Within two days of being acquired by General Mills in 2014, Annie's, the Berkeley, California-based natural and organic food company, received 20,000 comments on its Facebook page.
"I read every single one of those posts," said John Foraker, president of Annie's, at a panel discussion at Natural Products Expo West earlier this month.
Many of Annie's loyal customers saw the $820 million sale to General Mills as the company selling out to big food. The comments on social media from that day radiated fear of what would become of a brand that had cultivated an identity around social and corporate responsibility, which many found ran counter to General Mills's own brand.
Wrapped within their sentiments was the growing mistrust that many consumers feel towards legacy food companies. Over the last several years, there has been a call to arms, as people raise concerns about the additives used in processed food and whether they are at the root of health issues like heart disease, diabetes, and obesity that plague the country.
With more than half of consumers stating they are becoming more distrustful of the food system, big food companies are hoping to reshape public opinion by absorbing top organic and natural brands. Since 2000, General Mills has acquired Annie's, Cascadian Farm, Muir Glen, Larabar, Libert, Mountain High, Food Should Taste Good, Immaculate Baking, and Epic Provisions.
These acquisitions offered a course correction for a company that has experienced slumping sales. This week, General Mills reported a decline of 8 percent in net sales for its third quarter of fiscal 2016, but shared that its U.S. natural and organic business has experienced double-digit net sales growth. With consumer sales of organic food in the U.S. reaching nearly $36 billion, there is plenty of room for the company to expand. As a result of market demand, General Mills has committed to more than double the organic acreage from which it sources ingredients, to 250,000 acres by 2019.
As for the emerging brands being acquired, they are able to attach themselves to the economic engine of a large company that promises more resources and faster growth. Under General Mills's tutelage, Annie's has doubled the number of products in its line.
Despite General Mills seeming commitment to changing its part of the food system, it has struggled to allay consumer concern. Each time it purchases another company in the organic and natural food space, customers worry that the ethos of their beloved brand will be corroded by the company subsuming it. For its part, General Mills has no interest in dismantling the companies and is content to stay out of their way. When Steve Young, a vice president at General Mills, was brought onto Annie's to act as a liaison, he said he saw his role as, "Get Annie's what it needs, and keep away what it doesn't need."
Foraker echoed those sentiments and said that Annie's has never been asked to compromise, even when the company found itself on the opposite side of the debate from its parent company around the labeling of genetically modified foods (GMOs).
Annie's was a founding member of Just Label It, a coalition of companies in favor of mandatory labeling of GMOs, while General Mills, along with PepsiCo, Coca-Cola, Kellogg's, Kraft, and Land O'Lakes, spent millions of dollars in support of the Safe and Accurate Food Labeling Act. The bill, nicknamed by opponents the Deny Americans the Right to Know (DARK) Act, was designed to block states from requiring GMO labeling. Despite the clash of opinions, Annie's was never asked by General Mills to waiver from its stance.
In what is being seen as a major victory for consumers' right to know, last week General Mills capitulated and said it would label all of its products containing GMOs. The decision came on the heels of the DARK Act's defeat in the U.S. Senate.
The steps that General Mills is taking seem to be in the right direction, but it will be a long game for the company, as it works to position itself on the right side of consumers. Customer skepticism remains high, which can be healthy and crucial to keeping big food honest. Also, a whole new class of companies, like Annie's, are in the wings and looking to shake up the food system, which will work as a forcing function for good. But for there to be a real shift in the market, we don't need companies like General Mills on the sidelines, we need them as part of the solution.
As someone who has battled the establishment and then become part of it, Foraker recognizes the need for the two sides to come together: "You have to have big food companies in order for there to be change."