An old ad a block away from Steve Demos’ new offices on Boulder’s famous Pearl St. Mall still reads: “organic.”

Steve Demos, Silk Soy, Dean Foods: the Devolution of a Natural Products Success Story.

Changing the world, & getting rich while doing so.

Steve Demos, Boulder Natural Products Industry hero, sold to evil Dean Foods a few years back. Now, a few years later, Silk Soy—one of the very few crossover organic products (along with organic milk) bought by all Americans, not just those who care enough to pay extra to buy organic—has gone “natural.” What’s going on?

A non-exclusive elephantjournal.com light-on-the-investigation heavy-on-the-judgement report.

A few months back, it was widely reported—and almost universally bemoaned or condemned—that Silk Soy was offering a few, “natural” line of cheaper soy milk. It was ’cause of the economy, and ’cause they cared about poor people, White Wave/Silk Soy claimed.

Notice, the cartons say “Natural.”

Excerpt via crazy-for-organic Organic Consumers Association:

BOULDER, CO:  A division of Dean Foods, the organic industry’s largest namebrand manufacturer, rocked the organic world this week when it was reported that the agribusiness giant intended to create an entirely new, lower-priced, product category, “natural dairy,” aimed squarely at pirating away organic customers.  If successful Dean, the largest milk processor in the United States, will add to the pain many organic farmers are feeling due to slowing sales caused by the economic downturn.

For the first time the Horizon namebrand will market products that are not certified organic. Horizon has had the highest dollar volume of any organic industry brand.

Dean’s WhiteWave-Morningstar division, which controls the Horizon, Organic Cow, Silk, and other specialty brands and is based in Longmont, Colorado, has launched their “alternative to the organic label” at a time when sales in the industry have flattened after averaging 20% per year growth rates for more than a decade.  Recent articles in the New York Times, Boston Globe, and the Associated Press have profiled falling prices and production caps now being placed on farms producing organic milk-with many of these family farmers now facing financial ruin.

“This move by Dean Foods comes at a time when organic dairy farmers around the country are in financial crisis due to a glut of milk,” said Mark A. Kastel, Senior Farm Policy Analyst at The Cornucopia Institute.  “Responsible participants in this industry are using their marketing strength to ramp up organic demand.  Dean has instead chosen to profiteer at the expense of the hard-working family farmers who have built this industry.”

This move comes on the heels of the recent decision by Dean/WhiteWave to switch almost the entire product offerings of their Silk soymilk line to “natural” (conventional) soybeans.  Many consumers and retailers have expressed outrage when the switch to conventional soybeans was quietly made in Silk products without lowering the price. Industry critics have referred to the move as “sheer profiteering.”

“They are handling the introduction of natural products under the Horizon label a little bit differently than they handled their switch to conventional soybeans sourcing in Silk,” Kastel stated.  “With their soy products the appearance of their packaging and UPC product codes remained the same.”

Many retailers and consumers around the country, who had been longtime loyal customers, were outraged to find that their favorite organic brand had been switched to conventional, somewhat clandestinely. This has caused some retailers to now drop the Silk products.

Sara Loveday, a marketing communications manager at WhiteWave told the Natural Foods Merchandiser, an industry trade publication:  “We’ve only been organic in the past and the majority of our business will remain organic.  These are our first natural offerings in the marketplace, and Horizon always tries to provide great-tasting products for moms and for families.”

The Dean/WhiteWave spokesperson continued by saying the natural Horizon products would be “easier on the pocketbook.”

I am a “poor people,” and I can tell you that agribusiness (as in White Wave/Silk Soy’s owner, Dean Foods) cares little about poor folks, as evidenced in their focused destruction of small and middle-sized independent organic (and conventional) dairy farmers.

So what’s going on here?

A Natural-borne Buddhist Businessman Hero

Steve Demos is a titan in Boulder, Colorado. Boulder, my hometown, is rightly regarded as an epicenter of green business, renewable energy concerns, and natural products businesses, the kind you see in the aisles of Whole Foods.

Steve, an ex-hippie and son of a successful businessman, has long been a personal friend, acquaintance, and advisor to myself and elephant. I look up to him: for 20 years, a lifetime or two in my hurried, harried world, he struggled to bring vegan food choices to the mainstream. Tofu never really caught on the way he thought it would, though it did (with granola and Birkenstocks) become a symbol for mainstream-derided hippiedom. Finally, in the late ’90s, he struck gold: green gold. White green silk soy milk gold.

The container told the story. This stuff was milk, or could be used like milk. This stuff was accessible, and unlike dairy, healthy. This stuff was organic, and affordable.

Considering how few organic products have made their way into every American household, considering that, for all the green this green that hype, organics account for maybe 2% of American food business, well Silk Soy represented that rarest and most precious of breeds: the crossover, a Ricky Martin brings Latin rhythms to the tight-hipped masses of the burgeoning natural products industry.

Steve Demos, in the video below, calls it the largest organic company in the world, and states that sustainability is not an add-on to the company, but it’s foundation. Dean’s latest move undermines both statements.

The story doesn’t have a Happy Ending, unless you’re Steve and Co.

He sold out. In an in-depth interview with yours truly, he encouraged entrepreneurs to be careful when taking on ownership. “Give ’em an inch, you’ll eventually have to sell, or have a liquidity event.” Now, he’s taking his ka-millions and building another green, first-out-of-the-gates natural products, Goodbelly—and he’s doing so from the driver’s seat.

So while he’s no villain, no “sell-out,” Steve may not quite be the hero I have long regarded him as. When you sell to Dean Foods, or when they buy you against your will then show you the door despite continued business success, you’re more of a cautionary tale. Steve has never spoken a word of BS in the time I’ve known him, and he’d probably say much the same thing if you asked him, as I have, and as he has when I have. Still, he’s a cautionary tale with upwards of 30 billion in the bank. (Okay, slightly less than that), and he mainstreamed a green products, and he’s learned his lessons and is doing better. So he’s an extremely successful, big-good-doing cautionary tale. I should be half so lucky.

Dean Foods is The Man.

Dean Foods isn’t evil, but it’s close. If you saw The Corporation (video trailer at bottom), you know what I’m talking about. They’re wedded not to The American Way or to Green or to Humankind, even: they’re wedded to The Bottom Line.

And so, from that pov, their switch to “natural“—a generally meaningless, deceptive term—is akin to American Apparel suddenly making their clothes in China, or if the CEO of Whole Foods suddenly took a stand against health care as a right, rather than a privilege.

Before writing this little work, I asked my friends at White Wave to advise me on why they made the switch. I want to bury you, I told them, only I want to do so fairly. Shouldn’t be hard, in this case.

The below is literally copied and pasted, with the names of the I-figured-they-were-bought-and-paid-for-PR-and-Marketeers expunged to protect the feeling-guilty:

Way,

First, I’ll provide you with an overview of our new offerings so we are starting from the same page, and then move to the content.

Little Blends is a yogurt for toddlers with fruit and vegetable puree. Little Blends’ unique combination of whole milk yogurt made with organic milk, plus natural fruit and vegetable purees offer a more varied nutrition for babies and toddlers than traditional yogurt. Every container supplies 25% of the recommended daily value (DV) of protein, 20% DV of calcium, 20% DV of Vitamin A, plus Vitamin D, Iron, DHA Omega-3 and probiotics.
Flavors include Banana Sweet Potato, Strawberry Carrot and Apple Butternut Squash
MSRP: $3.39 – $3.59 (4-pack of 4-oz. cups)

Milk Breakerz in Vanilla and Chocolate will be available in select markets in August (mainly in the Southeast). The nutritional content of our Milk Breakerz single serve milk is an excellent source of protein (containing 10 g of protein per serving), calcium and Vitamin D. This is a convenient, on-the-go product with added protein that moms feel good about and kids like.
Excellent source of protein with 10g per serving
MSRP: $3.79 (6-pack of 6-oz. containers)

The cornerstone of Horizon’s business has always been to provide great-tasting dairy products that make it easy for moms to provide nutritious options for her kids.

The majority of our products are and will remain certified organic, and we will continue to invest in organic in order to educate consumers and grow the category. Our commitment to organic and our 485 family farmers remains.

The new natural products are in addition to our organic portfolio and provide functional benefits that are important to moms. The products offer great-tasting, wholesome nutrition at an affordable price.

Horizon listens to consumers who are searching for ways to feed their families healthy and nutritional products in a more affordable manner. As long as consumers demand a product of this kind, Horizon will search out ways to meet the consumer need.

You may want to talk to someone at Hartman or another research organization about the consumer demand for natural. The Natural Foods Merchandiser highlighted someone from Hartman and I think the hard research side of what consumers are demanding is interesting.

Last, because there is not a regulated definition of natural yet, we have defined natural as:
Milk from cows not treated with added growth hormones (rBST)
No artificial preservatives
No artificial flavors
No artificial sweeteners, including high fructose corn syrup
No artificial colors
No milk from cloned animals

Our products will be clearly labeled so consumers understand what they are purchasing, and we will continue to educate consumers about organic and natural products.

Please feel free to call me if you have any questions.

Thanks,
S

Basically, if this weren’t you all, who I trust and like, I’d be inclined to slam this decision. So I’d love to know the context and thinking behind it, and use the blog to correct any mistaken info that’s out there. I’ve read a lot that’s out there, and personally feel like the decision is sad for organics, environmentalism–but business-wise is practical and understandable in tough economic times. I just don’t see how “Natural” is any different from “conventional”–it seems like an inherently misleading term.

Yours,

Way
editor-in-chief, elephantjournal.com. Host: Walk the Talk Show with Waylon Lewis
Twitter: @elephantjournal (named Top Green Twitter by 4 nat’l organizations)
Thinking about pulling a petition for Boulder City Council: @waylonlewis
Facebook Page: elephantjournal.com
Columnist for Huffington Post, Intent, Care2, Treehugger, Shambhala, GreenUpgrader
Discovery’s Planet Green TV “Green Hero,” Treehugger: “Changemaker,” Shambhala Sun: “Prominent Buddhist,” 5280: “Top Single,” Naturally Boulder: an “’07 Green Entrepreneur of the Year,” MNN: “Top 10 Green Tweeter, Top 10 Green Video Blog.”

On Jul 30, 2009, at 3:24 PM, [email protected] wrote:

Way,

Happy to help and of course would like to see a thoughtful, nice piece. Do you have some specific questions I can answer? We don’t have a press release yet, but there is some information on our new website. I can give you some thoughts behind our decision to offer natural products.

We are also beginning to respond to the blogs to try and correct some of the misinformation out there.

Thanks,
S

I’d like to do a thoughtful, nice piece on the thinking behind the decision to offer “natural,” and how “natural” is or isn’t better than conventional. I’ve seen plenty of negative blogs, but Ellen asked me too do something nice so I’ll try! Can you email me info?

Yours,

Way
editor-in-chief, elephantjournal.com. Host: Walk the Talk Show with Waylon Lewis
Twitter: @elephantjournal (named Top Green Twitter by 4 nat’l organizations)
Thinking about pulling a petition for Boulder City Council: @waylonlewis
Facebook Page: elephantjournal.com
Columnist for Huffington Post, Intent, Care2, Treehugger, Shambhala, GreenUpgrader
Discovery’s Planet Green TV “Green Hero,” Treehugger: “Changemaker,” Shambhala Sun: “Prominent Buddhist,” 5280: “Top Single,” Naturally Boulder: an “’07 Green Entrepreneur of the Year,” MNN: “Top 10 Green Tweeter, Top 10 Green Video Blog.”

On Jul 28, 2009, at 9:39 AM, [email protected] wrote:

Hi Waylon,

Your email made its way to me, and I’m happy to answer your questions via email or on the phone. Just let me know what works best for you and your deadline.

Thanks,
S

Hi L,

Can you reach out to Waylon Lewis, elephant journal, with the questions he has on the WhiteWave natural line? Please let me know when you get a chance.

Thanks,

C

---

From: Waylon Lewis [mailto:[email protected]] 
Sent: Saturday, July 25, 2009 7:09 PM
To: C
Subject: Re: WhiteWave Creates Green Employees for Earth Day

You all still rep WhiteWave? I’m doing article on their new natural line, would love some info if so.

Yours,

Way
editor-in-chief, elephantjournal.com. Host: Walk the Talk Show with Waylon Lewis
Twitter: @elephantjournal (named Top Green Twitter by 4 nat’l organizations)
Thinking about pulling a petition for Boulder City Council: @waylonlewis
Facebook Page: elephantjournal.com
Columnist for Huffington Post, Intent, Care2, Treehugger, Shambhala, GreenUpgrader
Discovery’s Planet Green TV “Green Hero,” Treehugger: “Changemaker,” Shambhala Sun: “Prominent Buddhist,” 5280: “Top Single,” Naturally Boulder: an “’07 Green Entrepreneur of the Year,” MNN: “Top 10 Green Tweeter, Top 10 Green Video Blog.”

On Apr 16, 2009, at 12:53 PM, C wrote:

Dear Waylon,

Industry pioneer WhiteWave Foods spreads Earth Day to its employees throughout year.   Embracing true green practices every day, they provide unique sustainable benefits.

Sharing an environmental vision in-house and throughout the community, green programs include:
1. Eco-education for employees featuring brown-bag classes on topics from socially responsible investing led by Steve Schueth, president First Affirmative Financial Network, to composting at home led by Eco-Cycle of Boulder
2. An environmental focus during “Bring your Child to Work Day” on April 23, which will feature the “Race to be Green” relay race teaching composting and recycling lessons.  More than 150 children are expected to participate
3. All-natural, local and organic fare provided by the on-site Wave Café
4. Compost “gifts” for employees by working with Eco-cycle to track and collect green waste saved from the landfill, turning it into nutrient-rich compost and giving it back to employees to take home to personal gardens.
a. In 2008, 7,280 pounds of compostable materials were diverted from landfills through this program.  This is the equivalent of preventing over 350 cubic feet of methane being produced, which occurs when organic materials enter landfills
5. Employee created-programs such as the Battery Recycling Program which launches on Earth Day
6. A commitment to the Growing Gardens organization. On May 1^st over 40 employees will join the spring clean up efforts at the Children’s Peace Garden(www.growinggardens.org)
7. Alternative transportation incentive with an unveiling of low-emission parking spaces at the Broomfield headquarters this Earth Day

Through WhiteWave’s commitment to reducing the headquarters’ energy consumption and practicing an on-site zero waste recycling and composting program, the company helped the building to recently earn the EPA’s Energy Star certification for “Energy Performance.

To learn more about WhiteWave Foods and their responsibility to the planet and consumer contact me to speak to Ellen Feeney, the VP of Responsible Livelihoodand visit www.whitewavefoods.com.

Thank you and happy Earth Day.

J

Prologue:

As you can see when you read all the above, backward, you’ll find that “natural” does mean something to Horizon. I mean, White Wave. Or, rather, Silk Soy (they’ve all been bought by Dean). And, if you read over the thoughtful emails, thoughtfully, you might like myself move from cynicism and judgement to a more open-ended, open-minded question:

Is offering a transitional, more affordable product, like Clean Coal vs. Dirty Coal (considering that coal isn’t going anywhere, fast, isn’t it better to clean the process as much as we can, in the meantime?)—actually a wonderful way to move the supply-and-demand process toward a green, sustainable, eco-responsible food system?

I think so. Count one for “natural” when said term does mean something, and count one against me and my idealistic, ignorant, righteous pre-judgement.

Bonus videos: