playing field they are competing in, independent organic processors are unlikely to survive without such support.” 

Howard has created additional infographics and network animations on the wine, beer, soft drinks, coffee and seed industries, as well as on food-borne illnesses and the structure of the food system. Howard’s infographics and The Cornucopia Institute’s scorecards rating organic brands of dairy, eggs, soy foods and breakfast cereals are some of the important tools that empower consumers to make informed choices.
(Picture: an example of Cornucopia's scorecards)