For many, purchase rates and brand trust fall when ownership shifts.
The bond shoppers feel with some of their favorite organic food-and-beverage brands can erode quickly – when a major non-organic corporation scoops one up.
Data from the newest Quick Poll by The Lempert Report reveal potentially major financial implications for the acquiring companies. Sales momentum dips for the organic brand itself. And since consumers find buying to be less satisfying, retailer sales may also suffer when a non-organic parent acquires an independent organic brand.
The survey named eight organic brands purchased by major food corporations. Each experienced some customer attrition – between 7% and 22%, depending on the brand, our data show. The smallest customer loss occurred in Plum Organics; the highest occurred in Kashi. The survey queried consumers about: Annie’s (General Mills); Cascadian Farm (General Mills); Plum Organics (Campbell Soup); Kashi (Kellogg); Naked Juice (PepsiCo); Odwalla (Coca-Cola); Honest Tea (Coca-Cola).
The most striking finding: An aggregate 35% of consumers said they definitely had “stopped buying or bought less of” the organic brands since ownership switched to a major non-organic parent. By contrast, a 55% majority said they “have not stopped purchasing any of these brands for this reason,” and 10% had “never purchased any of these brands before.”
Our Quick Poll also asked if people “continued to buy or bought more of any these organic brands” since their takeovers. A 54% majority said this was true. By contrast, 36% said “there has been no change” in their purchasing habits of these brands for this reason, and 10% had never purchased any of these brands before.”
Survey takers most frequently said, “Integrity could become suspect over time due to corporate pressures” (32%), and “Integrity of the organic brand immediately becomes suspect” (27%), when asked how they feel about an organic-brand acquisition by a major non-organic parent. They were less optimistic that “The brand might inspire the food company to go organic on other product lines,” or “Thanks to more resources behind it, the brand might improve.”