Food companies will go non-GMO if CA labeling law passes

By Ken Roseboro
Published: August 31, 2012

Category: GM Food Labeling and Regulations

Non-GMO soybeans grown in the USA

To access all the articles in this month's issue of The Organic & Non-GMO Report, SUBSCRIBE NOW.

Ingredient suppliers say it would take two years for supply to meet non-GMO demand

Major food manufacturers are likely to switch to using non-GMO ingredients in their products sold nationwide if California’s initiative to label GM foods—Proposition 37—passes this fall, according to food industry experts.

Food manufacturers fear that a label saying Genetically Engineered on their products would scare off consumers. When GM food labeling became law in Europe food manufacturers stopped buying GM ingredients to avoid the GM label.

California’s big impact

California, which is the world’s eighth largest economy and consumes 12% of the food eaten in the US, is such a major market that it could lead companies to switch to non-GMO nationwide.

“A strong GMO labeling law passed in California would certainly influence all manufacturers of nationally distributed foods to try to go total non-GMO,” says Clyde Boismenue, owner and general manager of Basic Foods Company. 

“If labeling passes in California, most food producers will look at changing production on a regional and possibly on a national level,” says Steve Peirce, president of RIBUS, a manufacturer of non-GMO and organic rice ingredients. “I don’t think you can just change production for one state unless you are a small producer.”

“It’s difficult for them to have two labels (on their products). The large snack food companies could source non-GMO corn to work around that,” says Peter Golbitz, director of international business development of SunOpta Grains and Food Group.

Lynn Clarkson, president of Clarkson Grain, a supplier of organic and non-GMO grains agrees. “I think California would have an effect nationwide.”

As a bellwether state, California could also lead a GM food labeling trend that could spread nationwide. “If the California labeling proposition is enacted as law, I think that other states would most likely follow suit,” says Chris Buklin, raw materials documentation specialist for ingredient manufacturer Griffith Laboratories.

California’s influence on food consumption and national trends is a major reason why biotechnology and large food companies are pouring millions of dollars into defeating Proposition 37.

Two years for non-GMO supply to meet demand

If food companies decide to switch to non-GMO ingredients, can ingredient suppliers meet the demand?

Supplies of non-GMO ingredients are now limited. “If major food companies wanted to switch to non-GMO corn, there isn’t enough grown in the US to meet the demand,” Peirce says.

“Sourcing non-GMO is always a concern, especially with the poor weather experienced in North America this year,” says Buklin.

But Clarkson thinks there could be enough non-GMO supply over time. “I think the system could respond if it was phased in over a two-year period,” he says.

That two-year time frame would meet the 2014 date when the California labeling law would take effect.

Golbitz also thinks it would take two years for supply to meet the demand. “Farmers can convert to non-GMO a lot faster than they can convert to organic,” he says.

SunOpta is receiving more inquiries about non-GMO ingredients. “We have seen an uptick in interest by food companies wanting non-GMO ingredients,” Golbitz says. “Companies may be seeing what’s involved to convert (to non-GMO).”

Clarkson says seed companies would have to increase their supply of non-GMO corn and soybean seeds for farmers. With soybeans, he thinks it is possible because non-GMO soybeans yield more than GMO. Corn could be more of a challenge because of cross pollination. “At what (GMO) threshold can the seed system operate on a national level, 0.5% or 0.6%?” he asks.

Will increase non-GMO demand

Industry experts say switching to non-GMO would also depend on food companies’ customers.

“If their customers are natural food consumers and are concerned about GMOs, a food manufacturer would have to consider making that change or risk losing those customers,” Peirce says. “But to some of their customers GMOs won’t matter.”

Companies selling infant and children’s foods could be the first ones to switch to identity preserved, non-GMO ingredients, says Peirce.

Golbitz says the natural food industry will “take care of itself.”

Regardless of their customers, Clarkson thinks most companies will consider labeling. “There will be pressure in every company to evaluate the labeling situation,” he says. “Most companies would want to avoid a label.”

All suppliers agree that passage of Proposition 37 will significantly increase the demand for non-GMO ingredients.

“Some manufacturers will want to avoid labeling their products at all costs out of fear that nobody will buy them anymore. There may be a sudden interest for non-GM ingredients, which I think will level off again after a few months,” says Gary Bartl, president of Austrade, Inc., a supplier of non-GMO and organic ingredients.

“It certainly should increase demand and therefore will probably increase prices in the supply chain and at the retail shelf,” Peirce says.

Cost would be another major factor in a company’s decision to go non-GMO. Non-GMO ingredients cost more because of systems to preserve their non-GMO identity at every stage of production, unlike conventional ingredients that often contain GMOs and therefore are not segregated from GMOs.

Raise awareness of GM food issue

Ingredient suppliers support consumers’ right to know whether they are eating GM foods.

“It’s hard to understand why truth in labeling is creating such a backlash if there is true consumer demand for it,” Peirce says. “It would seem reasonable to give mid-range, non-organic consumers the choice to know whether their products contain GM ingredients.”

Golbitz thinks labeling would be a good way for biotech companies to educate consumers about GM foods. “This would have been a good opportunity for the biotech industry to say ‘we believe in the science and think it’s wonderful for consumers to know.’”

Such consumer communication has been sorely lacking, says Clarkson. “Biotech companies have done a lousy job promoting their products to consumers.”

No matter the outcome of Proposition 37, it will raise awareness of the GM food issue among consumers, says Jay Highman, CEO of organic baby food manufacturer Nature’s One, Inc. “It will offer an opportunity to open the dialog and benefit consumers by increasing the awareness on the national stage. That is exciting.”

© Copyright The Organic & Non-GMO Report, September 2012