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Ah, the pursuit of healthier eating… What interesting bedfellows this trend continues to make! The latest marriage is between Hormel Foods, the makers of SPAM (hold the Monty Python jokes), and Applegate Farms, the natural and organic prepared meat company. The dowry? $775 million.
Many see this as shrewd move by Hormel, capitalizing on the consumer’s quest for the ‘better for you’ alternatives offered by smaller, independent brands. Like the General Mills + Annie’s union before it, this latest mash up is a signal that the natural, healthy and organic food trend is not a fad. Larger food companies understand the imperative to adapt through evolution and acquisition or be left behind.
Our most recent study of Healthy confirmed the growing importance of better nutrition to consumers. Respondents see that eating right is a key component to the prescription for health. For consumers in the US & UK, healthy is connected with nature - things that are natural, clean, organic, and specific products associated with fresh and organic. Interestingly, in a previous study on the concept of Natural, consumers most often associated the word Organic with it. Layer in what respondents told us in a third study on Sustainability, and brands that stand for organic generate positive associations.
And that’s what Applegate Farms has going for it. Healthy. Natural. Sustainable. The brand with its simple tagline of ‘Natural & Organic Meats’ probably represents the best of these words to its fans. So it’s no surprise that many took to social media and other outlets to express their disappointment over the acquisition. As always for both companies in these pairings, the challenge will be authenticity. Will the big food company be able to convince consumers that they’re committed to the noble goals of their acquisition, and will the takeover target be able to stay believably true to their brand essence? Only time will tell.
But a word - or three - of encouragement to Applegate's fan base and to Hormel: Ben & Jerry's. Despite being acquired by global giant Unilever, the beloved ice cream maker has survived and thrived with unwavering commitment to its socially - and environmentally - responsible brand reputation. Sometimes unlikely marriages are the biggest success stories.
For more information on our Healthy, Natural or Sustainability studies, click here.