Organics, Stonyfield & O'Naturals In 2012

By Gary Hirshberg

Ill confess right up front that I am a pathological optimist by nature, but I envision an extremely bright future for organic/natural foods in general and for Stonyfield Farm in particular. Anti-globalization activists who disdain the politics of large corporate influence might be less than enchanted with the picture I foresee.

Rising rates and incidences of cancer as well as a host of other health problems will continue to spur a rapid integration of natural and organic products and attributes into the mainstream marketplace. Unfortunately, small and independent natural foods retailers will be relegated to highly specialized niches, probably in tandem with naturopathic or other alternative health practitioners (although they wont be alternative anymore) where specialized services will lead clients to the specialized extracts, vitamins and nutriceuticals that dont generate enough volume to be carried in mainstream stores.

Supermarkets as we know them will be nearly gone except in small towns, replaced by large integrated Wal-Mart-like mega-market stores. The mega-markets will be THE natural foods marketplace, and it will nearly impossible to distinguish their grocery aisles from the Whole Foods, Wild Oats, Mustard Seed and other large super natural stores we know today. The CEOs of these mega-markets will appear in ads proudly and articulately proclaiming their personal dedication to organic and pure foods. Organic or made with organic, will command 50 percent market share and this will have occurred because the increasing demand for clean food will have brought organic commodity and ingredient pricing to parity with conventional offerings. From the farmers perspective, this price parity will be possible because of four factors:

* due to higher demand, far larger amounts of cropland will be organically tilled, resulting in more land in rotation;
* organic yields will be far greater due to another decade of building soil health;
* conventionally grown foods will cost more because of the skyrocketed costs of fossil fuel inputs but also because of the high costs of defending against food safety claims and lawsuits; and
* Americans will be paying a higher percentage of our income on food, as we will have come to associate quality food with health insurance.

In short, the costs of conventional foods will have increased just as the costs of organic will have dropped.

Every item in the store will have a shelf touch-screen associated with it; when you push the button, the screen will show the complete nutritional profile of the item, along with a table showing percentages of mercury, iodine, pesticide and other toxic chemical residues. These data will be provided by a new generation of analytic labs who emerged due to consumers heightened awareness and fears, to provide such testing services to the food companies, and any supplier who wants to make these claims will have to employ these third party toxin certifiers. In fact, many mega-market chains will not allow products on their shelves that have not been third party analyzed. There will be scam artists and cheaters who will get caught for forging or falsifying certification data, and they will be routinely featured in the news.

Alas, natural foods producers will be like car companies today. There will be very few small mom and pop vendors and these few will be limited to a very small alternative marketplace (see below). The costs of marketplace entry and the capital costs of managing highly secure, ultra-pure processing facilities will result in a paucity of under-$100 million ventures, although the giant processors will have been savvy enough to realize that their Stonyfield, Horizon and Silk divisions need to be run autonomously and not from the centralized headquarters of their $100 billion firms. Still, there wont be very many vendors, and most will be wholly owned or co-owned by the mega-stores, or vice-versa.

Schumacher (Small is Beautiful) and anti-globalization devotees will not enjoy this vision or this world, and indeed a powerful network of community-based organic cooperatives and farms will have emerged to supply the five percent of the population who refuse to participate in the mega-markets. These super co-ops will be networked with real time video/internet links to sister co-ops all over the world and there will be trading between them, but their market/population penetration will be in the low single-digits.

This revolution will not be limited to food mega-markets. Restaurants will offer similar fare. One hundred percent of high end dining establishments will feature only organic foods, and a staff nutritionist will be as common as the wine sommelier is today. Three national organic and natural fast food chains will be the third, fourth and fifth largest fast food chains in the U.S. McDonalds and Burger King will have felt the pressure and will offer organic items, certified hormone-free, free range meats and chickens and a full soy complement.

On a personal level, Stonyfield will be an independently managed $500 million division of a large world-wide perishables firm that gobbled up Groupe Danone, Nestle and others during the decade. We will be 100 percent organic and we will have influenced our parent firm to offer 50 percent organic foods worldwide. Consistent with my Groupe Danone arrangement, I will be Chairman of Stonyfield and will have enormous autonomy to operate as I see fit. I will also sit on the board of the parent firm.

ONaturals will be well on its way to becoming the third largest fast food chain in the U.S., with hundreds of restaurants from coast to coast. We will be an independent chain with a large minority investment by a national restaurant concern and we will have 50 percent company-owned and 50 percent franchised units.

My feelings about this vision are mixed. I have enjoyed my last 25 years on the lunatic fringe with my fellow revolutionaries and pioneers. I must admit that becoming part of the mainstream, while aesthetically unappealing has nevertheless been THE goal. My role as father and perhaps one day grandfather, and as a man who loves this planet, requires nothing less than shelving my own rebellious instincts in favor of this run at the biggest prize of all – market dominance. Commerce is the most powerful human force on Earth, and only by marshalling this force can we hope to begin to restore our planet to a place that will support and nurture life.

We started Stonyfield Farm 19 years ago with seven cows and a dream. Today, we are supporting hundreds of organic farms and thousands of acres of organic cropland. This has resulted in the avoidance of literally tons of toxic materials. My optimism is rooted in the reality that it is a lot more rewarding supporting all this goodness than it was milking those cows and wondering how to meet payroll. Bigger can be better too. Its not about the size; its about the values that we encode into all that we do.

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Reprinted from the GreenMoney Journal, a SustainableBusiness.com Content Partner.
June/ July 2002 issue.