The GMO-Free Stream Is Turning Into a Flood

As advocates push harder to close the debate, more cracks in the wall form that will end up causing a torrent.

Jan 21, 2014 at 7:18PM

Like cracks in a dam that lead to the whole structure crumbling, the move toward removing genetically modified foods from the food supply, or at least informing the consuming public about how much of the food they eat has been altered in the lab, is spreading. It's only leaking through in droplets now, but soon it may become a torrent.

Aside from halfhearted attempts by the government to mandate GMO labeling, industry itself is beginning to see the benefit in identifying the products that have been modified, or more correctly, highlighting those that are GMO-free.

When it rains, it pours
The latest large food company to join the cascading list of those providing a product that isn't affected by genetic modification, Post Holdings (NYSE:POST), just unveiled that its Grape-Nuts Original will be Non-GMO Project-verified as of this month, and it also notes its Grape-Nuts Vintage is GMO-free as well. By avoiding the inclusion of soy, the most genetically modified food crop in existence, with some 94% of all seed being altered in the lab, Post is able to "clean up" the perception of a popular brand.

DuPont is the largest manufacturer of genetically modified soy seeds, ahead of even Monsanto, and it's estimated that about 60% of all processed foods on the market today contain soy. With at least 85% of all soybeans, corn, sugar beets, and canola grown from GMO seeds -- most of which are made by Monsanto -- it means if the label contains at least one of those ingredients, there's a good chance it's been modified on a genetic level, further suggesting some 60% to 70% of all food on the supermarket shelf is GMO.

Post's move, however, follows closely on the heels of General Mills (NYSE:GIS), which recently announced its original Cheerios cereal is now GMO-free -- though unlike Grape-Nuts, it isn't verified by a third party. And Kellogg (NYSE:K) has said that by the end of this year all existing Kashi cereals and Chewy Granola Bars -- two of Kashi's biggest products -- will sport Non-GMO Project verification. In 2015, all of new foods Kellogg introduced under the Kashi brand will be Non-GMO Project Verified and will also be at least 70% organic.

Although many of the food makers like General Mills have contributed millions of dollars to defeat labeling initiatives -- even if it might be the right thing to do for the wrong reason -- they've recognized there's a profit to be made from consumers desiring clean and healthy foods, so that momentum is building to at least create a segregated food list.

Rain o'er me
With the push led by the likes of Whole Foods Market (NASDAQ:WFM), which is undertaking an initiative of its own to inform customers by 2018 which foods it sells contain such ingredients, enough pressure can mount for manufacturers and suppliers to follow suit. It's not going to happen overnight or even anytime soon, but when there's enough of a backlash by consumers against products that don't carry a third-party verification seal -- call it guilt by disassociation -- we're going to see a stampede of companies culling GMO foodstuffs out of their product lines and demanding growers avoid them as well.

Already there are anecdotal media reports of an organic food shortage, and though "organic" usually means GMO-free (the USDA has a couple of small loopholes), it does signal consumers are giving more thought to what they're eating.

The main players in genetic modification remain Monsanto, DuPont, and Dow Chemical, along with Bayer and Syngenta. Over the past two decades, they've together purchased more than 200 seed companies and now completely dominate the seed market. Only when consumers push back against food product companies will the manufacturers force changes at their suppliers, who will cause the farmers to change their agricultural practices.

Cry me a river
When Kellogg announced the change at Kashi, it admitted the brand had gotten "too mainstream" and it wanted to restore its growth cycle. If a company is counting on being GMO-free as a means to exciting growth, it's understandable why proponents are worried and why the anti-GMO trickle is about to turn into a flood.

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John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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