A panel at this year's Natural Products Expo West trade show addressed one of the biggest consumer issues in our industry:
Natural brands large and small have been acquired over the past few years: Annie's, Krave Jerky, Honest Tea, Happy Family, Plum Organics, EPIC, Justin's, and more.
Many consumers have lost trust in Big Food. They're aware that the industry has compromised consumer health, wellness and the environment for profits. They know that ingredients made in labs, pesticides and other chemicals used are harmful.
Most of all, consumers today are aware that food doesn't need a laundry list of artificial ingredients to taste great or last on the shelf.
But as the panelists at the Expo West event discussed, Big Food acquiring natural food companies doesn't always mean a compromise of values and promises.
It could mean a better food supply, better practices. A way that Big Food can clean up its products faster and more efficiently.
Just the same, consumers often stop purchasing from companies that are acquired by big corporations - even if the promises and values remain in tact. They know that continuing to buy products means they're ultimately benefiting the larger entity that does business in ways they're against.
These issues aren't limited to food business, or natural products business. You'll see the same across just about any industry and market.
It's a delicate balance for every CEO of any high growth company. On one hand, you want to survive. On the other, you won't go anywhere if you lose customer base. Many small businesses opt for an exit or other moves to stay alive. This can be particularly true in the food business - overhead costs can be high. Product recalls can be devastating to the business.
Can there be a happy medium when someone other than you now owns your business?
Be willing ask the hard questions and drill down
Annie's president John Foraker said that he met with General Mills executives to discuss acquisition interest -- and stated point blank that Annie's wouldn't compromise its values and policies if it joined General Mills. He dug deeper to see where General Mills stood before moving forward.
Be clear with potential acquirers, partners, and investors about your principles from the start and be willing to ask the deeper, more difficult questions to know where they stand on your company's values and promises. Ask what they have planned after the sale. Make sure it's in the contracts.
Find out what they want to change or improve across their entire organization -acquisitions are often a way for companies to evolve or do business better.
Ask yourself if you really need to be acquired to thrive
An acquisition is a business achievement that gets a lot of fanfare and is considered a success. In many cases, it can mean positive things for your business - more access to capital and resources, greater distribution reach and other benefits.
But it isn't the only way to survive and thrive. Only you can know what your business truly needs, what other options you may have. Consider the range of avenues you might have, and weigh everything before you take the exit.
Don't be afraid to say no
It can be hard to turn down money on the table. Especially if you're a young, hungry startup running lean to survive. But, sometimes it's better to say no.
Many promising young companies are killed off or struggle to survive despite acquisition. They would have potentially fared better or done greater things had they declined an offer.
If it doesn't feel right, or you're not confident about the intent of the company buying yours, consider walking away.
But don't be afraid to say yes
A purpose-driven company cares about the business it does, including caring about its customers. But that doesn't mean you're selling out or throwing anybody under the bus when you opt to sell the business.
Sometimes it opens up the opportunity to expand distribution, reach and brand awareness. Larger company resources can help resolve issues in operational scaling or provide a more robust (and often necessary) marketing budget.
Before you finalize the deal, ask yourself and the company buying your business how you both feel the sale should be addressed with your customers. Make truth and transparency your foundation - and be prepared to face outcry, questions, and concerns with grace and care.
Avoid pre-canned PR statements and practices. You built your business on trust, and other values. Discuss your company's move candidly, and authentically to continue to foster it.
Most of all, don't be afraid to become a multi-national conglomerate yourself
A young company can be scary - for you, for your investors. There's a lot to lose, and that fear drives a lot of small businesses to run towards the safer and easier options.
But keep in mind that the giants in the business world were once you. They were once small, with limited teams, access and resources. Google was initially created and operated out of a homeowner's garage. I started Simple Mills in my living room.
Every small business stands a chance at becoming a big business, one that is publicly traded, or privately held, with millions or even billions in revenue.
While natural food companies are tiny today, many have the potential to become the next Big Food - done with new values, missions, and promises to bring a better food supply to consumers. That could be you, it could be me.
Don't always assume the easy route is best. Consider all of your options, including the possibility that your business could be the equivalent of Amazon, General Mills, or any other major player before you make a move.