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Wednesday, November 19, 2014

Strategic CSR - Ben & Jerry's

What I find interesting in the article in the url below is not Ben & Jerry's commitment to removing GMOs (genetically modified organisms) from its products, but the complexity involved in reaching that goal, which is staggering. Essentially, GMOs are everywhere:
"Two decades after the first genetically engineered seeds were sold commercially in the U.S., genetically modified organisms—the crops grown from such seeds—are the norm in the American diet, used to make ingredients in about 80% of packaged food, according to industry estimates."
The process is complex, even for a company that really makes only one product—ice-cream. The extent to which B&J's has to reach back into its supply chain to ensure that none of its ingredients are "contaminated" with GM foods is mind-boggling:
"Ben & Jerry's said most ice cream ingredients were already non-GMO. Still, the company needed to check with suppliers and rigorously investigate all 110 ingredients it uses to make ice cream. Among the surprises: finding out a product couldn't be considered non-GMO if the supplier dusted the pan with cornstarch before baking. The supplier had to switch to rice starch."
Essentially, B&J's has divided the task into two phases—first, removing GM ingredients from the "chunks and swirls" that it adds to its ice-cream and, second, removing GMOs from the milk it uses to make its ice-cream. While the company is approaching the end of phase 1 (almost two years after committing to this goal and one year behind schedule), removing GMOs from the milk it uses is proving to be much more difficult:
"The vast majority of the feed given to dairy cows in the U.S. is made with GMO corn, soybeans and alfalfa. That makes it difficult to find non-GMO milk in quantities large enough for Ben & Jerry's, so the company hasn't committed to doing it. Labeling laws like the one passed in Vermont don't apply to meat or dairy derived from animals that consumed GMO animal feed, buying Ben & Jerry's more time. "We are having conversations with multiple stakeholders throughout the entire supply chain," Mr. Michalak said. 'It's a slow process.'"
What is making a complex issue even more convoluted is B&J's nuanced public statements about GMOs:
"Ben & Jerry's, which ranks fifth among U.S. ice cream brands by sales, says it doesn't consider GMOs unsafe to humans either, but has always positioned itself as an environmentally friendly, socially progressive brand. Executives long wanted to drop GMOs, which they feel are part of industrialized, chemical-intensive agriculture that the company opposes, said Mr. Michalak, the social mission director. But the company didn't start discussing converting its flavors with suppliers until 2012."
And, even if a company wants to go "non-GMO," what that means in practice is not agreed upon and is far from standardized:
"Unlike with organic foods—which also can't contain GMOs but must follow additional restrictions—the government sets no standard for what qualifies as 'non-GMO.' Companies seeking some authoritative imprimatur must go to third-party certifiers, usually the Non-GMO Project, a nonprofit group founded by natural foods retailers. It vets applicants with an almost religious exactitude."
Take just one ingredient, honey, for example:
"To gain its certification, Enjoy Life Foods LLC, a small Schiller Park, Ill.-based company that makes gluten- and allergen-free snacks, traced its honey to the hive. 'We had to go to our honey suppliers, who went to the bee keepers, who had to actually determine how far the bees could fly to make sure they weren't cross-pollinating at any GMO fields,' said Joel Warady, its chief sales and marketing officer. … The Non-GMO Project, which has verified more than 17,000 products, says such lengths are necessary to ensure the bees aren't feeding on nectar or pollen from GMO crops. Thus, the organization requires a four-mile radius from the bee hives be clear of GMO fields."
In spite of the complexities, companies are increasingly feeling pressured to remove GMOs from their products:
"In addition to Ben & Jerry's, a subsidiary of Unilever PLC, General Mills Inc. this year started selling its original flavor Cheerios without GMOs. Post Holdings Inc. took the GMOs out of Grape-Nuts. Boulder Brands Inc.'s Smart Balance has converted to non-GMO for its line of margarine and other spreads. Chipotle Mexican Grill Inc. is switching to non-GMO corn tortillas."
There is also potential compeititve advantage in taking this action because, given the widespread use of GMOs, removing them from products constitutes a point of differentiation:
"'Non-GMO' is one of the fastest-growing label trends on U.S. food packages, with sales of such items growing 28% last year to about $3 billion, according to market-research firm Nielsen. In a poll of nearly 1,200 U.S. consumers for The Wall Street Journal, Nielsen found that 61% of consumers had heard of GMOs and nearly half of those people said they avoid eating them. The biggest reason was because it 'doesn't sound like something I should eat.'"
Take care
David Chandler & Bill Werther
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GMO Fight Ripples Down Food Chain
By Annie Gasparro
August 8, 2014
The Wall Street Journal
Late Edition – Final