The Spoils of Success for the Natural Products Industry

futurelab default header

by: Joel Makower

The natural products industry has become a screaming success. That's mostly good news. It also offers some cautionary tales for the sustainable business sector.

That's my 2¢ worth, having just returned from Natural Products Expo West, an annual industry trade show and shindig that attracts some 40,000 visitors — retailers and other industry professionals only, please, no outsiders allowed. The event fills nearly a million square feet of exhibition space at the Anaheim Convention Center, featuring some 2,700 exhibitors and dozens of professional education sessions — not to mention countless sideshow book signings, cocktail receptions, private dinners, and blow-out parties. (I was there to lead a session on "Greening Your Business and Bottom Line.")

You don't need industry stats to know that health-minded products — comprised of natural and organic foods, healthy ethnic and specialty foods, supplements, health and beauty goods, and "natural living" products, according to the organizers — is big business, but the stats are impressive nonetheless: Sales in 2005 were just north of $50 billion in the U.S. alone, according to Natural Foods Merchandiser, and probably twice that globally.

A hundred billion dollars, to paraphrase Everett Dirksen, is real money. And it's attracting big industry players. The tales have been well told of corporate megaliths swallowing up some of the industry's best brands: Ben & Jerry's (Unilever), Stonyfield Farm (Danone), Tom's of Maine (Colgate-Palmolive), Horizon Organics (Dean Foods), Odwalla (Coca-Cola), Hains Foods (Heinz), Boca Burger (Kraft), Morningstar Farms (Kellogg), Seeds of Change (M&M/Mars), and many others.

But the cavernous halls of Expo West showed that behind these companies are still more big players, such as ADM and Cargill, offering sweeteners, emulsifiers, texturizers, stabilizers, strengtheners, conditioners, and assorted other ingredients contained in the science projects that comprise many of today's manufactured foods, both "natural" and otherwise.

And it's not just Big Ag. Big Pharma was amply present, too, serving up a mind-numbing array of botanical extracts and biotech-infused antioxidants, binders, carriers, diluents, hydrocolloids, lubricants, peptides, and other components that go into today's "natural products." (Hydroxypropyl Methylcellulose, anyone?)

To be sure, there were plenty of "pure" foods and personal care products, too — those that were 100% organic, unadulterated with anything short of TLC.

It's all part of a massive industry that long ago crossed over into the "mainstream" category, attracting a wide spectrum of interests. Combing the aisles of the expo were dozens of buyers from Whole Foods Markets, as you'd expect, given that the company is now a Fortune 500 player, with nearly $5 billion in annual sales. But there were also buyers from Albertson's, Safeway, Sam's Club, Target, Wal-Mart, and most other major grocery chains and big-box retailers.

All good, of course, but there was something missing from it all, and it concerned me: The event seemed nearly devoid of anything political.

This is no small matter. Eating, as it's been said (by many, mostly attributed to restaurateur Alice Waters, but also to others), "is a political act," though you wouldn't know it from this event. Where were the activists — those advocating family farms, animal welfare, local foods, farmers' markets, the integrity of the U.S. organic labeling law, slow food, GMO-free food, healthy produce for the underclass, genetic biodiversity, organic school lunches, the connection between factory farming and climate change? If they were present, I didn't see them. (A few exhibitors promoted Fair Trade goods, though most were also pushing products bearing that label.)

It concerned me, both for the future of food, but also for the future of "green." As environmentally-minded companies grow and the market matures, will the politics that underpin their products and services similarly get glossed over, or ignored altogether, in the name of revenue growth, mergers, and acquisitions? Will concerns over biodiversity, clearcutting, access to potable water, asthma epidemics, endangered species, loss of wetlands, nuclear waste, and smart growth be swept aside by green businesses' rush to claim market share?

Don't get me wrong: I'm not against seeing these businesses and their sectors prosper and flourish. I'm just hoping that these companies don't lose their souls in the name of sales.

The sustainable-business sector does have at least one positive lesson to learn from the natural products folks: The latter seem to have done a great job of emphasizing the benefits of their products in positive terms, not just non-negatives. Today's natural products aren't just absent of pesticides, antibiotics, and artificial what-not. They have flavor, antioxidants, age-defying botanicals, and many other beneficial attributes.

On the other hand, too many greenies engage in what I call "unvertising" — impressive but uninspired lists of what's left out of their products: VOC-free, animal-friendly, climate-neutral, no old-growth fiber, mercury-free, non-petroleum, no artificial anything, etc. I can't think of many other businesses that have prospered by convincing the public that they are less bad. (One exception: The curious campaign by Cingular, now AT&T Wireless, boasting that it had the "Fewest Dropped Calls.")

For green products and services to sell, they'll have to emulate their natural-products brethren, learning how to articulate why they're good, not just why they're not bad. Otherwise, they will continue to suffer the huge chasm that exists between green concern and green consumerism — shoppers' general unwillingness to align their dollars with their green values.


One foodie footnote: A couple weeks ago, I had the pleasure of attending a presentation and conversation between Whole Foods CEO John Mackey and noted sustainable foods author and journalism professor Michael Pollan, which filled a 2,200-seat auditorium at UC Berkeley. The event was the culmination of an e-mail conversation that's taken place between Mackey and Pollan over the past year or so, archived here. I highly commend the webcast of the two-hour event, which includes a 45-minute presentation by Mackey on the "Past, Present, and Future of Food." It was both informative and inspiring, and gave me newfound respect for Mackey's company, which, despite its bigness, continues to learn, change, and innovate in the name of sustainable and healthy foods.

Original post: