The Global Supply Chain - Civic Agriculture: Reconnecting Farm, Food, and Community - page 33

Nestlé had sales of over $46 billion in 2001. Kraft Foods, which was recently spun off from
Philip Morris, is the largest U.S.-based food company, with sales of over $38 billion. Overall,
seven of the ten largest food processors are headquartered in the United States.
The sheer size of the multinational food giants has important consequences for farmers and
their farms, not only in the United States, but around the world as well. According to the geo-
grapher Philip Hart, “Size brings economic power and this is particularly significant when
set against the structure of the farming industry with its large number of relatively small pro-
ducers. Some of the most dramatic recent changes in agricultural marketing reflect the power
of these new markets to extract their requirements from the farming industry.” 4 Large food
processors and retailers centralize their purchases of farm products. Because they seek mass
quantities of standardized and uniform products, they have considerable power in dictating
how and where agricultural production takes place.

Table 4.1 . Ten Largest Food-Processing Corporations: 2001
Company

Headquarters Sales ($ million)

Nestlé Switzerland 46,628

Kraft Foods USA 38,119

ConAgra USA 27,630

PepsiCo USA 26,935

Unilever UK 26,672

Archer, Daniels, Midland USA 23,454

Cargill USA 21,500

Coca Cola USA 20,092

Diageo* UK 16,644

Mars USA 15,300

Source: Prepared Foods, December 2002, p. 83.
* Diageo sold off its Pillsbury Division to General Mills in late 2001.

During the 1970s and 1980s a rather dramatic transformation began to take place in the
processing side of the food industry. A wave of mergers and acquisitions transformed what
was at the time a system of large, nationally oriented food companies into a global system of
multinational food giants. In the process of this transformation, the ties between farmers and
processors were restructured. The story of Green Giant is revealing.