Staring behind the glass of an Odwalla cooler, I am making an agonizing decision: Strawberry C Monster, or a Mango Tango smoothie? After a few minutes of taste-bud indecision, the orange allure of the Mango Tango wins out, and I reach in and grab a bottle and head to the checkout line. I offer the cashier my dollar bills for this healthy treat from what I think is a small scale California operation. As I’m twisting off the cap, a friend casually asks if I know that Odwalla has been bought by Coke.

My stomach drops. I turn my Mango Tango to its side to read the label, and see no sign of a buyout—plenty of nutrition information and ingredients listed, an address and phone number for Odwalla distribution headquarters in California that I could call with questions or concerns, but not a word about Coca-Cola. I look at my friend to verify that she is not just teasing me. “You’re kidding?” I ask hopefully.

She’s not, and I look at the label again. Certainly if Odwalla (or is it Coke?) can find space on the label to tell me about the product’s vitamins, anti-oxidants, and lack of GMOs, then they can find a free corner for a line about whose dollar I’m supporting when I buy their beverages. But there’s nothing but a giant cartoon mango, mocking me. A sense of betrayal and frustration with the world of corporate conglomeration sets in, and I retighten the cap.

Like many other self-dubbed “conscientious consumers”, I boycott big business and its socially and environmentally irresponsible practices as part of my standard shopping procedure. Instead, I look for the small-scale, local, or somehow certifiably sustainable products, and do my best to keep my consumer dollar from such multinational giants as Kraft Foods, Wal-Mart, Nike, The Gap, and Coca-Cola.
But these big companies are clever. Sneaky advertising, market dominance that makes other options either too expensive or too difficult to find, or downright deceitful product labeling often trick us into buying from the big guys when we don’t want or mean to do so.

Interestingly, as the conscientious consumer contingent rises, these companies are beginning to respond to the green shoppers’ concerns.

As Sean Sugarman, post-merger CEO of Odwalla (formerly with Minute-Maid, another Coca-Cola subsidiary) noted in the GreenMoney Journal, “nourishment, convenience, and social responsibility are what consumers are looking for in the food and beverage industry.”

But, as the Odwalla buyout demonstrates, big company leaders are not responding to this changing demand by changing their practices. Rather, they are responding by buying out our favorite small-scale and sustainable product suppliers, and with them the brand labels that we green consumers have come to trust.
And they aren’t working too hard to let us know they’re doing it.

This practice has become particularly prominent in the food and beverage industry. You may or may not be disheartened to know that favorite little guy brands such as Boca, Cascadian Farms, PowerBar, Ben & Jerry’s, Stonyfield Farms, Kashi, Nantucket Nectars, Muir Glen, and Silk Soymilk have been bought by such big boys as Kraft, General Mills, Pepsi, Unilever, Dannon, Kellogs, and Cadbury. And disheartened or not, unless you’ve done your homework and have read about one of these mergers in the paper or on the internet, you probably haven’t heard about the change in ownership.

And you certainly didn’t read it on any of these product’s labels.

You might think that as these companies spend millions of dollars making these deals, they’d want to get a little PR for themselves in the process. But there’s good reason to keep quiet and keep the big brands off of the little labels.

Kevin Keller, Professor of Marketing at Dartmouth’s Tuck School of Business, has spent a good chunk of his career in brand marketing. According to Keller, it’s the brand and its trusting consumers that these companies are buying. “In this kind of acquisition,” he says, “about 80% of what these corporations are buying is the brand, and only 10-20% goes towards physical acquisitions like production facilities.”
As the green consumer niche grows in the food and beverage industry, so too grows the number of acquisitions in this market. According to Christie Nordhielm, Marketing Professor at Northwestern’s Kellogg Graduate School of Management, in an interview with Dennis Rodkin for Conscious Choice Magazine, small companies really just test the market for larger firms.

“The smaller companies act as market research firms for the big guys,” she told Rodkin. “They go out and identify and develop a viable market, and then they get picked up by the big guys.”

Beyond the benefits of fat checks cut to CEOs and stockholders, these smaller companies can actually gain a lot from mergers. They get access to parent company resources like large distribution networks, prime product placement, better worker benefits and savvy marketing. For a profit-driven company, such an offer is golden.

And for some value-driven companies, increased distribution translates to increased impact. Many sustainable business owners do not consider mergers to be selling out as much as helping others to buy into their own values.

As Sugarman of Odwalla said, “the best way to change the food and beverage industry is to educate consumers and let them choose where they put their dollars”. This, he argues, will in time attract larger companies to invest in green value businesses and will pull mainstream consumers to choosing more sustainable products. This is exactly what Sugarman and others at Odwalla will tell you they’re doing. They see themselves at the cutting edge of mainstreaming sustainability.

Yet there is a fine line in the world of acquisitions between sustainable growth and green-washing. In an industry where “sustainable” and “natural” are buzzwords, consumers must be on alert for false claims. And when a company won’t tell you that it’s partnered with a multi-national unless you call and ask, and even then won’t tell you details like whether their suppliers or producer prices have changed, it’s hard to believe that they’re giving us the unbiased and honest consumer education they claim we should have.

Odwalla claims to still be fully independent and autonomous, and indeed employees I spoke with at the company headquarters attest that not much has changed since the buyout. But why should we believe them?

Because, in this product market, it would be bad business for the purchasing companies to dilute the image they just paid big bucks for. The green image that comes with these brands that do so well in niche markets, says Keller, is actually the best leverage small companies have to maintain autonomy after mergers.
“If I’m advising these purchasing companies”, he says, “I remind them that they are buying these companies for a reason—and they can’t lose sight of that.
“The worst thing you can do,” Keller reminds his clients, “is to go in and make changes that lose some of the values you paid for.”

For Keller, the key issue with mergers is that of governance after acquisition. He wants to know how the big guys treat the little guys after the buyout, and if the little guys have been able to maintain their values and the elements that made them unique enough to be bought for such high prices in the first place.

In business, this kind of indirect rule in acquisitions is not the norm. But in markets where social and environmental values lie behind consumers’ brand loyalty, it’s a savvy way to do business.

The Stonyfield—Danone acquisition, for example, might actually merit the title of “partnership” that both companies use to refer to the $100 million dollar deal they made in 2001.

Gary Hirshberg, Chairman, President and CEO of the yogurt company that channels 10% of its profits to environmental causes, knew long before the merger with Danone, maker of Dannon yoghurt, that he wanted to partner and spread his company’s message and impact. But he was waiting to find the right parent company.

Hirschberg spent two years carefully working out the details of this merger so as to be sure that he and his company would not be forced into submission by the European yogurt superpower. He was determined not to follow in the unfortunate footsteps of Ben & Jerry’s, which was bought by Unilever in 2000, and actually sought the advice of the former ice-cream company CEO Ben Cohen when considering partnership.
The merger that resulted has been considered one of the most successful partnerships in the industry. Though Danone owns over 80% of Stonyfield Farm stock, the rest is owned by Hirschberg and his employees.
Hirshberg still independently manages the company and, crucial to his continued authority within the company, retains majority control of the Stonyfield Board of Directors.

The key to Hirshberg’s success was finding an investor with a genuine interest in Stonyfield’s mission-driven method and with compatible social and environmental values. Where Stonyfield gains access to Danone and Dannon’s distribution network and marketing resources, Danone gets consultation from Stonyfield experts on both organic and pro-biotics niches within the yogurt industry.

“Stonyfield is no different than before [Danone’s] involvement.” said Hirshberg in an interview with reporter Dale Buss for BrandChannel, “We’ve really been pioneering, they and us, a very unusual relationship that I think is probably a good model for other mergers and acquisitions—a combination of what I call a twenty-first century brand and a large, twentieth century parent.”

But for some consumers, how former CEOs are treated after making 30 million dollars is not the point. These consumers are more interested in finding out how many cents of their dollar are going to support a multinational company.

As both Nordheilm and Keller note, consumers are buying an image as well as a product when they make purchases. Companies like Odwalla, Stonyfield, and Ben & Jerry’s have certain images that consumers buy into. “The image of a small company like Odwalla is its alternativeness and naturalness” said Northwestern’s Nordheilm. “That image becomes a little less credible when you’re owned by Coca-Cola.”

Invariably some consumers that support the small, independent image will stop buying from these companies when they find out they have been bought out.

Perhaps this small setback to profit margins explains why companies choose not to make consumers privy to that information on their product labels. Or perhaps the setback in this market could be devastating for companies whose marketing success hinges on their perceived integrity.

This risk is real, but maybe it could actually be minimized with a little bit of transparency. Maybe consumers would be more likely to continue to support these companies after acquisitions if the companies had the courage to tell us– in more than just an obscure website link or watery PR statement—about what they’ve done, and why.

Whether the information is easily accessible on a product label or not, informed consumers are left to choose between rigid small-scale ethics and a less pointed but large-scale potential for real social and environmental impact. And informed consumers should know that many sustainable business owners have consciously made this choice as well.

Hirschberg, formerly a farmer at the New Alchemy institute, an educational non-profit ecological farming center, has chosen to go big instead of staying home.

Why? He went to Disney World in Florida some years ago and saw an exhibit on how food could be grown in the future. The exhibit was funded, ironically, by Kraft, and saw more visitors in a day than his institute in New England saw in a year. “I realized that to make an impact on the future of food production on this planet,” he said in an interview with David Batstone of Worthwhile magazine earlier this year, “I had to become Kraft foods.”
Indeed, there is powerful potential for change in the business world when value-laden companies get the chance to grow and influence the old powers.

Though in one sense Ben & Jerry’s exemplifies a classic soul-selling acquisition, it has also gotten its parent company to buy into some of its values. Ben & Jerry’s has actually helped push Unilever towards corporate social responsibility practices like conducting social audits and increasing its philanthropy fund.

And as a result of Ben & Jerry’s increased success and access to resources with the merger, it has been better able to pursue its own values. The company recently put out a line of organic ice-cream, and their social mission remains strong—they’re still supporting and partnering with non-profits that are trying to save the world.

Lee Holden, Senior PR spokesperson for Ben & Jerry’s, considers Ben & Jerry’s a leader in value-driven marketing and corporate philanthropy “There’s no road map on how to do this,” he says. “Basically, we reach millions of people, and we’re actually going to make a difference.”

Where Ben & Jerry’s is pioneering in corporate social responsibility, Odwalla is teaching the food industry a thing or two about the value and marketability of natural, healthy, GMO-free foods. Sugarman, speaking on the benefits to Coca-Cola of the partnership, says, “we now have a dialogue with natural food companies that we did not have before.

“We’re beginning to understand some issues from their perspective,” he says. “Odwalla is a bit of leavening for the bread. It’s tiny right now, but it’s having an effect.”

As a consumer, I have a choice to make. I can fight the powers that be, or I can encourage them to change and support them as they do.

When companies don’t change their practices and don’t stop doing the good things they’ve always done to warrant our support, are we really helping create positive change when we stop supporting them just
because multinational companies are supporting them too?

Shouldn’t we be excited that there are leaders in the business world with both the kinds of values we ascribe to and the leverage to actually have a significant impact?

I don’t know about Wal-Mart and Nike, but in the food and beverage industry, small sustainable company buyouts seem to be changing the business world more than the business world is changing them. Granted, it would be nice to have some clearer labeling and not to have to do hours of research to figure this out, and I might actually be even more likely to continue to support these companies if they were more honest about their ownership changes. But it may be that having a Mango Tango from time to time will have a greater effect on Coca-Cola’s business practices than if I choose to abstain.

So again I twist off the cap to the Mango Tango, and this time I drink it without guilt. And as a final gesture of my still conscientious consumption, I toss the container into the recycling bin.

Brooking Gatewood ‘05 was an Environmental Studies major and an Anthropology minor at Dartmouth. She was the editor-in-chief of TGM while she was here. Her interests include playing frisbee and eating good food and she spent the summer touring the country in a veggie oil powered bus, trying to change our culture one car at a time.