What happens when a publicly traded, 147-year-old global food and beverage institution buys a scrappy, organic baby food startup dedicated to alleviating hunger for children in the US?
On the one-year anniversary of Plum Organics’ both becoming a B Corp and being acquired by what CEO & co-founder Neil Grimmer calls “an American icon,” we caught up with Grimmer and Dave Stangis, VP of Public Affairs & Corporate Responsibility at Campbell Soup Company, last week at SOCAP to find out if the mission-driven startup and the multinational corporation are still in the honeymoon phase.
As Stangis and Grimmer described during their onstage conversation with Debra Dunn (of Stanford’s D.School) on Thursday, Campbell’s acquisition of Plum has not resulted in the dilution of the smaller company’s mission or integrity, as many cynics of big business fear when a smaller company goes big. Instead it’s fostered the continued evolution of both companies through a cross-pollination of ideas and strategies that each can use to enhance the fulfillment of its respective mission — as Stangis put it, it’s about “infecting and planting positive viruses to change, to replicate” on both sides.
“There will be places where we integrate … because it makes sense for both of us,” Stangis said during the session. “But where we don’t want to integrate is on the culture and on the innovation and on the challenge — we want to learn from each other.”
Dunn asked Grimmer to describe some of the ways becoming part of the Campbell family has helped Plum widen its reach.
“The first thing is, we have access: Our entry point now is … with the CEO of almost every major retailer, and talking at a much more strategic level around the health of kids in America, the kind of offerings that you can start to build,” Grimmer said. “So it’s a lot easier to have a bigger strategic impact on the retailer, which turns into bigger sets of Plum, which translates into more food for families across the country.
“Campbell’s has a massive production infrastructure and sourcing infrastructure around North America and the world and that’s been incredibly helpful, as well. We have a dream of creating a Plum plant that really embodies all the sustainability aspirations that we have. So all those things now are possible.”
As Dunn pointed out during the session, the bigger a company gets, the harder it is to innovate, which is why big companies use acquisition to fuel innovation. In this case, Campbell is showing that its acquisition of Plum has not only helped the soup company innovate in terms of reaching desirable new markets, it’s also teaching Campbell how to become more nimble.
“One of the things that Campbell does very well is producing in high-volume, but that also makes changing things more difficult,” Stangis observed. “Just the way the business is — the infrastructure, the way the product is produced, where we source it from … it’s very hard for Campbell’s soups and beverages to quickly change manufacturing systems. So one of our challenges has always been rapid prototyping among ourselves. Plum gives us this ability to look at it in a different way — their whole business is rapid prototyping.
“I learned a lot just the other day seeing every function of Plum, that every single function is different: Marketing is done different; HR is done different; IT, communications — digital, social — everything is done different. It’s done faster, more in the moment, and these are all things Campbell is learning but we need to learn it faster. And Plum gives us that ability to learn faster.”
While it’s evident that there’s good alignment at the top around the role that Plum can play in helping Campbell move in a new direction, Dunn wondered whether they’ve met pockets of resistance further down.
“People at Campbell’s love the ideas that are circulating around, and they love the vision of where this company is going — it’s very electric, it’s powerful — so it’s not a philosophical misalignment,” Grimmer said. “It’s more of a ‘hey, this is how I know how to run something, and I’ve been really successful doing it’ – they’re 147 years old, we’re 7 years old. And we’re like, ‘this is how we run it. It’s … sort of effective,’ “ he said, laughing. “So, you know it’s a process.”
When asked by an audience member about how Plum responds to those that might accuse it of “selling out,” Grimmer said: “The problems we’re trying to tackle from a social and environmental standpoint are so big that a small brand like Plum can’t do it alone, and quite frankly, a big company can’t do it alone. It’s actually about collaboration and partnership to get to where we need to go.
“I think it’s a very simple answer to say: big company buys small company, small company’s values go away. I think the Brave New World component is that we’re going to try to have big and small come together to create something new for both organizations that’s going to have a bigger impact on the world. And these kinds of moments where Dave and I rally with senior leadership at Campbell’s to become a public benefit corporation — that’s a step along that path. It’s not going to be quick, it’s not going to be easy, and it’s certainly not going to be popular. But I actually think it’s what we need to do to change the way the food system is happening in the United States.”
While Unilever set a precedent with its acquisition of Ben & Jerry’s in 2000 (and its continued support for its mission and sometimes divergent interests), a corporate-benefit corp union such as Plum & Campbell’s is still only a trend of one, but both Grimmer and Stangis see a turning tide.
“Consumers are investing their dollars into brands that invest back into social and environmental good,” Grimmer said, “and anyone who has good business sense sees that relationship and says, ‘I want to find ways to authentically support that.’ So … I like being the first one, but let’s get more people in this thing.”
“A lot of big companies, not just Campbell, are trying to do the right thing — they’re not called B Corps, they’re not certified by B Lab, but they’ve created a long-term view, they’ve tried to drive a triple bottom-line agenda, they’ve publicly reported, they’ve been accountable, they’ve kind of followed the same pillars as a B Corp,” Stangis added. “There’s a lot more authenticity in the process today and there’s a lot more strategy around long-term shareholder value. If you get in line with that, it’s not a scary proposition. Frankly, I kind of like being the only one — it’s a great story for us to tell. But it’s a model that a lot of others could follow.”
After the session, I asked Grimmer how he knew Campbell was the right partner for Plum.
“It comes down to faith and trust — it comes down to people, and faith in the organization comes with it. Actually, why I fell in love with Campbell’s — there was a one-pager that Campbell’s had that effectively said ‘Nourishing families, tackling hunger’ with Campbells’ logo in the center. Literally, we had a similar version — you peel the Campbell’s logo away, peel the Plum’s logo away, and it’s the same fundamental purpose. Literally our meeting this week was, ‘OK, let’s deliver on that promise.’
“Campbell’s — they’re an American icon,” he added. “And simultaneously they were also humble enough to ask questions like, ‘how did you guys manage to produce so many products with so few people?’ and ‘how are you doing all this cause-related work and rolling it into your marketing?’ You could tell even in those early due-diligence conversations that they wanted to learn how to help us and it felt really reciprocal in that way, so that was really powerful.”
So what’s next for the happy couple? While Plum has just launched 14 exclusive new products as part of Target’s Made to Matter collection, Campbell has set about making headway on sustainable agriculture, recently announcing a new set of goals around the sourcing of five key commodity ingredients — tomatoes, carrots, celery, jalapenos and potatoes — and using 20 percent less water throughout its supply chain. Stangis said that while the company is learning to be more nimble around making these types of improvements, it’s also an exercise in patience.
“It’s a whole new world for us … We’re like, ‘where are the results?’ But you know, it takes a while – it’s a learning process.”
As more purpose-driven, entrepreneurial ventures continue to emerge, bigger companies will want to acquire them — case in point: General Mills’ acquisition of Annie’s just this week. Smart parent companies will realize that if they want to enjoy the success and brand enhancement of their new additions and retain the loyalty of the savvy consumer segments that support them, the corporates will need to earn these consumers’ trust by authentically integrating and supporting the mission alignment that drives the smaller companies’ success.