General Mills, Cheerios, and GMOs -- The Latest Battle

General Mills (NYSE: GIS  ) has been touted by many as a shining example of corporate and social responsibility among major U.S. businesses. In 2012, Forbes recognized it as "The Most Reputable Company in America." The company states that one of its big goals "is to be among the most socially responsible food companies in the world." 

General Mills is also the maker of the No. 1 and No. 4 breakfast cereals in America: Honey Nut Cheerios and Cheerios. These two brands combined for $920 million in sales last year.

That's why it's important to note that for the second time in a year, General Mills is being called out for disingenuously labeling Cheerios as "all-natural" and funding campaigns to defeat measures requiring labeling of genetically modified, or GM, foods in California and Washington state. 

Lacking transparency
The most recent assault on the company has come from Green America. The nonprofit consumer organization says that while General Mills claims, "'The whole grain oats in Cheerios Cereal are natural,' it is silent about the fact that many of the other ingredients in Cheerios sold in the U.S., including modified corn starch, sugar, vitamin E, brown sugar syrup, canola, and natural almond flavor, are at high risk for containing GMOs." 

Adding to Green America's frustrations, General Mills reportedly offers its Honey Nut Cheerios and Cheerios brands in Europe either without any GMOs or -- if made in America -- with a label stating, "likely containing GMOs." 

Elizabeth O'Connell, campaign director for Green America, says, "Everyone should have the right to choose foods that are safe for themselves, their families, and the environment."

This isn't the first time consumers have railed against the company for its stance on GMOs. Last winter, General Mills issued an app to allow users to share their thoughts on what Cheerios meant to them. The situation quickly turned into a disaster, as the app and the company's Facebook page exploded with comments asking it to stop using GMOs or to at least start labeling them.

Is this really fair?
Few things are as contentious these days as the role that genetically modified organisms play in America's food future. Proponents of GMOs say that technology now allows farmers to get higher yields with less environmental damage and the same nutritional value as conventional crops.

Opponents, on the other hand, claim that the long-term side effects of GMOs haven't been studied enough, and that using GMOs consolidates power in the hands of a few major corporations while cutting down on biological diversity.

Many in the food industry have taken the stance that GMOs need not be labeled on food products because the public has an irrational fear of those ingredients, and aren't aware of the safe reality of GM foodstuffs.

But Mark Lynas, a supporter of GMOs in general, has stated that companies fighting against labeling are waging an unwinnable battle, and one that will ultimately hurt their images. Lynas believes that GMOs are every bit as safe as non-GMOs, but that it's too late to convince the public of this, especially because the convincing is coming from groups funded by the big businesses behind GMOs, including Monsanto and Syngenta. As Lynas stated in a speech at the Center for Food Integrity Summit this month, "Consumer right to know, however unjustifiable on scientific grounds, is an argument that -- once a critical mass of people are demanding it -- it is political suicide to oppose. ... So, let's think how this can be done, and moreover how it can present some opportunities to shift this debate in a more sensible and science-based direction."

While Whole Foods Market is the only major grocer to announce that it will require suppliers to label products containing GM foods by 2018, companies like General Mills might do well to support such stances in the future. While sales figures for Cheerios this year may inform General Mills' next step, the brand's long-term reputation might avoid the most pain by considering switching its stance.

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9/29/2016 4:01 PM
GIS $63.66 Down -0.42 -0.66%
General Mills CAPS Rating: ****