Whole Foods recently announced that they will begin requiring their suppliers to label products containing Genetically Modified Organisms (GMOs). Here’s the key piece from that announcement:
We are the first national grocery chain to set a deadline for full GMO transparency. By 2018, we will require our supplier partners to label products containing GMO ingredients, and we will work in collaboration with them as they transition to sourcing non-GMO ingredients or to clearly labeling products with ingredients containing GMOs.
This may seem a natural fit for Whole Foods and that it will drive the retail grocery industry down the GMO labeling path. I’m not so certain. Rather than leading the way for industry-wide acceptance of labeling, this may in fact further bifurcate the retail grocery market. Some vendors may decide to opt out and end their relationships with Whole Foods. Given that possibility, this feels like a bit of a gamble as Whole Foods has been working to gain market share through value pricing. If this doesn’t work as it appears they are hoping, they may be forcing themselves into a corner where broad appeal is more difficult. (I’m not trying to have a discussion of stock prices, just thinking through the possible outcomes and unintended consequences of strategy.)
Looking at the other industry players (Full disclosure, I am an employee of SuperValu.), I see one of two possible paths which will likely be decided by the first moving large player. Either a heavyweight like Wal-Mart will announce they’re going to go down the same path as Whole Foods (in effect enacting de facto legislation at that point), or a large supplier of Whole Foods will announce they’re pulling up stakes. In that case, they may lead the aforementioned market bifurcation wherein suppliers line up on either side of the labeling fence. The latter move would be much less certain than the former, but it certainly could drive the suggested outcome.
Whole Foods’ move appears to make industry-wide acceptance more likely, but I don’t see it as a foregone conclusion. Regardless of the outcome, I’m hoping it helps us replace the cacophony of fear-mongering and obfuscation with a more reasoned, science-based debate on the potential benefits and risks of GMO foods. If so, I think we’ll all owe a debt of thanks to Whole Foods. We’ll see.