Subscribe and receive the latest updates on trends, data, events and more.
Join 57,000+ members of the natural products community.
Does a big supplement player buying a perceived villain splash mud on the industry?
3 Min Read
Bayer, a major presence in supplements, announced it will purchase GMO giant Monsanto. It sounds like a company at odds with itself, but will consumers make the connection?
The news that Bayer is buying Monsanto raises some puzzling questions with no simple answers. The health of the planet and its inhabitants, and the health of the corporate balance sheet, are often at odds in any industry. Let’s face it, there is a lot of money to be made selling dangerous things. There’s also lot of money to be made selling healthy things, of course. The supplement and natural product industries are built on that premise.
But now a major supplement player is buying a company that many in the supplement and natural products industries see as a dark force working against the health of the planet and its people.
What does it mean?
It means what you’ve probably suspected or assumed: big companies have a lot of moving parts and they’re not always moving in the same direction. Bayer is huge in supplements in the mass market channel and its win over the FTC in 2015 was a win for supplement companies across all channels. That win put workable limits on what evidence the FTC could demand and painted lines on the playing field that are a lot easier to see. They had the deep pockets to fight the right fight and they won.
But was that a crusade for heath or a business decision?
The Monsanto deal doesn’t just suggest the latter. It declares it.
The debate over GMOs is far from settled, even in the supplement industry, but Monsanto is the name that most people will instantly associate with the GMO tidal creep. Whether you believe GMOs are bad for you or bad for the environment, few would argue that the kind of seed stock monopoly that Monsanto is shooting for is good for anybody but Monsanto.
And now Bayer.
The $66 billion dollar deal, which could still get derailed, comes in at 21 times earnings, according to Bloomberg. That’s not-big-surprise evidence of how big and profitable such a huge stake in Big Ag could be. The mission of Big Ag is more food for more people, not more health for more people, and on a planet careening toward 10 billion hungry homo sapiens Big Ag is only to get bigger.
Does this mean Bayer’s supplements division and the people working in it don’t care about health? Of course not. Their value-target products bring people into the supplement market who might go on to not just purchase products from other brands but also push their shopping carts into the natural channel.
So it would be great to see giant companies like Bayer be more consistent in their missions. Don’t hold your breath. Too many moving parts and motivations.
As much as anything, the Bayer/Monsanto deal is another argument for smaller brands. Consumers don’t trust big business. In New Hope Network research conducted earlier this year, big business was the least trusted category in the survey. Shoppers already suspect that companies put profit over ethics and, without a lot of expertise and research, it’s impossible to know how many fingers in how many pots a company might have. In food, we’ve watched those smaller brands get swallowed up by mega-corporations and hoped that the ethics of the small company would seep up into the parent company.
That dynamic is obviously not at play in the Monsanto buy.
Whether news of the deal will trickle down into the supplement division is the real threat. As the New Hope Network research and intuition shows, consumers find little confidence in big companies. The research also revealed tentative confidence in supplements. News that one of the biggest brands in the industry now owns a suspected villain like Monsanto is certainly not going to help.
About the Author(s)
You May Also Like
