The Incredible Shrinking Industry

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Over 11,150 Facebook comments. Within 48 hours of the initial post, that’s how many fans turned to the Annie’s Facebook page to voice their opinions over the announcement that General Mills was buying the 25-year-old company.

As you can imagine, the comments have been mostly negative. But what’s really at the heart of them, and what does the situation say about the current state of the food industry?

Hopping over to the Dark Side?
So, let’s start with the facts. Annie’s was founded in 1984 by Annie Withey and Andrew Martin to bring families a healthy option for natural macaroni and cheese. With her pet bunny, Bernie, as the company’s iconic mascot, Annie’s mac ‘n cheese, crackers, condiments and more have become staples in the pantries of millions of U.S. households. Non-GMO, natural ingredients and sustainable business practices are standards that shoppers have come to expect of the brand.

Company CEO John Foraker said on Facebook that once Annie’s becomes a part of General Mills, nothing will change about the company’s mission, culture and values. The buy-out, he stated, will open a new, exciting chapter in Annie’s history. The problem is that shoppers are very afraid of what might be written in these pages.

On Facebook, outrage over Annie’s new parent company being a supporter of genetically modified (GM) ingredients—and a financial contributor to anti-GM labeling campaigns—was a recurring theme, as was frustration and sadness over the loss of another successful small business. There was also fear over whether Annie’s could continue to maintain its standards for quality and sustainability with General Mills controlling the purse strings.

To its credit, Annie’s social media team did an incredible job of attempting to reply to the deluge of unhappy fans, but many shoppers still say they won’t buy the company’s products any more. It’s a sad day for many cheddar bunny lovers, for sure.

Behind the Bucks
I, too, feel some sorrow over the shrinking number of family-owned and small businesses in our industry, but I also see something positive. General Mills will pay $820 million for Annie’s. That’s a huge price tag, and more than it has ever paid for a natural/organic brand. But why? With incredible resources at its disposal, General Mills could certainly have developed its own natural/organic brand of Annie’s-like products. It didn’t.

I believe the food mega-company felt intimidated, to an extent, by something synonymous with many industry brands, and that’s  authenticity. Indeed, the honesty of a brand is something you just cannot whip up in a lab and market from a conference room. At a company’s core must lie a commitment to doing the right thing above and beyond financial gain. Huge food companies can no longer afford to ignore this fact or the power of natural companies to offer clean products made by ethical individuals.

There’s a huge difference between slapping an organic seal on a product and making a truly clean product. While the conglomerates can buy brands, they can never buy authenticity, something packaged within so many of the independent brands sold in your store. Shoppers know this fact well.

So, in the end, General Mills wants a piece of this, which says to me that the magic combination of ethical/natural/sustainable is incredibly valuable, in demand and worth investing in. The tides of shopper preferences for their food supply are turning, and mega-brands are starting to react. As long as our industry continues to offer products and brands that the big food giants are jealous of, I think we’re doing our job. WF

Kaylynn Chiarello-Ebner
Editor/Associate Publisher

Published in WholeFoods Magazine, October 2014