Who Owns What? A little research into corporate ownership of natural foods products

—by Heidi Goar, HPC Member

I don’t know about you, but I am a total snob when it comes to buying food. Totally self-righteous. I have been a proud volunteer member of HPC for years and I shop here almost exclusively. In fact, I drive from the West Side of St. Paul to shop here. I don’t go to other co-ops much because they are too glitzy, too “corporate.” I like HPC because it’s quaint; there isn’t enough room for everything and you have to say “excuse me” a lot as you squeeze through the aisles. I can chat with three or four people each time I stop in. I am allowed to use the bathroom even when I am not volunteering (mum’s the word).

Are we corporate pawns?

All this allows me to maintain one of my many delusions in life: that I am not a pawn in the game of “the man.” I am not one of those fools who buys all that mainstream, agri-business produced “food” others do. I am progressive and on to all of them. I know about the poisoned food supply, have for years. I know that the evil corporations have one motivation and one only—profit—and that compromises the quality of any product they produce. I know about herbicides, pesticides, GMOs, bad fat, good fat, all of it.

Shockingly, I still maintain this delusional state, even though I learned a few years ago that Kellogg’s owns Kashi brand (acquired in 2000)! I feel great about myself shopping at my funny little, quirky co-op, buying Boca Burgers for my boyfriend, even when they’re owned by Kraft (acquired 2000). I love to serve my After The Fall Cranberry Juice Sea Breeze cocktails and gloat about the high quality mixer I have in my house, even though Smucker’s has owned them for over a decade (acquired 1994). I feel superior to my unenlightened friends when I spread my shockingly imperial Muir Glen Pizza Sauce on my organic speltbased crust in preparation for the pesticide-free mushrooms and rBHTfree mozzarella cheese, the whole thing costing a pretty penny, as General Mills rakes in an amazing profit on the simple tomato-based product (acquired 1998).

Has "organic" lost its meaning?

This smug elitism, affordabe only by those of us who can literally afford it, is unattractive. The truth is that the world of organic is not what it used to be (which might be analogous to what the Greeks used to say: the Greek theater was never what the Greek theater used to be). Still, having corporations take charge of the production of organic foods should make you suspicious because, “...it leads to a lowering of standards, and emphasis on price as opposed to cost. It leads to uniformity, power, concentration, and control.”1

The sheer magnitude of the influence of corporations on the organic food industry is fascinatingly frightening. Since, by definition, corporations are motivated by profit, and to make profit, as the great Karl Marx first pointed out, a commodity must be sold for more than it cost to produce, we know that there must be hundreds of boardroom deals being made every day to push profit margins. It means that to make as much profit as possible, always the end for the capitalist, the single highest cost of production must be reduced: wages (and labor rights and benefits; consider issues raised about organic ingredients shipped from China where labor laws are nonexistent). It also means corporations are interested in every aspect of this industry, including the definitions of “organic,” “natural,” and “artificial.”

Corporations go organic

Corporations know what we are going to buy even before we start buying it, and that’s why they started acquiring organic brands before organic started to go really mainstream. That means that, ironically, as the organic food market explodes, so does corporate profit. Demand has been growing 20% per year to a $14 billion industry in 2005 and accounts for 4% of all grocery spending, which is about $550 billion.

But growth is slowing to about a 15% increase annually, maybe due to price or inability to meet demand. There aren’t enough organic ingredients. Seriously, we just don’t even come close to having enough. That means that one of the key tenets in the organic food movement, buy and sell locally, is being rapidly compromised. When Stonyfield (acquired by Groupe Danone in 2001) has gotten so big that is has to ship organic milk powder 9,000 miles (from Australia) to the East Coast to meet the demand for organic yogurt, you know the “buy locally” gig is up.2

If 40% of the organic products are owned by major corporations, that means that the production of those products are on a massive scale. Therefore those of us who are patting ourselves on the back for being sooooo conscientious should realize we may be part of the problem.

Who makes the rules?

While you may find this veiled ownership of your favorite organic or natural brands somewhat underhanded, what should be more disturbing is that when corporations have their grubby hands in anything, it means they will want to remake the rules of the game. And this situation is no different. In the mid-1990s when the first USDA guidelines were published they allowed for the “irradiation of meat, the inclusion of genetically modified crops, and confinement of livestock.”3 The USDA received 275,000 letters protesting the lax proposals, which resulted in the definition used today: at least 95 percent of the ingredients in the product are farmed without using chemicals, hormones, pesticides, or any method regarded as harmful to the environment. (See sidebar on page 7 for definitions).4

Does corporate involvement compromise organic quality?

But efforts by some of the larger organic companies to create a less stringent definition of “organic” continue. In April 2004, the USDA announced that it was considering allowing farms to retain the organic seal even if they used animal growth hormones, fed cattle nonorganic fishmeal, or sprayed some kinds of pesticides. Consumer advocates mobilized against the idea and sent thousands of e-mails and faxes to Washington, DC, within just a few days. The USDA backed down.5

The Food and Drug Administration permits the use of more than 300 synthetic food additives in conventional foods. US certified organic foods contain none of these additives. But we know that corporations’ profit margins are augmented by using them; so as the corporations become more and more involved, vigilance will have to increase to insure additives don’t creep into the organic food supply.

And now that WalMart is part of the organic market, we’ll need to be aggressively watchful. WalMart has increased its food sales from 3% to 11% in six years6 and is able to sell its organic food for only 10% more than its conventional groceries! We all know what the implications of this can be, how “rolling back” prices can crush smaller stores. But even more disconcerting is that WalMart has the ability to control whole markets (see Frontline’s “Is WalMart Good for America?”), including the capacity to shut down producers who don’t conform to their fiscal demands. They have already launched their own organic milk products and created a line of organic apparel.

Who are we kidding?

But WalMart is, to date, not yet the main problem. The main problem here, if you ask me, is self-delusion. We who shop exclusively at co-ops and buy these quirky foods no one has ever heard of, live in a little bubble. Says Mark Kastel, director of the Organic Integrity Project at the Cornucopia Institute, an advocacy group promoting small family farms, “Organic consumers think they’re supporting a different kind of ethic,”7 but we are really supporting corporations and many of the policies rejected by those who shop organic.

Barbara C. Robinson, who oversees the USDA’s National Organic Program, says Horizon (acquisition by Dean started in 1998 and completed in 2004) is the number one organic milk brand in the country and has 8,000 cows in the Idaho desert. Horizon cows eat corn, barley, hay, and soybeans, "...as well as some grass from pastureland," says Robinson. "The company is currently reconfiguring its facility to allow more grazing opportunities, [but the USDA] simply says animals must have ‘access to pasture.’ It doesn’t say they have to be out there, happy and feeding, 18 hours a day.”8

Believe me, I have bought plenty of Horizon products. But I love to hate stores like Whole Foods. I have never, ever purchased anything there, because it’s a corporation and I don’t support their ethos. They got successful by buying out the bigger, more successful stores and then rebranding them. They do centralized purchasing for produce, which now comes from places like Chile and New Zealand. In the process, many local organic producers went out of business. I particularly dislike that they seem as if they are a co-op; some people think they are a co-op. But, really, what’s the difference? There may be one, but I am not so sure anymore.

Massive scale and centralization of power and capital is the antithesis of what was the original intent of the organic food movement. I guess what’s troubling about Whole Foods is that they can get away with it more easily than Safeway because everybody thinks of them as green. The branding is so powerful that nobody thinks to question it

Escaping the corporate grasp

I am and will remain a food snob. I won’t start shopping at big box food stores to get the best deal, but that’s because I don’t have to. That giant corporations control not only a relatively large percentage of the production of organic food, but they are becoming major players in distribution of it, makes this the best of times and the worst of times.

Naturally, we should all be happy that demand is so great. I have been telling others what to eat for years and now I guess many are listening. We should all be happy that the price is within the reach of the middle class. But the trade-off is serious. Is it a sell-out? Ultimately, yes, it is, because, to quote Marx again, “those who control the means of the material production in a society, also control the means of intellectual production in a society.”

Maybe we should base our next moves on some co-op principles: autonomy and independence, education, cooperation among cooperatives, and concern for community.

Note: You can find a map of what corporations own which mainstream organic brands, as of August 2006, at http://www.certifiedorganic.bc.ca/rcbtoa/services/corporate-ownership.html.

Sources:

  1. "Who Owns What in the Organic food industry", Cyber-help for Organic Farmers, 2008. The Certified Organic Associations of BC provides support for this site: encouraging organic and alternative food production in Canada by improving accessibility to organic farming content online.
  2. "The Organic Myth", Bloomberg Business Week, 2006.
  3. "The Green Machine: Conventional food processors in the organic industry raise debate
    about the value of organic agriculture and the motives of big business"
    , JASON MARK / The Monthly (Emeryville, CA) October, 2004. mindfully.org
  4. ibid.
  5. ibid.
  6. "Where you shop matters", USDA, 2005
  7. The Cornucopia Institute: Seeking economic justice for the family-scale farming community.
  8. See 2.
  9. "The battle for the soul of the organic movement", CNN.com, 2006