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Each month I write a feature for Media Post:CPG, an integrated publishing and content company whose mission is to provide a complete array of resources for media, marketing and advertising professionals. This article first appeared on Media Post: CPG in March 2015.

Article Link (http://www.mediapost.com/publications/article/245411/big-foods-insatiable-appetite-for-good-food.html)

I had to smile upon seeing McDonald’s announcement this week of its plans to add kale as a salad or smoothie ingredient to the menu. McDonald’s also recently announced plans to serve chicken with “less antibiotics.” And, of course, they also announced a 4% same store sales drop and named a new CEO.

At last weekend’s Natural Food Expo, Chipotle’s CMO, Mark Crumpacker, shared with the crowd that there are a lot more ingredients than two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun in a Big Mac. Forty-eight ingredients by his count.  Most we don’t know and can’t pronounce. Does sprinkling a little kale on the menu or serving up less antibiotics fix that?

The race is on at Big Food, whether restaurant or grocery, to meet accelerating consumer demand for better-for-you choices. Kellogg acquires Kashi. Campbell acquires Bolthouse Farms. Pinnacle acquires Gardein. General Mills acquires Annie’s. Hershey acquires Krave Jerky. Big Food’s appetite for the much higher growth trajectory of natural and organic brands, along with the face-saving cover they provide at press events and annual meetings, is leading to a land rush of sorts. And that’s a good thing for consumers and manufacturers alike.

Why?

1. Because it shows U. S. consumers have turned the corner.They’ve slowly but surely come to an understanding that all that taste and convenience came with a big price: 35+% adult obesity (doubled from 1980 to 2000), 21 million Americans with diagnosed diabetes (tripled since 1980), 37% of Americans with cardiovascular disease. Baby Boomers are changing their diet because they’re coming to grips with mortality. Millennials have adopted BFY diets because they’ve gotten the message.

2. Because it shows Big Food is listening to consumers. Big Food isn’t doing this out of some sense of altruism. They’re paying 3+ multiples of annual sales for these brands because these brands are hot. Joining them by buying them is less expensive and less risky than trying to innovate and compete with them.

3. Because BFY food only works if you eat it. When Big Food buys a natural and organic brand, they do so with the expectation that the high velocity of that brand at narrow distribution (like natural sales channels and Whole Foods) can be scaled at grocery and mass where Big Food has long-standing distribution power. Big Food’s win in expanding natural and organic brands’ reach can also be the consumer’s win — more access to BFY food and, hopefully, lower prices that also come with scale.

Skepticism is both natural and healthy. Can Big Food be trusted to steward these values-based, natural and organic brands? Or will Big Food’s voracious need to reward shareholders inevitably suck the values out of these brands? There will certainly be those that stumble. But most know that the growth and margins they are paying for so dearly today, are dependent on the certifications, high-quality ingredients and fair labor practices on which these brands are built. Good Food is just Good Business these days.

It seems author Michael Pollan’s seven words of wisdom to guide our personal eating habits can be equally well applied to Big Food’s purchase of BFY brands: “Eat Food. Not too much. Mostly plants.”

Michael Bollinger
Michael Bollinger
President

With over 25 years in the advertising agency business, Michael is focused on building the consumer package goods agency of the future - today. One centered on the breakthrough brand storytelling skills of Smith Brothers' creative heritage, but delivered with the speed, efficiency and real-time optimization demanded by today's digital environment.

Michael joined Smith Brothers in 2005 as Director of Client Services, after spending the previous 20 years with DDB Worldwide where he was Senior Vice President, Group Account Director of the global agency's flagship, Chicago office.

Excited by Smith Brothers' creative firepower and entrepreneurial spirit, Michael joined the Smith Brothers’ team with a vision for delivering big agency resources on a dramatically more nimble and effective platform.

Under Michael's leadership the agency acquired digital agency, Hot Hand Interactive, in 2007. It added its Social Media practice in 2008. Developed an Analytics practice in 2009 and a Shopper Marketing practice in 2010.

Layered onto its existing strategic planning, creative and media capabilities, Smith Brothers is now a force in the CPG marketing world – working with brands like Nestle, Del Monte, Heinz, Ghirardelli, Red Bull, and more.

Michael holds a B.A. in English from Union College.