Foreclosing Food Choices

Patrick Woodall Research Director Food & Water Watch

Non-Price Effects of Mergers American Antitrust Institute Symposium June 15, 2016 Yanking the Food Chain

Reverberating Mergers Throughout the Food Chain

Seed CR-2 Post-2014 Flour Post-2015 Cereal FTC Wave of 77% Mergers CR-4 Merger CR-4 Blocked 85% Sysco- mergers 64% USFoods exceeds the 66% merger to late 1990s monopoly

Corn Soybean

Seeds Farms Flour Mill Cereal Factory Distribution Supermarket Home December Organic Industry 2007 Bloomfield Lovin 19% equity; TrueNorth Bakers Oven January 2016 May November Snyder's- EPIC 2013 March 2007 Structure: 2014 B&G Foods Rhythm Plum Provisions $140 M 80% equity Lance #95 Superfoods Acquisitions & Alliances, #68 Organics Ralcorp January 2016 November 2015 Late October Bolthouse partial equity January 2016 (private label Top 100 Food Processors in 2015 May 2013 $2.7 B July Farms $3 M organic foods) from ConAgra North America $1.27 B LaraBar Wolfgang Blake’s Food Diamond Puck July 2012 June 2008 Kettle $1.55 B Lightlife Should Naturally Foods July May 2015 February 2012 Taste Good March Fresh May 2011 July 2000; February 2010 #97 2008 TreeHouse 2012 Coleman September 2013, $615 M April $25 M Natural sold to Brynwood General December Foods 2014 August 2003 June 2015 Partners 1999 #38 Perdue ConAgra Mills $150 M Campbell $231 M December Hans Farms #7 #10 2009 August Garden July 2007 Cascadian Protenergy #29 Soup Co. $660 M 2007 Boca Fresh Farm Natural Sturm #25 Alexia January Draper Foods Gourmet Foods Foods Foods January 2013 March 2002 Valley 1998 Farms February 2000 Immaculate Petaluma/ Mondelez Baking Rosie Back to Muir Glen September #19 FreeBird/ Rudi’s Nature (spinoff from September 2014 2015 September 2003 Plainville Organic 1997 100% equity; Kraft) $820 M Evol Sioux- Farms Bakery August 2012 M&M Preme Annie’s December Seeds of majority stake Frutti di Millina's Ella's April 2014 Packing July Homegrown 2013 Udi’s Change sold to Brynwood January 2010 2014 Kitchen $61 M Earth's Best Bosco Finest $48 M #11 Partners $40 M Green & June May June 2012 February 2008 Black's 2001 2013 September Boulder $125 M 40% equity 1999 Nile Spice Walnut BluePrint Brands Mighty Keurig $43 M; from Heinz Honest March 2011 Acres December (Earth Balance) Erewhon Leaf November Green Tea 100% equity October June 1998 August 2014 Mountain 2012 November 2001 2003 Spectrum 2015 New Mountain Morning Tea December ShariAnn's Organics Pinnacle $975 M Suja Sun August Forte 2015 December Juice 2005 Foods PowerBar $13.9 B October 2013 2012 January 2012 Coca-Cola March $33 M Garden #45 Pria MOM/Malt-O- $10.4 B #5 August 2015 MaraNatha SunSpire 2008 Hain of Eatin' 30% equity DeBole's February 2014 Meal/Better Arrowhead January $90 M Celestial Willamette (from Nestle) Oats 2015 April Mills Egg D.E. Master June 2007 #79 $1.15 B JAB From Dean 1998 Farms September 2015 Blenders February 2013 April $80 M $90 M Holding 10% equity October April 2014 (formerly Sara TofuTown 1999 Golden December Company $1.25 B October 1997 $80 M Post Foods $2.45 B Lee) 2014 additional 2001 Health Boy 2013 $23.5 M March #49 7% $181 M Breadshop Valley Westbrae 2000 Dakota (spinoff from December Cargill Growers August 2012 Einstein Bearitos Westsoy $390 M Casbah September Ralcorp) September Green 2002 #16 $1 B Bros./ Odwalla Pasta 2013 2014 Mountain Little Bear Celestial Imagine/Rice Michael Foods $374 M Noah Seasonings Peet's Coffee Dream/Soy Peace May 2013 Coffee & October 2015 Dream Golden Cereal $158 M Tea Temple Hearthside Stumptown Earthbound Willamette May 2010 December 2012 Valley Foods (cereal October 2015 Farm So June 2010; joint marketing $71 M Delicious Granola division) Caribou Intelligentsia December 2013 agreement $600 M Nestle September 2014 Applegate #3 Silk $195 M Farms May May 2002 December Hormel May 2010 2011 $189 M Meyer Natural Dakota Brown #14 2015 Beef Van’s Sweet $775 M Foods Cow Leaf Tea May 1999 White- CROPP September 2008, $57M Alta Dena April 2014 February November 2009, via Israeli subsidiary Osem Group Wave $165 M 2003 Stonyfield (Organic Hillshire (50.1% equity) #39 July 1998, 13% Equity; brand licensed Valley) Brands (spinoff of Dean) Stonyfield to CROPP Tribe January 2004, 100% Equity, #91 (formerly Sara $216 M Dagoba for fluid milk Mediterranean October 2001 November Lee) Kellogg October 40% equity; Tyson Foods Horizon 2007 May 2011 #13 2006 January 2004 #2 Bear $122 M $87 M April 85% equity 1999 Naked Danone Aidell's The Organic Wholesome (Dannon) August 2014 Sausage Hershey May 2013 September Cow of #46 $8.5 B Pepsi & Hearty June 92% equity 2015 Flowers Vermont November August 2015 #1 2000 Foods $120 M 1999 #20 Foods $275 M August 2015 $307 M October 2000 #31 $125 M Happy 21.2% equity Alpine Valley Dave’s Kashi Wallaby Morningstar Family Bread Co. Killer November Lifeway Yogurt November 2006 Farms/Natural Bread 2005 Touch Food Miller- September February Naked Stacy’s Processors 2010 July 2012 Coors Juice Pita Chip Millstone # First 2006 #15 Kim & November $8 M February 2008 Juice Crispin Scott's 2014 Humboldt August 2013 Helios June 2012 $1.7 B J.M. Organic January Creamery AB InBev $7.9 M Brand 2010 Foster #6 Smucker Enray February 2009 August 2009 Acquisitions July #23 $14 M Fox Farms $19.5 M Bimbo 1989 J&J Snack Canada Bread 2002 March 2011 1984 Fresh # Numbers refer to Barrel #52 Foods Bakeries Co. $38.8 M Made rank in North #20 R.W. Santa Cruz Dairy American food & #93 Olafson's Goose Knudsen Organic beverage sales Baking Island according to Phil Howard, Associate Professor Co. Food Processing, Michigan State University August 2015 Concentrating Food Safety Risks

2011 Turkey Processing CR-4 = 55% Rampaging Retailers Supersizing the Supermarket National Market Share of Four Largest Grocery Retailers

59.3%

57.4%

53.9% 53.0%

50.7%

2009 2012 2014 2015 2016*

Source: Food & Water Watch analysis of Supermarket News/Progressive Grocer, * post Ahold-Delhaize merger estimate. Supermarket Consolidation Major Supermarket Mergers 2012-2015

KROGER Harris ALBERTSON’S Teeter

2600 Stores Nationwide 2300 Stores Nationwide , Dillon’s, , , , Acme, -Osco, Supervalu, Ralph’s, Fry’s, and more United , Safeway, Von’s, Randall’s, Dominick’s and more

Selected Delhaize SOUTHEASTERN PROPOSED Winn-Dixie GROCERS MERGER Selected 2,000 Stores Nationwide 750 Stores Nationwide Giant, Stop & Shop, BI-LO, Winn-Dixie, Harveys, Sweetbay, Reid’s , Hanneford Top 4 Retailers Control Over 90% Grocery Sales 2004

Source: Food & Water Watch analysis of MetroMarket data. Top 4 Retailers Control Over 90% Grocery Sales 2011

Source: Food & Water Watch analysis of MetroMarket data. Illusion of Choice Top Four Market Share by Grocery Category

92.0%

87.9% 87.0% 86.7% 85.0% 82.7% 80.8% 79.9% 78.9% 78.7% 76.7% 75.7% 75.8% 74.2% 73.2%

68.7% 68.1% 67.5% 64.8% 63.8%

60.3% 60.6%

Soda* Chocolate Performance Breakfast Potato Chips Ketchup** Refrig. Peanut Butter Pasta Sauce Coffee Lunch Meat Bars Cereal Yogurt* 2010-2011 2014-15

Source: Grocery Goliaths and preliminary update; * only 3 major firms, ** only 2 firms in 2014/5

Margarine Market Share

Top 4 Companies 89.2% ConAgra Foods 19.2% Parkay

58.4% Unilever Promise Many Brands, Few Manufacturers

Shedd’s Country Blue Crock Imperial Bonnet (8¢/oz.) (6¢/oz.) (7¢/oz.)

I Can’t Parkay Believe It’s (10¢/oz.) Not Butter! ConAgra (14¢/oz.) Unilever (19%) (58%) Brummel & Promise Fleishmann’s (18¢/oz.) Brown (w/ Olive Oil (w/ Yogurt 20¢/oz.) 19¢/oz.)

Source: Food & Water Watch, Grocery Headquarters 2016 Kraft Conglomerate Octopus 2011

Natural Mustard Cheese (17.3%) Meat Sauces (12.6%) Cottage Processed Cheese Mayonnaise (24.0%) Cheese (48.3%) (33.9%) (20.2%)

Pickles, Olives, Sour Cream Shelf- Relish (18.3%) Stable (7.5%) Dips Breakfast (8.1%) Meat (14.8%) Peanut Kraft Butter Meat Salad Dressing (2.4%) Substitute (20.5%) Foods (14.7%)

Hot Dogs Nuts (19.8%) (17.9%) Lunch Meat (34.8%) Dry Mac & Cheese (79.9%)

Refrig./Fzn. Fruit Drinks Coffee Cakes & Pies Hispanic (20.7%) Bacon (20.3%) (3.7%) Food (14.0%) (1.7%)

Source: Food & Water Watch, Grocery Goliaths Kraft-Heinz Conglomerate Octopus 2014

Peanut Frz. Handheld Butter Cottage (2.1%) Entrée Mayonnaise Frozen (2.6%) Cheese (33.1%) Appetizers (23.2%) (20.1%) Frozen Snacks Processed Cheese Ketchup (63.2%) (9.4%) (54.3%) Mustard Natural (10.7%) Cheese (17.9%)

Pickles, Meat Sauces Olives, (77.9%) Kraft- Bacon Relish (18.7%) (6.7%) Lunch Meat Heinz (34.8%) Salad Dressing Dry Mac & Cheese (17.6%) Spices Meat (78.0%) (1.6%) Hot Dogs Substitute (20.2%) (12.9%) Cooking Coffee Sauce Fruit Drinks Hispanic Pasta (13.5%) (9.9%) (13.7%) Nuts Food Sauce (26.1%) (4.5%) (10.6%)

Source: Mintel