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9 Nov 2018

SUMMARY: Sales of non-GMO foods are outpacing organic foods at U.S. grocery stores. This has important implications for the organic food industry which is responding with marketing to educate consumers. Organic foods are also non-GMO. Organic foods are certified by the U.S. Department of Agriculture which sets standards for the use of chemicals, antibiotics and animal welfare. The federal government regulates foods that are labeled organic, but not those labeled non-GMO. The distinction matters to companies because it can take years to be certified organic. It costs thousands of dollars initially and annual renewal is required. Non-GMO sales increased about 70% a year since 2013. This is significant to organic food companies because sales in one category can come at the expense of the other. Non-GMO and organic foods compete for shelf space. There is the perception consumers place a higher value on the non-GMO label than they do on certified organic foods. Non-GMO costs less and customers may feel it is just as good as organic. California Certified Organic Farmers developed a label to communicate that "Organic is non-GMO and more." Other cooperatives are considering marketing efforts to clarify that organic standards encompass non-GMO.

CLASSROOM APPLICATION: As consumer behavior changes, companies need to adapt. Organic foods are both non-GMO and they meet additional federal standards for certification which include the use of pesticides, antibiotics and animal welfare. Consumers seem confused about the differences between non-GMO and organic. This is important for organic food companies because the price of their foods is typically higher than those which are only non-GMO. Educating consumers is the goal of marketing efforts to clarify "Organic is non-GMO and more." The distinction is more important because of changes in consumer behavior which are driving shopping decisions. About 49% of consumers who responded to a poll thought non-GMO was important when shopping for food and beverages while 47% indicated the importance for organic. Consumers are interested in the safety and characteristics of the foods they buy and organic foods face new competition from efforts to market non-GMO foods.

QUESTIONS:
1. (Introductory) Define the term "non-GMO." Why would shoppers demand either non-GMO or organic foods?
2. Compare and contrast the standards and certification process for the non-GMO as compared to the certified organic label.
3. Discuss the efforts of organic food producers to market their products and educate shoppers about what organic certification entails.
4. Some producers think sales of non-GMO foods will boost sales of organic foods. Do you agree? Explain why…

Organic vs. Non-GMO Labels. Who’s Winning?Organic and non-GMO companies push for prominence—and meaning for their labels

Natural-foods makers have spent years going after the industry establishment. Now, they are taking on each other.Surging sales of foods marketed as made without genetically modified crops are outpacing sales of food labeled organic in U.S. grocery stores. That is frustrating some organic companies and farmers, who invest significant sums to meet government organic standards and to get their foods certified.

The organic industry is responding with marketing campaigns touting that its foods—in addition to being made without genetically modified organisms, or GMOs, as such crops are known—also abide by other requirements.

For example, the U.S. Department of Agriculture, which has certified organic foods since 2002, requires that producers also keep out most synthetic pesticides and certain fertilizers, and that animals used to produce organic food can go outdoors year-round and aren’t given hormones or antibiotics.

“Organic is non-GMO,” said Cathy Calfo, executive director of California Certified Organic Farmers, a trade group that recently started promoting a new label to highlight the difference. “Non-GMO is not organic.

The federal government doesn’t regulate non-GMO labeling. Instead, certification is done by private groups, mainly the Non-GMO Project. The Bellingham, Wash., nonprofit doesn’t prohibit the use of synthetic pesticides on crops used as ingredients, or ensure animal-welfare standards. But it says it tests more stringently to ensure GMOs aren’t inadvertently mixed into ingredients during transportation or production.

The distinctions might seem like hairsplitting, but they matter for companies. Earning the Non-GMO Project’s imprimatur or the USDA’s organic certification can take months or years, depending on the item and the applicant backlog. Each can cost thousands of dollars initially, and must be renewed annually—a significant expense for smaller producers. Prices for organic and non-GMO ingredients also are significantly higher than regular ones.

GMOs have become a focus of skeptical consumers. U.S. government agencies and international bodies including the World Health Organization long have said that GMOs—whose DNA is altered to withstand pests or weedkilling sprays—are safe. But the technology’s critics say it facilitates harmful use of pesticides and that GMOs’ safety for human consumption isn’t proven.

That doubt has driven rapid growth for non-GMO foods, which this year are on pace to surpass those of food bearing the USDA’s certified organic seal, according to data compiled by research company Spins LLC.

ENLARGE Non-GMO sales soared by an average of about 70% annually from 2013 through this year, and are expected to top $13 billion this year. That is five times the rate for food tracked by Spins that bears the organic seal, sales of which total nearly $11 billion for the 52 weeks ended Nov 1. The Spins data don’t include sales from Whole Foods Market Inc., a major seller of both categories.

The USDA’s organic certification applies to foods that are 95% or more organic. The Organic Trade Association, whose numbers include estimates of Whole Foods sales and some other retailers not measured by Spins, touts the much larger figure of $35.9 billion in 2014 for foods containing 70% or more organic ingredients.

One category’s growth can come at the expense of another’s, since specialty foods often compete for the same limited shelf space in supermarkets. Last year, foods labeled non-GMO claimed 3.7% of total food sales in U.S. grocery stores, more than the 3.5% for organic items, according to market-research firm Nielsen NV. About 49% of consumers polled by Nielsen called non-GMO an important factor in food-and-beverage shopping, versus 47% for organic.

Organic-food companies say many consumers are confused about the labels’ different attributes. Vernon Peterson, owner of Abundant Harvest Organics in Kingsburg, Calif., says he often receives inquiries about the peaches, persimmons and other crops that his company distributes to customers including Kroger Co. and Whole Foods.

“Even though we [are] a 100% organic company, I get a question or two a week, ‘is any of your produce genetically modified?’” he said. “We see the consumer putting a higher value on the non-GMO than the organic label.”

Megan Westgate, executive director of the Non-GMO Project, said the “relationship between non-GMO and organic is probably the most politically sensitive thing we deal with, and we’re careful not to undermine consumer trust in the organic label.” She said consumer confusion around the definition of organic predates the Non-GMO Project, but she acknowledged that some organic-food producers have expressed concerns about her group infringing on their turf.

‘We see the consumer putting a higher value on the non-GMO than the organic label.’

—Vernon Peterson, owner of Abundant Harvest Organics

Rising non-GMO food sales are “a two-edged sword,” said Oren Holle, a longtime organic farmer in Bremen, Kan. While some consumers may migrate from those to organic foods, Mr. Holle said he worries about “a perception out there that if I buy the non-GMO it’s a little less costly when you run up to the checkout counter, and it’s just about as good.”

Mr. Holle last year participated in an online-video campaign trumpeting organic food’s purported superiority over items that are only non-GMO. The Organic Farmers’ Agency for Relationship Marketing Inc., a cooperative that funded the campaign, is now discussing marketing materials that brand organic as “the real non-GMO.”

California Certified Organic Farmers, based in Santa Cruz, Calif., debuted its new label in March that boasts “Organic is non-GMO & more.” The labels are designed to attract shoppers looking for non-GMO foods while highlighting organic’s curbs on synthetic fertilizers and pesticides, said Ms. Calfo.

Mr. Peterson hopes the new label, which he has added to Abundant Harvest products, will clarify things. “When you have a confused public, it’s never good,” he said.

Some bigger organic brands are more sanguine. George Siemon, chief executive of Organic Valley, the largest U.S. cooperative of organic farms, said that while some consumers may find non-GMO easier to understand, it ultimately will boost organic-food sales by drawing more attention to how food is produced.Still, Mr. Siemon said that Organic Valley is considering adding a non-GMO label to some of its products.

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Trinidad Tremblay
Trinidad TremblayLv2
9 Nov 2018

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