Tomorrow, the Senate is set to vote on legislation that would potentially override a patchwork of state initiatives and pass a federal mandate that would block any mandatory labeling of GMO foods.
However, I don’t want to just talk about the GMO labeling debate, but rather that struggle it represents.
The struggle is this: if trust and authenticity are the prized currencies of today’s food environment, does true power come from success in the marketplace with consumers, or from top-down force from Congress to regulate labeling?
The grocery store has become Ground Zero for these two competing business strategies to play out.
The Consumer vs. Congress: where is the bigger business opportunity?
Politico broadly sketched these 2 different narratives as the “Good Food vs. Big Food” approach: The so called “Good-Food” approach focuses on crafting a better product and cultivating a compelling conversation with consumers to gain market share. Simpler ingredient lists, clear commitments around specific attributes (such as the use of antibiotics or GMOs), and transparency around ingredients and sourcing are its hallmarks. We see companies like Whole Foods, Applegate Farms and Chipotle employ this strategy.
In the so-called “Big Food” approach Washington lobbying to force favorable legislation is a key strategy. As public sentiment around food issues has intensified, lobbying dollars from the food industry has almost doubled in the past decade ago: nearly $33 million was spent in 2015 alone, according to Open Secrets. While political engagement is certainly an important pillar in setting policy, what's especially troubling in this instance is the appearance of secrecy, which lies in direct opposition to trust and transparency consumers crave. Recently unsealed documents in Washington state suggest that the Grocery Manufacturers Association may have purposefully shielded the identity of companies who poured $11 million into the fight to stop GMO labeling there.
Power vs. Force
The difference between a "Consumer" versus "Congress" strategy might be simplified into understand the difference between Power and Force, two distinctly different energies first identified by Dr. David Hawkins in his groundbreaking Map of Consciousness. And the “Good Food”approach (which align's with Hawkins' characterization of Power)-appears to be winning in the marketplace. To wit:
- The natural and organic categories are the fastest growing segments of the supermarket, enjoying double digit growth the past several years, compared to about 3% growth of traditional.
- According to a recent Nielsen report, brands that demonstrate a clear, consistent commitment to values like sustainability outperform those who don't by a factor of 4x.
- A new piece in Wall Street Journal reports that the top 10 branded food-manufacturing companies have collectively shed 4.3 percentage points of market share in the past 5 years.
Clearly, consumer expectations have changed. And the biggest opportunities for growth lie with aligning with shoppers evolving values.
In addition to consumer, here are 3 additional wedges threatening a top-down approach of relying on Congress:
1. Big food companies are already breaking rank
I give immense credit to Campbell's for recently shifting to a consumer-focused (Power) strategy: they dramatically shifted the direction of the GMO labeling debate when they announced in January that they would label all GMOs in their products and would cease lobbying opposition. A key thing to note here is that Campbell's isn't eliminating GMOs altogether, but will clearly label them-ushering in a trend around "GMO transparency" that bears close watching.
2. Disruption from innovators are changing the ground rules
Great companies today are asking: "what is the new baseline of doing business today? And clear labeling tops the list. The push towards ultra transparency is being driven by a combination of factors: heightened concerns around health, the environmental and social impact of food production, regulatory and safety concerns. In addition to companies like Campbells breaking rank, Grocery chains such as Whole Foods and Kroger are increasingly stepping up as gatekeepers for their customers: Whole Foods has committed to "full GMO transparency" by 2018. And Kroger has proven that they can play a role curating the experience their customers crave with their wildly successful Simple Truth line. If the market continues to reward companies who disclose GMOs, more will step into the space.
3. Conflict with other food business interests
The current fish fight illustrates how policy and rationale can quickly become muddied when competing interests converge in Washington. In November, the FDA gave the green light for the first GMO salmon to be approved for American consumers to purchase and consume. But, under intense pressure lead by Senator Lisa Murkowski (R-Alaska), Congress recently required the FDA to suspend sales of the GMO fish until GMO labeling guidelines and "a program to disclose to consumers" whether fish has been genetically altered are put in place. From Alaska’s point of view, salmon that grow to market size in the half the time (but wouldn't be labeled as GMO), will be less expensive, representing a clear and present danger to Alaska’s sizeable market share at the fish counter. The problem? Her arguments are the very same as what the Just Label It! campaign has been advocating in all of the other parts of the supermarket.
Rethinking The Calculus of Safety vs. Risk
The old calculus companies once did around “what’s safe” in terms of strategy needs to be carefully rethought. At most, relying on Force may win you time, but will ultimately lose you something far more valuable to a brand: credibility. And what may appear to be the riskier choice on the surface -putting your whole true self out there, telling your best story, and letting the consumer decide (Power)-is not just better for long term business viability, it’s food leadership. Companies who can recalibrate to this, or who already understand this, are set to soar in Food 3.0 .
So here’s a simple idea: be bold. Do the hard work now. Label your products to comply with Vermont’s ruling. Then ship those products all across the country, because you believe that moms in Virginia may likley feel exactly the same way as moms in Vermont when it comes to feeding their families. And, because you believe that every eater in America deserves the same access to information.
Judging from the data, 9 out of 10 American shoppers will thank you.