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The Food Industry's Choice

The food industry has a choice to make: stand with the chemical companies or stand with its consumers.
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By guest blogger Robyn O'Brien, author and former financial and food industry analyst

Fourteen years ago to the day almost, I was in NYC at a conference hosted by Merrill Lynch as a financial analyst covering the food industry. If you had suggested then that I'd be writing this today, I'd have said you were nuts.

When I worked as an analyst, I learned how the food industry uses ingredients or their artificial counterparts to manage its profitability and meet earnings. But never once while attending conferences or speaking with traders on the floor of the stock exchange did our team ever meet with the chemical companies engineering their products into our food, ingredients that required increased use of a portfolio of chemicals to help them manage their earnings. And we weren't alone.

But times are changing. And it's fascinating to see how the market is responding.

The brands in our portfolio were iconic, trusted brands that we grew up on. Today, companies like Chipotle and Annie's have stocks that soar when they announce that they're going to drop genetically engineered ingredients from their products or they publicize that their packaged makings of mac and cheese don't contain artificial junk. At the same time, companies like Kellogg's that refuse to respond to consumer demand see their earnings slipping and find themselves resorting to layoffs.

It appears that companies have a choice: to entrench and continue to defend the status quo or to adapt and embrace a food supply that meets the needs of today's consumers.

Many of us are waking up to the reality that while our food may look the same, a lot has changed, and it's done so without our knowledge. Last year, we learned how "pink slime" had been slipped into our hamburger meat, and this year, the focus is on GMOs, an unemotional acronym for a loaded topic.

Introduced in the 1980s and patented for their novelty, GMOs, or genetically engineered organisms, quietly found their way into our foods in the 1990s.

Why is this a big deal? Perhaps the six points listed below will shed some light:
  1. The novelty of these ingredients is so unprecedented that the Environmental Protection Agency now regulates genetically engineered corn as a pesticide. Before GMOs, insecticide was sprayed on corn and could be washed off. With the introduction of GMOs, corn is engineered to produce its own insecticide. Why label? If you had a choice between the two kinds of corn, one that is regulated as a food and the other regulated as a pesticide, which would you choose?
  2. The Food and Drug Administration says that these foods look, taste, and smell the same, that they are "substantially equivalent," but the United States Patent and Trademark Office says they are substantially different, with GMOs being so unique that the office has granted patents to the chemical companies that invented them. Not unlike Intel Inside, we now have GMO Inside.
  3. Chemical companies engineered food crops like soy and corn to withstand increasing doses of their chemicals. It's a brilliant business model if you're selling chemicals. And while shareholder reports note what a remarkable impact that has had on the top lines of weed killer and other chemical products, the President's Cancer Panel is telling all of us, especially those of us with kids, to reduce our exposure to these very same chemicals. Wouldn't you like to know which corn and which soy has been saturated?
  4. Twenty-five states have introduced GMO-labeling legislation, and more than 6 million residents voted for labels in California, the first state to introduce a labeling initiative last year.
  5. Sixty-four countries around the world label these ingredients. A partial list includes every country in the European Union, Japan, Australia, and even Russia, India, and China.
  6. More than 20 countries around the world flat out banned GMOs, didn't introduce them at all. The reasons vary, from no long-term human health studies and no synergistic toxicity studies (eating a pesticide sprayed with other weedkillers, anyone?) to no prenatal studies and concerns over everything from cancer to allergies.
So why is the industry so opposed to labeling? We label the inside parts of our clothes, our cars, and our computers, so why not our corn? The industry would say that it's just fear-mongering. But the bottom line is that it's these companies' fiduciary duty to do just that, dismiss labeling efforts. Labels would bring liability, traceability, and accountability. In other words, it would be increasingly hard for them to claim "no evidence of harm." Without labels, there simply is no evidence, and they are fighting for their shareholders to keep it that way. It's their fiduciary duty to shareholders.

But labels matter, especially in light of the escalating rates of allergies, autism, diabetes, and pediatric cancers. Changing labels doesn't cost more money. The industry does it all the time; just think of the recent label changes we've seen for the Halloween, Thanksgiving, and Christmas seasons.

And while the industry is quick to label those of us calling for full disclosure (I've been called a lot of names), the most important name that most of us hear is "Mom" or "Dad." And as parents around the country wake up to what is happening to our food supply--how these ingredients aren't being used in other countries and how American companies are opting out of these controversial ingredients overseas while leaving them in here--they are finding their courage and beginning to use their voices and platforms to create change. In some cases, that change has been positive: One look at Chipotle's share price shows how embracing the customers' request for more information can drive shareholder return. In other cases, the change has been negative: Kellogg's second quarter earnings of 2013 were down, and they recently announced a 7 percent cut in its employee base, as a grassroots movement to reject its products, aimed at children and loaded with genetically engineered ingredients, grows.

The food industry has a choice to make: stand with the chemical companies or stand with its consumers.

The fiduciary duty is an obvious one, to reduce the risk of litigation and to meet consumer demand. The food industry should join its consumers and honor Americans' right to know if the ingredients in their food are now genetically engineered or to opt out of buying and eating them entirely. Continuing to pump ingredients into the food supply that expose them to liability makes no sense.

Robyn O'Brien is a former financial analyst, mother of four and author. You can learn more at

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