Cheerios Says No to Monsanto

General Mills (NYSE: GIS  ) announced late last week that it would be making Cheerios GMO-free. The move is one of the first major responses by an American company to address the growing consumer concern over GMOs. If this is the beginning of a trend, the impact on seed-technology companies like Monsanto (NYSE: MON  ) could be substantial.

The start of something bigger
In the grand scheme of things, the removal of GMOs from Cheerios amounts to a nearly negligible amount of seed products amid the massive Monsanto offerings. Furthermore, oats, the primary ingredient in Cheerios, are remarkably inexpensive in the crop-product world. The bigger and more worrisome issue for Monsanto is that this may be the first of many such decisions by major food producers in response to consumer demand for GMO-free products.

GMOs are found in more than 80% of American food products, but for the most part go undetected by the average American consumer. While there have been no major direct and undisputed scientific studies indicating health issues related to the consumption of GMOs, a substantial subset of American consumers have taken issue with the prevalence of GMOs in food products. Attempts to pass legislation requiring the labeling of food products containing GMOs have so far been unsuccessful in both California and Washington state, but the move by General Mills to willingly remove GMOs from Cheerios will likely bring the issue back to the forefront of the public eye.

The resulting impact of GMO labeling on Monsanto could be huge, and similar results could be expected if major food manufacturers continue to willingly remove GMOs from their products, regardless of mandated labeling.

A little publicity goes a long way
General Mills is making a statement, but only one that it can currently back without suffering any major financial impact. Yes, Cheerios is General Mills' best-selling cereal brand, but the amount of GMOs found in the current formulation of Cheerios is arguably insignificant. By 'giving in' to consumer demand, General Mills has found a cheap and effective way to receive public attention and free advertising without substantially changing its product offerings.

General Mills is making the GMO-free change only to original Cheerios. The main ingredient in original Cheerios, as mentioned above, is oats, which are already GMO-free, requiring only a change in the sourcing of cornstarch and sugar. Major ingredients in other Cheerios-brand cereals such as Multigrain Cheerios have primary ingredients sourced from corn, wheat, and other more GMO-intensive crops. By making great claims for Cheerios, General Mills may have effectively gained public trust in regards to GMO-free product offerings while diverting attention away from the fact that the majority of its cereals do indeed contain GMOs.

In fact, most of the cereals produced by General Mills as well as most cereals produced by competitors Kellogg (NYSE: K  ) and Post Holdings  (NYSE: POST  ) actually contain a significantly greater percentage of GMOs than Cheerios ever did.

The takeaway
While the intention of General Mills in making Cheerios GMO free may be in question, the action is still a huge deal in the already-contentious world of GMOs and GMO-labeling. The attention gained will likely sway some Kashi-devoted consumers to try General Mills products.

On its own, the reformulating of Cheerios will have little or no impact on Monsanto and other seed-technology companies. Investors, however, should watch carefully to see if General Mills has started a cascading effect that could turn consumers away from GMOs in general, which could have a much more detrimental influence on Monsanto. 

Discover the Motley Fool's Stock of the Year
There’s a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it’s one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

 


Read/Post Comments (22) | Recommend This Article (19)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 06, 2014, at 2:31 PM, eevie wrote:

    Yay!! Thank you, General Mills!

  • Report this Comment On January 06, 2014, at 2:49 PM, truthnut wrote:

    YES! Thank you!

  • Report this Comment On January 06, 2014, at 2:51 PM, LACROSSENUT wrote:

    HOORAY FOR CHEERIOS!!!! Thanks, General Mills!

  • Report this Comment On January 06, 2014, at 3:07 PM, Rollo wrote:

    Smoke and mirrors. Monsanto probably OWNS General Mills (or the same people own both)! But, of course, this will brighten the day of the shiny, happy people wearing the rose-colored glasses. NOTHING will ruin their superficial day...NOTHING...not even reality!

  • Report this Comment On January 06, 2014, at 3:09 PM, FaithFamilyRevw wrote:

    Just so you are aware....Kashi is owned by Kellogg's. They were bought out and it's debatable if they are GMO free now that they are owned by a non-organic brand, unfortunately.

  • Report this Comment On January 06, 2014, at 3:44 PM, Cricket88 wrote:

    @FaithFamilyRevw...does it matter who owns Kashi? I mean, if they are stamped USDA organic, doesn't that mean they are, indeed, organic? Otherwise, they can't wear the label.

  • Report this Comment On January 06, 2014, at 3:44 PM, indycar01 wrote:
  • Report this Comment On January 06, 2014, at 4:17 PM, immoveable wrote:

    God willing, this will be followed by more major food companies doing likewise. I, for one, avoid GMOs at all cost. I can ill afford organic, but I pay for it anyway. I'm, hoping a larger scale marketing of organic and non GMO products will bring prices down.

  • Report this Comment On January 06, 2014, at 6:17 PM, rocking1995 wrote:

    Yes, I always buy organic whenever possible and I am PRAYING this is the start of other companies following suit and putting Monsanto out of business!

    Voting with my dollars everyday and believe we have a right to know if our food has been altered or has had chemicals/pesticides added to it. Tired of the government protecting industries that POISON our food supply!!

  • Report this Comment On January 06, 2014, at 8:50 PM, 2smartforlibs wrote:

    TO all you liberal kool aid drinkers what's Big G going to make for cereal from? ALL cereal grain is modified has been since we started growing grain. Thanks for drinking the kool aid FOOLS

  • Report this Comment On January 06, 2014, at 10:02 PM, archiebird wrote:

    Yay! Cheerios! As an avid organic food and non-gmo consumer, I will now start buying cheerios!!

  • Report this Comment On January 06, 2014, at 10:06 PM, frellmedead wrote:

    Not impressed. General Mills was one of the primary sponsors of the campaigns opposing GMO labeling. Of course, they are doing this because they see it as a way to increase profits, and it will cost them next to nothing to obtain the corn starch and sugar in original Cheerios from non-GMO sources.

    @Cricket88: Foods marked as organic are not necessarily GMO-free.

  • Report this Comment On January 06, 2014, at 11:55 PM, goliath wrote:

    Hmmmmmmm. . . . I think it is worth noting that Monsanto does not produce a GMO oat seed. . . . maybe the Fool needs to get the story right?

  • Report this Comment On January 07, 2014, at 10:38 AM, pinecone wrote:

    First, the article is wrong, wheat is NOT GMO'd.

    Second, the poster who said all grains are GMO'd doesn't know anything about plant science. GMO/GEO is taking DNA from one species & inserting it into another species. To get a hybrid (which uninformed seem to think is the same thing) you cross pollenate 2 plants of the SAME species. If you save the seeds of a hybrid, the resulting plants from those seeds will likely revert to one of the parent plants. The DNA inserted never goes away and continues forever in the seeds from GMO/GEO'd plants...for generations into the foreseeable future!

    There have been NO long term studies to show whether or not GMO's are harmful to humans who consume them.

    Corn starch can easily be replaced with potato starch and changing from corn sweeteners to CANE sugar won't be hard either.

    However, Walmart brand Cherrios are healthier than General Mills brand....read the labels!

  • Report this Comment On January 07, 2014, at 11:08 AM, eatmeoblamo wrote:

    since no oats are GMO, Cheerios has been non-gmo alla long. The only thing that has changed is gullible people will now buy more thinking something healthier about Cheerios, while GM laughes all the way to the bank.

  • Report this Comment On January 07, 2014, at 11:11 AM, hiddenflem wrote:

    as a parent i can say this is a great move. i know a lot of other parents who don't feed their kids cheerios because of this. You can call us biotech luddites if you will, but the bottom line with GMO's, BPA, and fire-proofing chemicals on couches is that the studies were not done prior to introducing any of these in a big way, but should have been. lack of evidence does not equal safety.

  • Report this Comment On January 07, 2014, at 4:37 PM, flemeur wrote:

    poor americans ;they have been poisoned to the point of no return ....and now poisoning the rest of the world .not very god fearing creatures...

  • Report this Comment On January 07, 2014, at 4:47 PM, ngs1 wrote:

    I was on the fence about the whole GMO thing until they started fighting the labeling of it so hard....then of course two things come to mind....

    1: Why would you "Monsanto...etc." fight labeling if you have nothing to hide...

    2: Now that I know you are fighting so hard on the whole labeling thing I need to know more about GMO which forced me to do further research into it....now my family is a limited to no GMO family.....

    As soon as I read this we were done supporting GMO's in any form:

    Over 80% of all GMOs grown worldwide are engineered for herbicide tolerance. As a result, use of toxic herbicides like Roundup has increased 15 times since GMOs were introduced. GMO crops are also responsible for the emergence of “super weeds” and “super bugs:’ which can only be killed with ever more toxic poisons like 2,4-D (a major ingredient in Agent Orange). GMOs are a direct extension of chemical agriculture, and are developed and sold by the world’s biggest chemical companies. The long-term impacts of GMOs are unknown, and once released into the environment these novel organisms cannot be recalled.

    Just sayin that if you have nothing to hide and your product adds value to peoples lives you wouldn't fight so hard to hide the fact that it is being consumed....why cant we just do what has worked for us for so long by cross breading and hybridizing plants....

    good for General Mills....we all have a right to know what is in our food and decide whether we want to consume it or not....

  • Report this Comment On January 07, 2014, at 6:19 PM, chukalukabus wrote:

    The fool didn't bother to read GM's press release.

    What?

    As for another poster on this thread stating there have been no long term studies on GMO's...

    You are dead wrong. There have been thousands of studies.

    They all have the same conclusion: GMO crops are safe and nutritional.

    Anything stating otherwise is just made up.

  • Report this Comment On January 09, 2014, at 8:45 PM, BigNuts55 wrote:

    Shamus,

    Are you aware the acronym GMO is never defined in this article? Yes, I looked it up, but that does not excuse the poor editing on this site.

  • Report this Comment On January 12, 2014, at 10:45 AM, cmalek wrote:

    BIG, BAD NASTY GMOs! The latest "scare du jour".

    The same thing happened back in the 70s with Alar being sprayed on apples. People with no lives and no science education got everybody in a tizzy that "our children were being poisoned by Alar!" What these do-gooders and crusaders did not mention was that you had to eat 5000 pounds of apples PER DAY to be adversly affected by Alar.

    All you people that are so dead set against GMOs should read independent and unbiased reports (not just the ones supporting your point of view) about what GMOs are and their effects on humans.

    @chukalukabus:

    If there "have been thousands of studies" could you do us a favor and point us to just one. However, make sure that the study DID NOT start out with the premise that "GMOs are poison" and then went on to prove it. That can hardly be considered unbiased.

  • Report this Comment On January 12, 2014, at 4:27 PM, RealityCounts wrote:

    Yes, Great Pursuers of Truth: Oats are probably the only 'large cash crop' that have never BEEN GMO'ed. It's the rest of the crud in cereal that comes into question. People look the way they look-keeping in mind that we are the most grossly obese society in the world-while rapidly spreading that 'protein culture' of ours to China and Japan-because our citizenry consumes things that are INDIGESTIBLE BY OUR BODIES. This manifests itself in obesity-period, end of story.

    Proof that the U.S. is becoming third-rate:

    1. October 2013 MEXICO BANS the growing of

    ALL GMO'ed Corn (U.S. biggest GMO crop)

    because it is ruining thousands of years of

    its' own growing/harvesting culture as about

    10 types of organic corn varieties are indigenous

    to Mexico-not to mention South America;

    2. Uruguay and Paraguay-it is illegal to raise Beef

    using GMO Feed Products and Steroids.

    Don't kid yourself-because of the death grip Monsanto has on all of our lovely politicians-honest Grocers seeking pure Organic Beef, especially, have to import much of their product.

    Some 'bread basket to the world' we have become...

    Monsanto can say all that it wants about drought/blight/pestilence proof seeds. Sooner or later, nature will figure out a way to beat all of those things by simply becoming resistant to those strains. Then, simply put, Monsanto has to 'turn up' the Franken Food Volume i.e. more inedible additives to keep achieving the same results...

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2783161, ~/Articles/ArticleHandler.aspx, 12/20/2014 10:30:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement