SPECIAL REPORT: The Impact of US GMO Labeling

18 Apr 2016 --- The number of US new product launches tracked with a GMO-free claim is entering a new stage, as major companies reveal plans to label their use of genetically modified ingredients. An analysis of global mainstream new product launches [excluding supplements, sports nutrition, clinical nutrition, oral care and pet food] featuring a GMO-free claim grew from 1% of launches in 2010 to 5% in 2015. But when looking specifically at the US market, launch numbers are even more dramatic, rising from 1% in 2010 to 14% in 2015. 

Over 34,000 US products are now reportedly labeled with the “Non­GMO Project’s” seal, representing about US$13.5 billion in annual sales. Recently, premium, gluten free baking company Cup4Cup announced that three of its products – including the top-selling Pancake and Waffle Mix – received non-GMO status, via the program.

The dramatic rise in non-GMO claims in the US comes amid a period in which the major players are starting to adopt GMO labeling. The moves are in response to the dawn of a mandatory labeling law in the small state of Vermont, which stipulates that certain products must carry GMO labeling from July 1, 2016.

Labeling its products which contain GMO ingredients will cost General Mills “millions of dollars,” according to the packaged food giant, as it and a number of big ticket food companies reluctantly begin rolling out GMO-labeled packaging across the US, following a ruling in the small state of Vermont.

The thorny issue of GMO labeling has come to a head after legislators in Vermont voted that food packages in the state must include GMO certification on July 1, a ruling that is already having big ramifications for the food industry in the US.

Food campaigners advocating putting labels on food containing GMO ingredients have hailed it as a victory, calling it a “right-to-know” issue similar to the carbohydrate count on packaged goods.

But the food industry, including Mars, Kellogg and Campbell Soup, feels it is unjust and will hurt consumers in the long-term.

Monsanto, the world’s biggest maker of genetically modified seeds, said the law creates “confusion and uncertainty for consumers” while Kellogg president of North America Paul Norman said that just labeling products in Vermont would be “logistically unmanageable”.

In a nutshell, the food industry argues that GMO soy, sugar and corn is entwined in a complex supply chain that geographically it  goes far beyond selling produce in a state with a population of 630,000.

The food giants, which have spent £100m in fighting the mandatory labeling last year alone, also argue that there is “no basis in health, safety or science” in what they see as a dangerous precedent in Vermont which would create a patchwork of state GMO labeling policies.

General Mills: "it will cost us millions of dollars"
Speaking to FoodIngredientsFirst, Mike Siemienas, an executive with General Mills, said: “We are doing this because the Vermont law takes effect soon and Congress has not passed any labeling so a national solution doesn’t exist and we face fines if we don’t comply.”

“Our stand on GMO labeling is consistent and clear. We support a national solution for GMO labeling and we have called on the US congress to set this standard and continue to press for action.”

“[The labeling] will start to appear on packages over the next several weeks. The law requires compliance by July 1 and depending on the type of packaging it can take several months to change and get flowing through the distribution network.”

“The change is costing us millions of dollars. We are doing this because we need to comply with Vermont law and congress has not passed a nation solution. We can’t just label for one state.”

General Mills’ labeling on GMO products will be twofold: either it will state the product has been “produced with genetic engineering” or “partially produced with genetic engineering”.

Continue to battle for change in legislation
Although General Mills, along with Campbell Soup, Mars and Kellogg have begun rolling out GMO labeling, they are still hoping that a voluntary national standard can be approved by Congress by July 1, effectively nullifying the Vermont ruling.

Speaking to FoodIngredientsFirst, Charla Lord, an executive with Monsanto, said: “We remain supportive of a uniform national labeling standard that meets the desire of consumers for accurate, science-based and useful information about the food we all buy and eat while recognising the safety and benefits of agricultural biotechnology.”

According to Rob Fraley, chief technology officer of Monsanto, the Vermont ruling could be so prohibitively expensive on food companies, that it could have far-reaching consequences for the production of GMO foods.

He said: “With a patchwork approach, farmers and food producers may have to separate, replacing and re-label products differently for sale in each state, raising their costs at a time when American agriculture can least afford it."

“As states develop and implement different labeling laws, food companies could be forced to create multiply supply chains, warehousing and delivery mechanisms to comply. And, these companies would be forced to move away from a safe, economical and environmental beneficial agricultural tool- GMOs- altogether. All of this will ultimately increase costs for consumers, hurting low-income families most.”

Trend towards non-GMO
The controversy around GMO labeling comes amid a growing consumer trend- particularly amongst millennials- for wanting GMO free products, primarily due to health concerns, in a similar vein to consumers wanting gluten-free products.

The trend has led to restaurant chain Chipotle banishing GMO ingredients from its menus, becoming the first fast food restaurant to do so.

Despite this growing trend, the majority of scientists argue that GMO food is safe. 

A recent study from the Pew Foundation found that nearly 90 percent of scientists from America’s largest science body think GMO food is generally safe

It also comes amid a growing organic market in the US. The total retail market for organic products is now valued at more than $39 billion in the US and over $75 billion globally. 

Organic food is one of the fasting growing segments of American agriculture,” said agriculture secretary Tom Vilsack. “As consumer demand for organic products continues to grow, the USDA organic seal has become a leading global standard.”

Ingredion: well-placed for changing trends
According to Ilene Gordon, the chief executive of ingredients company Ingredion, the company is well-placed to take advantage of shifting consumer tastes but makes the point there is no robust scientific evidence to support non-GMO products.

Gordon said: “You might have one or two friends that are outside Europe – because Europe is really all non-GMO – who are sensitive and prefer non GMO."

“It is a little bit of an emotional issue as there is no science to say that non GMO is better than GMO but if consumers want and need that then we the ingredients companies will product ingredients for that.”

“There is no science per se one versus the other. We as an ingredients company supply what the consumer wants and needs. We are one of the only companies in the US that has access to non GMO corn.” 

“One of my facilities in Indianapolis is 100 percent non GMO corn. We have been producing there for years to supply the European market and the demand is really growing in the US.”

The ingredients companies are at the behest of their consumers, who will be the ones who drive their business decisions.

Following a global trend
There seems no sign of the consumer trend for GMO foods bating anytime soon and the ruling in Vermont is following a global trend. More than 60 countries – including all the European Union and Russia – have restricted or labeled GMO foods. It now seem that the world’s biggest market for foods made with genetically altered ingredients will follow suit.

By John Reynolds