Recent data from a Lempert Report Quick Poll indicates potential for major financial implications for the acquiring companies.
Shoppers may love their favorite organic food-and-beverage brand, but this love can quickly dissolve if their go-to brand is scooped up by a major non-organic corporation.
Recent data from a Lempert Report Quick Poll indicates potential for major financial implications for the acquiring companies. Data shows that when a non-organic parent acquires an independent organic brand, sales momentum dips for the organic brand itself and since consumers find buying to be less satisfying, retailer sales may also suffer.
The Lempert Report survey questioned shoppers on several organic brands purchased by major food corporations, such as: Annie’s (General Mills); Cascadian Farm (General Mills); Plum Organics (Campbell Soup); Kashi (Kellogg); Naked Juice (PepsiCo); Odwalla (Coca-Cola); Honest Tea (Coca-Cola). Each experienced some customer depreciation – between 7% and 22%, depending on the brand, our data show. The smallest customer loss occurred in Plum Organics; the highest occurred in Kashi.
One of the most interesting findings: 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. So the question is, why?
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.
The message for companies here is that shoppers like transparency. Whether a brand has been acquired by someone else, or not, shoppers want to be able to trust the brand and trust the product.