Are buyouts always sellouts?

In July I blogged about finding out that Kashi had been bought by Kellogg. Though the customer-service rep I spoke with went to great pains to reassure me that the buyout didn’t represent a betrayal of Kashi’s ideals, red flags still popped up in my mind. 

Oftentimes when small, ethically committed companies are acquired by mega-corporations, their sustainable ethos is lost or watered down. For example, ever since Horizon Organics was bought by Dean Foods, in 2003, it has faced criticism over the industrial-scale dairies that joined its milk suppliers.

But I don’t think buyouts are always necessarily bad. One company I’m watching with interest is chocolate maker Dagoba. When it was acquired by Hershey’s in 2006, Dagoba founder Frederick Schilling stated on Slashfood that his decision “was based on my desire and passion to make change in the industry and assist in the transformation.” Far from compromising its ideals, the merger would enable Dagoba to “reach out to thousands, if not millions more farmers than we could have on our own.”

Is Schilling right? What about when his contract expires and the brand goes on without him? Only time will tell.

Another interesting example is yogurt maker Stonyfield Farm. Since 2004, 80 percent of its shares have been owned by Groupe Danone. Stonyfield has been criticized for decreasing the percentage of organic products it offers, but it’s still doing good things. It donates 10 percent of its profits to environmental projects, it offsets all of its C02 emissions, and as I mentioned in a recent post, it funds Climate Counts. CorpWatch even quotes a company spokesperson as saying that Danone “is asking us to help them change their operations worldwide to organic production.”

Indeed, a compelling argument can be made that large corporations, because of their size, have the capability to generate more net good in the world than small ones. But I still gravitate toward the little guys, such as family-owned yogurt maker Straus.

I’m definitely interested in continuing to explore this issue, though. If any readers have any good resources on this topic, shoot them my way.