Big Business Follows the Green
The labels on some of your favorite organic products are the very picture of Mother Earth. Sunlight streams over fields, birds perch in trees, rows of bright crops glisten on the hills. But read the fine print and you may find that the organic garbanzo beans or fresh apple juice you enjoy is brought to you by a conventional food processor not known for its environmental stewardship – companies such as General Mills, Heinz and Philip Morris's Kraft.
Today a significant – and growing – percent of organic foods are owned by corporations more often associated with the predations of agribusiness than with the ideals of sustainable farming. The increasing presence of conventional food processors in the organic industry is raising debate among farmers, shoppers and consumer advocates about whether the values of organic agriculture and the motives of big business can co-exist.
Does the mainstreaming of organics represent a victory for farmers and the environmentally minded, or is it a case of corporate co-optation? Can success be reconciled with the organic movement's original intent, or will the very term "organic" be rendered meaningless? How can the organic food industry be at once popular and principled?
Who Benefits Most?
"There's this image that 'organic' means local, family-owned farms," said Ryan Zinn, campaigns coordinator for the Organic Consumers Association, a nationwide network that promotes organic and fair trade foods.
"But the reality is that mainstream food processors have set up front groups," he continued. "The big point of contention is whether this is co-optation, or if the organic movement is the victim of its own success. The biggest beneficiaries are consumers, who have more access to affordable organic foods. But in the long run there's a lot of downsides. As corporate consolidation increases, you'll see a reduction of choice as small and medium-sized operations are simply pushed out of the market."
Figures supplied by the Organic Consumers Association reveal the degree to which conventional food processors have penetrated the organic market. General Mills owns the organic brands Cascadian Farms and Muir Glenn. Heinz holds a 20 percent equity share in food distributor Hain, which owns Rice Dream soy milk, Garden of Eatin', Celestial Seasonings, Earth's Best, and Health Valley, along with 15 other organic brands. Kellogg owns Sunrise Organic, while Kraft owns Boca Foods, maker of the popular vegetarian Boca Burgers. The largest organic seed company, Seeds of Change, is controlled by M&M/Mars. Your morning Odwalla is now brought to you by Coca-Cola.
The large conventional food processors aren't entering the organic market simply because they think it's a nice thing to do. They are buying up organics enterprises because it's smart business. Although organics represent just a sliver of all food spending in the U.S. – about two percent of the market – organics are the only sector of the food industry experiencing sustained growth.
Since 1997, total U.S. food sales have grown between two and four percent, according to the Organic Trade Association. During that same time, sales of organic foods grew about 20 percent. Total organic sales – food plus personal care products, pet food and household cleaners – are now at $13 billion, and projected to reach $30 billion by 2007. General Mills and Heinz are simply doing what any savvy business does: They are following the green.
We've Come a Long Way
Clearly the organic movement has come a long way from its roots. What started out as fringe effort inspired by back-to-the-land types who wanted to live in greater harmony with nature is now firmly in the mainstream, with some 58 percent of US households having purchased organic products, according to a 2002 survey. Organic foods used to be available only at local co-ops or self-described health food stores. Now you can find organic products at Safeway, Albertson's, Kroger's and even Wal-Mart.
The spread of organics from the neighborhood co-op to the supermarket shelves helps explain why many mom-and-pop companies have been bought up by (or sold out to, depending upon your point of view) larger corporations. Small, local organic operations simply do not have the reach to coordinate nation-wide distribution. Bigger companies do have the expertise in getting products to shelves across the country, and as the market for organics has grown they have stepped in to fill that role.
"I can't supply an Albertson's in Wyoming," said Tom Broz, owner of Live Earth Farm, a 30-acre organic operation in Watsonville, Calif. "But the large companies can."
The Organics Consumer Association's Ryan Zinn says the explosive growth of the Whole Foods and Wild Oats stores, national organic food chains that together account for about 17 percent of all organic sales in the U.S., has fueled the corporate consolidation of organics.
"Much of the stuff at Whole Foods or Wild Oats are organic segments of bigger processors," Zinn said. "They have pushed the corporate-organic mold. To go from regional to national distribution, you need to get bigger and take advantage of economies of scale that big corporations can provide. What Whole Foods initially did, out of necessity, was to source from small or medium sized operations. But as they grew they had to approach conventional operators and see if they could meet the demand for organics."
A Whole Foods spokeswoman declined to be interviewed for this article and said that company executives who could address the issue were unavailable for comment.
Move To the Mainstream
Farmers, advocates and ordinary shoppers all share the view that organics' move to the mainstream carries both benefits and risks. On the one hand, more organic foods are available to people than at any time since the start of the industrial food age, and this should have very real benefits for public health and the environment. But some people also fear that big business doesn't really believe in the values of sustainable farming and that, in the long run, their participation in the industry will dilute the very meaning of the term "organic."
"I'm torn," said Julia Wiley, who with her husband, Andy Griffin, owns Marquita Farms, which grows 200 varieties of organic fruits and vegetables in Watsonville, Calif. "As a mother, I'm glad that more organic food is accessible to more people. I do love that I can buy organic oatmeal. But I'm conflicted, because what the big boys are doing is still conventional agriculture if you have a 100-acre monoculture of organic crops."
A similar ambivalence appears to prevail among consumers. Shoppers leaving the bustling Whole Foods market in San Francisco on a recent Saturday expressed surprise when told that large conventional food processors own many of the organic products they buy. When asked what they thought about that fact, about half said it was cause for concern, while the other half felt that it was an encouraging sign of organics' success.
"If an increasing percentage of profits is coming from organic agriculture, then they [conventional processors] will keep building up the market for organics, which is a good thing," said shopper Jeff Plotts.
Gil Roybal, another Whole Foods shopper, had a different opinion. "I would be concerned that maybe they aren't really organic," he said. "Large corporations like General Mills have never been organic, and maybe they're trying to circumvent the system just to get higher prices, because people will pay more for organic."
Roybal's concerns are well founded, and they represent what advocates say is the biggest threat posed by big business's role in the organic market: the drive to loosen regulations governing the definition of "organic."
When the US Department of Agriculture (USDA) first moved to create a single organic standard in the mid 1990s, it did so largely at the behest of the largest organic operators, who were eager for a national definition after years of juggling different state rules. For local farmers, having a national standard was less of a concern since they typically only sold their produce within a single state.
To the shock of many longtime organic farmers and consumers, when the first USDA guidelines were published they allowed for the irradiation of meat, the inclusion of genetically modified crops, and confinement of livestock. After receiving some 275,000 letters protesting the lax proposals, the USDA backed off from the looser requirements and put in place the definition in use today.
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 non-organic fishmeal, or sprayed some kinds of pesticides. Consumer advocates mobilized against idea and sent thousands of emails and faxes to Washington, DC within just a few days. The USDA backed down.
As the fight over the federal standard reveals, there is an inherent tension between the principles of sustainable farming and the imperatives of big business. Sustainable agriculture puts a premium on biodiversity, on small scale production, and on intimate relationships between producer and consumer. In contrast, corporate capitalism prizes uniformity, large scale production, and mass marketing. The organic movement's growing pains center on the question of whether these two disparate value systems can be reconciled in today's economy.
The people at Stonyfield Farms believe the two worldviews can be combined. Founded in 1983 in New Hampshire, the organic yogurt brand says its mission is to "support family farmers and sustainable farming methods ... to serve as a model of environmentally and socially responsible business ..." and to "recognize our obligations to stockholders."
Today Stonyfield is the number one seller of organic yogurt in the U.S., and well known for using its recyled plastic lids to plug various progressive causes. The company is also 80 percent owned by Group Danone, the French manufacturer of products such as Evian water and Dannon yogurt.
A Stonyfield spokeswoman, Cathleen Toomey, said that when the Stonyfield executives were in negotiations with Group Danone they were adamant about retaining full management control of the company, and that the legal agreements governing the merger lock that arrangement in place. According to Toomey, Stonyfield is as committed as ever to its founding principles of preserving family farms. When asked if the company can remain close to family farmers even though it is owned by the world's 12th largest food processor, a corporation located on the other side of the Atlantic, Toomey replied:
"The question is: Can you maintain your mission? It's different with each company. We try to stay close to the farmers and the mission and that keeps it real. Because if you take the mission away from Stonyfield, you lose the value of the brand."
What About Sustainability?
For farmers and advocates, the tension between commercial success and staying true to the movement's values also hinges on the difference between organic farming and truly sustainable agriculture. As some see it, what the big companies are practicing may be organic, but it's not necessarily sustainable. Truly sustainable agriculture requires local production for local consumption; soil conservation; and farming practices that respond to nature's cycles rather than dictate to them.
The large organic companies may not be using pesticides or animal growth hormones, but they continue to engage in industrial farming. They plant monocrops in which hundreds of acres are dedicated to a single plant, and they remain involved in a system in which the typical American meal travels 1,200 miles from farm to fork.
"In the long run, this kind of farming – in which you have 10,000-acre organic farms – won't help," said Broz of Live Earth Farm. "It won't help the environment and it won't help the workers. It's not sustainable. Sustainable means growing food in a harmonious way with nature. There's also the social aspect, to have fair practices for workers. There's also the economic factor; I would rather see 100 small farms than two giant ones."
Julia Wiley of Marquita Farms agrees. "The federal standards are just about what 'thou shalt not do.' It doesn't talk about what you should do: soil conservation, reducing the distance food had to travel, staying away from monoculture. Staying local is important because it means that the food on your plate used less fuel to get there."
Both farmers say that consumers who are concerned about the corporate consolidation of organic farming and want to support sustainable agriculture should buy from local farmers markets or join a CSA (community supported agriculture) in which city dwellers receive weekly produce deliveries directly from the farm. Farmers markets and CSAs, these growers say, are the truest expression of the original ethic of the organic movement: That by getting to know our farmers, we will also get to truly understand our food.
And if current trends continue?
"We could end up with just one or two kinds of organic tomatoes," Ryan Zinn of the Organic Consumers Association warned. "And then we end up facing the same pitfalls in terms of environmental sustainability and food security that we now face."