Hey Canada! Did you know that just a handful of food giants produce the majority of the food you eat? In fact, Nestle and Pepsico are the number one and two biggest food companies in the world, respectively, Nestle alone with 8000 brands and $99 billion in sales in 2013.
According to Oxfam’s Behind the Brands, only ten companies are part of an industry valued at $7 trillion, larger than even the energy sector and representing roughly 10% of the global economy. In their report, they state:
“…the food and beverage industry has used cheap land and labor to produce the least expensive products possible – often of low nutritional value while maximizing profits. Costs like the impact of drained water resources, rising greenhouse gas emissions, and exploitative working conditions have remained off company ledgers, while the industry and its shareholders have prospered.” Source Oxfam
In a press release on Tuesday, March 24th, the Brazilian Investment Firm 3G Capital, part owners of H.J. Heinz, announced their plan to purchase Kraft Foods for $40 billion US and merger with Heinz. CEO Warren Buffett of Berkshire Hathaway Inc. helped orchestrate the deal and with a combined income of about $28 billion, the Kraft Heinz Company will be the 3rd largest food and beverage manufacturer in North America and the fifth largest in the world. (Pepsico Inc. and the little known but massively successful Tyson Foods Inc. place first and second North America).
Warren Buffett is no stranger to the food and beverage industry. He has a net worth of $70 billion and was named the richest person in the world by Forbes, before giving away a portion of his vast fortune. Meanwhile, Berkshire Hathaway Inc., of which Buffett is the majority stock holder, is the fifth largest public company in the world. It wholly owns Dairy Queen, half of Heinz, an undisclosed percentage of Mars Inc. and has a 9% minority holding in the Coca-Cola Company.
Buffett bought up Coca-Cola Company stock back in 2008, eventually purchasing up to 7% of the company for $1.02 billion. It would turn out to be one of Berkshire’s most lucrative investments, and one which it still holds. Oh yeah, and Berkshire Hathaway also own 5% of Restaurant Brands International, the fast food restaurant company that 3G Capital created after the merger between Burger King and Tim Hortons. And back to Tuesday’s press release, which states that Heinz shareholders will collectively own 51% of the new company OR Warren Buffett holds that 51%. See where I’m going with this?
Oxfam conducted a study in 2013 that found that roughly 67% of US respondents were concerned about how their food is produced, (I don’t have Canadian stats for this)which shows that most of us really care about what we eat but also, at what costs those cheap and tasty foods come to market.
But even if you think you are choosing store brands that represent your core values, those same mega corporations may actually still own them? For example, White Wave, producers of Silk, acquired Earthbound Farm Organic, America’s largest grower of organic produce in 2013, Hain Celestial owns Earth’s Best Organics and Arrowhead Mills and General Mill’s recently purchased Annie’s Homegrown in 2014. (See link here)
General Mills, who purchased Annie’s Homegrown last year, was the same corporation that lobbied against GMO labelling in Oregon and Colorado with $1.5 million dollars just for lobbying at their disposal. By comparison, Annie’s put up $135,000 supporting the measure before the General Mills Borg swallowed them up. (See link here)
With these food conglomerates continually snowballing and picking up acquisitions along the way, the 1% of the world’s wealthiest own these food giants and control what the rest of us 99% eat.
According to the US based consumer protection group, Food and Water Watch, they state:
“Bigger food companies…actively target smaller and local brands as well as the lesser brands of their competitors for acquisitions or mergers.”
Even as I sit here, eating from a partial bag of Humpty Dumpty Cheese Sticks, I’m cognisant of the fact that some bigger company might swoop in and buy up privately owned Old Dutch before this blog post goes up. The same independent watch dog also states:
“…many firms sell multiple brands of the same product, which leads consumers to believe that they are choosing among competitors when they are actually just choosing among products made by the same firm that may have been made at the same factory.”
You see examples of this in our own country. Weston, Canada’s largest food processing and distribution company and owners of Loblaws, No-Frills and Shopper’s Drug Mart, stocks their shelves with Country Style, Old Mill and Wonder breads, bagels and English muffins, appearing that they offer a selection of products to the consumer.
In actuality, Weston foods, including Wonder for which they hold the license for in Canada, produces all of these products. By their own words, Weston foods refer to the bread market as oligopolistic. (See link here Slide 10) I’m no economist, so I had to look that particular word up, but what it means is that the market is concentrated with very few players. That’s not an ideal thing in a free market.
You won’t find any of Weston Foods’ direct bread competitor in any of Loblaws’ stores either: Canada Bread, the makers of Dempster’s. The largest Mexican-owned baking company Grupo Bimbo (named in 1945 by mixing the two words bingo and Bambi – I’m not making this shit up!) just purchased Canada Bread and former subsidiary of Maple Leaf Foods. Will the newly minted Dempster’s producer dump the maple leaf logo and rename it Mexican Bread? Doesn’t have the same ring to it.
According to Oxfam International, the wealthiest 1% will soon own more than the rest of the world’s population by 2016. Members of this global elite had an average wealth of $2.7 million per adult in 2014. The siblings and owners of the family business Mars, Inc. have a combined total worth of almost $80 billion dollars. That’s just for candy and gum. But Oxfam also calculated that the top 80 wealthiest individuals who it turns out have a combined wealth of $1.9 trillion dollars, equal to Canada’s GDP. And Warren Buffet and the Mars siblings have half of that!
Consumers, of course, can create change on their own. According to Food and Water Watch, shopping the perimeter of the store and avoiding processed foods and choosing whole foods can make a huge difference not only in your health, but also your grocery bill. My sage advice to you is do your own research and while we cannot control the vast majority of things in this world, we as consumers can control what we purchase and put in our mouths.