Green companies becoming a corporate hot ticket?

I read with interest today in the Business section of the Sacramento Bee an article (culled from the New York Times, written by Louise Story, Jan 6, 2008) about Burt's Bees being sold to Clorox for $913 million. In 2003, AEA Investors, a private equity firm bought 80% of Burt's for 141.6 million. Odd bedfellows indeed. What caught my interest even more was the following list of acquisitions: L'Oreal paid $1.4 billion for the Body Shop; Colgate-Palmolive bought 84% of Tom's of Maine for $100 million. It seems there is a corporate trend toward purchasing "green" companies... to make themselves look better?

Clorox claims they are interested in learning from Burt's Bees socially and environmentally friendly business practices. Still, it causes one to wonder about the destiny of some of our favorite and trusted "small market" homespun brands. What stake does the mega-corporation have in knowing the origin & safety of each and every ingredient? What impact does great financial growth and success have on the end-product? The current chief executive of Burt's Bees, John Replogle, was hired by AEA and came from another household product mega-corporation, Unilever.

Replogle states all of the beeswax used by Burt's is coming from Ethiopia. There is no comment about whether this is fair trade or not. He does mention it has to be shipped across the Atlantic adding to the carbon emissions load the company must buy offsets for to remain "green". Currently, employee bonuses are based partly on how well the company meets energy conservation goals.

This train of thought reminds me of the corporate buyout of IAMS dog foods by Procter & Gamble, taking IAMS from a carefully fostered premium dog food company into the nationally super-sized arena. This kind of growth has it's own inherent risks. Loss of control over product quality remains a top concern, especially with all the recent tainted manufacturing products coming out of China. I am sure there are more companies that have already been sold or are on the verge of being taken over.

Hard to imagine where this will lead. Roxanne Quimby, co-creator of Burt's Bees with Burt Shavitz (who left the company in 1999), took a significant portion of her profits to purchase 100,000 acres of land she will try to restore to its natural state. She sees this as a guilt-free way of giving up control of the company that she helped build up from $3 beeswax candles sold at craft fairs in 1984.

My closing thought here is buyer beware... do we know the corporate history of our favorite trusted brands? Does that homespun identity still represent family values, healthy ingredients, holistic business practices and authenticity? It's worth checking out...

Be well, Janis 01/13/08

Note: the bulk of this article is based on the information provided in the NYTimes article; I apologize for any unforeseen errors that I did not personally research.