Can you profit from GMO-free products?

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Can you profit from GMO-free products?

GMO can be found everywhere, though many consumers are not aware of the negative effects. We explore the possibility of making a profit with GMO-free goods.  

By Kavita Sabharwal

 

The results of a 2012 Mellman Group poll showed 91 per cent of American consumers want to know whether GMO are present in their products, and 53 per cent of consumers said they would not purchase food with genetically modified ingredients, according to a recent CBS and New York Times poll. Consumers in both Canada and the United States have expressed an interest in finding out whether their foods are genetically engineered and wish to learn more, although unfortunately they do not always have an opportunity to because these products do not subscribe to mandatory labeling requirements.

Genetically engineered products accrue approximately $400 billion in global sales annually and that number is expected to double by 2017 to 18 per cent of the total food products available. The Non-GMO Project states that up to 80 per cent of conventional processed foods contain GMO in the United States, including many household staples such as cereals, snack bars, cookies, lunchmeats and crackers.

GMO-free product consumption is growing as well. Natural specialty foods have grown by 9.4 per cent, while non-genetically engineered foods make up 15.8 per cent of total food in North America. Non-GMO is the fastest growing category in the natural channel. Currently, these products represent $5 billion in annual sales of over 15,000 verified products in North America. Consumers trust verified products with the Non-GMO Project seal and products that carry the seal tend to have higher sales than their non-verified counterparts.

Graham Clarke, grocery merchandiser at Pomme Natural Market, believes there is a huge market for non-GMO foods. “With the vast amount of information available to consumers nowadays that wasn’t necessarily readily available in the past, they are becoming more and more educated on healthy eating choices and in this case, on the impacts of GMO foods,” he says. “It’s very difficult for manufacturers to find organic, non-GMO ingredients. If these crops were more available, manufacturers would use them as the consumer demand is growing faster than the crops are available.”

 

What’s wrong with GMO?

According to Michael Internicola, senior vice president of sales at Andalou Naturals, consumers are moving away from genetically engineered foods. Although North American countries do not have a ban on these products, 64 countries across the world have some sort of restriction or outright ban on GMO.

“Genetically engineered foods have been sprayed by the herbicide Roundup by definition,” says scientist and non-GMO expert Thierry Vrain. “If you want to avoid the very toxic residues, then you have to avoid GMO altogether.”

According to Vrain, Roundup is now starting to fail due to weed resistance; now, farmers who wish to genetically engineer their crops are turning to 2,4-D, a stronger herbicide and an ingredient in Agent Orange. While Vrain says 2,4-D is not responsible for the birth defects experienced in Vietnam decades after the widespread use of the herbicide during the war, this chemical is far from harmless.

“Dioxins are some of the chemicals that are the most toxic that we’ve ever known. They were quite widespread in Agent Orange and they are responsible for the birth defects. Hopefully the 2,4-D formulation will not contain dioxin, although it is a contaminant in the manufacturing process,” he says.

 

Identifying GMO in your store

It seems that most stores prefer to integrate non-GMO with standard fare, as Randee Glassman, director of marketing, public relations and communications at Organic Garage, says her store does. For those customers who wish to avoid GMO and aren’t able to find the right information on the packaging, Glassman suggests choosing organic foods instead.

Organic products prohibit the use of pesticides and herbicides; therefore these crops cannot be genetically engineered to resist the effects of these toxins. Most large grocery stores carry organic products, however they are usually placed separately from conventional items and are priced at a premium. However, larger chain grocery stores cannot carry exclusively organic products since that could alienate a large number of their shoppers.

Clarke says that since several shoppers in natural and organic stores are what he calls “cross-over shoppers,” the store merchandises both natural (which may contain GMO) and organic goods side by side to reduce the “sticker shock” of healthier choices. Clarke says he has not seen a negative impact by merchandising these products this way since it offers a choice for consumers on whether or not they choose to pay extra money for the organic version.

“Although our preference would be to sell only non-GMO, it’s an unrealistic model at this point as many of the natural product manufacturers out there simply can’t find a steady supply of non-GMO ingredients,” he says.

Whole Foods Market also chooses to integrate non-GMO products with conventional products, as long as they fall within the same category. Kate Lowery, a spokesperson for Whole Foods, says that since all Non-GMO Project-verified goods are labeled, customers who are looking for those products can easily find them. The retailer has come out with a mandate that by 2018, every product in the store that contains GMO will be labeled as such.

“This is one of those times where doing the right thing benefits the retailer and the manufacturer. I think as consumers become more aware they will look for products that are verified and that will give them an assurance,” says Internicola. “A good natural food retailer is a gatekeeper and they should be looking to put products in their stores that they’ve signed their name to.”

 

Creating a balance

The issue with GMO is that the demand for non-genetically engineered products is there; what is lacking is the awareness. As a retailer, looking for ways to educate your clients on GMO can increase the popularity of these choices in your store.

Independent retailers can use this to their advantage, according to Internicola. “I think there’s a lot of movement around the right to know what is inside your products. It’s one of the core attributes of the natural food industry,” he says. “Most customers that come into a natural food store believe that the retailer has verified that the products in that store are good and clean. Retailers and manufacturers need to work together. They need to take that message into the store using their point of sale and saying these products are non-GMO and communicating to their customers why they have these products in their stores.”

Merchandising to create interest in non-GMO products can be difficult, because although most consumers would avoid GMO if these products were clearly labeled, putting special emphasis on non-GMO merchandise can hurt sales of other foods.

Lowery says Whole Foods does not make an effort to separately market non-GMO products. She says they have experienced a huge amount of growth due to rising demand for natural, healthier foods. However, she does not believe that encouraging non-GMO would hurt sales of more conventional products.

“We’re not about necessarily pushing non-GMOs. What we do is give customers a choice and let them decide,” she says.

Clarke believes placing an emphasis on buying non-GMO would not impact sales of conventional products since price is often a factor for shoppers. “This comes back to the whole idea of buying organic versus conventional. In some families, it’s just not affordable,” he says. “The good thing is that as more people buy organic, the cheaper it costs to produce, so hopefully in the future the price of conventional versus organic will be more in line, at which point there will be a drop in conventional food consumption.”

For discerning shoppers, the Non-GMO Shopping Guide is an online resource that lists non-GMO brands of grocery products in every category. A conventional retailer may not want to carry exclusively these products since that might transition them into a health retailer, alienating mainstream customers. However, carrying a balance of conventional and GMO-free products is a smart way to appeal to every consumer. If your store is larger, consider creating a separate section solely for natural foods where you can include non-GMO selections. That way, shoppers can choose which section to shop in without negatively impacting the sales of more mainstream products.

Since sales of organic and non-GMO products are only growing, consider only carrying labeled products as a first step. Get informed on GMO and pass that information along to consumers, keeping them informed on what is contained within those crops and what it means for their health. Keeping GMO out of stores and out of the hands of knowledgeable consumers will ensure the popularity of non-GMO products and the retailers that carry them will only grow.

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