True Cellular Formulas Team - March 19, 2023
Sell Up or Sell Out?
Companies That Have ‘Sold Out’ and the Problem With Quality Control
It’s every small business dream, yet every consumer’s nightmare: acquisition by a big company. Today we explore the problem with quality control once small companies get bought out and why most people consider them ‘sellouts.’
Hu Chocolate was Bought out by Mondelēz International (owners of Oreo)
This breaking headline broke hearts across America. Healthy-chocolate-loving Americans have been raving about this all-organic company owned by siblings since its inception in 2012. Most of us remember when Hu opened ‘Hu Kitchen’ in New York, a small cafe that didn’t budge an inch regarding quality. Organic, seed-oil-free, dairy-free, and wheat-free, this company was revolutionizing the realm of packaged foods.
The Hu company made headlines when 100% of the company was recently acquired by Mondelēz International, the parent company to many brands, including Oreo, Cadbury Dairy Milk, Milka, and Toblerone chocolate; Sour Patch Kids candy, and Trident gum.[1,2] It’s not surprising that many Hu fans are disappointed by the news of this sale and the likely demise of the quality of their beloved chocolate and healthier snack products.
Big Dream for the Company, Big Nightmare for the Customers
Many small business owners dream of a multi-million dollar paycheque. To have built enough success in your small biz to be acquired by a larger parent company sounds great on paper. The problem for the consumer is the bigger company has far less integrity.
Why this is true is an age-old question, and it permeates so many different industries: the education system, the governmental system, the food industry, and big tech: the bigger the company, the less awareness anyone has about what’s going on down the whole supply chain.
Small business owners are often passionate about their products. Their company usually has a story, an intention, and a purpose. Although money is a factor (since living in the modern world does depend on financial income), it wasn’t the only factor. The small business owner took a leap of faith from being an employee for somebody else and started building their own dream. This is when businesses are most deeply rooted in integrity: when the company directly reflects the individual(s) who created it and when they still have a strong grip on every part of the supply chain.
As the business grows beyond the founder’s capacity to oversee the supply chain, we typically see integrity waver. This can be mitigated to a degree if the employees share a similar set of values and vision, but the bigger the company, the more likely this vision becomes diluted.
The ultimate death of this integrity comes when a company is bought out by multi-billion dollar parent companies who oversee hundreds of brands. When we take a step back, we see that only a handful of companies own nearly 100% of their industry’s businesses.[4-5] From food to entertainment to body care, as soon as a small business owner sells up, it is likely their company has been scooped up by one of the tentacles of the big multinational corps. These businesses aren’t rooted in integrity; they’re rooted in profit. The more profit becomes the core goal, the more corners are cut, and the less integrity and quality we see in these companies products.
We see this in big cities, too; all the benefits that come with the convenience of living in multi-million-person cities: access to stores, entertainment, services, and infrastructure. And yet the bigger the city, the more disconnected most people tend to feel from themselves and their community.
Historically, we were living in tribes that kept everyone accountable to one another. Everyone had a role, and although the roles differed, they were all equally valuable to the community’s functioning. When we moved out of this tribe model into the competitive model of modern society-- we started seeing people cutting corners, lying, and cheating to get a competitive advantage over others. As soon as we introduce a “societal ladder” where higher positions are gained not through life experience (being an elder) but rather through hustle culture, things in the realm of integrity often fall apart.
Sell Up or Sell Out?
We tend to see the accusations of ‘selling out’ thrown around most in the world of natural products. Yet, this unsung promise regarding all-natural and organic goods seems to be that we (the producer and the consumer) are on the same team. That ‘team’ is against ‘the man’ in many ways, the proverbial concept that these handfuls of big companies that own the world do wrong by consumers and by the planet and that by buying local, organic, and handmade goods, we’re helping change the landscape of the industry and helping the world.
It’s hard to blame a small business owner who has likely hustled up the ladder for years only to be offered a multi-million dollar paycheque to sell their company. Owning a business is hard work, and the idea of early retirement does sound like a dream. But, historically, we consumers know that once a big company buys up the little guy, it’s probably time to look for another brand.
This may be a part of how things work, and those looking to support smaller companies operating out of deep integrity and high-quality control move on to the next wave of small-business owners just starting up. We know many new, local business owners always try to make it. So when the small guys sell up, perhaps it’s time for us to move on.
Small Natural Brands that Have Sold to Big Businesses
We can’t speak to the quality and changes of every company. Still, based on the principles of small-business integrity and big profit-driven companies, you can decide for yourself which companies you want to support.
The ‘Natural’ Company → Bought Out By:
- Hu Chocolate → Mondelēz International
- Garden of Life → Nestle
- Burt’s Bees → Clorox
- Seventh Generation → Unilever
- Tom’s of Maine → Colgate-Palmolive
- Ecover → SC Johnson
- Native → P&G
- This is L → P&G
- Schmidt’s Naturals → Unilever
- Nutranext → Clorox
- RenewLife → Clorox
- Cascadian Farm → General Mills
- Kashi → Kellog’s
- Boca Foods → Kraft
- Odwalla → Coca-Cola
- The Body Shop → L’Oreal
- Naked Juice → Pepsi
- Energy Brands → Coca-Cola
- Honest Tea → Coca-Cola
- Food Should Taste Good → General Mills
- Annie’s, Inc. → General Mills
- Blake’s All Natural Foods → ConAgra
- Van’s Natural Foods → Hillshire Brands
- Cereals from Hearthside Foods → Post Holdings
- Lara Bar → General Mills
- Bear Nakes → Kellogg’s
The bigger the company, the less likely it will hold to its small-business values. When it comes to natural products and organic foods, many consumers are concerned when small or local businesses sell up to big international conglomerates. Whether you continue to buy from them is up to you, but making informed choices means keeping up to date with which big parent companies have bought out the small guys.
- “About Us.” Mondelēz International, Inc., www.mondelezinternational.com/About-Us.
- “Mondelēz International Acquires Hu, a Well-Being Snacking Company.” Mondelēz International, Inc., ir.mondelezinternational.com/news-releases/news-release-details/mondelez-international-acquires-hu-well-being-snacking-company.
- What Happens to Your Small Company after an Acquisition? www.foodprocessing.com/business-of-food-beverage/mergers-acquisitions/article/11415021/what-happens-to-your-small-company-after-an-acquisition.
- “Which Corporations Control the World?” International Business Degree Guide, 11 Feb. 2014, internationalbusinessguide.org/corporations/.
- Coffey, Brendan. “The Four Companies That Control the 147 Companies That Own Everything.” Forbes, Forbes Magazine, 12 Oct. 2022, www.forbes.com/sites/brendancoffey/2011/10/26/the-four-companies-that-control-the-147-companies-that-own-everything/?sh=24a2a1e4685b.
- Junger, Sebastian. Tribe: On Homecoming and Belonging. Twelve, 2016.