For many years, some parts of corporate America haven't taken seriously the controversy surrounding genetically modified organisms, but times are changing. General Mills' (NYSE:GIS) original Cheerios are now GMO-free. When a company -- and brand -- this big makes a move like this, it says a lot about shifting consumer demand.
Original Cheerios are principally composed of oats, a crop that isn't genetically modified to begin with. To boast the new "Not Made with Genetically Modified Ingredients" label on the original Cheerios packages, General Mills found a way to make the cereal using non-GMO alternatives to its cornstarch and sugar ingredients.
According to General Mills spokesman Mike Siemienas, "There is broad consensus that food containing GMOs is safe, but we decided to move forward with this in response to consumer demand."
If a company as big as General Mills cites consumer demand in a move like this one, it's obvious that what was once considered a fringe concern has gone very much mainstream.
This is huge news coming from an old-school giant like General Mills and its major cereal brand, which was first served in 1941 under the name "Cheerioats."
Other major companies and brands had already made big moves on the GMO front this year, showing growing attention to the consumer topic.
Whole Foods Market (NASDAQ:WFM) will require its suppliers to label whether their products contain GMOs by 2018. It's the first major grocery chain to make such a deadline for GMO transparency .
Chipotle (NYSE:CMG) has vowed to label its ingredients, and is working on phasing out GMOs as it can. In fact, last quarter, on its quarterly conference call, Chipotle management talked about phasing out the ingredients. It's a sure sign that things are changing when a publicly traded company discusses removing GMOs in its supply chain on a conference call with analysts.
Kellogg's (NYSE:K) Kashi is also trying to remove GMOs from its products. Eleven of its products are already verified by the Non-GMO Project, and it's still working on the rest. It's committed to be able to offer more than half of its products GMO-free by 2015.
Major providers of genetically modified seeds, many scientists, and the Food and Drug Administration say that genetically modified seeds and crops are perfectly safe. GMO opponents point out potential health concerns and possible negative environmental ramifications that could result from tinkering with the genetics of major food crops.
The arguments as to whether GMOs are perfectly safe or horribly hazardous could -- and do -- go on and on. Still, one of the simplest things companies can do -- and most don't want to do -- is to simply label whether or not their foods contain GMOs.
In the Cheerios case, though, General Mills is going beyond simply labeling it -- it's marketing original Cheerios as GMO-free. For the companies most dependent on widespread public acceptance of GMOs, this may be a striking blow.
Companies such as Monsanto, DuPont, Dow Chemical, and Syngenta make genetically modified seeds and herbicides for major U.S. crops like corn and soybean. That biotech area is obviously under pressure given many consumers' distrust of GMOs, and the topic's heating up and gathering traction.
Industry giants (and rivals) including the aforementioned have recently responded to controversy by funding a website, GMOAnswers.com, for public outreach with their own side of the story. According to the site: "Join us. Ask tough questions. Be skeptical. Be open. We look forward to sharing answers."
Is outreach too little, too late?
What you're missing
It looks like awareness of GMOs -- and concern about such ingredients -- has reached past a relatively small group of consumers. With a brand like Cheerios jumping into the mix, you've got to wonder: Could eradicating GMOs become a mainstream competitive advantage instead of an obscure niche? It seems such a shift may be in its initial phase.
Granted, the American food supply is currently dominated by genetically modified crops, which makes supply tight and prices high for organic, but consumer demand could drive a faster transition of more farms from conventional to organic. With pioneers like Whole Foods and Chipotle leading the way, we may see a different kind of modification of our food supply -- and the stocks we should invest in.