Organic Products Turn into Big Business If you are listening while brushing your teeth, here's a story for you: Colgate-Palmolive is buying Tom's of Maine, the leading maker of natural toothpaste. It's just the latest example of a big corporation acquiring a company that succeeded by selling organic or health-oriented products.
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Organic Products Turn into Big Business

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Organic Products Turn into Big Business

Organic Products Turn into Big Business

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Tom's of Maine, the environmentally friendly maker of natural toothpaste, is being bought by industry giant Colgate-Palmolive. Colgate is acquiring an 84 percent stake in the company for about one hundred million dollars. It's the latest in a string of small, natural products businesses that have been acquired by major corporations.

NPR's Chris Arnold reports.

Tom's of Maine is now Tom's of Maine, and Belgium, the Czech Republic, Honduras, Malaysia, and the 41 other countries where the multi-billion dollar corporation Colgate says it has offices.

Well, actually, the name will not be changing, nor will the unusual toothpaste flavors like fennel and apricot. Tom Chappell will remain the CEO. His wife and co-founder Kate Chappell will stay on as vice president.

Ms. KATE CHAPPELL (Vice President, Tom's of Maine): Tom's of Maine will remain Tom's of Maine. It's not going to go somewhere else. It's going to stay right here with our values intact, where we started 36 years ago.

ARNOLD: Kate Chappell says the company will be run as a stand-alone subsidiary of Colgate. Tom's will continue to donate ten percent of its pre-tax profits to charity. Workers will still get paid to spend five percent of their work time volunteering. And she says the company will maintain the same standards for natural and sustainable products.

Ms. CHAPPELL: We're going to do business as we have done business. And that's part of our agreement with Colgate, because they recognize that makes good business sense too.

ARNOLD: The natural products area is getting very competitive, and even though unlike organic products, there's no set definition for what makes something supposedly quote, “natural,” Tom's right now is the number one selling natural toothpaste. But that's still a tiny slice of the overall market.

And Tom Chappell says he worried that Tom's could easily get crushed if it didn't get a big company behind it to help it grow.

Mr. TOM CHAPPELL (CEO, Tom's of Maine): And without growth, our leadership will be eclipsed by someone who simply has more money.

ARNOLD: Anti-corporate natural product enthusiasts are likely groaning about Tom's selling out to the man, but equally true is the fact that these little companies are pushing big corporations to change. In just the past few years, big companies have bought up Horizon Organic Dairy, the organic yogurt maker Stoneyfield Farms, The Body Shop, Burt's Bees. Before that, Ben and Jerry's Ice Cream was bought up.

Mr. HOWARD CHO(ph) (Equity research analyst, Standard & Poor's): That's where the growth is.

ARNOLD: Howard Cho is an equity research analyst with Standard & Poor's. He says in recent years, organic and natural products have seen a lot more growth than their more traditional counterparts.

Ronnie Cummins, the national director of the Organic Consumers Association, has been tracking data from the USDA, as well as industry sources.

Mr. RONNIE CUMMINS (National Director, Organic Consumers Association): Across the board, there's been a growth in the United States of 20 and 25 percent ever since 1991. And in certain sectors, like organic meat, the growth is actually, right now, over 100 percent a year.

ARNOLD: Cummins says natural and organic foods together ring up some $45 billion dollars in sales a year in the U.S., so that's why big corporations have been snatching up these companies.

Cummins, though, does have some concerns.

Mr. CUMMINS: If we don't look out, and if we allow business as usual practices to predominate, we're going to see an erosion of organic standards.

ARNOLD: Cummins says already some big corporations, General Mills, Dean Foods, Dole, and others, have lobbied in Congress for legislative changes that he says weaken the requirements for products that are labeled organic.

At the same time, Cummins says it's a good thing that these big companies are selling healthy, organic, and natural products to more people.

Chris Arnold, NPR News.

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