The future of. Non-GMO
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- Doreen Wilkinson
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2 CONTENTS Assessing Strengths Where Falls Short Balancing Threats and Opportunities Balancing Threats and Opportunities About the Sponsors Introduction A genetically modified organism (GMO) has been altered at the genetic level in a laboratory to produce new traits. About a third of GMOs are engineered to contain a pesticide called Bt and three quarters are engineered to be herbicide tolerant. As awareness about the topic grows, consumers are increasingly wary about the potential long-term health, environmental and sociological impacts of GMO food consumption. The regulation of GMO continues to evolve as a hotly debated issue, pitting health advocates against big business. In many parts of the world, like in some countries in the E.U. for instance, GMOs are subjected to more rigorous, science-based evaluations before they are approved for use but some health advocates and environmentalists question the validity of these assessments. In the U.S., where 93 percent of Americans favor labels on genetically modified food, GMO regulations are still in their relative infancy. Spurred by the defeat of California s Proposition 37, which would have instituted the mandatory labeling of genetically engineered food, many states have since taken it upon themselves to introduce GMO labeling bills. Percent of Americans who favor labels on genetically modified food 93% Of Americans Favor Labels Food manufacturers are also flocking to the non-gmo movement, voluntarily subjecting their foods to stringent analyses to confirm non-gmo status, then adding no GMOs, non-gmo or even GMO-Free to their product packaging. Many natural food retailers are committing to the non-gmo movement as well. The trend is strong among independent and smaller scale natural chains and was galvanized when Whole Foods Market announced its intent to implement full GMO transparency by The non-gmo movement is bolstered largely by consumer voice. However, if it is to evolve into a fruitful, viable market segment, industry experts say there are some key obstacles it must overcome. 2
3 The Project Verified seal now appears on over 25,000 products from 2,000 companies, and total sales of Project Verified products are now in excess of $8 billion. Assessing Strengths STRENGTH 1: Consumer Awareness The non-gmo movement is buoyed by many strengths, the greatest of which is consumer awareness and advocacy. Taking a path similar to the organic movement, several consumer studies have confirmed their preference for nongmo transparency. In response, the wheels of legislative progress are moving, albeit slowly. This increasing awareness has come about for several reasons but certainly includes the publicity surrounding the California and Washington referendums as well as the various state labeling efforts, said Ken Ross, CEO of Fairfield, Iowa-based Global ID Group. The lawsuit against the state of Vermont will almost certainly further increase awareness as consumers are increasingly asking why food companies are trying to prevent them from knowing what s in their food. STRENGTH 2: Labeling A second strength focuses on the widespread adoption of non-gmo labeling and the Project Verified seal. After several years of behind-the-scenes work in creating a standard and working with retailers and manufacturers to enroll in the program, the Project Verified seal now appears on over 25,000 products from 2,000 companies, and total sales of Project Verified products are now in excess of $8 billion. Consumer awareness of the seal is growing rapidly as consumers shop in the natural and organic aisles and have seen it on a large number of products, Ross said. Consumer buying behavior is being influenced by the seal, and SPINS has reported that products carrying it experience an average of a 5 percent jump in sales. 3
4 Assessing Strengths STRENGTH 3: Global Regulations The global GMO regulatory environment has also emboldened the non-gmo movement, especially in the U.S. Sixty-seven countries including Europe, China, Russia and Japan currently have either partial or full bans on GMOs or require products containing GMOs be labeled. Claims that labeling GMOs would place an undue burden and cost on product manufacturers certainly has not been borne out in these other countries, Ross said. If the governments of so many countries are still questioning the safety and value of GMOs, there must be unresolved scientific, technical or environmental issues. STRENGTH 4: The Tie to Organic And finally, the non-gmo movement directly benefits from the inherently GMO-free status of organic. Although it s more expensive than standard foods, consumers know exactly what they re getting with organic and typically don t mind paying a little more for it. 4
5 Independent research is expensive and time consuming but is essential for a thoughtful and meaningful dialog between all interested stakeholders. Ken Ross, CEO of Fairfield, Iowa-based Global ID Group Where Falls Short WEAKNESS 1: Funding WEAKNESS 2: Mixed Messages supporters say there are many aspects of the movement hindering its forward momentum and the thread connecting them all is lack of funding, especially in comparison to genetically modified alternatives. In short, biotechnology is a lucrative industry that many say uses its deep pockets to influence consumers, scientists and government about the virtues of GMOs. The fear mongering and tug-of-war skewering of the science, technology and safety of non-gmo and GMO foods doesn t help either. Ross asserted that it s not only polarizing but also damaging to the industry on the whole because it closes the door on more nuanced and reasoned dialogs on a segment characterized by a very complex set of issues. The pro-gmo community outspent the GMO labeling advocates by close to 10 to 1 in the California and Washington labeling referendums, said Ross. At the same time, these initiatives were barely defeated despite the disparities in spending, indicating a deep well of general consumer support for labeling. The lack of independent scientific research is a chief funding-related concern. Industry analysts point to the specter of bias, questioning independent research conducted by scientists with connections to the biotech industry. It has proved difficult to generate an adequate volume of independent research on the wide range of relevant issues, said Ross. Independent research is expensive and time consuming but is essential for a thoughtful and meaningful dialog between all interested stakeholders. While non-gmo proponents claim that genetically modified organisms are harmful, they have not been able to support their claims with irrefutable data, added Kantha Shelke, Ph.D., Corvus Blue LLC, Chicago, IL. It would [also] help if the non-gmo movement articulated the right questions and hypotheses to ensure that there is indeed no harm from approved GM varieties. And despite the collective consumer desire to know what s in their food, a great deal of misunderstanding still exists because the non-gmo movement is characterized by a distinct absence of consumer-friendly terminology. Using the terminology genetically modified organism as a catch-all term for all types of breeding and biotechnology techniques is without a doubt a great disservice to both sides of the issue, said Shelke. 5
6 Balancing Threats and Opportunities The biggest opportunities for the non-gmo movement will continue to hinge on the power of the consumer voice and how they choose to wield their purchasing decisions. Major brands such as Cheerios, Grape Nuts and Ben & Jerry s have already been compelled to commit and convert to non-gmo formulations or to complete GMO transparency, as have restaurant chains like Chipotle and retailers like Whole Foods Market. Nate Yates, business director, Enliten and NA Sweetness Innovation at Ingredion Inc., Westchester, Illinois, compared the growing interest in non-gmo to the evolution of the organic segment but with one caveat. In terms of food segments, [consumer adoption of non-gmo products] has been very broad, he said. It s very similar to the organic trend, but there s also a tremendous amount of confusion around non-gmo and organic. 6
7 Supply And Demand Working in Harmony? Ross said food manufacturers and retailers are keen to be receptive to consumer demand. If consumers keep increasing their spending on non-gmo products, then product manufacturers and retailers will keep increasing the supply of nongmo choices, he said. But demand and supply go hand in hand and at present, there is a lack of non-gmo ingredient supply, especially in the realm of corn and soybean-based ingredients. Loren Israelsen, president of United Natural Products Association, said other key matters connected to this supply shortage relate to keeping the supply affordable and the challenge of achieving scalable third-party verification of these non-gmo ingredients. Streamlining the demand for credible, third-party verification of non-gmo products is another matter the industry is addressing in an effort to balance the supply chain. The Project, North America s only third-party verification program for nongmo food and products, has verified more than 25,000 products since The group s Project Verified seal is the fastest growing label in the natural products industry. To help increase the capacity of the verification process, last year the Project announced that NSF International would join the group as a technical administrator to oversee the verification process and issue evaluation decisions based on a product s compliance with the Project Standard. The industry is addressing these issues by laying groundwork it hopes will turn these challenges into opportunities. Israelsen pointed to the formation of the Dietary Supplement Working Group, a consortium of like-minded supplement companies, banded together to tackle the challenge of expanding the availability of non-gmo ingredients, especially those intended for use in dietary supplements. 7
8 China, which bans GMO products is already a major supplier of supplement ingredients to the U.S. market [and] could emerge as a major supplier of non-gmo ingredients to that same U.S. market. Loren Israelsen, president of United Natural Products Association Supply And Demand Sourcing Issues For some in the industry though, there s still a huge void to fill. [Processors] currently have conventional and organic (some); however there is no ability to do a third classification of non-gmo (from the major corporations), said Steve Peirce, president of RIBUS. If the classification is to occur, it will be with small players (niche markets) or there will be a change in farming (limited amounts of GM crops). Ross was confident that the uptick in demand would naturally stimulate the supply chain to align with market demand. Temporary shortages of certain ingredients may arise and may take several growing seasons to catch up with; however, he said many supplier countries, such as Brazil, are in a position to supply relatively large quantities of non-gmo soy or corn in a fairly short time. This conversion has already begun as global food companies such as Cargill and ADM have recently announced plans to produce certain non-gmo ingredients in response to growing market demand, he said. 8
9 We are well along in strengthening the non-gmo ingredient supply chain because our vendors, and their upstream suppliers, know our customers as a whole represent significant long-term demand for non-gmo ingredients. Alan Lewis, director of special projects for Vitamin Cottage Natural Food Markets, Inc. Supply And Demand A Balanced Message Beyond the scope of keeping up with demand, the big short-term threat will be keeping consumers informed with a balanced non-gmo message. Robert Craven, CEO, MegaFood, said a grassroots effort organized by the natural products community would be the most ideal and logical way to educate consumers and advocate for non-gmo ingredients. Manufacturers partnering with their respective communities could illustrate a collective rising above the competitive nature of the industry for a higher cause, he said, ultimately demonstrating that the cause is not for the profit that comes from attaching to a mega-trend issue. Alan Lewis, director of special projects for Vitamin Cottage Natural Food Markets, Inc., said that improving on the current shortcomings of the non-gmo segment will likely take a long-term, generational commitment. He added that from a retailer s perspective, we cannot demand the complete removal of GMO ingredients without jeopardizing the viability of our vendors, especially the most vulnerable ones, [but] the presence of these statements on ingredient panels is proof positive for impatient customers that change is afoot. 9
10 Directory Listings: MegaFood Sarah-Marie Cole Fresh from farm to tablet, MegaFood is a real as it gets. Since 1973, MegaFood has been committed to making products that use real food from familyowned farms to make a real difference, and has produced some of the most effective and awardwinning supplements available today. A pioneer in the natural products industry, MegaFood was the first company to make vitamins from scratch using farm fresh whole foods. MegaFood continues to innovate by sourcing fresh and local foods and manufactures more than 30 beneficial nutrients using their proprietary Slo-Food Process. Whole Earth & Sea from Natural Factors Joy Yagi Whole Earth & Sea is the new non-gmo whole food supplement line from Natural Factors. From our Natural Factors farms, we harvest fresh organic ingredients for our age- and gender-specific multivitamin and mineral formulas, as well as our bone formula. Also available in the Whole Earth & Sea line are Herring Gold, high in omega-3 phospholipids, and our delicious Organic Vegan Greens Protein Bars. Nature s Path Foods Inc. Kyla Hochfilzer Nature s Path is a passionately independent, family-owned cereal company that has been committed to organics for almost 30 years. As a founding member of the Project, we believe everyone has the right to delicious, organic, non-gmo food and with your support, we re working towards a day where all foods will be organic. 10
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