February 19, 2014
US food firms set to offer GMO-free products
The growing ''genetically-modified (GM) free'' trend has prompted US food companies to offer consumers thousands of products free of GM ingredients but are finding the effort costly and burdensome which could result in a price spike for consumers.
Eighteen years after GMO crops were introduced to help farmers fight weeds and bugs, they are so pervasive in the supply chain that securing large and reliable supplies of non-GM ingredients is nearly impossible in some cases.
As one of the world''s largest makers of consumer food products, the Minneapolis-based General Mills has hefty buying power in the marketplace for corn, soy, sugar, oats, and other commodities needed for its packaged food products.
But when the company announced last month that its 70-year-old "yellow box" Cheerios would be made free of GM ingredients, the effort capped more than a year spent tracking down ingredients that have undergone no genetic modification. Cheerios is primarily made with oats, for which there are no GM varieties. But even securing small amounts of non-GM corn and sugar used to sweeten the cereal was a challenge, officials said.
General Millssaid it spent millions of dollars installing new equipment for processing non-GM ingredients and setting up distinct transportation and handling facilities to keep non-GM supplies from mixing with biotech supplies. The company is not raising prices for its non-GM Cheerios right now. But it sees labelling the cereal as free of ingredients that many consumers associate with health or environmental risks as helping gain market share.
The change came after outside pressure from activist groups who oppose biotech crops. But Tom Forsythe, General Mills'' global communication executive who met with the critics about their concerns, said the company''s decision was an independent one.
General Mills is only the latest of many food companies making the shift. Post Foods said last month that it was altering ingredient sourcing for its Grape-Nuts cereal. Companies making baby foods, baked goods, frozen dinners and pet food are among those offering non-GM versions.
There is no federal standard for non-GM labelling, so many companies, like Post, are signing up for a third-party verification programme known as the Non-Genetically Modified Organism (GMO) Project. The project started by natural and organic food retailers in 2007 in Bellingham, Washington, grants manufacturers a license to use a seal signifying their products have been audited to assure that they contain no more than 0.9% GMO.
The number of such non-GMO "verified" products surged to 14,800 in 2013, up from 4,000 in 2011, and 1,000 more products are in the verification pipeline, according to the Non-GMO Project Executive Director Megan Westgate. Sales last year of verified products hit US$5 billion, up from US$1.7 billion in 2011, she said.
More than 90% of the corn and soy now grown in the US are GMO strains. This means the pipelines for harvesting, storing, transporting, mixing and purchasing the commodities are awash in the biotech supplies. To supply conventional crops, farmers must plant non-GMO seeds, prevent pollen or other contaminants from drifting in from neighbouring fields, and store and transport the grain separately from GMO crops. The separation must be maintained all the way to the finished product.
Partly because of the pipeline headaches, non-GMOs typically come at premium prices. Non-GMO corn, a key ingredient in many packaged foods, is especially scarce because virtually all corn in the US likely has at least some slight contamination, experts say. Indeed, even as General Mills labels its Cheerios as "not made with GM ingredients," it adds a disclaimer that "trace amounts" of GM material "may be present." The company would not say how much GMO it allows in the corn and sugar for its non-GMO Cheerios.
The difficulty of supplying large quantities of non-GMO commodities is such an urgent problem that in December three dozen representatives of grain and food groups formed the "Non-GMO Working Group" to try to expand the non-GMO commodity supply chain.
The market moves have caught the eye of some investors. One, San Francisco-based Equilibrium Capital Group, is looking at investment opportunities in grain storage, transportation and converting farmland to non-GMO crop production.