General Mills is ridin' for the brand
The hoopla about Cheerios coming out with “non-GMO” ingredients is not surprising to me. From experience with other food companies, I realize that they will do anything to protect the equity in their brand name. Why General Mills publicly made the switch is another example of a savvy protest group hitting the most sensitive part of a company. The cereal giant decided appeasement was the best means to diminish publicity and online attacks, but they didn’t do it for any reason except to protect their bottom line.
This story isn’t really about genetically modified grain. It is about the shiny thin covering of a company that produces a convenience food that consumers could live without. They can’t risk losing its commercial charm. Cereal is processed grain that is fortified with vitamins and combined with preservatives and sweeteners. It is aggressively marketed as fun, healthy and satisfying, but it’s purchased because kids like it and the boxed product is more convenient than making it yourself.
Cereal companies make an estimated 40 to 45 percent profit and have 90 percent penetration in most markets. That means literally every American household makes a purchasing decision on cereal. The brilliance of marketing this original fast food has made some of the largest fortunes in the history of America: Kellogg and Post are revered names of the pioneers of the industry, dating back to the 19th century. It is no coincidence that dry cereal became popular at the beginning of the industrial revolution. Cereal manufacturers learned to make nutritious and palatable products that could be eaten dry or with milk or yogurt as an ideal breakfast food for people in a hurry.
The key to all cereal makers’ profitability is their brand. “Grape Nuts” was first introduced in 1898. Kellogg bought the rights to “Cornflakes” in 1906 and General Mills started producing “Wheaties” in 1924. “Cheerioats” came along in 1941 and became “Cheerios” in 1945. All of the companies enlisted sports figures or cartoon characters to promote their products. Generations of Americans have consumed these cereals and hold them in high esteem.
Several years ago, I was the moderator of a panel at Arkansas State University that included the director of science and technology from Gerber Foods. The company had just announced that it would stop allowing any genetically modified raw product from being an ingredient in its baby food. I questioned the science behind the decision and was told by the chief scientist with the company that it was necessary “to protect their brand.” He was imminently qualified to discuss science, but he yielded to marketing because the company realized that the issue was all about keeping the consumer from choosing a competitor or worse. Making baby food is something that any mother or father can do with a stove, a pan and a strainer. Baby food and cereal industries can’t afford to empower consumers to make their own.
It was most interesting that Gerber was owned by Novartis, which was developing genetically modified crops as a core business. Since that time, Novartis became a part of Syngenta and Gerber was spun off and is now owned by NestlÃ©.
Why did they ever start using GMOs in the first place? The challenge lies in sourcing raw materials at the lowest possible cost. Rapid adoption has made GMO grain plentiful and competitively priced. It can be graded, stored and forward contracted with certainty. It is basic economics that having to source a guaranteed non-GMO product meeting volume and quality standards costs more money. Their loyalty is to the bottom line and only when there is a backlash against the input does it cause corporate reaction such as restricted sourcing and identity preservation.
In the late 1990s, I interviewed an official of Unilever, one of Europe’s largest makers of processed foods, and inquired about their stand against GMO grains. “We import exclusively from Brazil,” said the executive. “GMOs are illegal in Brazil.” I asked if they tested for GMO proteins when the raw product arrived in Europe. “We don’t need to because GMOs are illegal in Brazil.” I thought I noted a slight wink in his eye as he said it. It was all about appearances. Brazilian grain was abundant and cheap, and that was why they were buying it. Later, when it was revealed that Brazilian farmers were getting GMO soybeans out of Argentina and planting them “illegally” that Unilever had to source products that were truly GMO free.
It is fine with me for food companies to sell a specific type of product as long as they promote its merits. I have great concern about selling against technology. Putting a label on the cereal that says “Does Not Contain Genetically Modified Grain” raises questions in the minds of many who had no opinion and possess little knowledge. That means they are likely to assume GMOs are bad since that is the interpretation they interpret from the packaging. It is reported that General Foods spent $2 million to defeat food labeling initiatives in California and Washington. Regarding the non-GMO Cheerios, their spokesperson would only say, “We believe consumers will embrace it.”
The activist group GMO Inside mounted a Facebook campaign that caused thousands of people to demand GMO-free Cheerios. Since there are no GMO oats yet approved for planting, the protest was against cornstarch and sugar products in the cereal that may be genetically modified. It is estimated that 80 percent of processed foods contain one or more GMO ingredients.
We are a wealthy nation and many people have the luxury of spending a sizable amount of money for food. Consumers of wealth in Europe, Australia and Asia are susceptible to the same scare tactics we experience here. As long as there are zealots and self-proclaimed scientists who know how to use electronic media, the marketplace is going to remain in turmoil.
Editor’s note: Ken Root has been an agricultural reporter for 39 years. Root now does daily radio and television programming and is a columnist. He can be reached at email@example.com.