The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Monday, November 17, 2014

Strategic CSR - GMOs

This week, I would like to use the Newsletters to discuss a number of articles I have seen recently about genetically modified foods.
I wanted to start with the radio story in the url below, which is interesting for two reasons: First, it reports on the increasing number of companies that are dropping genetically-modified organism (GMO) ingredients from their foods:
"The Non-GMO Project has certified more than 20,000 products since it launched in 2007, and … says this is one of the fastest growing sectors of the natural food industry, representing $6 billion in annual sales."
Second and more interesting, however, the story reports that the firms that are doing this are not necessarily advertising the fact:
"General Mills' original plain Cheerios are now GMO-free, but the only announcement was in a company blog post in January. And you won't see any label on the box highlighting the change. Grape Nuts, another cereal aisle staple, made by Post, is also non-GMO. And Target has about 80 of its own brand items certified GMO-free. Megan Westgate runs the Non-GMO Project, which acts as an independent third-party verifier of GMO-free products, including Target's. She says her organization knows about 'a lot of exciting cool things that are happening that for whatever strategic reasons get kept pretty quiet.'"
It seems that, while non-GMO foods are increasingly being demanded by consumers (or, at least, the right to know whether GMOs are in the foods they are eating), firms that are responding to this demand feel there is limited marketing value in doing so. In other words, firms perceive that while some consumers will value this change, it is not clear that all or even most consumers will do so. As such, companies are taking a progressive stance on a sensitive social issue (appealing to those consumers who support removing GMOs from foods), but are not communicating the change in case it adversely affects other consumers who prefer the status quo. Ben & Jerry's offers a perfect example of the consequences of altering an established product:
"One recently deceased flavor [is] Coffee Heath Bar Crunch, one of the company's best-sellers. Ben & Jerry's CEO Jostein Solheim says the company had to remove the key ingredient, Heath bars made by Hershey, and rework the flavor. Its replacement is called Coffee Toffee Bar Crunch. (Some fans have blasted the company in online forums, claiming it doesn't taste as good.) The reason for the change? Hershey makes Heath bars with genetically engineered ingredients, and Ben & Jerry's has made a pledge to remove all GMO ingredients from its ice cream."
And, to make walking this fine line on an evolving social issue even more delicate, some of the same firms that are voluntarily removing GM ingredients from their foods are also fighting local initiatives that require greater transparency in food labelling:
"They often fight those battles through the powerful Grocery Manufacturers Association, or GMA, a trade group with hundreds of members. It has just filed suit against Vermont over the state's GMO labeling law. Even Ben & Jerry's, so vocal in its anti-GMO stance, has a conflict, of sorts. It may have eliminated GMOs, but it's still owned by Unilever, which put a lot of money toward fighting labeling legislation in California and belongs to the GMA."
Take care
David Chandler & Bill Werther
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Some Food Companies Are Quietly Dumping GMO Ingredients
By Jane Lindholm
July 22, 2014
National Public Radio