A consumer advocacy organization called the Environmental Working Group (EWG) recently released a report raising concerns about the presence of an herbicide in breakfast foods. The group tested more than 40 oat-based products from several companies and called out by name PepsiCo's (NASDAQ:PEP) Quaker division, General Mills (NYSE:GIS), Kellogg (NYSE:K). The study found most of the tested products contained higher-than-expected levels of a chemical called glyphosate.
What is glyphosate and how did it get into cereal products?
Glyphosate has been used to control weeds in farming for more than 40 years. It is most widely known as a key ingredient in Monsanto's Roundup. Monsanto was recently ordered by a California court to pay $289 million to a school employee who believes his cancer was caused by exposure to the chemical. The company plans to appeal. Although the chemical has been on the watch list of ingredients with a possible link to cancer, the trial doesn't prove glyphosate causes cancer. The verdict reflects the jury's belief that Monsanto wasn't open about the risks of using Roundup.
Monsanto was acquired by Bayer Group in June. Bayer issued a press release this week saying in part that it "believes that the jury's decision is at odds with the weight of scientific evidence, decades of real world experience and the conclusions of regulators around the world that all confirm glyphosate is safe and does not cause non-Hodgkin's lymphoma. ... As this case proceeds, Bayer believes courts ultimately will find that Monsanto and glyphosate were not responsible for Mr. Johnson's illness."
EWG's findings about breakfast items were published soon after the Monsanto verdict and were quickly picked up by the media, but concerns about glyphosate aren't new to Quaker. The company faced a lawsuit two years ago alleging it was "deceptive and misleading" about products labeled "100% natural" when containing traces of glyphosate. A judge threw the case out, saying the levels of glyphosate were well below government thresholds.
Quaker and General Mills both issued statements saying their products meet federal standards and are safe.
What do the EWG findings mean?
EWG's report strongly suggests that eating a small amount of these grain-based products exposes people to a pesticide that may increase risk of cancer. Worth noting is EWG's target for an acceptable amount of glyphosate in food. EWG has selected 160 parts per billion (ppb) as a threshold for safe consumption of glyphosate. It started with California's recommended level for foods, then made it stricter to take into account children's smaller size. To put this into a visual perspective, the EWG target of 160 ppb is equivalent to 1 inch in a 100-mile stretch of road.
Even before the release of the EWG's report, some food producers were refusing to purchase grain exposed to glyphosate, but not because of health risks. Instead, they based their decision on testing which showed glyphosate reduced the quality of the grain and the food it's used to produce. Whether driven by health risks or food quality concerns, only a few U.S. manufacturers have taken direct action to limit use of the herbicide-treated ingredients.
Will EWG's findings affect sales?
Fear of cancer can affect Americans' behaviors. Research has suggested chances of cancer are higher from eating grilled meat, bagels, or drinking coffee. People may not be cutting back much on those products, but for others, like artificial sweeteners and trans fats (oils used to help foods last longer), links between consumption and cancer did weaken sales. In the case of trans fats, research and the resulting backlash resulted in government regulation.
The EWG's report about glyphosate names a large list of brands and products, some of which are targeted toward children. The list and broad media coverage are raising concerns, at least in the short term. Any risk of eating a cancer-linked food is too big for some people and for many parents. But additional evidence may be needed before we see manufacturers respond with changes to their supply chain.