Two major food-company acquisitions have the Twittersphere talking.
This year, the foodie blogsphere and Twittersphere was rocked with the news of two major food-company acquisitions, which left some consumers and retailers wondering where the natural and organic meat industry is heading, and if it’s smart to follow along.
Hormel and Applegate Farms
Earlier this spring, the New York Times reported that food giant Hormel would purchase Applegate Farms, a natural and organic meat producer, for $775 million—Hormel’s largest acquisition to date. The Times reported that the purchase was expected to add 7 to 8 cents a share to Hormel’s earnings.
Bridgewater, NJ-based Appelgate Farms has long been touted as one of the nation’s leading natural and organic meat producers, a pioneer in expanding natural and organic lines into family favorites like bacon, hot dogs, and deli meats. The company was founded in 1987 and was one of the first to make antibiotic-free and humanely raised meats available nationwide.
In a press release, Applegate Senior Director of Mission Gina Asoudegan wrote that Applegate “will continue to support labeling and transparency on genetically engineered foods, limiting the use of antibiotics in animal agriculture, and advocating for the advancement of humane standards.”
Niman Ranch Pork and Perdue
In September, Mother Jones reported that Perdue, the nation’s fourth-largest chicken company, purchased Niman Ranch, a specialty producer beloved by many consumers for antibiotic-free pork as well as alternative beef, lamb, and egg products.
With the purchase by Perdue coming right on the heels of the Hormel-Applegate acquisition, the message this year has been clear: meat that can be marketed as organic, pasture-raised, natural, and so on, is not just popular with consumers, but with corporations as well.
What Does This Mean?
The deals by Hormel and Perdue signal what food-industry insiders have long predicted: natural and organic products are big business, and no longer the exclusive territory of small family farms and independent food producers. As a result, consumers could expect to see more of their favorite small natural and organic food producers courted, and perhaps purchased, by large corporations.
As expected, not everyone has been happy.
Co-op Meat Merchandiser Sam Estes said keeping up with changes in the industry is a challenge, and often a driving force behind the products shoppers see on the Co-op’s shelves.
“This sort of thing shows how complicated it is behind the brand name,” Estes said. “Brands work with other brands, buy other brands, and package other brands. We just try to stay ahead of it. It’s why we make the decisions we make about which brands to carry in our stores. We’re concerned about what’s happened and we’re looking at making our own changes accordingly.”