The GMO Debate: What Retailers and Suppliers Need to Know in 2014
Date: 06/20/14 | Source: Specialty Food Magazine | Author: Eva MeszarosCategories: Trends and Statistics; Food Trends; Market Trends; Industry Stats
In the food dispute of the decade, one fact is clear: consumers are growing more aware—and wary—of genetically modified foods. Here, specialty retailers and producers across the country explain why you should craft your own GMO strategy for the sake of sales, trust, and transparency.
By Eva Meszaros
Three little letters have become the hot-button food issue of the decade. Genetically modified organisms, or GMOs, have brought forth a surge of impassioned campaigns both for and against their presence in the nation’s food supply. Everyone has an opinion about it—even those who don’t quite understand it. And while conventional channels may still be a few years from being caught up in the heat of the debate, the topic is white hot in specialty foods.
Yet even with all this discussion and focus, there is much confusion around GMOs. It’s been just 20 years since genetically engineered crops first entered commercial production in the U.S., and their relative youth may be part of the challenge researchers face in calculating the full potential health impacts of GMOs. The politically charged battles that have risen as a result have fueled some of the claims around GMOs that range from calling them “completely safe” to “deadly.”
This consequence may be what inspired a new movement, focusing on transparency over outright prohibition. The Non-GMO Project was launched in 2007 to build awareness and help consumers find products that are free of GMOs. Organic Voices launched the Just Label It campaign in 2011 to support mandatory labeling laws that have cropped up—most prominently, California’s Prop 37 in 2012 and Washington state’s I-522 in 2013, both subsequently voted down by narrow margins. The movement came to a head in March 2013, when Whole Foods Market, the nation’s largest natural foods grocer (posting nearly $13 billion in sales in 2013), announced it would require the labeling of all products in its stores that contain or may contain genetically modified ingredients by 2018. (Whole Foods reps declined an interview for this article.)
According to the Center for Food Safety, as of April, some 26 states are currently considering labeling laws or the banning of GMOs altogether. To date, three states—Connecticut, Maine, and Vermont—have enacted mandatory-labeling laws, a first step toward federal regulation, proponents say.
To Label or Not to Label
As the regulatory battle plays out, keeping customers loyal may be more about action than opinion. In an online column dated Feb. 18, consumer researcher The Hartman Group strongly advised producers to be proactive with consumers to maintain trust. “For some companies, talking about GMOs will mean finding out if it is feasible from cost and other standpoints to remove GMOs from their products … For other companies, it could mean talking openly about why they use GMOs and what would happen if they stopped—to prices, for example,” the group wrote.
Surveys consistently show that a majority of consumers support labeling genetically engineered foods, across demographics and political party lines. In 2012, research firm The Mellman Group found that 91 percent of consumers want the FDA to mandate labeling. Reader polls from The New York Times, Reuters, The Washington Post, and a slew of others in recent years have had similar findings.
Aspirations and action don’t always meet halfway, but here’s where specialty foods stand out: according to an NPD Group report released earlier this year, most consumers (67 percent) are not willing to pay more for non-GMO products, but when singling out specialty food shoppers that willingness grows to about 50 percent. Retailers and producers are taking note. And while some are tracking consumer interest to gauge their response, others have taken a stronger stance.
Ramping Up at Retail
Specialty store owners are typically ahead of the curve with foods perceived as “clean,” often touting natural and ethical claims well before they hit the mainstream. Non-GMO is no exception. And as retailers increase their offerings, customers are responding. At Marczyk Fine Foods in Denver, shoppers have begun asking explicitly for GMO-free products and seeking out the Non-GMO Project Verified seal, says Christopher Weir, director of purchasing. “The little logo … that has impact,” he says. “They gravitate toward it.”
Whole Foods’ initiative has been an undeniable influence, and specialty retailers see the move as a positive one, encouraging consumer education and a greater appreciation of specialty offerings. For those who support broader societal shifts, the grocery giant’s role is seen as game-changing. “If there’s going to be a sea change, they have the buying power to influence farmers to do things correctly and have companies ... change the way that they choose their ingredients,” says Nate Plutko, grocery buyer at Delaurenti Food & Wine in Seattle, Wash. “They’re setting the foundation.”
In the meantime, buyers are getting proactive, reviewing what is GMO-free in their current offerings as well as using it as a component in evaluating new pitches. Plutko says he pays particular attention to incoming products being considered for inclusion on Delaurenti’s shelves, as does Marczyk. “It’s on my list of questions to ask of producers,” says Weir, who adds that he’s been considering adding signage and starting to contemplate changes to the market’s prepared foods menu. “This is something that is important to my customers,” he explains. “They’ve voiced that to us.”
A handful of specialty grocers are taking a bolder stance on GMOs. Some, like Mom’s Organic Market, based in the DC Metro region, are no longer accepting products with ingredients deemed as high-risk (see High Risk, Low Risk, p. 44) by the Non-GMO Project without organic or non-GMO certification; others, like San Diego’s Jimbo’s, are moving toward a completely GMO-free store. The Organic Consumers Association has brought attention to these causes, recognizing the top U.S. grocers leading such efforts in its Right to Know Grocers Contest.
Most specialty food retailers, though, are exercising preparedness and responding to consumer demand. “We’re never going to have a standard like what Whole Foods has,” says Weir. “I don’t see us ever being at that stage. But call me in four years, I could be totally wrong about that.”
Beliefs vs. Bandwagons
Since Whole Foods’ big announcement, specialty producers have been anything but shy about jumping on board with non-GMO certification. In March 2013, the Non-GMO Project had verified nearly 10,000 products. In the year since, that number has skyrocketed more than 70 percent, bringing the current total count to more than 17,700, reports Courtney Pineau, assistant director at the Non-GMO Project.
Notes Delaurenti’s Plutko: “Everyone’s including that in their pitch a little bit more.”
Generally, retailers encourage getting certified, if only to keep up with the competition. “It will only behoove them as more and more consumers become savvy to this movement,” says Heather Julian, manager of gourmet grocery at Sickles Market in Little Silver, N.J.
Saffron Road Foods, the packaged food brand of American Halal Co., planned a strategy to stand out. “We did want to be first to market with a frozen entree,” says executive vice president Jack Acree, a badge of pride the company has worn since earning certification for its Chana Saag with Cumin Rice entree in January 2013.
Dancing Deer Baking Company introduced its non-GMO Thin & Crispy line of cookies at last summer’s Fancy Food Show. “It’s important to be in the game,” says director of marketing Laura Stanton.
For Kimberly Crupi Dobbins, founder of Simple Squares, a line of organic snack bars, getting the Non-GMO Project Verified seal was akin to getting a foot in the door. “We’ve gotten a lot of interest from stores that may not have looked at us in the past,” she says.
But it’s not all about taking advantage of a trend. For many, the certification is another way to show a company’s core values and mission, whether that be promoting pure ingredients, health, or transparency. For Crupi Dobbins, being non-GMO was about providing the best possible product. “If I’m going to be eating packaged food, I want to be sure that it’s the healthiest and safest that I can possibly buy,” she says. “We’re trying to be as transparent as possible.”
Some suppliers view it as a way to authenticate unsubstantiated “natural” claims—Crupi Dobbins politely calls it “creative marketing”—that have that once top-sought term experiencing consumer fatigue. According to the Specialty Food Association’s 2014 “State of the Specialty Food Industry” report, while claims of natural or all-natural are still highly prevalent, most channels reported a drop in confidence for the claims’ future: less than half of retailers saw “all-natural” interesting consumers most in 2013, versus 55 percent in 2012; for the past two years, only a third predicted that interest would grow in the coming years.
“We saw that many people were frustrated by the claim natural or all-natural and how that has been diluted over time,” Acree agrees. Non-GMO certification was a way to validate those claims. “It’s just another way for the consumer to know what’s in their food and, in this case, what’s not in their food.”
Whatever the drive, for those still teetering on a decision, Crupi Dobbins recommends producers look to their own mission and goals, to “evaluate what’s going to be important to them and important to their particular consumer. That will help
them create a blueprint of how they’d like to proceed.”
Starting from Scratch
One strategy that has surfaced among producers new to the certification process is starting with a fresh product concept, rather than reformulating an existing line.
It seems counterintuitive, but starting from scratch has its benefits. Acree says it simplified the process, tracking every aspect from the outset. Dancing Deer did the same with its line “just to understand the process, learn the ins and outs, and see what both the consumer and retailer reaction would be,” Stanton says. From a marketing standpoint, she adds, introducing a truly new line with certification lent itself to making a bigger splash in the market. Stanton says the company is learning as it goes and taking its time to certify other products.
A blank slate also allows for setting a new standard with ingredient suppliers. Angela Pellegrini, who oversees all certifications as quality assurance project manager for Saffron Road Foods, says that communication is the first step in formulating a new recipe, such as for spice blends used in its chickpea snack line, one of the first products the company had verified by the Non-GMO Project. “Before we even start,” Pellegrini explains, “we make sure that the spice blend company knows that they cannot source anything that is derived from GMOs.”
Slideshow: Products Go Non-GMO
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Bumps in the Road
No certification process is swift, and non-GMO has had a unique set of obstacles in its relatively early stages. Time delays, evolving standards, high-risk ingredients, and costs all play a role.
Supply and Demand. Delays due to a limited selection of certified ingredient suppliers have been worsened by sheer demand. Pellegrini says the process that once took 60 days can now take upwards of six months. (The Non-GMO Project’s website states the process takes 4 to 6 months.) Though, a benefit of increasing demand is a growing supply of usable ingredients. “We wanted to start with ingredient suppliers that were already verified,” recalls Stanton of certifying Dancing Deer’s cookies. “At that time, a year ago ... there was only one [verified] butter supplier in the country.”
Evolving Standards. The Non-GMO Project Standard is somewhat of a living thing. The organization opens its official document to public comment twice a year, and updates can be major or minor. Recent changes under consideration include the particulars of honey verification and whether immersion packaging, such as tea bags, should be part of the process. Keeping up with the changing standards can be challenging, Pellegrini notes.
High Risk, Low Risk. All ingredients are not treated equally. The Non-GMO Project categorizes foods based on the likelihood of GMOs being present. “Products with many GMO-risk ingredients require a more thorough review, including testing, traceability, and segregation requirements,” says Non-GMO Project’s Pineau.
Corn, canola, and soy are listed among high-risk crops (since a majority of those U.S.-grown crops are genetically modified), as are animal-derived products, including meat, milk, and honey, which the organization traces back to the source of animal feed—from the grain fed to cows to the sweeteners bees may forage. Simple Squares’ certification process took two years, says Crupi Dobbins, purely to verify its honey supplier. Saffron Road took to verifying its vegetable entrees first, knowing the meat varieties would take longer. Its lamb entree will likely be next, says Pellegrini, since the company sources lamb from New Zealand, which grows no GMO crops. Importing meats is a viable solution for some; more than 60 countries currently have regulations—some even a total ban—on GMO food and feed. Sickles Market recently introduced a line of grass-fed, free-range Angus beef from Silver Fern Farms in New Zealand to add to its GMO-free offerings.
One thing suppliers should realize, Pineau notes: even low-risk items can warrant verification. “Take, for example, dried fruit. Raisins and similar fruit are sometimes packed with a small quantity of oil to keep them moist,” she says. If that oil is, say, canola, your low-risk product has just become high-risk.
Pricing Pressures. One of the more feared aspects of certification, cost increases aren’t absolute. Simple Squares didn’t have to change any ingredients, says Crupi Dobbins, so pricing held. Interestingly, Saffron Road experienced price decreases in its reformulated simmer sauces, Pellegrini says. Acree adds that upfront costs—such as a dedicated certification staffer—are part of the equation, but the company’s existing use of some organic ingredients helped keep adjustments to a minimum. “If a company was not doing that, it might increase their costs,” he says. And though Saffron Road plans to continue moving away from GMOs, Acree says, for now, animal proteins in the frozen entrees do pose cost constraints.
Consumer education can play a role in relieving the pricing pressures. Marczyk’s Weir urges manufacturers to use non-GMO ingredients whenever possible, but all too often hears they can’t afford it. “You can afford it—you need to charge appropriately,” he asserts. “We need to train people that real food from real farmers costs money.”
Weir sells meats from Niman Ranch and other sustainability- and humane-focused businesses, about which Marczyk staff regularly educates new customers. “They’re expensive for a reason,” he says. “We tell them that story behind the meat, and it’s our job to explain and tell that story not only to our customers but also to new producers as well who may
not be educated.”
Organic vs. Non-GMO
Amid all the non-GMO introspection is the elephant in the room: organic. The two big players in GMO-free certification have led to a new degree of confusion, among consumers and the trade alike.
Generally, retailers taking a stance on GMO transparency consider the organic seal as equal or better; certified organic products are widely accepted as being free of genetically modified ingredients. In fact, the U.S. Department of Agriculture states that the use of GMOs is prohibited in organic products, from plantings to animal feed. But the Non-GMO Project website contends the agency hasn’t addressed
the issue of cross-contamination and
-pollination, and it calls out certain allowed substances in organic production (such as ascorbic acid and ethanol) as being at risk of GMO contamination.
So, while non-GMO verification doesn’t cover the full spectrum of organic certification, some producers (and the Non-GMO Project) argue it delves deeper into ingredient verification. “The product itself might be organic, but the way it was produced doesn’t necessarily mean it will pass the non-GMO certification,” Pellegrini explains. “I would suggest that if a company can do both, they do.”
Meticulous inspections aside, consumers scanning grocery shelves simply may not know the difference, or the similarities. For that reason alone, Simple Squares’ Crupi Dobbins decided two labels—Non-GMO Project Verified and USDA Organic, side by side—was better than one. “You have that 1.3 seconds for people to look at your packaging,” she explains.
If that’s not enough to sway skeptics, Acree shares a compelling piece of data he received from Whole Foods. “The products that carry both the organic and the non-GMO certification sell better than like items that just have organic certification,” he says, chalking it up to reassurance. (Whole Foods reps did not respond to requests for comment.) “Having that additional verification seems to have value to consumers who are still learning what it all means.”
Transparency, Education Above All
With competing labels, political battles, and emotions running high, it’s easy to lose sight of the unifying goal in specialty foods. Retailers and producers agree they have a responsibility not only to be transparent with consumers but also to help guide them in their choices. “At the end of the day, I’m just glad that people are asking themselves where the food is coming from,” says Weir. “I think that’s the big picture.”
Plutko agrees, stressing a level of trust unique to independent retailers like Delaurenti’s. “You hope that you’re selling the absolute best product you can for your customer,” he says.
“Go as natural as possible, and I think everyone will be alright,” he continues. “When I get it here in the store, whatever product it may be, I can sell it with the utmost confidence and have such a great conscience about doing it too. In the long run, it benefits the producer, and it benefits the store, and it benefits the customer.”
So You’re Ready to Go Non-GMO
Keep in mind these 3 tips for when you’re ready to take the plunge.
1. Consider starting from scratch. Ensuring your products will meet the Non-GMO Project’s standards is easiest if you control the process from the get-go. Dancing Deer Baking Co. did so to learn and understand the process from start to finish. Plus, the business saw the added benefit of introducing a truly new product, “as opposed to new and improved,” says director of marketing Laura Stanton. Similarly, Saffron Road Food devised its chickpea snack line and newest simmer sauces with non-GMO in mind. “We were able to start fresh and say, OK, this is going to be a non-GMO verified product, from day one,” says Jack Acree, executive vice president. “That made it simpler to do.”
2. Take your time—and be patient. Don’t go trying to reformulate your entire line of products right off the bat. Choose one or two—ideally those with low-risk or the fewest high-risk ingredients—and familiarize yourself with the process. And, say producers, it’s a lengthy one. Causing delays initially was the dearth of verified ingredient suppliers, such as for butter and honey. Now, as supplier lists have grown, so has demand: the Non-GMO Project reports it is verifying more than 1,000 products every month. “Understand that it takes an incredible amount of time and effort to do it,” says Saffron Road’s Angela Pellegrini. “[Do] not expect results in 30 days.”
3. Double up on certifications. Trying to decide between non-GMO and organic? By definition, organic foods can’t contain genetically modified ingredients, but some argue that while organic has a longer list of requirements to meet, non-GMO certification delves deeper into ingredient origin. Second, producers agree that consumers don’t necessarily know one certification from the other and may make snap decisions based on incomplete information. If those aren’t reason enough, Acree refers to recent data shared by Whole Foods Market: that products carrying both certifications sell better than similar items that have only organic certification.
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