The Participants Are:
Betsy’s Health Food
Two stores in Houston, TX
President Rainbow Light Nutritional Systems
Santa Cruz, CA
Neil E. Levin, CCN, DANLA
Nutrition Education Manager
Senior Manager, Marketing
CEO & Founder
The Mustard Seed
John Vidergar, Co-founder
Michelle’s Miracle Brands and Cherry Works
Michele McRae, CN
Senior Director of New Product Development
Rainbow Light Nutritional Systems
Santa Cruz, CA
Ken Ross, CEO
Global ID Group
Ken Whitman, President
Michelle’s Miracle Brands and Cherry Works
Non-GMOs (genetically modified organisms) have been a hot button topic for some time. And with a number of states asking voters if GMO products should be labeled, Vermont became the first state to pass a no-contingency mandatory labeling law, in 2014. Here, Vitamin Retailer (VR) asks industry experts how non-GMOs are affecting the industry today and where they see it going in the future.
VR: How is the market for non-GMO products?
Kahler: Recent media attention on GMOs has fueled consumer awareness and concerns regarding the impact of GMOs on their health. Fifty-four percent of Americans are now aware of the term GMO, and 64 percent of natural channel shoppers are aware of GMOs.1 According to a study conducted by the PEW Research Center, only 37 percent of the American public view genetically modified foods as safe to eat.2 Research now indicates that more people prefer a product marked as Non-GMO than a product marked as certified organic.
The market has responded to this upwelling of consumer demand. In 2013, there was a 145 percent increase in Non-GMO food and beverage product launches.1
Levin: The demand for non-GMO is constantly growing, including both certified organic and verified non-GMO products. Our estimate is that sales increases are double digits annually.
Lowery: Non-GMO certification has become an increasingly important factor in consumers’ supplement decisions over the last three and a half years. Capsugel’s market research has shown that more and more consumers are checking for such certification (as well as for vegetarian, vegan, gluten-free, halal, kosher, etc.) on the labels of their products before they decide to buy food and supplements.
According to the 2013 NMI SORD study, 42 percent of supplement users said they consider non-GMO compliance important in their purchase decision. (In Brazil, that number is 48 percent, and in Mexico, it is 44 percent). Millennials are driving this trend with more than half (54 percent) of supplement user in this younger U.S. demographic deeming non-GMO-certified supplements as preferable.
Furthermore, consumer consideration of non-GMO labeled supplements surpasses their consideration of certification for vegetarian (38 percent), gluten-free (33 percent) and kosher or halal (23 percent).
This growth is tied to the top lifestyle values—including knowing the source of ingredients (71 percent of supplement users feel this is important), from natural sources (66 percent), and environmentally responsible brands (55 percent)—all of which reflect a consumer demand for more transparency in the source of ingredients used in supplements.
Ross: The demand for non-GMO products in the United States has been growing at more than 25 percent per year and it appears that trend will continue for some time. According to SPINS, Non-GMO Project Verified products currently represent close to $11 billion in annual sales. Further, the overall natural/organic market now exceeds $80 billion in sales. As all organic products are non-GMO, if one looks at non-GMO verified products entering the conventional as well as natural markets, it would be reasonable to project that the total category of non-GMO verified products could be north of $100 billion.
Whitman: I would actually phrase it in reverse. I believe the market for products containing GMO ingredients is declining and that the market for Non-GMO certified as well as organic products is increasing. This is a reflection of the growing trend towards clean food.
Vidergar & White: We believe that the non-GMO is now more important than being organic.
VR: Why did you choose to verify that your product is non-GMO?
Kahler: We’re committed to providing supplements of the highest efficacy, quality and purity. As the No. 1 selling natural women’s, men’s and prenatal brand, we offer nutritional solutions to meet a broad range of needs and preferences, including for organic and non-GMO products.
Levin: We assure non-GMO status for our products because of our scientific understanding that natural is better and that GMOs aren’t natural. We utilize the Non-GMO Project verification when possible, but sometimes organic certification or other IP (identity preserved) standards are utilized. Certified organic products, of course, are both non-GMO and pesticide free. IP ingredients may not meet some provisions of the Non-GMO Project Standard but do have non-GMO documentation and testing of agricultural materials before processing; as some processing may obscure a material’s origins resulting in no detectable GMOs after processing. We do not rely on PCR (polymerase chain reaction) testing of highly processed materials as evidence of GMO status since they may not retain enough genetic material left to detect for the test to be meaningful. That test only works on largely unprocessed materials.
Lowery: It is our goal to proactively bring new value to customers. We believe our Non-GMO Project verification will help our customers expedite their process for applying for verification for their finished products. In addition, and equally important, several of our key customers expressed interest in the specific booming consumer demand for Non-GMO Project-verified products.
Whitman: We wanted to show support for the Non-GMO Project and the movement away from highly processed and manipulated foods.
Vidergar & White: Because of public demand. Whole Foods Market is a great example of the future.
VR: How has the response been from your retail partners and customers?
Kahler: Both our retail partners and our customers have been enthusiastic about our introduction of Non-GMO Project Verified products. We’ve been building our source-documentation ingredient library for years, which has put pressure on the supply chain to be able to develop and deliver this documentation. In some cases, the ingredient has been non-GMO all along, but the rigor of documentation wasn’t available. As the No. 1 most trusted natural brand,3 the pressure we’ve put on the supply chain has helped to move the industry towards greater transparency and non-GMO documentation for everyone. After all, a rising tide lifts all boats.
Levin: Both our retailers and consumers have been strongly supportive of our efforts to provide non-GMO products and to provide transparency on our process and progress.
Opheim: It’s been great. Generally our customers know that we’ve always used non-GMO ingredients, but they are happy to see we’ve taken the steps to verify our products. Retailers love this too, as it positively influences sales.
Whitman: Our involvement product-wise as well as philosophically in the non-GMO movement has been very well received. Vidergar & White: Very encouraging. Several of our long time retail customers have asked for non-GMO only products.
VR: What are your thoughts on state labeling initiatives and programs such as Just Label It and the Non-GMO Project?
Levin: In general, manufacturers are wary of state-specific labeling schemes that will set different labeling requirements for various states, preferring a single national standard. Another issue that has been raised is the proposed “bounty hunter” provisions in some state bills that allow lawyers and/or citizens to initiate complaints and profit from them via either reimbursement of “expenses” or penalties, a la California Proposition 65 lawsuits. Attorneys can generate high fees regardless of penalties. Industry trade associations are working toward a single federal labeling standard without the onerous provisions that have split the industry during past campaigns.
The widely claimed statement that it costs nothing to label GMOs is only narrowly accurate; if a company was willing to just label a product as possibly containing GMOs without any real documentation it costs nearly nothing, but to actually collect and analyze that documentation is quite time-consuming and expensive. We have full-time staff working on that one issue, and Non-GMO Project verifications or organic certifications are additional and substantial expenses.
McRae: I think there is a lot of logic in Federal oversight on this to uphold greater clarity and consistency. Look at the success of the USDA’s (U.S. Department of Agriculture) National Organic Program. Leaving it to the states, which would allow for a wide variance in regulation, would likely lead to even more confusion among consumers. Our inter-state commerce at every level makes state-specific regulatory compliance and enforcement very challenging, and we’ve also seen examples state-specific legislation, which doesn’t have the same rigor behind it that Federal oversight can afford.
Whitman: I believe that the war has been won on a philosophical and moral basis. There will be more battles ahead but no matter how much money is spent in resisting change, change is inevitable. Light has been shed on an area of darkness and you can’t go back in time and pretend that it hasn’t. Better living through chemistry had its heyday back in the 50s and 60s. The watchword for today is better living through nature.
Vidergar & White: Labeling is a huge issue with the government. So our attention to every detail is critical. The FDA (U.S. Food and Drug Administration) is now currently reviewing all labeling issues, so until the requirements are made clear we will continue to navigate accordingly. We certainly can’t second-guess the FDA and governing sources.
VR: Do you think the American public is becoming more proactive about non-GMO products?
Kahler: Shoppers do show a preference for products labeled non-GMO. And while 61 percent of shoppers express growing concerns that GMOs may impact their health,1 many also believe there is a lack of information on the topic and feel unsure whether to actively avoid GMOs or wait until more proof is available.
There is still an overwhelming amount of confusion among consumers in the market place about vitamins, minerals and botanical supplements. Rainbow Light is committed to providing a broad variety of nutritional solutions that support the diverse needs of our loyal customers, including organic and non-GMO verified options.
Levin: We see conflicting evidence of Americans’ desire for non-GMO products. On the one hand, polls indicate a strong preference for non-GMO foods and that is reflected in sales increases, including organics. On the other hand, ballot initiatives have failed in most states that have had elections to decide the issue. But on the whole, the demand and desire for non-GMO products is on the rise, and NOW Foods is committed to supporting the growing non-GMO movement.
Ross: I think the success of the Non-GMO Project seal can be attributed to rising consumer demand for verified non-GMO products. With iconic brands such as Cheerios or Grape Nuts going non-GMO, it seems to indicate that mainstream consumers are moving in this direction. FoodChain ID has verified over 26,000 products and we set a record in February of 2,000 verified products in one month.
Whitman: The increasing numbers behind state initiatives tell the story as well as the amount of web traffic on the subject.
Vidergar & White: Yes for certain. It is very clear that consumers and our retail partners are reading labels for their own health benefits. Each wants to know … this is a good thing.
VR: GMO labeling is required in a number of countries. Why is the U.S. behind on this matter?
Levin: Our government decided in 1992 not to label GMOs as a political—not scientific—judgment. It is bizarre that GMO crops can be declared to be “substantially equivalent” to conventional crops while patents are granted that define them as quite unique. Because of the agribusiness lobby’s power and its influence over college agricultural extension programs, colleges now share in biotech patents and are no longer neutral on the subject. By contrast, numerous countries have preferred to respect their consumers’ rights over commercial interests by requiring labeling, and restricting GMO crops under a precautionary principle.
McRae: There is confusion around this matter and the industry is looking to governing bodies and FDA for guidance. Currently in the United States, policy requires labeling of GM foods only “when there is a substantial difference in the nutritional or safety characteristics of a new food.” This differs from policies in other parts of the world such as Europe—which requires labeling at GM levels above 0.9 percent, and Japan—which requires labeling at GM levels above 5 percent.
Consumers do want to know where their products are coming from, how they are made and whether or not they contain ingredients derived from genetically engineered sources. It’s a bit of a surprise when you look into consumer reports and you see that the greater part of shoppers are demanding mandatory labeling of products that contain genetically modified ingredients. With foods and crops this is more straightforward to understand percent non-GMO, but with dietary supplements it is much more complex. The ingredients in the finished goods all have sub-ingredients to maintain potency, stability and compatibility for manufacturing, and these sub-ingredients are most challenging to get the full supply chain documentation. In many cases, it just doesn’t exist and if you don’t have the documentation the Non-GMO Project cannot approve the finished good as non-GMO. Non-GMO Project Verification is based on documentation. In cases where the documentation isn’t currently available, it does not mean that the ingredient or sub-ingredient is not GMO-free. It takes time to complete the rigor of documentation.
Despite our present delay here in the U.S., based on entities like Just Label It, the Non-GMO Project, and other new possible methods of quantifiable non-GMO testing, we will likely soon begin to catch up to the many other countries that are already enforcing strict regulations on GMO labeling.
Ross: Every region in the world has different priorities and preferences around food. Organic is much more popular in Europe and the U.S. than it is in Japan or Brazil. Horsemeat is a delicacy in France and abhorrent in the U.K. European consumers have always expressed concerns around GMOs and the regulations in the E.U. reflected those concerns by requiring labeling. The U.S. consumer is probably less intensely focused on food than many Asian or European consumers and this simply wasn’t near the top of the list of concerns of mainstream consumers until recently. It is hard to pinpoint when the issue of GMOs hit the radar of mainstream consumers, but the rise in importance of this issue does seem to be coincident with the labeling initiatives in California and Washington. For the first time, many consumers began asking what GMOs are and whether they are comfortable eating them. While the debate about safety may go on for a long time, it is apparent that U.S. consumers want the right to know and to choose. For this reason, it seems likely that there will be a federal labeling law sometime in the future.
Whitman: It probably gets down to the use of gross national product as a measurement of government success. People getting sick, going to doctors, taking multiple medications or having surgeries all adds to the GNP. There is no provision for quality of life in that metric. So profit generally gets protected.
The other issue is the amount of influence corporate funds have on elected officials and the impact of lobbies on state and federal government.
Vidergar & White: The process is requiring education to the matter … government relations to suppliers is one example.
VR: Do you have a prediction for the future of non-GMO?
Levin: The future of GMO includes both certified organic and verified non-GMO products. Pressure on major food manufacturers, restaurant chains and dietary supplement companies will have great influence on what new GMO crops emerge and whether they are embraced or rejected by those companies. We’ve seen GMO tomatoes rejected by consumers, McDonald’s rejecting GMO potatoes, most milk producers rejecting the use of rBGH hormones and baby food makers avoiding GMOs. Now there are non-GMO Cheerios in another market test; if successful, mass-market food companies will embrace the non-GMO movement and pressure farmers to produce crops that meet that standard. On the other hand, GMO apples have just been approved by the federal government and threaten another major food production industry and its exports.
NOW Foods will continue to press for transparency, including federal labeling that makes sense, and the availability of non-GMO ingredients for our products. The pressure on raw material vendors is steadily growing, increasing their awareness of the need for non-GMO raw materials, and that will gradually make more options available for committed non-GMO manufacturers like NOW Foods.
Lowery: We believe the non-GMO wave is far from peaking. The consumer appetite for transparency extends to all foods, beverages and supplements. Clean label means natural, simple, as close to whole as possible, with no additives, preservatives, allergens or GMOs.
Specifically, according to the NMI 2013 SORD study:
• 66 percent of supplement users want supplements from natural sources
• Two-fifths of supplement users are concerned over tainted or illegal ingredients in supplements and welcome education on the safety of the formulation process
Of all of the demographic segments, Millennials also show the greatest interest in “clean label” supplements and purchase products based on their values.
• 60 percent of Millennial supplement users are aware supplements can be vegetarian based.
• 54 percent of Millennial supplement users deem non-GMO-certified supplements are important.
• 35 percent of Millennial supplement users deem kosher- or halal-certified supplements important
McRae: I feel that the demand for products that are “non-GMO” will increase as time goes on, as consumers become more educated on the subject. For the future, I see the government stepping in to enforce federal regulation around GMO-labeling and contributing more resources and science to explore risks and safety concerns for consumers, and what this means to agriculture and the farmers.
Opheim: Interest in non-GMO ingredients seems to steadily increase, and we imagine this will become a standard topic of conversation in the coming years. We do think non-GMO is becoming increasingly mainstream, and we appreciate how consumers have become more aware of the ingredients in their products.
Ross: It looks like non-GMO is becoming a desired consumer attribute just like gluten free or low carb. It remains to be seen how large the category will grow or whether it will level off or decrease like low carb or continue growing like gluten free. The food industry has seen many fads come and go, but I have confidence that non-GMO will continue to grow and become an established category of food products that justify their growing space on store shelves.
Whitman: Once the tipping point is reached and elected officials see that the public won’t vote for a GMO-supporting candidate or won’t buy GMO products things will change.
We are in a transition from industrial agriculture to natural agriculture. I don’t know how long that will take, but, of course, industrial agriculture has been a fairly recent development in the bigger view of history. Once we get back to nature (and this includes eliminating the use of toxic pesticides), the distinction between organic and non-organic will be less and less and the use of GMOs will be come a thing of the past.
Vidergar & White: The future is bright and the majority of large companies will soon require non-GMO, so the supply chain must comply with their customers’ requirements. The customer is always right! VR
1 NMI 2014 GMO Consumer Insight Report.
2 PEW Research Center, www.pewresearch.org/science2015.
3 Weist & Co., 2014.