Robyn O’Brien is the co-founder of rePlant Capital, an impact investment firm, deploying integrated capital from soil to shelf in order to build soil health and financial resiliency for farmers. She is also the founder of Do Good, a strategic advisory firm, and the AllergyKids Foundation. Random House published Robyn’s book, The Unhealthy Truth, in 2009, and her TEDx talks have been translated into dozens of languages and viewed by millions around the world.
You know that change is happening in the food industry, when a new ETRADE commercial takes aim at the food movement.
“Meat Meat” proclaims an empty food stand in an airport, as another with fresh farm to table offerings has throngs of visitors.
The man waiting for his flight, an investor observing it all, does a quick search and places a trade, betting on the food movement.
It’s a smart move not just for an advertising campaign.
Why? The organic industry is growing at a double digit pace. A quick look at White Wave’s share price (WWAV) tells that story. Conventional? Well, a quick look at Kellogg’s share price (K) explains what is happening there.
The food movement has hit mainstream. Wal-Mart is launching an organic line, Costco is growing theirs. Kroger’s Simple Truth brand became a billion dollar brand in two short years. It’s more than a fad or a trend. It’s a fundamental shift in the way that we are eating. ETRADE sees it.
The message to the food industry? #dumpthejunk #realfoodsells
Large food companies are keeping moms in the dark by funding efforts against mandatory GMO labeling. Without labeling, moms can’t know what’s in the food we feed our kids. Honesty brings transparency. Labeling GMOs, the way that they are labeled in 64 countries around the world including for all of our key trading partners, is honest. These ingredients are new to our food supply, patented by the United States Patent and Trademark Office for their novelty, and have never before existed in our food.
Pro-labeling does not mean that we are anti-GMO. It means that we are for transparency, for more science on these new foods, for the freedom to choose what we feed our families.
We want to know more about these new products, how they work, how they affect our loved ones. Labels provide that information, not just for moms, but for everyone trying to navigate the changing landscape of food and the changing health of the people that we love.
Carl Sagan said, “Extraordinary claims require extraordinary evidence.” Extraordinary love will bring about this change, this need for labeling, for more evidence as to how these products are impacting our families, so please watch and share the video below.
Recently, I shared a video out of Sweden that went viral. It highlighted what happened to a family of five when they were taken off of conventional food and put on an “only organic” diet for two weeks. The level of tested pesticides in their bodies dropped off to almost nothing. It opened up a dialogue and prompted calls for science: What about other pesticides? Why did some have higher levels? Is dehydration a factor? What is the long term impact?
The questions speak to why it is so important that we continue to study the intended and unintended effects of how our food is produced.
But what does the term “organic” actually mean?
The term “organic” actually refers to the way agricultural products are grown and processed and legally details the permitted use (or not) of certain ingredients in these foods.
The term “organic” actually refers to the way agricultural products are grown and processed and legally details the permitted use (or not) of certain ingredients in these foods.
The details are that the U.S. Congress adopted the Organic Foods Production Act (OFPA) in 1990 as part of the 1990 Farm Bill which was then followed with the National Organic Program final rule published by the U.S. Department of Agriculture (USDA).
The standards include a national list of approved synthetic and prohibited non-synthetic substances for organic production, which means that organically produced foods also must be produced without the use of:
antibiotics
artificial growth hormones
high fructose corn syrup
artificial dyes (made from coal tar and petrochemicals)
artificial sweeteners derived from chemicals
synthetically created chemical pesticide and fertilizers
genetically engineered proteins and ingredients
sewage sludge
irradiation
According to the United States Department of Agriculture, these added ingredients are actually what differentiate organic foods from their conventional counterparts. A Stanford study a few years ago concluded that there is little difference between organic and conventional food. But nowhere in that Stanford study, comparing organic food to conventional, were ingredients like synthetic pesticide, sewage sludge or any of the above measured. There was no measure of the insecticidal toxins produced by a genetically engineered corn plant, no measure of the added growth hormones used in conventional dairy, no measure of the fact that 80 percent of the antibiotics used today are used on the chicken, pork, beef and animals that we eat.
Food is not just a delivery device for vitamins and minerals, as measured in the study, but it is also used as a delivery device for these substances that drive profitability for the food industry. To fail to measure these added ingredients, while suggesting that there is essentially no difference, is incomplete at best. Some might even go so far as to suggest that it is irresponsible in light of the fact that we are seeing such a dramatic increase in diet-related disease.
Additionally, anyone who knowingly sells or mislabels as organic a product that was not produced and handled in accordance with the regulations can be subject to a civil penalty of up to $10,000 per violation. In other words, if an organic producer were to add any one of the ingredients listed above, they would be fined.
WHY ORGANICS COST MORE
Admittedly, the high price of organic food can irritate anyone. But the scrutiny that these foods undergo is enormous and expensive, driving prices at the cash register and for those producing them on the farm. Why the costs? Because the cost structure on our food supply offers taxpayer-funded resources called subsidies to the farmers using genetically engineered seeds and saturating crops in insecticides and weed killers, while charging the organic farmers fees to prove that their crops are safe.
That’s like getting fined to wear your seat belt.
So while conventional food production allows for the addition of cheap, synthetic and often controversial ingredients that have been disallowed, banned or never permitted for use in developed countries around the world, organic food carries the burden of having to prove that its products are safe — products produced without the use of added non-food ingredients that other countries have found controversial or removed from their food supply.
In other words, it’s an un-level playing field right now. And if we were all sitting down as a national family at our national dinner table, I don’t think that any of us would want to be using our resources this way. Wouldn’t we rather have the organic food be the one that we fund, making it cheaper, more affordable and more accessible to all Americans?
Or if given the choice, would we rather eat food hopped up on growth hormones, antibiotics and chemical pesticides? That’s a personal decision, a personal responsibility. We have to know what is in our food to make that decision.
And while correlation is not causation, in light of the growing rates of cancer, diabetes and other conditions affecting our families, the answer would appear to be “eat less chemicals.”
Food, clean from antibiotics, added growth hormones and excessive pesticide residue, should be a basic human right, afforded to all Americans, regardless of socioeconomic status.
But right now, the majority of the population does not have that choice. Food, clean from antibiotics, added growth hormones and excessive pesticide residue, should be a basic human right, afforded to all Americans, regardless of socioeconomic status.
The authors of the Stanford study concluded that the studies reviewed do not support what they call the “widespread perception” that organic foods overall are nutritionally superior to conventional ones, although eating an organic diet may reduce exposures to pesticides and antibiotic-resistant bacteria.
A Stanford press release quoted senior author Dena Bravata as saying, “There isn’t much difference between organic and conventional foods, if you’re an adult and making a decision based solely on your health.” (According to the Stanford Medical Center press office, Bravata is no longer doing interviews about the study.)
In one key finding, the team reported a “risk difference” of 30% between conventional and organic produce, meaning organic produce had a 30% lower risk of pesticide contamination than conventional produce. That number was based on the difference between the percentages of conventional and organic food samples across studies with any detectible pesticide residues (38% and 7%, respectively).
But the concept of risk difference is potentially misleading in this context, as the metric does not refer to health risk, according to Charles Benbrook, research professor and program leader for Measure to Manage: Farm and Food Diagnostics for Sustainability and Health at Washington State University. Furthermore, says Benbrook, “Pesticide dietary risk is a function of many factors, including the number of residues, their levels, and pesticide toxicity,” not just whether contamination was present.
Which is exactly what the video out of Sweden brought to light yesterday.
In a letter accepted for publication in the Annals of Internal Medicine, Benbrook pointed to the Stanford team’s lack of consideration of extensive government data on the number, frequency, potential combinations, and associated health risks of pesticide residues in U.S. food. Using data from the U.S. Department of Agriculture’s Pesticide Data Program,4Benbrook calculated a 94% reduction in health risk attributable to eating organic forms of six pesticide-intensive fruits.
The Stanford researchers also missed opportunities to examine the relationship of pesticides and health outcomes demonstrated in a growing number of cohort studies, says Brenda Eskenazi, a professor in the School of Public Health at the University of California, Berkeley. Eskenazi conducted one such study, one of a trio published in April 2011 that examined the relationship between cognitive development and prenatal pesticide exposures in two multiethnic inner-city populations6,7 and one farmworker community in California. One of the studies found deficits of seven IQ points in 7-year-old children in the highest quintile of pesticide exposure, compared with children in the lowest quintile, as measured by maternal urinary pesticide metabolite levels during pregnancy. Results were comparable in the other two studies.
In concluding that the evidence “does not suggest marked health benefits from consuming organic versus conventional foods,” many commenters, including Eskenazi and Benbrook, felt the Stanford team ignored risks to broader public health like those outlined in an April 2012 review by David C. Bellinger, a professor of neurology at Harvard Medical School. In his review Bellinger argued that subtle impacts of organophosphate pesticides on neurodevelopment can add up to substantial population-level impacts. He wrote, “It is frequently noted that a modest downward shift in mean IQ scores will be accompanied by a substantial increase in the percentage of individuals with extremely low scores.”
Conventional toxicology testing is now being shown to miss responses that occur at doses that are orders of magnitude lower than previously established no-observed-adverse-effects levels, with potential implications for our understanding of pesticide safety. And others are finding in animal studies that pesticide exposures in utero can induce epigenetic changes that alter stress responses and disease rates in future generations.
What are all of these pesticides in combination doing to us, to our families, to our children or during our pregnancy? The fact is: we need more scientific studies, and the video shared yesterday, like the Stanford study from a few years ago, speaks to that and opens the dialogue.
SO WHERE TO START?
Since the high price of organic produce and a flawed food system that continues to charge organic farmers more to prove that their products, produced without ingredients that mounting scientific evidence has shown to cause harm, is still an insurmountable hurdle to the majority of the population, especially the growing number of unemployed, where can an American who wants to avoid these ingredients start?
Start with baby steps. None of us can do everything, but all of us can do something. And thankfully, foods without these controversial additives and ingredients are increasingly sold in grocery stores like Wal-Mart, Costco, Kroger and Safeway, which represent the largest single distribution channel, accounting for 38 percent of organic food sales in 2006. Look for milk labeled “RbGH-free” or look for products without high fructose corn syrup or artificial colors. A growing number of companies, from Kraft to Nestle, are producing them, because their employees have kids battling conditions like asthma, allergies, diabetes and cancer, too.
So maybe you rolled your eyes at this whole thing a few years ago, dismissing it as an expensive food fad. I did. The Stanford study goes a long way towards reinforcing that. But read between the lines and exercise precaution where you can. Let your local representatives know that this matters to you, that you believe organic food should be the affordable option to families. Let your local grocery store know that you hope to see more in their aisles. They are listening, they are learning all of this, too. They have family members struggling under the burden of disease.
The love that you have for your family and country can propel you to do things you could never imagine. So navigate the grocery store a bit differently, get involved with a food kitchen, a community garden, a child’s school. And reach out to your legislators. They have families, too.
Because as the science continues to mount, from the Presidents Cancer Panel to the American Academy of Pediatrics, we are learning just how much the food we eat– and the artificial ingredients being added to it — can affect the health of our loved ones. So ask why. In light of the escalating rates of conditions and diseases in our country and around the world, it is one of the most patriotic things that we can do.
Bouchard MF, et al. Prenatal exposure to organophosphate pesticides and IQ in 7-year-old children. Environ Health Perspect 119(8):1189–1195 (2011); http://dx.doi.org/10.1289/ehp.1003185.
Engel SM, et al. Prenatal exposure to organophosphates, paraoxonase 1, and cognitive development in childhood. Environ Health Perspect 119(8):1182–1188 (2011); http://dx.doi.org/10.1289/ehp.1003183.
Rauh V, et al. Seven-year neurodevelopmental scores and prenatal exposure to chlorpyrifos, a common agricultural pesticide. Environ Health Perspect 119(8):1196–1201 (2011); http://dx.doi.org/10.1289/ehp.1003160.
Biotech companies like Monsanto have generated a myth that GMO crops are necessary to feed the rapidly growing world population. It’s a brilliant marketing platform built around their patented technology, but research has proven that we already have all the necessary technology to double food access in a way that is safe and better for the environment and all of our health.
The chief causes of global hunger today are poverty and small farmers’ lack of access to basic resources such as fertilizers and roads to market. So why do Big Ag and biotech companies keep insisting that the solution to meeting the demand for food is investment in their genetically engineered seeds?
Investing in infrastructure in developing countries would significantly reduce food waste. About a third of the food grown in developing countries is lost due to lack of storage or inability to get it to market. Improving roads, transportation and storage facilities is crucial to reducing waste and increasing the incomes of poor, small farmers.
On top of that, a recent case study in Africa found that crops that were crossbred for drought tolerance using traditional techniques improved yields 30 percentmore than GE varieties.
Given that creating just one genetically engineered crop variety can cost upwards of $130 million, you’d think Big Ag companies would invest in strategies that have been proven to work and less on GMOs that may not even increase crop yields. But what corporations really care about is their bottom line, patenting these inventions, engineering them to be used in conjunction with a portfolio of their synthetic chemical products, in an effort to increase their profits, feeding shareholder return, not feeding a hungry world.
This short video walks you through the claims and through the solutions.
Lower commodity prices and slower growth are forcing the agrochemical industry into M&A talks, according to Bloomberg.
Monsanto has approached Syngenta about a takeover that would create a giant in the market for seeds and crop chemicals with more than $30 billion in revenue. Getting a deal approved by regulators won’t be easy — and may not happen at all…
To address antitrust issues and help its case, Monsanto has planned for a deal to include a sale of parts of the combined business, a person familiar with the matter has said.
Roundup’s Headwinds
The seed company’s CEO Hugh Grant calls Roundup cancer concerns a ‘distraction rather than a reality.’
The reality is that countries like the Netherlands have banned the product.
When asked directly about the issue, Grant said he didn’t see the issue impacting the business, and that the company will continue to support the product. He called it “unfortunate noise” and a “distraction.”
A look inside Monsanto’s business model reveals some interesting trends and what could be driving a merger and a possible spinoff.
Where it gets interesting is that Monsanto isn’t the only one looking at Syngenta. Private equity groups, Dow and DuPont are also likely suitors.
So why the financial engineering of its business model?
Sales of what Monsanto labels its “agriculture productivity products,” which includes Roundup and similar items, account for about a third of the company’s annual revenue.
Considering industry headwinds such as lower corn production in U.S. and appreciation of U.S. currency, Monsanto has lowered its earnings per share (EPS) guidance for fiscal 2015.
The World Health Organization just declared the ingredient in their signature product, Roundup, a possible carcinogen.
Declining commodity prices aren’t helping.
Corn seed sales are slowing and consolidation would allow for cost cutting measures.
Private equity firms, Dow, Dupont could all line up as potential acquirers of the Roundup line, enabling Monsanto to get the liability off of its balance sheet.
Private equity firms, Dow, Dupont could all line up as potential acquirers of the Roundup line, enabling Monsanto to get the liability off of its balance sheet.
Licensing agreements could enable the company to continue to see a revenue stream from their product given how that it is required for use with their genetically engineered, Roundup Ready crops, while distancing itself from some of the health concerns.
Tax issues and currency risks could also be helped by an offshore merger.
As commodity prices slump, the company is also facing declining borrowing capacity that is based in part on the value of inventory, which has seen a decrease in the midst of corn prices falling.
Amidst all of these challenges and increased scrutiny of its signature product, Roundup, Monsanto could use a merger to divest of its Roundup division.
Glyphosate has been around since 1970 and has been reviewed by multiple regulatory bodies since, including the Environmental Protection Agency. The EPA originally determined that it might cause cancer, but reversed its decision six years later after re-evaluating the study. At the beginning of April, headlines around the world shared that the World Health Organization had declared it a possible carcinogen.
There are a lot of ways to look at the story right now, but it’s especially important to look at how it is impacting farmers.
If you go back to August 2014, forecasters predicted that Argentina was going to plant less corn due to increasing interest rates making loans to farmers more difficult. Other countries are also planting fewer acres of genetically modified crops or rejecting them altogether. In other words, the growth trajectory began to slow.
In October 2014, Monsanto issued cautionary guidance, suggesting that their earnings could be off by as much as 50%. It was a strategic move and is often used on Wall Street, guide numbers down so that you are certain to be able to beat the estimates and provide an upside surprise. It rallies the stock for shareholders.
And that is exactly what Monsanto did.
Monsanto’s earnings were mixed.
But how is this impacting farmers?
At a recent meeting in Missouri that I attended, farmers quietly shared how Monsanto is laying off employees. Earnings weren’t down by the forecasted 50%, but they were down by 34%. Revenue was off, too, and farmers were reporting on the impact.
It’s no secret that government subsidies support this industry. The biotech industry and the chemical companies selling genetically engineered seeds and the portfolio of products needed to grow them enjoy a government sponsored, financial advantage in the form of subsidies.
So how did Monsanto miss?
Currency is playing a role, oil prices, safety concerns, geopolitical maneuvering, as countries like China and Russia, reject Monsanto’s products. Food is a political football.
Corn prices are down.
On top of that, advance contract buys of the agrochemical products used on these crops are also down as farmers are putting off input decisions due to low crop prices. The same thing is happening in fuel and fertilizer. Experts are advising that farm income will be down and for farmers to reconsider cash outlays, capital purchases, etc., based on an expected large dip in net proceeds from the 2015 crop. Farmers are hunkering down. On top of that, the volatility in fertilizer pricing can be one of the more uncertain inputs for farmers, so a hesitation in purchasing is not a surprise.
According to Schnitkey, G. “IFES 2014: 2015 Crop and Income Outlook: Conserve Cash Income.” farmdoc daily, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, December 30, 2014, “Gross revenues in 2014 are projected to be below total costs. Similarly, 2015 gross revenue is projected to be below 2015 costs.”
That’s not only hammering top line growth but also the value of Monsanto’s inventory.
More Headwinds
And it’s not just U.S. farmers that are hesitating on these purchases. China was once a large importer of these chemicals, and that has stopped. China’s eleven month agchem export is up by 11%, with 17 newly approved pesticides in China.
And all of this happened prior to the recent World Health Organization announcement that the ingredient in Monsanto’s signature product, glyphosate, is a “probable carcinogen.”
In October 2014, Monsanto (NYSE:MON) missed expectations as sales fell 36% in. Revenues of $1.7Bn missed analyst expectations of $1.98Bn by a pretty wide margin (more than 10%).
On top of concerns over the price of corn, extended lower fuel prices could also eat away at the margin between gasoline and ethanol, making ethanol less cost-competitive and ultimately holding the potential to cut demand, thereby further lowering corn prices. There are already calls on capping ethanol, so the world’s largest seed company by sales has been increasing investments intended to bolster growth. An acquisition of Syngenta would further bolster that growth.
In the meantime, Monsanto has been running a share buyback program that is larger than any in the company’s history, and it’s been financed by debt.
Financial Engineering
Debt financings may not be in the best interest of shareholders over the long term. Share buybacks prop up the share price in the short term, but when they are financed with debt, the process also levers up the company.
So what could Monsanto do? Where could they find the cash to financially reengineer some of these issues?
Under a merger, Monsanto could restructure its balance sheet and portfolio, addressing the increased concerns around Roundup by selling off the division and using the proceeds for an acquisition.
The seed company’s CEO Hugh Grant calls Roundup cancer concerns a ‘distraction rather than a reality.’ Is it a big enough distraction to divest?
When asked directly about the issue, Grant said he didn’t see the issue impacting the business, and that the company will continue to support the product. He called it “unfortunate noise.”
But a Monsanto-Syngenta merger would allow a graceful exit strategy for the Roundup division.
It’s not an unprecedented move. Monsanto has a similar experience with another of its products, Posilac, recombinant bovine growth hormone, when it came under increased scrutiny and public concern. When the science got controversial and consumers caught wind of it, the market responded with manufacturers labeling their products as “rbGH-free” and Monsanto sold the dvision to Eli Lilly. Consumers, once educated, wanted nothing to do with it, much like what the marketplace is seeing around glyphosate and the response to the World Health Organization’s calling it a “probable carcinogen.”
Like it was able to do by selling its Posilac/rbGH division to Eli Lilly. Monsanto could raise the funds for an acquisition and corporate restructuring by selling off its Roundup division to a private equity group or other interested buyer. It could continue to capture the financial upside of its Roundup Ready product line with licensing agreements that relate to their genetically engineered, Roundup Ready products, without carrying the PR responsibility and liability on its balance sheet.
Monsanto isn’t in business to save the world. It’s an agrochemical company. If one division appears to be increasingly weak, the fiduciary duty of the company’s executives is to address it. And in many cases, that can look like a merger, acquisition or sale.
Let someone else turn it around.
A quick look at their prior earnings model shows that the division is experiencing a contraction. It was already happening ahead of the World Health Organization announcement.
Few investments firms are saying anything. Transactions of this size, either debt deals or M&A activity, can enrich financial analysts who back the company and the banks they work for, despite red flags.
It’s not the first time for something like this to happen. Analysts ignored the erosion of Enron’s core business, as the company made millions in transaction fees for the banks.
A merger between Monsanto and Syngenta would create a lucrative deal for the banks overseeing it. Banks benefiting from debt and equity deals less inclined to report negatively for fear of losing those deals.
The world feels fragile, particularly in a geopolitical and economic sense, says my friend Vikram Mansharamani over at Yale.
As global concern around Monsanto’s products grow, along with currency concerns, declining commodity prices, inventory issues, health concerns and more, it appears that Monsanto’s business model just might be increasingly fragile, too, and that an M&A activity is intended to shore it up.
Just as Enron’s tagline encouraged us to “Ask Why,” perhaps it’s time that we do the same with Monsanto.
In the last few weeks, a growing number of companies in the Grocery Manufacturers Association have announced that they are dumping artificial ingredients from their products. It is a growing trend in the face of consumer demand.
#dumpthejunk has become the rallying cry, as a growing number of consumers call on companies to remove artificial ingredients, as we find ourselves reading labels because of diabetes, food allergies, ADHD and so much more.
So why is this happening on a one-off basis? Why didn’t the Grocery Manufacturers Association give its members the heads up? Why are these companies slowly peeling off these ingredients one by one in a slow and often reactionary process? It’s death by a thousand cuts.
The Grocery Manufacturers Association is the voice of more than 300 leading food, beverage and consumer product companies, but will it be a relic of the 20th century?
A question that is starting to pop up is: Is the Grocery Manufacturers Association still delivering value to its members? Would members be better served by forming a new organization? What if a new group started? Let’s just hypothetically call it the Food Production Association, and its mission was to meet the needs of companies in the 21st century?
A look back at the history of the Grocery Manufacturers Association suggests this might be a good idea.
But do 21st century consumers actually turn to this organization today or is it a relic of the 20th century? And is it an advocate for its members?
The organization’s website goes on to say:
“A vital role of GMA is to serve as a central resource for our members, providing industry model practices and a means for collaboration between members, retailers and service providers on important challenges and opportunities facing the industry.”
The organization may have done that twenty years ago, but is it still doing that today?
The landscape of health has changed, and it is changing the landscape of food. Today, the rates of diabetes is skyrocketing, 1 in 4 children has a chronic condition, 1 in 13 children has a food allergy, 1 in 10 has asthma and 1 in 68 has autism, with cancer now the leading cause of death by disease in American children. The rates of these conditions are escalating, and parents are reading labels.
Did any of us expect motherhood or fatherhood to look like this? Not at all. No one would choose autism, life threatening food allergies or cancer. No one. But we find ourselves face to face with these conditions every day. It is changing so many things in our lives, and it is changing how we approach the grocery store.
Some companies want to spend millions of dollars debating how we got here. Parents don’t have time. Their hands are tied managing these health conditions. CNN/TIME reported that the additional costs of raising a child with food allergies is $4,200/year. Consumers want transparency and denying them basic information about what is in the food we are feeding our loved ones is out of touch.
Over the last year, more than 60 state laws have been introduced to label genetically engineered ingredients in foods. Consumers know about it, companies know about it. Companies inside the Grocery Manufacturers Association are producing product lines without these ingredients, and those product lines are profitable pieces of their portfolio. One look at the success of Kroger’s Simple Truth, “free-from” line demonstrates what a brand can do when it removes additives, GMOs, high fructose corn syrup and more.
Consumers want “free-from” food. It’s not about debating the “how” or the “why” we got here. It’s about meeting her where she stands in the aisle of the grocery store, holding onto a child with diabetes or food allergies, or shopping for parent with cancer.
Everyone is recognizing the need for food free from artificial ingredients. Panera Bread recently announced that they are pulling these ingredients from their products, Target’s Simply Balanced has committed to removing genetically engineered ingredients by the end of 2014, and Kroger is seeing record earnings growth with its Simple Truth product line, free from artificial ingredients and genetically engineered ingredients. The brand went from $0 to $1 billion in revenue in two years
So if companies that are dumping the junk are being rewarded by both consumers and the stock market, shareholders and stakeholders, what purpose does the Grocery Manufacturers Association serve by getting in the way of that? Is that in the best interest of its members?
As the Association spends record amounts filing a lawsuit against the state of Vermont which has just taken a big step towards bringing transparency to its food system for its consumers, you have to wonder if this is money well spent for its members. What if instead, these members decided to leave the organization and start another one, one that truly met their needs in the face of changing consumer demand and the changing health of American consumers. Or what if some got aggressive and filed a “loss of business” lawsuit against it given the decline that companies like Kellogg’s are seeing in sales and the resulting employee layoffs as they entrench on the GMO labeling issue?
21st century families want free-from food. It isn’t complicated, and shareholders and stakeholders are rewarding the companies that understand that and are delivering products that meet that need.
They’re not debating the science, they’re not filing lawsuits, they are simply meeting us where we stand: in the aisles of the grocery store shopping for the 1 in 3 American children that now has allergies, asthma, ADHD or autism. They are building a new food economy, becoming icons for the 21st century consumer, making the Grocery Manufacturers Association look like a relic of the 20th century.
The $2.1 trillion food, beverage and consumer packaged goods industry employs 14 million U.S. workers. As consumers opt out of food loaded with artificial ingredients, demand is growing. From 2013-2018, demand for organic is expected to grow 14%, but in the United States, less than 1% of farmland is under organic farm management which means that we have to turn to countries like China and Romania for non-GMO or organic food. We are literally outsourcing that entire economic opportunity. It is not in the interest of our food companies, our families or our farmers.
If the Grocery Manufacturers Association was true to its mission it would meet the 21st century consumer where she stands, and it would be addressing this supply chain issue for its members. But it’s not.
As it stands, it is quickly becoming a relic of the 20th century, opening the door for another industry organization to form.
Can you imagine if Kroger, Target, Chipotle and other food companies joined together to form the Food Production Association whose mission was to build out a clean and safe food system and to secure the supply chain for 21st century families? Instead of channeling member dollars into lawsuits, it could grow the base of US farmland under organic management, so that we don’t outsource this economic opportunity for our companies, farmers and country to our trading partners.
Cancer, autism, food allergies and other conditions we are seeing in the health of our loved ones are not “trends,” neither is the demand for transparency. American consumers have a right to know whether the EPA regulates their corn as a pesticide or not. Sixty percent of the world’s population has been given that right.
Imagine an organization for the food industry that actually focused on securing a non GMO supply chain for American companies, rather than fight this shift in consumer demand and outsource this economic opportunity to China and Romania. Here’s what a logo might look like. It’s food for thought.
Before speaking out about the current problems with our food system, I was working as a financial analyst that covered the food industry. My day to day consisted of meeting with management teams, taking factory and store tours and cranking out reports on companies like Kroger, Safeway, Costco and Whole Foods. I wasn’t a foodie, and I couldn’t cook.
My job included crunching the numbers, learning business models and evaluating the costs of production and distribution of our food supply.
Thank goodness.
Because today, that experience has served a greater purpose: the ability to look at the current state of our food system, the financial engineering of the science behind it and the economically motivated decisions that food industry executives make to meet their fiduciary duty to drive shareholder return and sheds light on how these decision are affecting the health of our families.
And it’s becoming increasingly obvious that we’ve got a broken economic model at work in our food system. Taxpayer resources called subsidies are used to support growing crops in a chemically-intensive, genetically and financially engineered kind of way. It drives shareholder return for the companies that have developed these genetically engineered crops and the weedkillers, herbicides and insecticides used to treat them. While on the other hand, farmers that are growing crops organically, which means by law without the use of synthetic pesticides and genetically engineered seeds designed to require increasing doses of toxic weed killer, have to pay fees to prove that their crops are safe, then fees to label those crops with the “USDA Organic” seal and then they don’t receive the same crop insurance and marketing assistance programs that the other farmers do.
Add to that the fact that American companies formulate their products differently for eaters over seas, without the use of artificial colors, genetically engineered ingredients, high fructose corn syrup.
In the United States, we now have to use the adjective “organic” to label food that does not contain these artificial ingredients. Overseas, that food doesn’t need the adjective “organic.” Instead, the foods that are labeled are the genetically engineered ones, so that consumers can make an informed choice.
This can be tough to swallow. Our taxpayer dollars are hard at work growing a food system that is chemically-intensive, while farmers that are growing things without the use of these genetically engineered seeds and the portfolio of chemicals needed to grow them (things that even the President’s Cancer Panel has urged us to avoid) end up costing the consumer more to buy.
As consumers, we get hit twice: once, with our tax dollars subsidizing this chemically intensive agricultural system, and twice, by the price of organic food if we choose to opt out.
It’s a broken system we’ve inherited, but it doesn’t have to be that way going forward.
The health of our country is largely contingent on the health of our food supply, and while the biotech industry argues that a lot of these ingredients are perfectly safe (just as the tobacco industry claimed the same of their products to our grandmothers), U.S. food companies are removing them from their products in other countries (or not even introducing them in the first place). Chipotle has removed them from their products here.
This free-from food should be affordable to all Americans, not just those in certain zip codes or those who can afford organic.
Given that our American food companies make their products without artificial ingredients like GMOs overseas, isn’t it time that that they start doing the same thing here?
Our health is on the line, our economy, too. It’s time for American food companies to dump the junk: artificial dyes, artificial growth hormones and the other artificial ingredients now found in our food supply and to give Americans the same products that they they are serving overseas: products that are free-from these ingredients that have the potential to cause harm.
There is nothing more patriotic that they could be doing, and the time for them to do, for consumers and for shareholders, is now.
Last week, a friend died. There was no long, drawn-out illness, no last good-byes. He was 41, married, with two little boys and had a heart attack.
And like that, his circle of friends was left standing with a hole in it and an unshakeable sadness.
It is impossible to try to make sense of something like this. His wife was given a paper angel by one of their boys on the morning that he died. Grief comes in waves, and it can be hard to swim against.
This morning, as I tried to work, to write about Chipotle and McDonald’s, all I could think about was this quote by Mary Oliver:
We are only here once. We have inherited systems, food systems, health care systems, other systems, that no longer work for 21st century families. We can spend months picking them apart, or we can spend our days building better ones.
The landscape in front of us is wide open. Each of us is here with a very unique set of skills and talents. We need all hands on deck. The legacy is ours to create.
“So tell me, what is it you plan to do with your one wild and precious life?”
Written in memory of Peter Johnson with such gratitude for the kindness that he brought into the world.
One of the most compelling promises that the biotech industry makes to justify the need for their products (genetically engineered crops and portfolio of chemicals needed to grow them) are that these ingredients are needed to feed the world.
Who can argue with that?
But according to Business Week, it turns out that “after millennia when the biggest food-related threat to humanity was the risk of having too little, the 21st century is one where the fear is having too much”.
It’s not just a domestic problem here in the U.S.. It’s a global one.
In the U.S., we waste and toss out almost 40% of our food, racking up $165 billion in losses each year.
Let’s step back and think about this for a minute, not just from the comfort of our homes here in the United States, but as a global issue.
How could that food be put to better use? And do genetically engineered crops impact this issue?
The chemical industry is busy manufacturing demand for their products by claiming that we need them – their genetically engineered seeds and the portfolio of pesticides, herbicides and fertilizers needed to grow them – to feed the world. It’s their job and a strong marketing strategy.
But are they using scare tactics to get us to believe that we need their genetically engineered, chemically dependent products in order to feed the world. Are we really facing mass starvation without them?
Most of these genetically engineered crops are grown to be fed to livestock. Some goes into ethanol and ends up in our cars. But has it contributed to the global obesity epidemic and food waste?
It turns out that just might be the case.
According to Business Week, “the issue isn’t so much that we can’t grow enough. Rather, existing food supplies are so poorly distributed that those hundreds of millions have too little for their own health, while 2 billion-plus have too much.” On top of that, a third of food is wasted worldwide, spoiled and thrown out before it even reaches consumers.
We are wasting enough food every day here in America to feed the hungry. And while much focus has been on the obesity epidemic, it is becoming increasingly hard to ignore the fact that with advertisements and food access available 24/7, we’ve got more food than we know what to do with.
Nearly one-third of the fruit, vegetables, grains, meat, and packaged foods produced across the globe gets tossed out every year.
Americans throw away an average of 20 pounds of food each month — costing them each between $28 and $43.
One of the most insightful disclosures of just how bad this food waste and excess of commodity crops has gotten is documented in the movie, Dive! The Film, a film made with Jeremy Seifert and Josh Kunau, that highlights exactly what goes into dumpsters in America. And it is shocking what we throw away.
This 45-minute documentary follows Seifert and his friends as they explore the alleys and backstreets of America’s grocery stores in search of good food tossed away because of overly cautious expiration dates. These guys don’t mess around. They suit right up in their bathing suits and dive right in…to America’s dumpsters, and turn up some of the most amazing information.
Americans throw away 96 billion pounds of food every year, or 27 percent of the total amount of available food. That’s 3,000 pounds of food a second.
But it’s not just us tossing those PB&J crusts out, the main line of food waste tends to be coming out the back end of the grocery stores. And the film shows that a frightening amount ends up being tossed by grocery stores before it can be purchased by consumers.
Now that’s good news for the food industry, as it creates a constant state of demand for their products.
But what if we were to figure out a better business model, designed to deliver all of the food we need without wasting over a quarter of it? What if our taxpayer dollars were used to build a distribution model to get this food to people who need it, like the 1 in 4 American children at-risk for hunger, rather than on farm subsidies which are arguably contributing to this mounting waste?
We have an opportunity to actually build a better food system, one that creates less waste and more nutrient-dense foods. Wouldn’t that be in the best interest in the health of our families, our corporations, our economy and our country?
In the meantime, what can consumers do?
Mine your fridge
Use your freezer
Get creative with leftovers
Compost
Take smaller portions
This isn’t just an American issue. Food waste is a global problem. If you are interested in learning more, please visit: http://divethefilm.com/
Do you know that food companies can decide for themselves which additives are safe?
It’s time to look into how new ingredients get from the food industry’s lab to your dinner table. Thousands of these additives now exist in our food supply.
Additives are added to our food to improve their texture, taste, appearance or extend their shelf life. The approval of these additives have to go through the FDA which regulates 80% of our nation’s food supply. According to the FDA, “there are thousands of ingredients used to make foods. The Food and Drug Administration (FDA) maintains a list of over 3000 ingredients in its data base.”
A legal loophole exists, where ingredients that are labeled GRAS (generally recognized as safe) get a free pass through the regulatory system.
But a legal loophole exists, where ingredients that are labeled GRAS (generally recognized as safe) get a free pass through the regulatory system. It means that companies can determine on their own that what they’re adding to our food is safe. It expedites the process. Then it is up to the company to inform the FDA if they want to.
Think about that for a minute. Think about it in relation to the tobacco industry or the auto industry or any other industry. What if the car companies had the ability to determine that their products were safe without oversight?
How in the world did we let this happen?
A 1958 law allows companies to market ingredients without oversight by the U.S. Food and Drug Administration if they can establish that their ingredients are “generally recognized as safe” for specific uses. In other words, companies using the so-called GRAS process must demonstrate that there is a consensus among scientific experts that their ingredients are safe.
The Center for Public Integrity found that at least four of the top 10 GRAS panel experts had also served as scientific consultants for cigarette makers.
I’ll let that sink in for a minute, as the parallels between Big Tobacco and Big Food extend beyond the overlap of these experts.
The world of GRAS panelists is a small one. A Center for Public Integrity analysis found that the top 10 most frequently hired panelists have each sat on two dozen or more panels. Most experts have decades of experience making GRAS determinations and maintain affiliations at universities.
“These are standing panels of industry hired guns,” said Laura MacCleery, an attorney for the Center for Science in the Public Interest. “It is funding bias on steroids.”
“Funding bias on steroids.”
“It’s not a large universe of people,” said Steve Morris of the Government Accountability Office, which published a report in 2010 that cited financial conflicts of interest in the GRAS system as a concern. “The fact that there’s … repetition and there’s familiarity, that could potentially breed a conflict.”
In 2013, a Pew Charitable Trusts review of GRAS assessments concluded that “financial conflicts of interest were ubiquitous” in the system.
In 2010, the Government Accountability Office recommended that the FDA “develop a strategy to minimize the potential for conflicts of interest in companies’ GRAS determinations.”
These are not wild-eyed activist groups asking for this, but our very own Government Accountability Office.
Five years later, the FDA says it’s still working on it.
Right now, companies have no legal obligation to tell the FDA what they are putting in our food.
Think about that. Then watch this three minute clip and share this article with your family and friends.
What can we do? Tell the FDA that it’s time to stop chemical and food companies deciding for themselves that food additives are safe. Learn more here.
Learn more about Food Safety Scientists Ties to Big Tobacco here.
