I'll Buy That

January 17, 2008 6:30 PM

Selling out is becoming trendy. Last fall, Burt’s Bees was sold to Clorox. It turned out then that former owner Roxanne Quimby bought out co-founder Burt himself in 1999 and sold 80% of the company to AEA Investors in 2004; this was just the final stroke of the pen.

The Body Shop became a part of L’Oreal in 2006 (previously), the same year Tom’s of Maine was bought out by Colgate. Estee Lauder acquired Aveda back in 1998.

If you start getting into food, Stonyfield Farm is owned by Danone. Nantucket Nectars has been part of Cadbury Schweppes since 2002. And remember Fresh Samantha juices? Bought by Odwalla, which itself is owned by Coca-Cola. Ben and Jerry’s became a part of Unilever back in 2000, and now the company’s name is often a symbol of an acquisition gone awry.

For better or worse, organic is now fluffy fodder for mass marketing. Even bleach-maker and Burt's Bees-buyer Clorox recently announced its own Green Works line of products.

So you might ask: which companies are making an effort to be green and haven’t sold out (yet)?
Here’s one list. Problem? It includes the founders of:
- Seventh Generation, which has had some interesting encounters with giant retailer Walmart and has partnered with that other giant retailer, Target;
- Stonyfield Farm, which as mentioned above is now a part of Danone, but whose business ethics are defended here;
and
- Whole Foods, which is trying to buy out Wild Oats but keeps butting heads with the FTC.

But don't lose all hope. There are still lots of names on that list, and many green and greenish companies out there: Ecover, Dr. Hauschka, Dr. Bronner, Method, Kiss My Face, and heaps more. (These aren't endorsements, just examples.)
There's advice on being green (I know, it ain't easy.)
Or you could make your own.

posted by bassjump (43 comments total)

The term "selling out" is way beyond trendy.
posted by cmgonzalez at 6:35 PM on January 17, 2008

I didn't sell out, son! I bought in!
posted by infinitewindow at 6:54 PM on January 17, 2008

It is a double edged sword. Environmental activists have pushed for more public awareness of the impact of their decisions. This creates a demand for environmentally friendly, a term I'm using broadly, items. Realizing that people are willing to pay a premium for products with an environmentally friend bent, corporations cash in.

Is this a bad thing? No. It shows that people are willing to pay much, much more for products that lessen ones environmental impact. I think environmentally friendly and corporations can coexist. The question is whether the marketing of environmentally friendly will be truly enforced or if middle managers or others trying to juke stats start trying to take shortcuts, but that's something that must be done on a firm level and is just as likely, if not more so, to happen in a small company than a large company. Why do I say more so? Because people will be watching Clorox closely, much more closely than they watched Burt's Bees before.
posted by geoff. at 7:11 PM on January 17, 2008 [5 favorites]

All I know about Burt's Bees is that NO ONE around here seems to stock the Bay Rum aftershave balm any more.
posted by jquinby at 7:20 PM on January 17, 2008

Whole Foods did end up acquiring Wild Oats last summer. Whole Foods is has a decent green record. compared to other grocery stores.
posted by birdherder at 7:23 PM on January 17, 2008

Bees hate it when you splash bleach on them.
posted by Balisong at 7:25 PM on January 17, 2008 [1 favorite]

Well, it's not really selling out... it's the multinational corporations accumulating so much revenue, capital, and market share that the smaller competitors are just peanuts. Why would they not buy them up? Proctor & Gamble has an annual revenue of $76 billion, easily beating out the GNP of most emerging economies.

I don't need to be reminded every time I turn on the damn TV at 10 am about Lysol or Tide.
posted by crapmatic at 7:40 PM on January 17, 2008

Correct it has become a fashion indeed.

Recently Mysql sold out to SUN for 1 billion !
posted by chrisranjana.com at 7:53 PM on January 17, 2008

As long as I can still buy my flavors of Ben & Jerry's at the local supermarket, I don't consider anything gone awry.
posted by smackfu at 8:05 PM on January 17, 2008

I'm not sure it's really "trendy," in the cool/hip sense, but it's undoubtedly both frequent and profitable.

Nothing like the 'ol bait and switch.
posted by Kadin2048 at 8:22 PM on January 17, 2008

Um, selling out? I don't know if you've realized this, but generally people go into business to make money.

What exactly is wrong with big businesses wanting to sell to a growing market niche?
posted by Pants! at 8:36 PM on January 17, 2008

I didn't even know that Toms of Maine was bought by Colgate. It's my favourite toothpaste and deodorant.

Not sure how I feel about this.
posted by purephase at 9:11 PM on January 17, 2008

The moment I saw Ben&Jerry's in the 7-11s in rural Japan I knew something had gone awry... and then I saw Burt's Bees lip balm being sold in bulk in Hong Kong... recently a local organic/natural product importer has stopped carrying Tom's of Maine because of the sell-out... and last month my local drug store in suburban Tokyo started carrying Dr. Bronners... uh-oh
posted by ameca at 9:27 PM on January 17, 2008

Has Unilever altered the sweetness levels of Ben & Jerry's ice creams since the buyout?

I've tried a few bites in the last year (after a multiple year break) and found it cloyingly, unpleasantly sweet.
posted by Auden at 9:35 PM on January 17, 2008

Has Unilever altered the sweetness levels of Ben & Jerry's ice creams since the buyout? I've tried a few bites in the last year (after a multiple year break) and found it cloyingly, unpleasantly sweet.

I checked out a pint in a grocery store the other day (about two miles from the original Ben & Jerry's scoop shop), Auden, and was truly shocked to see that one of the main ingredients was high fructose corn syrup. When Unilever bought the company, I figured they would trash all the social ideals, but it never occurred to me that they would crap up the product as well.
posted by LeLiLo at 10:49 PM on January 17, 2008 [1 favorite]

Thanks for that NYT Burt's Bees link, bassjump. I have friends who are good friends of Roxanne Quimby's, and she lives not far from me, but have never met her. It's incredible that Burt, having tried out a real house, went back to his chicken coop. Burt himself, now 72, makes his home again in the converted turkey coop — expanded but without running water or electricity — but with $4 million or so to his name.

And maybe even more remarkable that, as Quimby says, she [has] spent more than $50 million to buy 100,000 acres where she tries to restore the land to its natural state by blocking hunting, closing roads and dismantling bridges. That's a lot of acres, even in northern Maine, equivalent to almost 13% of Rhode Island.
posted by LeLiLo at 11:05 PM on January 17, 2008

Yes, Ben & Jerry's changed; I noticed it in the late-90s before the Unilever buy-out. All of their new flavors were suddenly "cloyingly, unpleasantly sweet" (perfect description) and the old flavors seem to at least have more air, if not a formula change.

I used to go through several pints a week in the 90s. Now, I try a pint every couple of years.
posted by D.C. at 11:15 PM on January 17, 2008

I always thought Burt's Bees Lip Balm was too gritty...like it had too much honey in it that had crystallized a bit. Made it unpleasant to schmeer on the lips.

I just bought some Levi's, recently, the first time since they stopped making them in the US.

These are made in Lesotho.

Lesotho...Levi's.
posted by darkstar at 12:29 AM on January 18, 2008

NYT Times article on Burt's Bees founders, Clorox buyout

But not even Clorox can sanitize the details of a fallout between Mr. Shavitz and Ms. Quimby that began in the late 1990s — when Ms. Quimby managed to buy out the bee-man for a low, six-figure sum. She has been paid more than $300 million for her stake in Burt’s Bees, and she spends her time traveling, refurbishing fancy homes in Florida and preserving large tracts of land in Maine. Burt himself, now 72, makes his home again in the converted turkey coop — expanded but without running water or electricity — but with $4 million or so to his name.
posted by Locative at 1:50 AM on January 18, 2008

(article is linked in the main post, but I thought that part was especially interesting)
posted by Locative at 1:52 AM on January 18, 2008

Recently Mysql sold out to SUN for 1 billion !

I seriously do not understand Sun's business model.
posted by Deathalicious at 2:43 AM on January 18, 2008

This is happening in the world of microbrewing as well - Miller bought Leinenkugel, Budweiser bought Red Hook, etc. But some times the good guys win, like when the rights and recipe to Midwest stalwart Grain Belt were purchased by my beloved Schell.
posted by Ber at 5:02 AM on January 18, 2008

To those who question why these are "sellouts" and not just businesses trying to make money:
These companies were built around the idea of lessening products' impact on the Earth, whether it's through using organically-grown ingredients, fewer chemicals, smaller or recycled packaging, staying local, etc. Once they become part of a larger company, they also become part of a much larger supply chain, in which the shipping alone vastly increases the product's carbon footprint. So while these greener products might be reaching greater numbers of people, they're doing so at the cost of increased greenhouse gas emissions. And sometimes the product itself changes: see lelilo's comment above about Ben & Jerry's changing their recipe.

Furthermore, proceeds from the sales of these products are now going to support companies whose ethics are often at odds with the ideals of the original company. See the Nantucket Nectars link in the post: the original company started a foundation that ceased charitable activities after the buyout. Buying a cruelty-free Body Shop product ultimately supports a company that is notorious for testing on animals. And so on.

So that's why I see it as a problem. I understand that a business owner has every right to make money from his or her company, but these kinds of acquisitions leave a sour taste in my mouth because they seem to controvert the very ideas behind which these smaller companies were originally founded.
posted by bassjump at 5:04 AM on January 18, 2008 [5 favorites]

It's the American Dream, isn't it? Come up with a unique product, or savvy spin on an existing product. You then toil and sweat to expand your market niche, and then really expand into the mainstream. Once you're there, the BIG guys make you an offer you can't refuse, to either bury you as their competition, or diversify their grip on the market share you originally broke into.
As the owner/founder of the business, you sell your company, and end up with enough money to live the rest of your life in relative comfort, or actually in luxury....what would you do?
Most of these companies are privately owned, so they are "sold" by their owners, not BOUGHT OUT by the big evil corporations. Let's be clear about what's going on...it's all about the money, after all this is capitalism. All the lofty ideals have a funny way of slipping away when a check for $XX billion is staring you in the face.
posted by GreyFoxVT at 5:23 AM on January 18, 2008

I think a lot of these smaller business owners just get overwhelmed by the business once it gets to a larger scale. It's not fun any more, so they sell it and move on.
posted by smackfu at 5:56 AM on January 18, 2008

"Dr." Bronner (now deceased) put his own kids in orphanages so he could build his business, which makes over $6 million a year. And even though they were traumatized by this (I think only one is still surviving) there is a strong Bronner family presence in the business, aunts, uncles, grandkids all work there.

I just saw Dr. Bronner's Magic Soapbox and that guy really was nuttier than a fruitcake, as you would expect from reading that long label.
posted by pinky at 8:30 AM on January 18, 2008

I checked out a pint in a grocery store the other day (about two miles from the original Ben & Jerry's scoop shop), Auden, and was truly shocked to see that one of the main ingredients was high fructose corn syrup. When Unilever bought the company, I figured they would trash all the social ideals, but it never occurred to me that they would crap up the product as well.

This is the reason why I avoid AT ALL COST (in fact I'm going broke because of it) buying food from any company that has to post quarterly profits. Their whole business model is about increasing profits and they do that by cutting and skimping on quality. The reason most companies use High Fructose Corn Syrup is because it's pennies cheaper than sugar. It's a fucking indirect poison that's making Americans obese and diabetic but hey it's good for the bottom line so why not? I'm really starting to believe the whole agri/pharmaceutical conspiracies - one makes the poison the other the cure.
posted by any major dude at 8:31 AM on January 18, 2008

Yeah, if people stuck to ice cream with sugar, they'd be healthy as a clam.
posted by smackfu at 8:56 AM on January 18, 2008

Ever since Unilever bought Ben and Jerry's, I haven't been able to find Clam Peckinpah at my local grocery store.
posted by box at 9:08 AM on January 18, 2008

So, are the purchasing companies making the original owners sign non-compete agreements as a condition of these sales? Because otherwise it would seem to be pretty easy for Tom, Ben and Jerry et al to take their expertise and good reputation and open up, oh, Jerry, Ben and Tom's of New Hampshire. Sell ice cream with cool ingredients and real sugar, toothpaste that's effective and all-natural, donate a part of the net to charity and make good money. Now there's your canesugar/dental logrolling conspiracy right there, all in one company.
posted by Shotgun Shakespeare at 9:25 AM on January 18, 2008

You keep your filthy corporate sellout hands off my liquid aminos!
posted by joseph_elmhurst at 9:59 AM on January 18, 2008

Once they become part of a larger company, they also become part of a much larger supply chain, in which the shipping alone vastly increases the product's carbon footprint. So while these greener products might be reaching greater numbers of people, they're doing so at the cost of increased greenhouse gas emissions.

This is the conventional wisdom, to be sure, but it's in no way an unwavering rule. Let's consider Tom's of Maine, which I'll assume for the sake of my counter-argument was made in Maine. As it grew more popular, it would've been shipping in smallish lots with big per-unit GHG loads to places like my local natural foods store here on the Canadian prairie.

Unilever, however, has presumably begun (or will begin) manufacturing at one of its regional centres here in Canada - I think there's one in suburban Vancouver. Already a shorter supply chain, and that's before we get into the smaller GHG footprint per unit of larger shipments. And since the entire packaged goods industry is now hustling to reduce waste and boost efficiency all along its myriad supply chains - primarily in response to Wal-Mart's sustainability scorecard initiative, which obliges every one of its 60,000-plus suppliers to reduce its energy load by I think 5 percent - it's safe to assume that this is a trend that will only become more widespread and ambitious.

I know talk of incremental change at Wal-Mart and Unilever isn't nearly as funky as some counterculture entrepreneur beating the majors at their own game, but it's also far from a black-and-white issue.
posted by gompa at 10:27 AM on January 18, 2008

This is the conventional wisdom, to be sure, but it's in no way an unwavering rule. Let's consider Tom's of Maine, which I'll assume for the sake of my counter-argument was made in Maine.

FWIW, this assumption is correct. There is a real "Tom" and he and his wife really did found the company, etc. He's a really nice guy in fact.

I worked at Tom's for a while, but was gone a couple of years before the sale. They truly did a lot for their employees and for their community (environmentally, socially, financially). In fact, 5% of your time was to be spent volunteering somewhere in the community (your choice).

One thing you heard over and over - from Tom, from managers, from former execs of places like P&G - was that no big company could ever do the things they way they did, because there was always the bottom line and shareholders to deal with. So, I think that's why a lot of people considered this one a "sell out" vs. a "cash in" - either the culture of Tom's was going to slowly change, or Colgate was going to become more like Tom's. I don't think I have to tell you how that is working out.

Here is a passage from my blog post on the buyout:

The press release has the language you'd expect:

"Just as importantly, we see Colgate as an excellent fit with our own cultural values. Colgate has a commitment to product excellence, to global efforts to promote oral health and has a 200-year history of caring for consumers and for giving back to the community. We are excited by Colgate's desire to continue Tom's of Maine leadership and heritage in natural care"

Of course they are so excited about this excellent fit that according to the Associated Press:

"Packaging of Tom's of Maine products will not identify the company as a Colgate subsidiary"

Tom Chappell once wrote:

"I wondered why all toothpastes were full of complex abrasives, dyes, artificial flavors, preservatives, binders, fluoride, and worst of all, saccharin, long suspected as a cause of cancer. Why were Americans consuming seven hundred million tubes of toothpaste every year and spending more than a billion dollars filling their mouths every day with chemicals?"

I guess he can ask them directly now.

The word is all employees got a $10,000 bonus after the buyout.
posted by mikepop at 11:14 AM on January 18, 2008

Eco-stuff! The little bitty markup that pays for a great big delusion!
posted by Zed_Lopez at 11:31 AM on January 18, 2008

mikepop: Fair enough points regarding workplace quality and employee treatment - obviously no multinational packaged goods behemoth is going to be able to match a mission-driven enterprise on these levels.

Thing is, though, that there are upsides to "selling out" that directly mirror the benefits of doing the same in, say, the music business. To wit: I went to high school in a small city in northern Ontario in the pre-internet days, and the two local record stores carried only brisk-selling major label titles. When Nirvana exploded, you could buy Nevermind there, but not any of the bands they expressed admiration for (or indebtedness to) in interviews. I had to wait for university to discover the Pixies, Dino Jr, Fugazi.

Now, my wife and I buy Tom's of Maine for the same apparent reason Tom started the company: to avoid the abrasives and all the rest. Thing is, before it went multinational, there were maybe three stores here in Calgary - a city of a million-plus - that reliably stocked it. You still get a blank stare at the cash at some supermarkets here when you ask why they don't have it, and expedience has dictated on a couple of occasions in the last year that I lay in a tube of abrasive-filled Colgate or something to carry us through to the next time we could get to the natural foods store on the far side of town.

In recent months, though, the availability of Tom's toothpaste has been rapidly expanding; it no longer requires a special trip. I'm grateful for that. A mixed blessing, yes, but my hunch is it's unlikely we're going to see an end to the era of saccharin-laced toothpaste without a few compromises with the entities that sell ninety-whatever percent of the stuff.
posted by gompa at 11:38 AM on January 18, 2008

Another danger of expansion is that eventually they need their product in Walmart to grow further, and Walmart places oppressive pricing pressure on their suppliers. Good for the consumer right up until the product is compromised.
posted by smackfu at 11:42 AM on January 18, 2008

gompa: What's interesting is that Tom's had engineered some breakthrough distribution deals - major grocery stores, Walmart, etc., before signing on with Colgate. It would have been interesting to see how it all would have worked out if they had kept at it themselves.

That said, I'm all for making money. And not being there at the time or privy to the no-doubt thousands of details involved, I can't really rate where this falls on the sell out scale. But for the reasons I posted I can understand why so many of their customers would perceive this as a major sell out, rather than just another business deal.

According to the website (which for whatever reason continues to use my design from 2002 which I still rather like), Tom is still the CEO there whereas I would be sailing around the Caribbean somewhere. So I won't pretend to understand his motivations.
posted by mikepop at 12:15 PM on January 18, 2008

The problem with buy outs is that it takes the business away from founding principals, and removes management from local concerns. Like, say, a neighborhood copyshop run by someone who likes the craft and customer contact selling out to a Kinko's, which gets rid of the craft part and subsumes the customer service into its own ethic, which will necessarily be less personalized.

Like my neighborhood bank, which sold out to a national brand, telling me that "we have so many more services now" while increasing the cost and inconvenience of the only service that I actually NEEDED, namely a checking account.

No surprise at all the Ben & Jerry's new owners replace expensive natural ingredients with high fructose corn syrup, because the point is not high quality ice cream with a social mission anymore; it's delivering the highest dividend to the stock holder, a very different proposition.

Then there's the issue of investment in the local community, for instance Marshall Field's in Chicago to name one of many that have gone through similar transformations, which once was one of the largest supporters of arts and social services in the company. Five acquisitions later, they no longer support local arts and their social spending is through giant marketing campaigns disguised as "marches for the cure" type stuff.
posted by nax at 12:29 PM on January 18, 2008

Tom is still the CEO there whereas I would be sailing around the Caribbean somewhere. So I won't pretend to understand his motivations.

Here's a very sunny way of looking at it with nothing but parallel anecdote to back it up: What if he's never been so close to the control levers on a machine this large, and it excites the hell out of him? What if, furthermore, he finds the rest of the gang in the control room actually willing to listen to reason, far more ready than he'd ever have guessed to (say) explore the elimination of carcinogenic sweeteners and ground glass from their products in favour of some of the stuff he whipped up in Maine? He recognizes a vessel this large might take the rest of his life to turn that far, but he realizes it's the most powerful vehicle he'll ever get his hands on for taking his life's work to a level of influence he'd never even dreamed of?

Just a thought. I base it on similar stuff I've heard in the course of reporting a story I haven't yet published from people who are working with various packaged-goods behemoths on the embrace of more sustainable business practices.

The case of (former Sierra Club president) Adam Werbach and (his main client these days) Wal-Mart is also instructive. Myself, I think there's room for healthy skepticism about Werbach's ability to create lasting change in such an organization while acknowledging that if he can, it'll be more substantial change than he'd have ever managed preaching to the Sierra choir. He's through the looking glass, here, people.
posted by gompa at 12:39 PM on January 18, 2008 [1 favorite]

Boca urger went from zero to 200 million, IIR, in just a few years. After the buyout, cheese started appearing as an ingredient.
Sure they have one remaining vegan type of boca burger. But did adding cheese hurt sales?
And so it goes.
posted by Fupped Duck at 1:04 PM on January 18, 2008

Y'know, right now if anyone was actually buying I would sell out in a second. Hell, it wouldn't even take me that long. Just stick a fork in me, people.
posted by miss lynnster at 7:14 PM on January 18, 2008

An unrelated aside on Tom's toothpaste, which I love dearly, and Tom's deodorant (the only stuff I can use anymore, everything else smells appalling to me): my dentist once asked me which toothpaste I used, because my teeth were cleaner than ANYONE he'd seen. Thanks, Tom's of Maine!

(I'll take my $10,000 endorsement bonus now, please)
posted by bitter-girl.com at 10:52 AM on January 19, 2008

I saw this piece today and thought I'd post it as follow-up.
An excerpt:

Is corporate involvement in "natural" products bad? The answer isn't cut and dry. In part these smaller brands built consumer loyalty by having a good story, usually a story of naturalness and ecological beneficence coupled with smallness, ruralness, and gumption. The smallness and gumption becomes overtly fake when a small company is devoured by a larger one, but at the point you are eaten by Clorox I'm not sure you can lay claim to small and feisty any longer anyway.

As to the environmental records of the smaller companies, and what will happen in their accession to larger companies, we can probably say it ends up a mixed bag. The larger companies often want to integrate the interesting green aspects of the small, and pledge to keep the green unchanged. I'm sure we're all skeptical about that pledge. When this issue arises, I often think of Gene Kahn. He founded Cascadian Farms, back when he was a '70s back-to-the-lander, and in all the articles I've read about him, he never looks back. First he sold to Welch's, during a time of financial duress, and now Cascadian Farms is part of General Mills. Kahn appears to feel that any successful alternative venture will be absorbed into the mainstream, where it will begin to effect change from within. It's hard to argue against the huge increase in organic acreage. Even industrial organic is far better than conventional industrial.

I feel it may be the same with all these relatively smaller personal-care product companies and food specialty companies. Some of the environmental and social benefits they had worked for may be lost -- or polluted through association with larger companies with egregious environmental and social records -- but on the positive side, their products are distributed widely, and may replace less beneficial products. A type of evolution occurs, and we don't need to see it as a loss on our end.
posted by bassjump at 1:19 PM on February 6, 2008