GENEWATCH
 
A BUSINESS PERSPECTIVE ON GMO LABELING AND TRANSPARENCY
By Andy Barker
 

from GeneWatch 29-1 | Jan-May 2016

Jerry Greenfield, co-founder of Ben & Jerry's, has a knack for getting to the heart of things. "Every company should be proud to tell consumers what is in their products," he testified in front of Vermont's legislature back in 2014. It's a statement he has made in support of mandatory GMO labeling at rallies around the country, in conversation with members of Congress and in dozens of media interviews.

It's not just a talking point. It is an attitude about transparency that Ben & Jerry's has embraced since the days of the original ice cream scoop shop, when our co-founders proudly advertised such disastrous flavors as Honey Apple Raisin Oreo and Lemon Peppermint Carob Chip. In the 1990s, our company fought (unsuccessfully) for mandatory labeling of dairy products produced with rBGH, an artificial hormone given to dairy cows to increase milk production. In the last several years, we have advocated for mandatory GMO labeling, supporting efforts in Washington DC and nearly a dozen US states to pass new laws on this issue. It's clear to us that the vast majority of Ben & Jerry's fans support labeling. And numerous surveys have measured overall public support for mandatory GMO labeling at around 90%.

Still, despite the logic behind our company's position on labeling, there are real world implications for our business, and for the whole food industry. What are those implications? Why do we continue to see mandatory labeling as the right path forward, for our company and for the United States?

The fundamental reality

Beneath all of the furor around GMOs and GMO labeling, a few basic trends are driving the evolution of the food industry today. One is a growing consumer interest in so-called 'clean label' foods, those with ingredients perceived to be pure, natural, and simple. This interest has been fueled by decades of marketing from the food industry itself, pitching consumers relentlessly on the idea that 'natural' means 'better'; the emergence of the millennial consumer, with higher expectations around food purity and corporate social responsibility; and a new focus on the connections between food quality and health outcomes driven by the rise of chronic disease rates around the world and the growth of the alternative health care sector.

Supporting this trend is growing consumer interest in transparency, which has been accelerated by the expansion of digital and social media. There are few places for companies to hide anymore when their activities - and their supply chains - are out of line with the expectations of some segment of the population. And it is easier than ever for companies to discover what their consumers want so they can bring products to market to meet that demand.

GMO labeling aligns with the trend

In most consumers' minds, genetically modified foods do not qualify as pure, natural, and simple. Indeed, whatever one might say about GMOs, it is hard to make the case that they are 'natural' foods, by any reasonable definition. (Though that question, too, is currently under consideration by the Food and Drug Administration.) In this light, the push among the public for mandatory GMO labeling is not purely about the 'right to know.' It is also about consumers' right to choose, or said another way, their ability to avoid GMO foods in their diet.

And consumers are already choosing on the basis of voluntary GMO labeling. The Hartman Group reports that 40% of consumers are avoiding or reducing GMOs in their diet, with concerns ranging from potential negative health effects to environmental concerns. 'Non-GMO' has now become a 'purity marker,' and sales of foods with this claim are growing at 14% annually. This makes Non-GMO one of the fastest growing segments in the supermarket, according to Packaged Facts. Consumers want more of these products - and they want choice in the marketplace, which mandatory labeling promises to deliver.

Is the cost and complexity of labeling really the problem?          

Some have argued against mandatory GMO labeling on the grounds that the expense of changing labels will raise the cost of food. This has not been Ben & Jerry's experience. On the contrary, label changes are a frequent and ordinary part of doing business. Every year, we make changes to between 25% and 50% of our packaging. Over the last 7 years, we've gone through three full packaging redesign projects. In other words, we have changed the packaging on every single pint in our product line as a matter of normal business. Lots of things impact the cost a consumer pays for a pint of Ben & Jerry's ice cream. Changing labels is not one of them.

What is really driving industry opposition is the fear that transparency will prompt some consumers to choose not to buy foods made with GMO ingredients. Today, many consumers are unaware that GMO ingredients are used in most processed foods on supermarket shelves. Mandatory labeling will certainly raise awareness. And given the underlying trends favoring 'clean' labels, this is likely to further erode demand for conventionally sourced foods.

Some food companies with conventional supply chains are responding to the prospect of mandatory labeling by reformulating their products to avoid GMOs. This is likely to add some measure of complexity and cost into food company supply chains - in the short run. Depending on the ingredients being transitioned, there are typically cost premiums for Non-GMO ingredients compared to conventional ingredients once segregation, testing, and verification costs are included. However, Ben & Jerry's experience shows that transitioning products to Non-GMO ingredients can be achieved without raising prices to consumers, even for complex products. (And with all of the chunks and swirls, Ben & Jerry's ice cream is one of the more complex consumer food products available.) In the longer run, as the size of the Non-GMO marketplace grows to respond to consumer demand, it is likely that scale efficiencies will reduce cost premiums on Non-GMO inputs.

The specter of a state-by-state GMO labeling 'patchwork'

The reality is that neither the Food and Drug Administration nor Congress has shown any inclination to create mandatory GMO labeling at the national level, despite more than a million public comments demanding it. The only viable path to national labeling leads through the states, where legislatures have been more responsive to public opinion and where ballot initiatives allow voters in some states to consider legislation directly. Ben & Jerry's home state of Vermont is the first and, so far, only state to pass mandatory GMO labeling without a 'trigger' that would rely on action by other states to take effect. Although a court challenge to Vermont's Act 120 is still pending, and the threat of Congress pre-empting Vermont's law still remains, this law has put tremendous pressure on policymakers - and on national food companies - to respond. As of the time of this writing, several national companies had made announcements of their plans to voluntarily label their products everywhere in the United States, to comply with Vermont's law. In effect, one small state has set a de facto national standard on GMO labeling. Ironically, this state's legislature has responded to American consumers' desire for labeling more effectively than Congress. In any case, a mandatory, national, on-package GMO labeling requirement remains the ultimate goal of most advocates, including Ben & Jerry's. In the meantime, our company will continue to support efforts in other states to pass labeling laws similar to Vermont, thereby reinforcing the existing de facto national standard.

The path ahead

The debate over mandatory GMO labeling is far from over. Yet it seems safe to conclude that the underlying trends will continue to grow: consumers will increasingly seek out clean label products; responsive food companies will be rewarded in the marketplace; the supply of Non-GMO ingredients will grow to meet demand; and the pressure will continue to build for mandatory GMO labeling. Whether or not this goal is achieved nationally in the near future, the desire among the public for transparency about the food supply will not go away. The real question for food companies is how they want to respond to the trend. At the leading edge, some companies have embraced transparency as a North Star, from hundreds of start-up natural food companies to national brand owners like Campbell's. For these players, transparency is not an obstacle but a path to growth and profitability in a highly competitive landscape.

 

Andy Barker is Social Mission Strategy and Policy Manager at Ben & Jerry's.

 

 
 
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