Imagine there are two organizations that fund their operations by selling highly visible food brands to customers across the country. One is worth $33 billion, owns private jets, and sells products at supermarkets in thousands of locations. It has diversified into hundreds of products in dozens of brands and relies on a complex distribution system aimed at minimizing risks and volatility. The other has members who refer to themselves as Daisies and Brownies, spends weeks every summer bunking in cabins, and sells products by going door to door and through word of mouth. It relies almost entirely on one brand that is sold for a limited time each year.
Which organization would seem more likely to succumb to pressure to change ingredients in its products? You might figure the private-jet-flying corporation would be "Too Big to Care" and choose the less diversified organization. And, of course, you would be wrong.
There might not be a merit badge for standing up for science, but assuming there were, General Mills (NYSE:GIS) would have a spot missing on its sash. On the other hand, the Girl Scouts of America stood its ground and leaned on global scientific consensus when asked to remove food ingredients made from genetically modified organisms, or GMOs, from its famous Girl Scout Cookies. The organization has even used activist pressure as a teaching moment for its young members -- and we could all learn from it.
Our cookies contain genetically modified ingredients. So what?
Don't worry, you still get to inhale Samoas and Thin Mints by the sleeve. There's even a gluten-free cookie being sold in select regions this year. Just don't expect your Girl Scout Cookies to go GMO-free anytime soon. Why not? Here's what the organization has to say on the topic:
Girl Scouts of the USA listens to our customers and we work with our trusted bakers, who are industry leaders, to develop recipes using ingredients that will produce the best-tasting and highest-quality cookies while simultaneously addressing industry trends, scientific trends, and of course, consumer preference. As an organization, we continue to defer to required Federal guidelines as they relate to our products.
At the current time, there are genetically modified agricultural crops (GMOs) in Girl Scout Cookies. Our bakers determine whether to use GMOs in Girl Scout Cookies based on a range of market-related factors and depending on the specific cookie recipe.
Girl Scouts recognizes that many people have concerns regarding GMO ingredients, and we monitor member and consumer opinion on this matter. It is important to note that there is worldwide scientific support for the safety of currently commercialized ingredients derived from genetically modified agricultural crops. The World Health Organization, the Food and Agriculture Organization of the United Nations, the U.S. National Academy of Sciences, and the American Medical Association all share this assessment. In addition, in the future, GMOs may offer a way to help feed an ever-increasing world population.
Nothing new there, but it is refreshing to see an organization with a brand that has become an annual American ritual stand up against factually incorrect claims. And why not? Girl Scouts actively participates in science, technology, engineering, and math, or STEM, programs aimed at introducing girls to knowledge-based fields that will drive the future global economy. Boys can't have all the fun.
The last line of that statement is also key; it reads, "In the future, GMOs may offer a way to help feed an ever-increasing world population." At the time of this writing, Bill and Melinda Gates are in Brussels, Belgium, advocating for the adoption of GMOs by African farmers. The philanthropic duo believe widespead adoption of genetically modified crops could improve agricultural yields on the continent by 50% in the next 15 years, thus taking a big bite out of world hunger.
Given the importance of cutting-edge science in everyday life and the global economy, I've made the case for scientifically responsible investing (a play on socially responsible investing, although they are often the same thing). Some companies have yet to catch on.
Science and investors fail with kneejerk reactions
Early last year, General Mills caved to activist pressure and removed the one ingredient (corn starch) in its Original Cheerios that was made from a GMO. Considering that the 11 remaining Cheerios brands didn't change a single ingredient, the company's attempt to appeal to the anti-GMO crowd was highly criticized by customers on both sides of the debate. The move might not have directly impacted investors, but the company dedicated an entire year of time and monetary resources to make the minor change. It later admitted that sales of Cheerios were unaffected by the move.
The same activist groups that targeted General Mills and Girl Scouts are waging fear campaigns against other consumer-facing brands and companies, including Starbucks (NASDAQ:SBUX) (to use organic dairy milk) and Sabra hummus from PepsiCo (NASDAQ:PEP).
Starbucks has invested in a technology platform that feeds coffee grinds to bacteria that convert it into nutritious animal feed or fertilizer. The milk or vegetables produced with the waste product are then sold back to Starbucks locations in Japan. Meanwhile, PepsiCo built a multimillion-dollar Biology Innovation Research Lab in New Haven, Connecticut, that will conduct cutting-edge research aimed at making the company's business better for customers and our planet.
Now ask yourself an important question: What decisions will drive future growth for the companies you own? Spending money on programs that fail to add value and only appeal to a small group of customers, or investing in next-generation technologies and products -- including those relying on biotechnology -- that cut costs and inject more sustainable practices into a business? The answer is obvious.
What does it mean for the rest of us?
There is growing resistance to consuming foods that have been genetically modified. That remains a small but vocal minority (see results from any labeling initiative placed on a ballot), but well-organized groups have pressured highly visible food brands to remove genetically modified ingredients from their products. Some campaigns have been successful, some have failed, and many more are ongoing. While these demands run counter to the opinion of regulatory and scientific institutions across the globe, consumer-facing companies large and small have succumbed to anti-GMO demands. It's refreshing to see an important and well-respected organization such as the Girl Scouts stand up for science -- even if those with shareholders and much less to lose choose not to.