Nonprofit David Cuts Down Agribusiness GoliathsDecember 14th, 2009
Dean Foods, Target Stumble—Being Forced to Correct Deceptive Practices
CORNUCOPIA, WIS: An investigation by the USDA’s National Organic Program has determined that Target Corporation wrongly used the image of a certified organic product when promoting the sale of a conventional product to consumers. The investigation was triggered by a complaint filed by The Cornucopia Institute.
The violation at Target came after Dean Foods switched almost all their category-leading Silk soymilk from organic to conventional soybeans earlier this year. The specific problem involved Target using an image of a Silk organic product, in advertising flyers, when the retailer was really selling Silk’s reformulated “natural” version (not organic, but made with conventional soybeans). Target made a commitment to the USDA to review their procedures to “prevent future errors of this nature.”
Dean Foods stealthily switched its core Silk product line to cheaper conventional soybeans, while, until recently, retaining the same packaging appearance. Now the giant dairy processor’s WhiteWave division has been found itself to also be misrepresenting the product as organic on one of their own websites. A new legal complaint has been filed in an attempt to protect consumers from what Cornucopia calls, “fraudulent misrepresentation.”
“It should not take the judicious oversight of an industry watchdog to cause these giant corporations to simply comply with the law,” said Mark Kastel, Cornucopia’s Senior Farm Policy Analyst. “Target and Dean are trying to do organics on the cheap and have not invested in the kind of management expertise necessary to prevent problems of this nature from occurring,” added Kastel. “And after widespread media condemnation, it’s hard to believe that Dean Foods hasn’t even cleaned up its own websites.”
Since the NOP investigation, and Target’s pledge to review their practices, unlike Dean Foods, Cornucopia has not observed additional problems with the retailer’s advertising.
The meteoric rise in consumer interest in healthy, environmentally sound and humane farming practices has catapulted organics into a $24 billion industry. Along the way, major agribusinesses, like General Mills, Dean Foods and Kraft have gobbled up many pioneering companies that helped build the industry through a series of acquisitions. Today, most processed organic food is produced and controlled by the same type of companies that bring us International Delight imitation coffee creamer, Cheetos, Ding Dongs and Cap’n Crunch.
No longer controlled by industry visionaries, corporate managers now seek to squeeze extra profits out by sometimes switching established organic brands to “natural” labeling, using cheaper conventionally grown and processed ingredients.
That’s a far cry from when the organic food and farming movement first started enjoying widespread commercial success in the 1980s. In its inception, the industry was dominated by a number of family businesses, entrepreneurial enterprises and farmer-owned cooperatives, where building a profitable brand was most often married with the owner’s values.
“Big is not necessarily bad in the organic industry,” said Kastel. “As an organic watchdog we are much more concerned with ‘corporate ethics’ than we are with ‘corporate scale.’”
Dean Foods, the largest dairy processor in the United States, has apparently acquiesced and finally changed the packaging for their Silk brand of soymilk. Cornucopia had sparked widespread media scrutiny, and associated consumer backlash, against Dean for quietly shifting their core Silk product line from organic to conventional soybeans—while keeping essentially the same packaging and UPC (scanner) barcodes. “This change [new packaging] should have happened right as they shifted to conventional soybeans, not after the fact,” said Kastel.
“For the better part of this past year, consumers and retailers both have repeatedly reported that they were deceived and ended up unknowingly buying Silk products with conventional soybeans,” stated Kastel. With both their new and old packaging still in the marketplace, Cornucopia is concerned that consumers will be misled by advertising on websites representing the product as organic.
Silk is manufactured and distributed by Dean Foods’ WhiteWave-MorningStar division headquartered in Longmont, Colorado. Like many other massive agribusiness corporations, the Dean name never appears on the packaging for its soy foods or its Horizon dairy label — just as consumers will never see the name General Mills on a package of Cascadian Farms frozen vegetables, Kraft on Back to Nature brand crackers or Kellogg’s on Kashi cereal.
Dean/WhiteWave spokesperson Sara Loveday denied the corporation intentionally misled their customers, telling the East Bay Express in a November interview, “The company was not trying take advantage of consumer confusion over organic and ‘natural.'”
“These corporate food giants know that many organic consumers are looking for an alternative to our current food production system,” said Will Fantle, who heads up Cornucopia’s research staff. “Upon acquiring a number of the leading organic pioneers, they have kept their subsidiary names upfront on packaging to create a facade “hiding” the true corporate ownership,” Fantle noted.
Cornucopia maintains a chart, Who Owns Organics, created by Michigan State University professor Philip Howard, on its website that lifts the veil, enabling consumers to know who is producing their favorite organic brands (https://www.cornucopia.org/who-owns-organic/).
Roy Beard, who has operated Roy’s Natural Market in Dallas for 41 years, told the Fort Worth Star-Telegram, in their November 8 coverage surrounding the Silk controversy, that he hadn’t realized there was a product change until contacted by a reporter. He said retaining the same bar code “was troubling.” Most retailers were never informed of the Silk switch to conventional soybeans.
Dean/WhiteWave has also received heat in the organic food and agriculture community for choosing to convert some of their Horizon dairy products, the leading organic label in terms of sales volume, to cheaper “natural” (conventional) ingredients.
“This really hit a nerve because one of these new Horizon products, Little Blends yogurt, is aimed specifically at toddlers, at an early stage of development, where the nutritional superiority of organic food, and its benefit of avoiding chemical residues in our food, is so critically important,” Kastel explained. “This starkly undermines the propaganda on the Horizon website proclaiming how dedicated they are to the organic movement — this is all about profit, not values!”
The media blow up on the Silk switcheroo included a front-page story in the Chicago Tribune in July that outlined a consumer survey indicating the public was unclear about the difference between natural and organic labels and that some corporations, particularly Dean Foods, were taking advantage of the confusion in the marketplace.
“Dean has only added to the marketplace confusion between ‘natural’ and ‘organic,’ as they definitely do not mean the same thing, and ‘natural’ requires no verification whatsoever,” Urvashi Rangan, a senior scientist at Consumers Union, publisher of Consumer Reports, also told Barry Shlachter of the Star-Telegram.
The Cornucopia’s Kastel likes to identify corporate giant Heinz as a company doing organics right. “They helped fund California tomato growers who switched to organic production, and they brought in a highly reputable organic certifier, produced the product in their own plant, and finally put the Heinz name on the label,” Kastel stated. “I think their ethical approach to organic production is what consumers expect and is being rewarded in the marketplace by virtue of the success they’re having with their organic ketchup.”
Cornucopia also cites Stonyfield yogurt, which was acquired by group Danone of France, as another example of a large public corporation continuing to uphold organic values. Stonyfield remains committed to buying all of their milk from family-scale organic farmers, unlike Dean Foods that is increasingly relying on factory farms for its Horizon milk supply.
“The independently owned organizations, although they are fewer, have not totally gone away,” observed Fantle. Eden Foods, Nature’s Path and Organic Valley, among others, are still independently owned even though they each do as much as $500 million of business every year.”
The new legal complaint filed against Dean Foods, for representing their conventional Silk soymilk as organic on one of their websites, was filed with the USDA’s National Organic Program. “We fully expect the NOP to send a cease and desist order to Dean Foods,” said Kastel. If Dean, a $12 billion a year public corporation, is found to have willfully violated the federal law governing organic commerce, it could be subject to fines and other penalties.
Another website maintained by Dean/WhiteWave, http://www.silksoymilk.com, shows their new redesigned packaging. “Since they changed to conventional soybeans in the first quarter of 2009 this package redesign is very, very late and in the meantime many consumers picked up Silk, thinking that was still organic, and were taken advantage of,” said Kastel.
Many retailers complained, and have subsequently dropped Silk products believing they and their customers were intentionally deceived. Kastel responded by saying, “I think Dean Foods should make a very generous contribution, using their ill-gotten gains, since they saved so much from switching from organic to conventional soybeans, to one of the feeding programs in this country that are facing incredible pressure right now from those who are facing ‘food insecurity’.”
A copy of the formal legal complaint, by The Cornucopia Institute, charging Dean Foods with allegedly violating of federal organic regulations, can be accessed at: www.cornucopia.org/Silk/WhiteWaveComplaint.pdf