David Sprinkle, Research Director, Packaged Facts04.01.14
GMOs (genetically modified organisms) are plants and animals that have been created through the use of technologies that merge molecules of deoxyribonucleic acid (DNA) from the genes of different plant and animal species to create new life forms that have not previously existed in nature and that could not be created through traditional crossbreeding techniques.
The process of creating GMOs is referred to as genetic engineering (GE), bioengineering and biotechnology. The primary aim in creating GMOs is to develop plants that are resistant to pests and other forms of infestation. Other goals in creating GMO plants are to develop plants that can grow in places foreign to their natural environment and tolerate extreme weather conditions. GE animals are typically intended to develop faster and with higher food value.
Global Growth
In our report “Non-GMO Foods: Global Market Perspective” (October 2013), Packaged Facts projected global sales of non-GMO food and beverages will reach $550 billion in 2014, or nearly 11% of the global market. However, this market exists largely under the rubric of organic products, and the question remains whether non-GMO will simply bolster the case for organics, or truly mark a fork in the road for the food industry.
Packaged Facts estimated a compound annual growth rate of 28% in the number of non-GMO foods and beverages introduced globally between 2009 and 2013. The number of product launches doubled between 2009 and 2010, remained fairly stable over the 2010-2012 period, then surged by roughly 25% in 2013. The key areas of opportunity are currently to be found in Europe, where consumers are seemingly opposed to all things GMO, and in the U.S., which is the main producer of GMO crops.
For packaged foods, the key categories for non-GMO product introductions globally are dairy case; condiments and ingredients; meals, entrees and side dishes; and salty snacks. Dairy case has accounted for 19% of non-GMO new product introductions globally, though only for 7% of those in the U.S. Non-GMO salty snacks, conversely, are disproportionately important in the U.S. market.
In Europe, the opposition to GMO foods has encouraged leading international food manufacturers such as Nestlé and Coca-Cola to introduce non-GMO versions of their products, such that Europe accounted for approximately seven out of 10 non-GMO food and beverage new product introductions globally between 2009 and 2013. Additionally, in the European market, dozens of retail grocery organizations have banded together to demand Brazil grow more non-GMO soybeans. Soybeans are used in animal feed and grocers are demanding more non-GMO varieties so they can position their fresh meat and poultry as GMO-free.
In the U.S. retail market, Whole Foods announced plans to label GMO products by 2018, and Trader Joe’s sells only non-GMO products. Among chain restaurants, Chipotle Mexican Grill has announced efforts to remove GMO ingredients from its sourcing. Mainstream U.S.-based food manufacturers that have announced non-GMO reformulations include Ben & Jerry’s ice cream (a Unilever brand), General Mills for the original Cheerios variety (but not otherwise) and Post Foods for Grape-Nuts. At the same time, the certification organization NSF International has stepped up to join forces with the Non-GMO Project to help deal with a backlog of verification requests. In addition, U.S. manufacturers are being pressed to identify products that have GMO ingredients through a series of state-by-state referendums that call for mandatory labeling of these products.
Much of the non-GMO labeling in other regions of the world is done by the marketers themselves, with assurances they have thoroughly vetted their products. But there is at least one organization, the Global ID Group, which has representation in Europe, the U.S., Asia, South America and, beginning in 2013, Australia. The company provides accredited third-party certification to the food industry including manufacturers, retailers, farmers, agricultural processors and ingredient producers. (For more on non-GMO certification see page 36.) By country, China and Australia both rank among the top 10 in the number of non-GMO new product introductions.
In the rest of the world, there is growing demand for organic foods and beverages, reflecting improving economies and the emergence of middle class consumerism in developing nations. The rising popularity of organic products implies increased demand for non-GMO labeling of products.
Consumer Interest
Despite these favorable signs for growth in sales of non-GMO products, there are also indications that consumer demand may not be as solid as it appears. Some surveys have found consumer interest in having non-GMO choices isn’t as deep as it is broad. A Packaged Facts consumer survey in January/February 2014 found 20% of U.S. consumers strongly agree they want non-GMO grocery products, and 22% somewhat agree, compared with only 12% strongly disagreeing and another 12% somewhat disagreeing.
According to this same survey, fewer than 7% of U.S. consumers indicated non-GMO was the “most important” product characteristic in choosing their breakfast cereal. General Mills announced in February 2014 that GMO-free re-formulation did not move the sales needle for Cheerios. So while there is widespread concern about GMOs in the U.S. market and solid support for mandatory labeling of products with GMO ingredients, there is no evidence that a majority of consumers will flock to non-GMO products.
More generally, a study by the Center for Food Safety found that while about 60 countries have mandatory labeling when it comes to GMO ingredients in food and beverage products, some 130 do not. In addition, there does not appear to be any trend toward an increase in the number of countries with mandatory labeling, nor is there any current indication of any major surge in non-GMO labeling pressures outside of the U.S.
Seeds for the Future
GMO crops such as corn and soybeans have been grown commercially for two decades, and there is broad agreement within the scientific community regarding their safety. However, there is an intense body of dissent from this position in the U.S. and Europe. Elsewhere though, more and more countries are getting on board the GMO bandwagon, especially developing nations where the need for dependable crops is critical in the fight to end hunger and poverty.
There is still resistance to GMO crops in economically hard-pressed African, Asian and Latin American nations, but the GMO seed companies working with international food and agriculture agencies and non-governmental organizations are pushing forward with growth agendas built around the implementation of GMO agriculture. While the process will be slow and at times uncertain, the long-term trend appears to favor more use of GMO crops around the world—where securing an adequate food supply is all too often the over-riding concern.
The spread of GMO crops will likely have a two-fold effect on the development of the market for non-GMO foods. On the one hand, the expansion of GMO crops—not just corn and soybeans, but also sugar beets and a broad variety of vegetables—will increase the presence of GMO ingredients in food everywhere. Barring a health or ecological disaster resulting from GMO plants, consumers are likely to become more comfortable with consuming foods with GMO ingredients, even if they are labeled as such.
On the other hand, a portion of the global population will continue to resist consuming GMO ingredient foods. Marketers will want to gain their business by producing an increasing number of non-GMO alternatives and highlighting organic foods as non-GMO. In effect, the expansion of GMO crops will clarify and substantiate the market for non-GMO products.
David Sprinkle is the research director of Packaged Facts, a division of MarketResearch.com. He can be reached at dsprinkle@marketresearch.com.
The process of creating GMOs is referred to as genetic engineering (GE), bioengineering and biotechnology. The primary aim in creating GMOs is to develop plants that are resistant to pests and other forms of infestation. Other goals in creating GMO plants are to develop plants that can grow in places foreign to their natural environment and tolerate extreme weather conditions. GE animals are typically intended to develop faster and with higher food value.
Global Growth
In our report “Non-GMO Foods: Global Market Perspective” (October 2013), Packaged Facts projected global sales of non-GMO food and beverages will reach $550 billion in 2014, or nearly 11% of the global market. However, this market exists largely under the rubric of organic products, and the question remains whether non-GMO will simply bolster the case for organics, or truly mark a fork in the road for the food industry.
For packaged foods, the key categories for non-GMO product introductions globally are dairy case; condiments and ingredients; meals, entrees and side dishes; and salty snacks. Dairy case has accounted for 19% of non-GMO new product introductions globally, though only for 7% of those in the U.S. Non-GMO salty snacks, conversely, are disproportionately important in the U.S. market.
Much of the non-GMO labeling in other regions of the world is done by the marketers themselves, with assurances they have thoroughly vetted their products. But there is at least one organization, the Global ID Group, which has representation in Europe, the U.S., Asia, South America and, beginning in 2013, Australia. The company provides accredited third-party certification to the food industry including manufacturers, retailers, farmers, agricultural processors and ingredient producers. (For more on non-GMO certification see page 36.) By country, China and Australia both rank among the top 10 in the number of non-GMO new product introductions.
In the rest of the world, there is growing demand for organic foods and beverages, reflecting improving economies and the emergence of middle class consumerism in developing nations. The rising popularity of organic products implies increased demand for non-GMO labeling of products.
Consumer Interest
Despite these favorable signs for growth in sales of non-GMO products, there are also indications that consumer demand may not be as solid as it appears. Some surveys have found consumer interest in having non-GMO choices isn’t as deep as it is broad. A Packaged Facts consumer survey in January/February 2014 found 20% of U.S. consumers strongly agree they want non-GMO grocery products, and 22% somewhat agree, compared with only 12% strongly disagreeing and another 12% somewhat disagreeing.
According to this same survey, fewer than 7% of U.S. consumers indicated non-GMO was the “most important” product characteristic in choosing their breakfast cereal. General Mills announced in February 2014 that GMO-free re-formulation did not move the sales needle for Cheerios. So while there is widespread concern about GMOs in the U.S. market and solid support for mandatory labeling of products with GMO ingredients, there is no evidence that a majority of consumers will flock to non-GMO products.
More generally, a study by the Center for Food Safety found that while about 60 countries have mandatory labeling when it comes to GMO ingredients in food and beverage products, some 130 do not. In addition, there does not appear to be any trend toward an increase in the number of countries with mandatory labeling, nor is there any current indication of any major surge in non-GMO labeling pressures outside of the U.S.
Seeds for the Future
GMO crops such as corn and soybeans have been grown commercially for two decades, and there is broad agreement within the scientific community regarding their safety. However, there is an intense body of dissent from this position in the U.S. and Europe. Elsewhere though, more and more countries are getting on board the GMO bandwagon, especially developing nations where the need for dependable crops is critical in the fight to end hunger and poverty.
There is still resistance to GMO crops in economically hard-pressed African, Asian and Latin American nations, but the GMO seed companies working with international food and agriculture agencies and non-governmental organizations are pushing forward with growth agendas built around the implementation of GMO agriculture. While the process will be slow and at times uncertain, the long-term trend appears to favor more use of GMO crops around the world—where securing an adequate food supply is all too often the over-riding concern.
The spread of GMO crops will likely have a two-fold effect on the development of the market for non-GMO foods. On the one hand, the expansion of GMO crops—not just corn and soybeans, but also sugar beets and a broad variety of vegetables—will increase the presence of GMO ingredients in food everywhere. Barring a health or ecological disaster resulting from GMO plants, consumers are likely to become more comfortable with consuming foods with GMO ingredients, even if they are labeled as such.
On the other hand, a portion of the global population will continue to resist consuming GMO ingredient foods. Marketers will want to gain their business by producing an increasing number of non-GMO alternatives and highlighting organic foods as non-GMO. In effect, the expansion of GMO crops will clarify and substantiate the market for non-GMO products.
David Sprinkle is the research director of Packaged Facts, a division of MarketResearch.com. He can be reached at dsprinkle@marketresearch.com.
|
Half of specialty store shoppers will pay more for non-GMO products, according to NPD. Labeling of genetically modified (GMO) foods is at the center of debate across the U.S., but the decision to buy or not buy non-GMO foods is often based on price, according to The NPD Group. A recent food market research study on GMO awareness and concern among consumers found that 67% of all primary grocery shoppers are not willing to pay a higher price for non-GMO foods. More than half of U.S. consumers expressed some level of concern about genetically modified organisms, but when asked to describe GMOs, many primary grocery shoppers were unclear, which may be a factor in their unwillingness to pay a higher price for non-GMO foods, according to the NPD study, “Gauging GMO Awareness and Impact.” Also unclear to consumers was the prevalence of GMO vs. non-GMO items at grocers. Four out of 10 primary grocery shoppers either thought they buy non-GMOs mostly while the same ratio of consumers said they are not sure. More consumers have been expressing concerns about GMOs as confusion persists. “Since more consumers over the last few years have been expressing concerns about GMOs, it’s time to have a dialogue with shoppers about what they are and what roles they play in the food chain,” said Darren Seifer, NPD food and beverage industry analyst. “Manufacturers and retailers can take an active role in this conversation by helping to educate consumers about GMOs, and learning which food and beverage categories face scrutiny among consumers when they are trying to determine if the product contains GMOs. Marketers who wish to get messages out about their products as they relate to GMOs should engage both traditional and social media for effective communication avenues.” |
