GMO labeling has seized the attention of the food and beverage industry for the past few years, but recently the debate was reignited by an announcement made by a major manufacturer. Earlier this month, Campbell Soup Co. publicly committed to labeling GMO ingredients in its products over the next 12 to 18 months. The company also threw its support behind national mandatory GMO labeling legislation.
Campbell became the first major manufacturer to make such a commitment. The announcement generated a number of questions and opinions from food and beverage industry players regarding what this announcement could mean for Campbell, other manufacturers, and labeling legislation.
Will other companies follow?
Now that Campbell has become the first among major manufacturers in terms of GMO labeling, whether other companies will follow Campbell’s lead is unclear to much of the industry. With Vermont’s mandatory GMO labeling initiative set to go into effect in July and other states hinting at passing similar legislation, many analysts feel that companies going this route was a given.
"We are operating with a 'Consumer First' mindset," Campbell’s President and CEO Denise Morrison said in a message to employees. "We put the consumer at the center of everything we do. That’s how we’ve built trust for nearly 150 years. We have always believed that consumers have the right to know what’s in their food. GMO has evolved to be a top consumer food issue reaching a critical mass of 92% of consumers in favor of putting it on the label."
"Campbell’s leadership most likely realized that the move was inevitable given the pressure from consumers, government, and traditional retailers," said Larry Lucas, partner at Vivaldi Partners Group, a global brand strategy consulting firm that has worked with major brands, including Campbell. "… I anticipate that many other major manufacturers will begin to make the announcement once they have an internal transition plan identified."
"I can see why many companies may choose to go this route since they will be creating labels for Vermont, and it will probably be easier to make a label for the whole country than make separate labels," said David Zuckerman, a Vermont state senator, vice chairman of the Agriculture Committee, and a lead sponsor of the state’s GMO labeling law. "I also think that companies like Campbell see the opportunity at being out front on this to gain public notoriety since there is strong consumer interest in knowing what is in their food."
Not all industry players feel the same way.
"There is also broad industry consensus that a 50 state patchwork of labeling laws would only prove costly and confusing for consumers, farmers and food manufacturers," the Grocery Manufacturers Association (GMA) said in a statement. Campbell has been and will remain a member of the GMA, so the company "is withdrawing from all efforts led by groups opposing mandatory GMO labeling legislation, including those led by GMA," Morrison said in her message.
How might this impact Campbell’s image and brands?
Labeling GMO ingredients is a double-edged sword for food and beverage manufacturers. Disclosing that a product contains GMO ingredients could turn off health-conscious consumers looking to avoid GMOs, but letting consumers know what is in their food directly on a product label signifies a commitment to transparency. This is becoming more important for manufacturers as distrust for major companies grows among certain groups of consumers.
"While [Campbell] will have products that contain GMO’s, offering clarity and information will generally be seen as a positive step for a food giant," said Zuckerman.
"I believe increased transparency, including information on GMOs, is here to stay," said Charlie Arnot, CEO of The Center for Food Integrity. "… Our research shows consumers are increasingly skeptical of Big Food and Big Ag, and that increasing transparency is an effective way to overcome that skepticism."
Not all members of the food industry believe that GMO labeling will necessarily hurt sales of brands that contain GMO ingredients, including Campbell, and a recent study corroborates that conclusion.
"Consumers will appreciate the transparency, and I suspect the majority of consumers will not change their behavior or brand choice in the near future regardless," said Lucas. "Old habits are hard to break. But for those who really care, they will continue to seek out more specialized alternatives and will be willing to pay more."
Regardless of whether they bear a GMO label, many Campbell products are center-store, like brands Goldfish and Pepperidge Farm. Campbell has acquried Bolthouse Farms and Plum Organics to develop a healthier portfolio. Campbell has also announced it would simplify product labels, remove certain artificial ingredients, and made other commitments to healthy food expansion, though these efforts have not yet paid off in earnings reports.
GMO labeling legislation pending
Along with Campbell’s labeling commitment came vocalized support for mandatory GMO labeling legislation, which has been uncommon among major food manufacturers and organizations like the GMA.
Attempts to pass GMO labeling legislation has not made it through both houses of Congress yet, but legislators have pledged that this topic will be a focus in this year’s session. A voluntary GMO labeling bill did pass the House last July, but such a bill has not yet made it through the Senate.
Many manufacturers and industry groups have been united by shared concerns for what mandatory GMO labeling could mean for both manufacturers and consumers.
"There is wide agreement on the urgent need for Congress to act on a bipartisan solution to avoid the economic costs of the Vermont law that will be shared throughout the industry—from producers to consumers," according to a statement from the Coalition for Safe Affordable Food (CFSAF).
Companies seek out other options
Regardless of whether companies do start to make their own GMO labeling announcements, it’s unlikely that all manufacturers will go this route unless mandated to do so by the government.
One alternative that rose for food and beverage manufacturers is the SmartLabel, sponsored by the GMA and being adopted by several companies at its outset, including Campbell. This labeling initiative will facilitate access to more product information, including GMO information, via a scannable QR code printed on the product label rather than having the information itself printed on the label. SmartLabel is expected to appear on nearly 30,000 products by 2017.
"Providing consumers with the information they need to make informed product choices is a core commitment of GMA and is at the heart of our new SmartLabel initiative which will provide consumers with far more information than could ever appear on a food label," GMA said in a statement.
Food industry groups feel that these types of options are necessary to combat the possibility of state GMO labeling legislation that could require different labeling specifications for each state, making label standardization more costly and difficult.
"This is a priority for us because we recognize that unless there is a consistent national standard, companies will be forced to make decisions based on Vermont's law, despite the fact that it is riddled with loopholes that will drive up the grocery bills and result in confusing misinformation for consumers," a spokesperson for Coalition for Safe Affordable Food (CFSAF) told Food Dive.
What will be critical for manufacturers to watch over the next year or so is the reactions of consumers and whether such a decision can actually help or harm a company’s sales and reputation.
"Sharing more information can result in increased questions. In the short term, there may be more consumer interest than normal," said Arnot. "In the long term, I think it will be important to be committed to remaining transparent as issues evolve and change. Today the hot issue is GM labeling. Next year it will be something else. The key is to remain transparent regardless of the issue."
Manufacturers may also stay tuned to the discussion brewing at a GMO food labeling session, which was said to be hosted by USDA Agriculture Secretary Tom Vilsack sometime this week.