Manufacturers responding to non-G.M.O. trend

by Keith Nunes
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Consumer concerns around health and wellness and the environment are supporting the trend.

The anecdotal evidence suggesting a shift of mainstream food and beverage products toward non-genetically modified ingredients is growing. During the month of February, alone, several companies, large and small, announced initiatives meant to establish a position in the niche or differentiate themselves from other manufacturers.

On Feb. 2, for example, Archer Daniels Midland Co., Chicago, announced it had acquired a controlling stake in Harvest Innovations, a manufacturer of minimally processed, expeller-pressed soy proteins, oils and gluten-free ingredients. All of the products manufactured by Harvest Innovations are non-G.M.O.

“More and more consumers are looking for foods that are gluten-free, that aren’t genetically modified, and that are healthy and organic, and ADM is perfectly positioned to meet those needs,” said Vince Macciocchi, president of ADM’s Wild Flavors and Specialty Ingredients business unit. “We were already the provider of choice for a wide range of healthy, clean label ingredients, and in the last year, we’ve significantly expanded our product portfolio. Today’s addition perfectly complements our existing ingredient businesses and offers customers a full-service, one-stop shop for their ingredient needs.”

On Feb. 9, La Brea Bakery, Los Angeles, a small baking company, announced it is in the process of transitioning its entire line of artisan bread to non-G.M.O. ingredients. Many of La Brea Bakery’s bread products already are certified non-G.M.O. by the Non-GMO Project, according to the company. La Brea Bakery will transition the rest of the products that aren’t already non-G.M.O. throughout the year, with the entire bread portfolio 100% non-G.M.O. by Dec. 31, 2016.

La Brea Bakery sesame semolina loaf, non-G.M.O.
La Brea Bakery announced it is in the process of transitioning its entire line of artisan bread to non-G.M.O. ingredients.

“This is an investment we are making in our brand to stay relevant with consumer eating patterns,” said Kristina Dermody, president of La Brea Bakery.

That same day New World Pasta Co., Harrisburg, Pa., and a subsidiary of Ebro Foods, said its pasta products, which are marketed under the American Beauty, San Giorgio, Ronzoni, Creamette, Prince and Skinner brands, had been certified non-G.M.O. by the Non-GMO Project.

To Jennifer Tesch, chief marketing officer for Healthy Food Ingredients, Fargo, N.D., the trend is not surprising.

“During the past several years, from a domestic standpoint, consumer understanding and consumer education of G.M.O.s, non-G.M.O.s and the Non-GMO Project has grown,” she said. “There was a time when it was not very well known, but by informing consumers about what it is and the fact they have been given a choice — that has really driven the growth, and we are seeing the numbers explode exponentially.”

The numbers are driven by activity in the market as ingredient companies strive to add non-G.M.O. certified ingredients to their product portfolios. Data provided by the Non-GMO Project show the growth has been rapid.

The number of products bearing the Non-GMO Project Verified label continues to grow.

The Non-GMO Project lists verified products under a variety of categories, including bread and baked goods, dairy products, soups and sauces, etc. Within its wholesale ingredients category, which includes such ingredients as flour, soybean meal, seasonings, etc., the number of verified products has risen from 15 in 2010 to 852 by the end of 2015.

“… The interest from wholesalers and ingredient manufacturers has experienced the most growth in the past two years,” said Annie Shannahan, client services director for the Non-GMO Project, Bellingham, Wash. “In fact, 81 products were added to this category in January (2016) alone. If that trend continues this year, we will see twice as many new wholesale products verified as compared to 2015. We see this as a good indication that consumer demand is starting to have a rippling effect on the supply chain.”

This past December, Flavorchem Corp., Downers Grove, Ill., introduced a line of Non-GMO Project verified flavors, including cocoa, coffee, orange, lime, peppermint and lemon. Edward McIntosh, marketing manager for the company, said Flavorchem’s non-G.M.O. initiative is in an effort to be proactive.

“The public is still increasingly focused on health and wellness and clean labels,” he said. “Non-G.M.O. ingredients provide that peace of mind to consumers.”

He added that the number of companies reaching out to Flavorchem for non-G.M.O. ingredients is growing.

“The nutraceutical and beverage industries we have seen show the strongest demand for non-G.M.O. ingredients whereas confectionery shows the least,” he said.

The market research company Packaged Facts, Rockville, Md., estimated that sales of non-G.M.O. food and beverage products totaled $200 billion in 2014. In its report “Non-G.M.O. foods, U.S. and global markets perspective, second edition” Packaged Facts forecasts sales of non-G.M.O. products will reach $330 billion by 2019.

The company’s sales forecast is supported by the findings of a consumer survey it did in 2015 to gauge U.S. consumer interest in non-G.M.O. products. A similar survey conducted in 2013 found that approximately 30% of respondents reported buying grocery products with G.M.O.-free labels and 27% said they bought organic products in part to avoid G.M.O.s. By 2015, the numbers had jumped to 39% and 35%, respectively.

Howard Waxman, a business research analyst and author of the Packaged Facts report, attributed the growing interest in products manufactured with non-G.M.O. ingredients to a number of factors, including consumers being worried about long-term health, a lack of trust in the food industry, the impact of G.M.O.s on the environment and fears the increased use of G.M.O.s will drive small farmers out of business.

Mr. Waxman’s findings are supported by research conducted by the Food Marketing Institute, the Grocery Manufacturers Association and the consultancy Deloitte, which found consumer issues such as health and wellness, safety and social impact are having a greater influence on consumer purchasing decisions.

Ms. Tesch of Healthy Food Ingredients said the U.S. market for non-G.M.O. products is in its infancy.

“If you look 10 to 15 years ago, there was no domestic market, but it was already very apparent in Europe,” she said. “Then the market started to develop in Southeast Asia in countries like Japan.

“G.M.O.s have become a political issue here, and we have seen several state laws and state bills that have passed or just narrowly missed and those efforts are causing more awareness around the issue.”

Given that most non-G.M.O. crops are grown on forward contracts, Ms. Tesch said ingredient sourcing and product development lead times can vary.

“It depends on the size of the roll-out,” she said. “What type of product launch are we talking about? Is it a full roll-out across the country or are we talking about a region? If it’s a 100% switch, you may be looking at a six-month lead time.”

In its report, Packaged Facts estimated introductions of products featuring non-G.M.O. ingredients to be 2,000 per year, up from a few hundred just a decade ago. How the trend evolves will depend on a number of factors, most notably on the regulatory front where government officials and industry stakeholders are debating whether the labeling of foods containing G.M.O.s should be voluntary or mandatory.

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