An EPIC Acquisition?

At the beginning of 2016, General Mills announced a new acquisition: EPIC Provisions, based out of Austin, TX. Committed to the tagline, “feed others as you wish to be fed,” EPIC began as a solution to the lack of packaged, animal protein bar options on the market. Founders Katie Forrest and Taylor Collins created their own bars combining meat and other ingredients as a savory counter to the sweet-granola-power-protein-bars so abundantly available at any retailer offering foodstuffs. Valuing humane treatment of the animals we eat, Forrest and Collins sought out responsible suppliers that raised grass-fed meat and were committed to the same ideals EPIC on which was founded. After the success of their initial bars, they expanded into other offerings, including trail mixes, and ultimately entered into a General Mills partnership.

Following in the footsteps of their 2014 purchase of Annie’s Homegrown, General Mills seems to be seeking out companies that focus on health, ingredients, and sourcing over profit. The purchase of both Annie’s and EPIC allows them to pivot their offerings toward growing customer demands, while still maintaining the products that made them one of the leading CPG companies that they are today. That’s not to say that General Mills hasn’t been trying to clean up the products they already offer; facing criticism for the ingredient decks of their cereals, the company has recently made over nearly all of its cereals so that they can now claim no artificial colors and flavors amongst their ingredients. Though admittedly just a drop in the bucket, the moves towards cleaning up their own products and acquiring companies with more holistic values are evidence that General Mills isn’t content to stick to “how we’ve always done it.”

That doesn’t mean there are not concerns as to how this will pan out moving forward. A growing company that is focused on grass-fed, humanely processed meat could run into trouble as sourcing becomes more and more difficult. Certain meats—like beef, chicken, and pork—have been the focus of humane treatment for quite some time, but not without various criticisms as to what that actually means in practice. While the methods of treatment for those animals evolve, diversifying animal protein sources is becoming more of an interest to consumers, and it’s difficult to determine what that will look like realistically and financially for companies as they expand their meaty horizons. For instance, The Honest Bison, which provides EPIC with their bison, uses ranchers that practice Holistic Management—a method that involves growing native grasses that are in turn used to feed the animals. It’s an admirable approach that seems entirely possible when you compare 500,000 bison to the 90 million cattle currently in the United States. But what happens if bison becomes a more appealing and sought after protein source? Turning bison into a commodity will abandon that which EPIC was based on by turning bison into cattle, and principle into profit.

This is not to doom EPIC from the get-go. Ideally, diversification of protein sources will allow for humane animal treatment to be more widespread and accessible, part of their initial goal from the start, and it is fascinating that General Mills is looking to involve themselves with companies that will not largely impact their financial profile, no matter how many new customers these smaller brands bring in. EPIC remains optimistic that “this acquisition is not about General Mills changing EPIC but rather EPIC changing General Mills,” and many hope that they are right. However, as more of these small-scale, hopeful operations become successful and more appealing to those with the capacity to buy them out, it will be interesting to track if their values will continue to align with the consumers who supported them from the start, or if they will diverge towards the thinking patterns of big business. Reading these trends and following the relationships of the little guys with their new owners will be important to understanding consumer perceptions and how far companies can go before losing their trust. What will be the opinions of EPIC’s original customers? How will new buyers react to their products?  Understanding the answers to these questions will be key in making sure this EPIC acquisition does not become an epic failure.

-Sarah Morrison, Research Associate/Creative Specialist

Does “Selling Out” Mean What It Used To?

In the world of business, the acquisition of smaller companies by larger corporate entities is commonplace. While often a smart business move for both parties, the risk of alienating customers and losing a brand’s founding identity is a strong concern. When Kellogg’s acquired Kashi in 2000, Kashi was allowed its autonomy for a short while and sales soared until it’s parent company began to encroach on their values, of which the brand’s fans were fervent. Sales declined sharply upon the increased intervention, and the brand is still recovering, in spite of returning to a more independent coexistence with Kellogg’s. Yet, Kashi is just one drop in the corporate merger landscape.

David Gelles paints a different picture in his article “How the Social Mission of Ben & Jerry’s Survived Being Gobbled Up,” which explains the growth of the Ben & Jerry’s brand and ultimate Unilever takeover in 2000. What makes this buyout of a small company by a giant, multinational corporation unique, Gelles states, is the autonomy Ben & Jerry’s preserved in regards to their social mission, a stipulation that was written directly into the acquisition agreement. While likened to a “marriage” that warranted adjustment on both sides from the start, the rocky beginning developed into a dynamic that allows Ben & Jerry’s the authority to advance their own agenda and push back against Unilever policies that contradict their mission and values.

Is this good news for small brand lovers everywhere? Perhaps. While David did not slay Goliath in this example, they did find a way to be allies and to allow for compromise when appropriate. Currently, small, local, successful organic brands are the objects of desire for many large corporations, but are healthy, stable “marriages” realistic? By the time of the acquisition, Ben & Jerry’s was a cultural force with a well-established following; their social mission was largely built into their brand recognition. Not all small brands have this luxury, nor the long history, to provide them the clout to negotiate on a higher corporate level. Will the Ben & Jerry’s/Unilever relationship be an exception to the rule or is this the story of a new model to be applied elsewhere?

Gelles doesn’t answer these questions and that is smart; there remain too many unknowns to make generalizations and predictions regarding the future of acquisitions. Ben & Jerry’s has proven itself an asset to Unilever and, with tripled revenues, they are able to leverage their worth as a company. So long as the shareholders are happy, the marriage is happy. But what of the smaller brands that have similar missions but less brand recognition? The broader question might then be: how much to meddle?

Frequently, when smaller brands are bought out by the larger companies, there is a minor public backlash. Fears of products changing and values being abandoned overshadow the potential benefits of such a merger. Maintaining a relationship with current customers is a key component of a successful acquisition, and part of that is truly understanding what they love about a brand and their products. How do all of the headlines affect consumers when they are actually at the grocery store making a purchase decision? Though they might have just heard that their favorite little company was bought out, if the product they want looks/tastes the same, does the acquisition matter?

Not every small brand is Ben & Jerry’s, but their model is admirable to follow. By recognizing what makes a brand popular and researching their steps forward, larger companies will be able to strategize the extent of their influence in order to increase their market share while minimizing the casualties of the acquisition.

-Mary Dolan O’Brien and Sarah Morrison