In the early part of 2015, as the Hormel Foods purchase of Applegate approached, rumors about the possibility of a deal began to circulate on the internet. This was the most difficult period for Rob O’Donnell, Applegate’s VP of consumer engagement and digital innovation. He had worked at the company for over 20 years and took great pride in the transparency they showed to their customers. This time his hands were tied. Because of strict federal securities laws, no one at either company could publicly talk about the deal until it was finalized.
“We were accustomed to putting all our cards on the table, but for two months we were legally bound not to talk about the purchase before it was officially announced,” O’Donnell recalls. “Customers were asking questions and we couldn’t answer them. That was the hardest part.”
Since its founding in 1987, Applegate had developed the sort of loyal following that companies dream about. Applegate’s customers often became unpaid brand advocates, excitedly posting recipes, promoting the company’s products to friends and sharing news about the company. One even went so far as to record a company jingle. Often the mail brought handwritten notes, mostly from moms, thanking Applegate for making food they could trust and feel good about feeding their families. No one knew exactly how Applegate customers would react to the news of the company’s sale, but one thing was certain: They weren’t going to keep it to themselves.
Customers were asking questions and we couldn’t answer them. That was the hardest part.ROB O’DONNELL, APPLEGATE VP OF CONSUMER ENGAGEMENT AND DIGITAL INNOVATION
Rejoining The Conversation
As difficult as the “quiet period” was for O’Donnell, the period immediately following the announcement wasn’t easy either. The people on Applegate’s customer relations and social media teams, who typically work in separate areas of Applegate headquarters, pushed four wooden tables together in a conference room and opened their laptops. For the next few weeks, it was all hands on deck. Sure enough, Applegate customers were concerned about what the purchase would mean—and they were vocal about it. But for O’Donnell and the rest of the Applegate staff, it was a relief that they could at least get back to having an open and honest conversation with their most devoted fans.
Applegate worked hard to reassure its customers that the company had no plans to change its products or the way they were sourced or prepared. Hormel Foods was determined to let Applegate be Applegate. Indeed, Applegate’s commitment to organic and antibiotic-free meat was a major part of the company’s value as a brand. Not that Applegate wouldn’t evolve. There would be changes but they would come in the form of opportunities to reach a broader consumer segment and have a greater impact on the meat industry as a whole.
Some customers got this right away. On the Applegate Facebook page, not long after the Hormel Foods purchase announcement, one customer wrote: “I’m hoping this is a blessing in disguise … I can’t wait to see the distribution channels Hormel Foods will bring to Applegate and how many people will have these products available to them that didn’t have that option before.”
Tough But Engaged
Many others were more skeptical. “I will continue to support your company assuming you will continue to support animal welfare,” wrote one Applegate customer named Alissa. “I expect transparency in return.”
Those sorts of comments—we’ll stick with you, but we’re watching—were O’Donnell’s favorites. “We loved that,” says O’Donnell. “To have our customers commit to staying engaged and to keeping us honest—that was our biggest win.”
It was clear that actions would speak louder than words. Customers didn’t have to wait long. Applegate’s announcement that it was going to move ahead on aggressive non-GMO practices, just a few weeks after the Hormel Foods purchase closed, put a lot of minds at ease. “That decision was critical for both customers and Applegate employees,” recalls O’Donnell. “We weren’t hitting the brakes with our core mission or our values. We were putting the pedal to the floor.”
Doubling down on the Applegate Mission
It quickly became clear that the Hormel Foods leadership team was going to insist that the brand stick to its core values. “Because Hormel Foods values the Applegate® brand so intensely, we were pushed to double down on our mission,” says Applegate Product Manager Jeffrey Behm. “Hormel Foods leadership held our feet to the fire and made us commit to the things we believe in.”
Because Hormel Foods values the Applegate brand so intensely, we were pushed to double down on our mission.JEFFREY BEHM, APPLEGATE PRODUCT MANAGER
Applegate’s slogan had long been, “Changing The Meat We Eat.” It’s a statement that is easily understood by consumers and families but it has other, bigger-picture meanings. Changing industrywide practices had long been the dream of Applegate founder Stephen McDonnell. Applegate quality meats, he believed, shouldn’t be just for those who shop in certain retailers or live in high income zip codes.
“For years I’ve been saying to anyone who would listen that the Applegate model of antibiotic-free, humanely raised animal agriculture could be scaled up – and that the big meat companies should get on board,” says McDonnell. When Hormel Foods showed interest in the company, McDonnell saw his opportunity. Hormel Foods wouldn’t just be buying Applegate, he became convinced. They’d be buying in.