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Mary Mazzoni headshot

3p Weekend: Impact Companies Thriving Under Fortune 500s

By Mary Mazzoni

With a busy week behind you and the weekend within reach, there’s no shame in taking things a bit easy on Friday afternoon. With this in mind, every Friday TriplePundit will give you a fun, easy read on a topic you care about. So, take a break from those endless email threads and spend five minutes catching up on the latest trends in sustainability and business.

American shoppers continue to gravitate toward more healthful foods and natural personal care products. But it may come as a surprise how many of these newly-popular organic, natural and socially-focused companies are owned by larger conglomerates.

In some cases, corporate behemoths come along, gobble up smaller competitors and basically transform them into yet another one of their already-established brands. But when done right, these partnerships can be a boon for social-impact startups, as well as society at large.

In short: Multinational corporations have access to a vast network of packaging and transportation infrastructure, as well as substantially larger market penetration. When given access to these resources while still being able to maintain their missions, social-impact companies can bring their visions to scale -- and their products to more customers.

This week we tip our hats to eight of these David-and-Goliath success stories that prove collaboration yields success.

1. Ben and Jerry's

Consumer packaged goods giant Unilever purchased Ben & Jerry's in 2000. Some in the environmental community were quick to say the ice cream label sold out. But things didn't exactly develop that way. From the start, Unilever seemed resolved to let the new subsidiary do its own thing, despite shelling out a reported $326 million on the acquisition. And now both Ben & Jerry's sales and its social mission are thriving.

The company maintains an independent board that has the authority to support and defend its social mission, explained here by CEO Jostein Solheim. In 2012, it became a certified B Corp. And the company continues to voice its political, social and environmental values loud and clear. It took a cross-country road trip with Tesla to promote climate action; launched flavors to commemorate everything from voting rights to racial equality; and even dipped out free ice cream to attendees at the Paris climate talks. Yep, even in the shadow of a Fortune 500, Ben & Jerry's is still out to save the world with ice cream.

2. Annie's Homegrown

General Mills purchased organic and natural foods label Annie's Homegrown for a staggering $820 million in 2014. The Annie's staff was not prepared for the backlash, 3p editor-in-chief, Jen Boynton, reported last year. “The internet threw up,” explains industry analyst and food advocate Robyn O’Brien. “This big guy has just come and taken our sweet Annie’s.”

Despite customers' initial concerns, this marriage seems to be a happy one. For Annie’s the acquisition meant more product lines, more outlets and more happy customers. The conscious food label has no plans to change. And that's good news for General Mills, as healthy food sales continue to climb. As O’Brien succinctly put it, “Here everyone was saying Annie’s was selling out, but what if General Mills was buying in?” Click here to check out Jen's full 2015 report on Annie's and General Mills, one year on.

3. Plum Organics

Plum Organics is a certified B Corp and benefit corporation. The purveyor of nutritious, organic baby food was purchased by Campbell Soup Co. in 2013. The acquisition made Plum the first U.S. benefit corporation to be wholly-owned by a public company. Some customers were nervous. But the companies emphasized transparency in the move and said it would increase the sustainability of both parties.

Since the acquisition, Campbell's stock price continued to climb. And Plum was able to "reach more families across the country," which was its ultimate goal, said co-founder Neil Grimmer. 3p founder Nick Aster sat down with Grimmer and Dave Stangis, Campbell's VP of CSR and sustainability, to talk about how things are going. Check out the video interview here.

4. Honest Tea

Coca-Cola purchased a 40 percent stake in natural beverage label Honest Tea in 2008. Three years later, it purchased the small beverage brand outright. Honest Tea remains an independent operating unit within the beverage behemoth.

As with all of these partnerships, fans were concerned at first. But founder and "Tea-EO" Seth Goldman insisted the move was necessary to bring Honest Tea’s mission and impact to scale -- and he was right. Honest Tea grew by an enviable 30 percent between 2011 and 2015. It was able to purchase more organic products -- 6.7 million pounds in 2014 -- and vastly increase distribution. The company also used its savings on bottling and logistics to expand its fair trade purchases.

5. Tom's of Maine

Colgate-Palmolive acquired an 84 percent stake in Tom's of Maine for roughly $100 million in 2006. Loyalists to the natural personal care company were wary, and some complained of a sweet flavor in their toothpaste, reports Business Insider. But a stipulation of the deal allowed Tom’s of Maine to continue its business practices without interference from above.

Since the move, the company continued to incrementally improve its operations -- from cutting water use in manufacturing to improving product packaging.

6. Stonyfield Organic

French multinational food corporation Danone has owned an 85 percent stake in Stonyfield Organic since 2004. Two years later, the two companies opened an organic dairy farm in Europe, in hopes of replicating Stonyfield's success in the U.S.

Stonyfield's sales topped $360 million by 2013, co-founder Gary Hirshberg wrote in an op/ed on TriplePundit. After nearly a decade under the Danone umbrella, Hirshberg wrote freely about the need to boost organic sales, both for our health and that of the environment. He touched on controversial topics like GMO labeling, climate change and systemic poverty, all without fear of 'the big guy upstairs.'

For its part, Danone is striving to improve sustainability at Stonyfield, and within its broader operations. In 2013, it commissioned German software producer SAP to calculate the carbon impact of its 30,000+ products. And Stonyfield even made a foray into packaging-free yogurt, proving even the weird is not off-limits in this partnership.

7. Kashi

Kellogg bought natural cereal and snack bar maker Kashi in 2000. Since the move, Kashi continued to operate autonomously under the Kellogg umbrella. Staffers continued to wear flip-flops to work, but Kashi's sales soared by 24 times within eight years, the Wall Street Journal reports. With the options for cereals growing exponentially by the day, the growth-spurt slowly petered out -- and the Journal was quick to say Kashi "fell from grace."

Some in the financial community called on Kellogg to further absorb Kashi's operations to turn sales around. But Kashi, for its part, is returning to its social mission to accomplish the same job. Through a transitional ag protocol launched with nonprofits, the natural label and its parent company hope to boost the supply of organic food -- a boon for their business as well as others. We're not ready to label this union a dud just yet. Let's keep our eyes peeled.

Want to know some of the other large companies behind your favorite organic brands? Check out this interactive graphic from the Washington Post

Image courtesy of Ben & Jerry's

Mary Mazzoni headshot

Mary has reported on sustainability and social impact for over a decade and now serves as executive editor of TriplePundit. She is also the general manager of TriplePundit's Brand Studio, which has worked with dozens of organizations on sustainability storytelling, and VP of content for TriplePundit's parent company 3BL. 

Read more stories by Mary Mazzoni