Trendsurfing: Corporate organics (The Times)
By David Rowan
You're an ethically aware, animal-friendly, socially responsible and all-natural anti-corporate hero. So what do you do? Sell your company sharpish to the first multinational conglomerate that waves a chequebook, according to one of today's defining business trends. With sales of organic, natural and Fairtrade products booming as more consumers put health and conscience before price, vast global corporations are queuing to buy up these right-on upstarts. The good guys typically justify ceding control by claiming that they can educate the corporate giants from within. But are they simply selling out their integrity along with their stock?
It's a debate that has been buzzing through activist groups since two of the most respected "social conscience" firms succumbed to the corporate dollar. Tom's of Maine, the all-natural toothpaste-and-deodorants firm that gives one-tenth of profits to good causes, agreed last month to sell an 84 per cent stake to Colgate-Palmolive, the latter's ethical credentials tarnished by its chemical ingredients and union unrest. The Body Shop, meanwhile, accepted a £652 million bid from L'Oréal, in the activists' bad books over animal tests and its part-ownership by Nestlé, the infamous pusher of powdered baby-milk.
In fact, the trend - let's call it corporate organics - has been accelerating for a couple of years. With UK sales of organic food growing by more than 10 per cent a year, big business has shown an all-natural yearning to tap into this potentially lucrative market. If you have ever bought Seeds of Change organic food ("Goodness from the ground up"), you may not realise that it is now owned by a division of Mars, just as Green& Black's chocolate and Nantucket Nectars Organic juices are part of Cadbury Schweppes. Similarly, the organic yogurt maker Stonyfield Farm now sits inside Groupe Danone, Aveda has gone to Estée Lauder, and Back to Nature to Kraft Foods, whose ultimate parent - shhh - is Altria, aka Philip Morris.
It's an inevitable pattern, according to Peter Melchett of the Soil Association, the UK's main organic farmers' group. "Once an organic business gets big enough to make an impact on the market, your choice is either to be bought out, or to wither and die as the big companies out-compete you," Melchett says. He points to some potentially big advantages - such as the new investment and distribution channels that have taken Green & Black's into the smallest newsagents - but also to the less acceptable pressures from supermarkets in dictating how organic food should be produced. Others worry that corporate takeovers will undermine the founders' original values. "It remains to be seen whether these smaller companies will be able to maintain their integrity," says Mary Rayner of Ethical Consumer magazine. "Cadbury's or L'Oréal may have bought into an idea, but that doesn't mean they've changed their company culture."
There are already signs that the more savvy green consumer is fighting back. Opponents of L'Oréal's record of animal tests have declared next Saturday an "international day of action" against the Body Shop, with demonstrations planned outside stores and talk of a boycott. Tom's of Maine, meanwhile, has suddenly plummeted down Ethical Consumer's shoppers' league tables thanks to Colgate's poor rating for environmental reporting.
Still, ethics can be a complicated business. Green & Black's is currently endorsing a consumer boycott of Nestlé, according to the Baby Milk Action website. But as Green & Black's is now part of Cadbury's, which has faced ethical concerns of its own, shouldn't Green & Black's logically be boycotting itself?
(The Times Magazine, April 22 2006)
You're an ethically aware, animal-friendly, socially responsible and all-natural anti-corporate hero. So what do you do? Sell your company sharpish to the first multinational conglomerate that waves a chequebook, according to one of today's defining business trends. With sales of organic, natural and Fairtrade products booming as more consumers put health and conscience before price, vast global corporations are queuing to buy up these right-on upstarts. The good guys typically justify ceding control by claiming that they can educate the corporate giants from within. But are they simply selling out their integrity along with their stock?
It's a debate that has been buzzing through activist groups since two of the most respected "social conscience" firms succumbed to the corporate dollar. Tom's of Maine, the all-natural toothpaste-and-deodorants firm that gives one-tenth of profits to good causes, agreed last month to sell an 84 per cent stake to Colgate-Palmolive, the latter's ethical credentials tarnished by its chemical ingredients and union unrest. The Body Shop, meanwhile, accepted a £652 million bid from L'Oréal, in the activists' bad books over animal tests and its part-ownership by Nestlé, the infamous pusher of powdered baby-milk.
In fact, the trend - let's call it corporate organics - has been accelerating for a couple of years. With UK sales of organic food growing by more than 10 per cent a year, big business has shown an all-natural yearning to tap into this potentially lucrative market. If you have ever bought Seeds of Change organic food ("Goodness from the ground up"), you may not realise that it is now owned by a division of Mars, just as Green& Black's chocolate and Nantucket Nectars Organic juices are part of Cadbury Schweppes. Similarly, the organic yogurt maker Stonyfield Farm now sits inside Groupe Danone, Aveda has gone to Estée Lauder, and Back to Nature to Kraft Foods, whose ultimate parent - shhh - is Altria, aka Philip Morris.
It's an inevitable pattern, according to Peter Melchett of the Soil Association, the UK's main organic farmers' group. "Once an organic business gets big enough to make an impact on the market, your choice is either to be bought out, or to wither and die as the big companies out-compete you," Melchett says. He points to some potentially big advantages - such as the new investment and distribution channels that have taken Green & Black's into the smallest newsagents - but also to the less acceptable pressures from supermarkets in dictating how organic food should be produced. Others worry that corporate takeovers will undermine the founders' original values. "It remains to be seen whether these smaller companies will be able to maintain their integrity," says Mary Rayner of Ethical Consumer magazine. "Cadbury's or L'Oréal may have bought into an idea, but that doesn't mean they've changed their company culture."
There are already signs that the more savvy green consumer is fighting back. Opponents of L'Oréal's record of animal tests have declared next Saturday an "international day of action" against the Body Shop, with demonstrations planned outside stores and talk of a boycott. Tom's of Maine, meanwhile, has suddenly plummeted down Ethical Consumer's shoppers' league tables thanks to Colgate's poor rating for environmental reporting.
Still, ethics can be a complicated business. Green & Black's is currently endorsing a consumer boycott of Nestlé, according to the Baby Milk Action website. But as Green & Black's is now part of Cadbury's, which has faced ethical concerns of its own, shouldn't Green & Black's logically be boycotting itself?
(The Times Magazine, April 22 2006)
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