Whole Foods Moves Toward More Transparent Retailing

GMOWhole Foods Market, the upscale chain of natural foods, will be the first national grocery store to implement a new initiative, which will make it obligatory to label products containing genetically modified ingredients, in its American and Canadian stores by 2018. Zintro experts share their opinion on how other retailers will respond to this initiative on transparency.

Independent Food Safety and Quality Consultant, Eric Szulczewski doubts that this movement will be an industry-wide trend toward requiring non-GMO status since achieving and maintaining GMO-Free certification might be a burden for suppliers. “The entire supply chain down to the primary producer must be monitored and certified. Documentation must be created, maintained, transmitted, and retained at all points in the supply chain. Wal-Mart has been the main driver for the adoption of SQF and Tesco has been behind a good deal of the grocery business demanding BRC compliance from suppliers. Upscale and boutique operations like Whole Foods supplied the impetus for USDA Organic certification from suppliers, and this has not trickled down to more mainstream supermarkets,” he notes. “In order to label a product as GMO-free, a third-party certification is required, just as it is to use the USDA Organic bullet to identify a product that is certified as organic. It’s up to the suppliers to determine if it is economically viable for them to perform this due diligence, and incur the extra cost that non-GMO raw materials command in the marketplace. As a Quality Manager in a private-label producing facility, Szulczewski believes that the additional expense incurred whenever the customer decided on a label change was extraordinary. “This is why there is a five-year gap between announcement and enforcement. It gives the suppliers time to achieve certification, to run out old packaging, to create new packaging with Non-GMO bullets, and to start utilizing it for Whole Foods,” he adds. “Since Whole Foods tends to be a smaller customer, and the highest costs of new packaging tend to be fixed regardless of quantity of packaging, some companies would find it more financially prudent to drop Whole Foods as a customer rather than incur the extra expense.”

According to food scientist and consultant chef, Kevin Stanton, even though large food retailers might embrace the non-GMO labeling movement by 2018, the relationship will resemble the current organic/non-organic strategy. “To enact such a plan, retailers will need to do little work. Instead, producers of finished goods and suppliers of raw ingredients will feel the burden of the certification process. Certification will require initial testing, strict document controls as well as a required system of ongoing testing. This extra step will be easy to navigate for large suppliers and producers, but small food companies might find the extra step complex and costly,” he explains. “Not just in terms of the certification process, but reformulating recipes will require time, staff and money. Genetically modified ingredients are attractive to large food companies for their reduced cost and seasonal stability. With already small margins, it will be difficult to persuade the industry at large to make such a dramatic shift.” Stanton argues that it might be difficult to convince price sensitive consumers to choose a more costly, GMO free option. “Smaller food producers who sell premium brands are likely to make the transition as demand becomes more pronounced and the availability of GMO-free ingredients becomes larger in the coming years. Producers who provide Whole Foods with finished goods will manage this transition, but the added cost of GMO-free certification will certainly be felt by the Whole Foods consumer,” he adds. “However, this added labeling requirement will open producers to new markets. Companies which transition to certified non-GMO will find it much easier to export their products to European markets, where all GMO products are currently banned. As more producers and suppliers cater to the labeling requirements of Whole Foods, these less known retailers, who do not need to directly invest in this transition, are sure to benefit greatly.”

By Idil Kan

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