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The Corporate Takeover of Small Green Brands: Blessing or Curse?

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By Diane Small

Perhaps one of the biggest, most ecologically damaging conspiracies ever centres around the electric car. Although many believe these have been an innovation created in response to climate change, electric cars have existed for over 100 years – at the turn of the century, they were popular for their smooth ride and quiet engines. Many inventors at the time were interested in improving the technology of the electric car – some like Ferdinand Porsche, founder of the sports car company by the same name, developed an electric car called the P1 in 1898, and created  the world’s first hybrid electric car shortly after.

Thomas Edison, one of the world’s most prolific inventors, firmly believed that electric vehicles were superior and worked to build a better electric vehicle battery. He partnered with Henry Ford to explore options for a low-cost electric car in 1914.

Yet, it was Henry Ford’s mass-produced Model T that actually dealt a blow to the electric car. Introduced in 1908, the Model T made gasoline-powered cars widely available and affordable, and with the discovery of Texas crude oil, gas became cheaper. Instead of the older electrical charging stations dotted around the nation, gas filling stations began popping up across the country.

Public transport still ran on electricity though – you can still see the electrical tracks for buses and streetcars in many major North American cities today. But General Motors (GM) and other companies – including Standard Oil, Mack Trucks and Firestone Tire – soon started snapping up buses and supplies to National City Lines and its subsidiaries as part of a deliberate plot to purchase and dismantle streetcar systems in many cities in the United States.

Rather than maintaining small, European style towns, these companies pressured urban planners to create high density living areas (i.e. the suburbs) in order to increase demand for private, gas fuelled cars. Most companies involved were convicted in 1949 of conspiracy to monopolize interstate commerce in the sale of buses, fuel, and supplies to NCL subsidiaries, but were later acquitted.

In the end, electric vehicles all but disappeared by 1935.

Image: Wikicommons

Image: Wikicommons

The takeover of small green brands

So by now you’re probably wondering: what does the takeover of public transportation by big business have to do with organic beauty products? A lot, actually.

Ask most small beauty brand owners what their ultimate wish is, and they’ll probably tell you it’s to be bought out by a bigger company. So Seventh Generation was probably thrilled when Unilever took it over this week. In case you’re not familiar with them, Seventh Generation is a leading all natural home care products brand – and now it’s owned and distributed by one of the largest chemical manufacturers on earth. Surely National City Lines was also thrilled to be bought up by General Motors – for awhile.

The trend for green acquisitions by major food, homecare and beauty industry giants is on the rise. In July, SC Johnson (whose ‘baby safe’ products have just been taken to court for causing cancer) purchased the natural home care & personal care brand Babyganics. Like Unilever, SC Johnson will look to build distribution of its new green brand in mainstream mass market channels.

Unilever is likely to build synergy between its green brands. It previously acquired the natural skincare brand REN skincare, expanding its international distribution. The multinational is also reportedly seeking to add Jessica Alba’s Honest Company to its portfolio. By doing so, Unilever will be the first multinational to have a major presence in the natural personal care, and home care product industries, as well as chemical cleaners (like CIF and Domestos bleach) and chemical foods (like Knorr and Country Crock).

Unilever is not the only large corporation to go on a shopping spree for sustainable industries. L’Oreal was the first to make major acquisitions when it bought The Body Shop and Sanoflore in 2006. Many have argued that The Body Shop’s green credentials have since declined dramatically – rather than improving their products to be more sustainable, most are packed with the same harmful chemicals that any cheap drugstore beauty brand has. Moreover, social and ethical projects are no longer the focus on the brand. Colgate-Palmolive (whose toothpastes have been linked to cancer) and Estee Lauder (whose owner supports the notorious IDF in Israel) have also bought green brands.

Whilst some may argue that this is a good thing, as it allows for green brands to spread more rapidly around the world, others aren’t so sure. For example, branding expert Victoria Brockman states that “if an environmentally friendly company is purchased by, say, a chemical corporation, it’s highly unlikely that the brand will evolve to become greener; what is more likely is that the brand’s green credentials will slowly decline. For example, an industry giant may take advantage of economies of scale by packaging the beauty products in the plastics they manufacture rather than making a switch to bioplastics or glass. If the corporation works in conjunction with GMO producers, what’s to stop them from adding GMO soy ingredients to a product and calling it ‘natural’?”

Indeed, Unilever and other major corporations like it are deeply connected to the petroleum and GMO industries, which raises the question of whether these companies are also acquiring organic labels to help greenwash their image. To wit: Unilever’s website is full of platitudes about its commitment to ‘sustainable living’, yet contradicts this in the section where they also state they support GMO crops (which are increasingly proven to be bad not only for human health, but the health of the planet, too) and use them in their products.

Buyer Beware

Such takeovers also present consumers with an ethical dilemma: if you’re vegan, for example, and refuse to use products that are tested on animals, what do you do if the cruelty-free brand you love is acquired by a company that does test on animals? That was exactly the issue faced by fans of the Body Shop after it was bought out by L’Oreal (who DO test on animals) and Aveda lovers after Estee Lauder (who also test on animals for their products sold to the Chinese market) bought it.

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Another example would be Burt’s Bees. While most people believe that purchasing one of their natural creams or lipsticks will somehow benefit bee colonies, the place the consumer’s dollar actually goes first is to the company that now owns Burt’s Bees: Clorox, makers of highly toxic home cleaners like PineSol and Clorox bleach. What green beauty lover wants to support a company whose products pollute the environment and hurt human health?

Another worry is that once a brand is purchased by a major corporation, it will quietly change its green policies. For example, in the UK, Fresh & Wild was always known as an organic supermarket chain, but when Whole Foods bought it out around 2012, some non-organic food crept onto the shelves without most consumers being aware of it. Having always trusted the integrity of the Fresh & Wild brand, shoppers didn’t realise that Whole Foods’ policies weren’t as strictly organic as Fresh & Wild’s.

When large corporations purchase organic brands, it’s also a serious threat to small independent organic labels who cannot compete with the ubiquity of their competitors. Think of the most common organic brands: Tom’s of Maine is very well known, thanks to the promotion of its parent company, Colgate Palmolive; in shops around the world, you’ll find JASON and Avon Natural Products for sale (formerly Avon Organics until it was discovered they were lying about their organic status), due to JP Heinz having a 20% supporting share in their parent company, Hain Foods. With the backing of Estee Lauder, Origins (which is actually not all that natural or organic at all) is found in department stores around the world. The huge conglomerates behind these ‘green’ companies marginalise any potential competition from smaller, better, greener brands.

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Finally, some fear that once purchased, environmentally friendly brands will simply be killed off – as is what happened to the once-renowned organic brand Kibio after Clarins bought it in 2010 – and what happened to National City Lines after it was bought up by GM et al.

According to Organic Monitor, the trend of green acquisitions is set to continue to grow in 2017 and beyond. Enormous multinationals will buy up more green brands as they look to enter the fast-growing realm of organic and natural products, and aim to reach their sustainability goals – or to greenwash the bad name of their brand overall. The major question, however, is whether the conscious consumer will be made aware of further acquisitions, and once known, continue to vote with her wallet by avoiding the ‘babies’ of the big business behemoths.

Main image: Steve Cutts. For more of his great work, click here.



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