Ari LeVaux has a great article at AlterNet that considers the possible implications of a significant purchase in the organic food business. Specifically,
WhiteWave, maker of Silk soymilk, is purchasing San Juan Bautisa-based Earthbound Farm, the nation’s largest producer of organic produce. Organic industry observers are wondering what the fallout of this consolidation, announced December 9, will be….
Earthbound Farm, which started in 1984 with a rented raspberry patch and a farm stand, went on to transform the way America eats salad. Today it controls 60 percent of the bagged organic salad market, which it helped pioneer….
[S]ome are forecasting dark clouds over the WhiteWave buyout, as it invokes the specter of Dean Foods, the nation’s largest dairy. Soon after purchasing WhiteWave in 2002, American organic soybean growers, who had been supplying Silk’s primary raw material, were told they had to meet the price of Chinese organic soy, which was lower. Organic soy is labor-intensive, American farmers couldn’t go that low, so Silk began sourcing from China. The company amassed a commanding share of the organic soy milk market, before pulling a stealth bail on organic.
Silk switched its supply again, back to the U.S., and to conventional soybeans. New product offerings from Silk were not organic, and the flagship product was downgraded as well, with “organic” being replaced by “natural.”…
WhiteWave says it plans to run Earthbound as a separate business unit, with no significant operational changes planned, and has expressed interest in keeping [Earthbound founders] Myra and Drew Goodman on board as advisors. Similar promises were made to WhiteWave/Silk founder Steve Demos.
The full piece is an eye opener; check it out here.