A lot of companies in the same situation get stuck in the tailspin. They start focusing on the losses, the downward slide. Or worse, they panic and start making the wrong decisions. It's understandable -- $4 billion is a shocking drop.
But rather than letting a crushing blow determine its future and its fate, three Big Food players took another route: They launched incubators to breed and invest in natural product companies instead.
It's a cursory lesson in how to get back up after your company has taken a serious blow to its business - and how to avoid landing there in the first place.
Old dogs, new tricks
Kellogg's Eighteen94 Capital offers supply chain, marketing, and other support to new food businesses. Campbell's launched Acre Ventures with the purpose of leveraging disruption and change in the food industry. With 301 Inc., General Mills provides equity investment and other resources to emerging food startups.
Through this approach, they're able to tap into what's shaking the foundation of their business - and benefit from it. Additionally, they're adjusting their own existing products to better meet new consumer needs and demands.
Not bad for three companies that were founded before 1906.
But, it brings up one of the greatest challenges you'll encounter with your own company at some point: When faced with the choice between compromising your values to increase profits, what will you choose?
The pressure to take shortcuts
One of the things I've found interesting in a growing company is how conscious of a decision it is to stay true to your roots - and it goes beyond just having a purpose or mission statement. It happens more easily than you might think, even if you started your company with a purpose and a mission.
Not long ago, I had a conversation with a marketing VP at another food company that had once been natural like my own. While initially they wouldn't have used artificial ingredients like dipotassium phosphate or artificial flavors, they succumbed to it as they got larger and the stakes to innovate grew.
As a company grows, the pressure to take shortcuts increases. It stems from having more money, needing to sustain growth rates, having investors/shareholders, needing to reach profitability, conserving ownership, and in some cases, greed. As a result, companies miscalculate the risk, cost, and consequences of taking a shortcut.
Change by change, the product changes, the company becomes a different company. Little by little, these shortcuts make a difference. The consumer notices, the industry notices. I call it death by 1,000 cuts. It can happen to any company, of any size, in any market position.
You really do have a choice
The reality is, businesses always have choices - and choosing to undermine the mission and authenticity of yours can hurt it, often more than it might seem.
More than ever, this is true today. We're in an era where consumers are more conscious of what they purchase, where it's from, and from whom. Trust is not given automatically. They read labels, they research products online.
It's elevated the importance of authenticity, and is driving a greater need for it to be part of every consumer brand regardless of industry.
In a world where information moves fast and reaches more people, including greater connectivity among peer groups, authenticity, values, and missions become more than just marketing speak - you've got to live them.
We've faced this many times since the day I launched my business, and I am certain we will again down the road. But, I know without witnessing Big Food's peril the importance of maintaining our authenticity - Simple Mills was created to meet the consumer demand for natural food that caused Big Food's loss.
Certainly, today, Big Food is making the right moves to change its position. But, it's not going to be easy. It's so much easier to do it right from the start - and not compromise it for anything. Set your company's values from day one, and stick to them.