Know If It Is GMO: Campbell Soup Label Disclosure

It has been about a week and a half since The NY Times and other mainstream news sources reported that Campbell Soup Company has announced that it will disclose on their product labeling all genetically modified or genetically engineered ingredients across every entry in all their product lines. I have reported on the GMO labeling issue in the past, especially with the situation in California, where all the huge food companies joined together to defeat that proposed ballot initiative.


This choice by Campbell’s Soup at this time will certainly apply pressure to other food industry players to comply in disclosing their GMO containing products. In the process, the federal government will also be under scrutiny, particularly the FDA, to initiate fundamental and substantive progress on a labeling requirement system for genetically modified ingredients in consumer food products.


The component of the decision by Campbell Soup that is significantly newsworthy is the size and scope of the amount of products it covers. This food industry giant has several brands encompassing the full range of the grocery channel from Prego sauces, Swanson broths, V8 beverages, and Pepperidge Farms bakery products.


The iconic Campbell’s Soup brand alone has an enormous amount of products especially with the line extensions of recent years to add lower sodium and gluten free soups for an increasingly health conscious American consumer. The reality of the consequences for this move sent shockwaves through the food industry and through the Wall Street analysts who evaluate the factors which will potentially impact a given publicly-traded corporation such as Campbell.


In some of the media reports I researched, it was noted that some investment analysts believe that this choice toward full disclosure by Campbell’s is going to “scare the consumer” when they pick up a can of soup and read that it contains genetically engineered ingredients. These same reports indicate that a drop in sales which will cause a chain reaction to a decrease in revenue will cause a drop in the stock price. The competition in the soup aisle and the other grocery aisles could stand to benefit from this decision by Campbell’s.


The move to full disclosure of these ingredients will serve as a stark dose of reality to the average American consumer of just how widespread the use of genetically engineered products is within the food supply currently. The average consumer may, at that point, start to question whether the competition in the aisle also contains GMO ingredients. The impact of this decision on the sales of healthier trending grocery outlets such as Whole Foods, Wegman’s, or Trader Joe’s remains to be seen.


Furthermore, this decision will inevitably shift the focus onto the fact that the key ingredients in many of our food products: corn, soybeans, and sugar beets are all genetically engineered. The alternative sources of these staple commodities which are grown currently in conditions that are organic or GMO free are produced in nowhere near the quantities needed to sustain the entire food supply. The global farming system could not produce those crop yields of GMO free food ingredients if they wanted to because the seeds are genetically modified and the soil of so much farmland is contaminated with pesticides and chemicals such as Roundup.


Green Mountain Debate


Vermont passed legislation on the state level requiring food sold there to have a full disclosure of genetically engineered ingredients on every product label. This is thought to have been the driving factor behind the decision by Campbell’s Soup Company to make the change to their labels across the board.


The legislation passed in the Green Mountain State also brought about renewed vigor in the food industry regarding the debate over the GMO disclosure laws. One side of this discourse feels that the food industry should be insulated from having to disclosure this information fully, yet another group feels that the disclosure should be limited in scope. Further still, a third faction of this argument believes that the federal government needs to pass legislation that supersedes the state government level activity on this issue.


In fact, I believe that the motivation behind Campbell’s Soup and their decision to fully disclosure the GMO ingredients in their respective products is to push the federal government to adopt a coherent policy for the entire industry. This new label disclosure by a major player such as Campbell’s “moves the needle” on the conversation with the federal government and food industry leaders. When asked about the motivation for the decision in an interview with the NY Times, Campbell Soup Company CEO, Denise Morrison, explained that the consumer has “the right to know” if a product contains genetically modified components.


In the view of the food industry players involved, most of them would rather deal with a federal mandate on how to label GMO ingredients than the alternative, which is to deal with each individual state passing their own procedures relative to the labeling of these ingredients. The rationale behind this viewpoint is due to the fact that changes to any food product label are expensive and time consuming for the food companies involved.


A system for GMO disclosure which is reliant on the legal activity of 50 separate state governments that could come up with 50 different procedures or sets of requirements for a label on a food product is a recipe for disaster. It will dominate the time for numerous departments in the respective food company, it will drive up labor costs because the labels will have to be switched out during the production runs depending upon which state the product is being distributed to, and it will increase the cost to the consumer as well.


Conversely, the federal system would allow for one universal change to the label of a given product which would be effective across the country and be far more efficient for everyone involved. However the system has to be done in the right way, it should be cohesive and inclusive so that circumvention is not attainable. Some consumer advocacy groups linked to the “no GMO” movement have voiced concerns that the federal system may provide loopholes for the food industry to get around fully disclosing the specific genetically engineered ingredients in their products.


The argument could be made that this situation is not a clear victory for the “no GMO” movement because we still have no federal mandate on a universal labeling system, the state level legislation is still active which forces those groups who are advocating for “right to know if it’s GMO” to fight separate lobbying battles in each state, and the bottom line is that the GMOs are still in our food we will just be told what they are exactly.


This choice by Campbell’s is clearly an indication of the strength of the healthy eating and wellness trends in the American consumer landscape. In the months to come it will be interesting to see which companies within the consumer packaged goods industry will follow suit with label disclosures on GMO ingredients.


In my professional experience in the food industry working with product line extensions across a variety of segments and dealing with label declarations, Campbell Soup Company was bold in this move and correct in their assessment that we need a federal system for GMO disclosure. A state-by-state format for this type of consumer labeling situation is a nightmare scenario for all parties involved. The need for a decision by federal regulatory entities needs to become a high priority in 2016, the American people and the food industry need it to happen sooner rather than later.


The next round in this fight is to eliminate GMOs which is an entirely different challenge with its own set of issues.



(Frank J. Maduri is a freelance writer and journalist with a professional background in marketing for the food, pharmaceutical, and healthcare industries. He has experience with food and beverage line extensions for national consumer products brands involving compliance with federal and state labeling requirements.)



The Complexities of a Global Economy Reliant on China

(This post originally was submitted to a subscription-only financial investment site. I have included it here on my blog in order to reach a wider audience.)


The first two weeks of 2016 have proven that the global economy being so reliant on China can wreak havoc on the stock markets of all the major indexes in the world. The uncertainty which is pervading Wall Street regarding the future of the Chinese economy and their currency is the underpinning for the rapidly declining performance of the US financial markets.


The second issue with the global economy is the precipitous drop off in the price of oil. The price for a barrel of crude oil is now down to below $30.00 and this huge price decrease on a commodity as vital as oil is great for consumers paying less at the pump to fill their cars, but it is detrimental to the overall economic outlook.


The rationale behind the drop in oil prices is tied to two main factors. First, it is a matter of basic supply and demand: the world has too much oil and far less demand for this resource. The United States alone has contributed to this situation with the abundance of laws clearing the way for the rise in hydraulic fracturing, or fracking, in huge swaths of land called shales or shale plays. The result of fracking created conditions in the market where oil was entering the system from several new entry points in different states that previously did not contribute to the oil supply. This added to the increasing supply quantities.


The second component to the drop in oil prices is the decreasing demand from emerging economies in other parts of the world including, and most importantly, the Chinese economy. The slowing growth of manufacturing and other factors in China have a chain reaction effect where the world’s largest emerging market needs less oil.


In addition, a factor that is certainly contributing this issue and will continue to be in the coming months is the freedom of Iran from economic sanctions and their subsequent reentry into the oil market. The broader issue is that Iran has not made any money from their oil supply due to the international sanctions levied because of their nuclear program; so any revenue it makes from the sale of oil is gravy to them. This will translate into a commodity pricing battle between Iran, Saudi Arabia, Libya, Iraq, and other Middle Eastern countries who are in dire need of liquid cash so they have turned on the oil faucet, so to speak.


The evidence of the impact of these new Middle Eastern players (Libya, Iran, and Iraq) is demonstrated by the dip in oil prices below the $30.00 threshold. Many economists will attribute this to an overabundance of supply of oil because a couple of reputable studies show that American demand has not diminished and that Americans are driving more now on average than in the past several years.


Fuzzy Math


The root cause of the issue revolving around a global economy that is reliant on China is that the accounting practices in that Asian powerhouse have been consistently under scrutiny for being unreliable in the best case scenario. This inherent unreliability coupled with inconsistent practices in quality control as well as variability in their supply chain all equals what Wall Street cannot handle: unpredictability.


That unpredictability coupled with the turbulent valuations surrounding the Chinese currency, the yuan, and the result is the wild swings in the trading activity across all the major stock indices from the start of 2016. The data coming out of China, financial or otherwise, is so completely unreliable and lacks so much credibility that the integrity of the entire financial marketplace is vulnerable to the deficits we have witnessed in the first two weeks of this year.


Some economists and financial market analysts will tell you that China is a growing economy with an emerging middle class which was bound to hit some “bumps in the road” and that this was expected. My take is slightly different in that I do not think our entire global economic future should be underpinned by the performance (or lack thereof) in China. I know it may seem naïve but I feel like it must change, it is a fundamental flaw in the global system.


Other economists and experts predict that it is precisely because of this widespread reliance on China and products manufactured and exported from there all over the world, that the global system will collapse worse than it did in 2008. In that case, if the first two weeks of this New Year are any indication, we might be in for that situation playing out exactly in that manner.


Elbow Room


The other notion that is prevalent in some circles of the financial realm at this point is the thought process that the Chinese yuan might be trying to elbow its way into the top currency spot in the world.


I find even the mention of this so fraught with concerns because of all the issues with the currency valuation in China at this point. The recent decline in the overall growth of the Chinese economy will have a reverse effect in that I believe it will drive investors back to the American economy and to invest in the US dollar. The US dollar is, and will remain, the top currency in the world based on the stability of our democracy and our economy, even in the event of a recession or a downturn.


It is time for us as investors and for the world economies involved to look at China with caution and to prepare your portfolio strategy accordingly for both the short term and the long term investment objectives. In the end, this year is showing us what most of us already knew, we cannot trust the information coming out of China and we need to embrace different practices when evaluating their economy in the future.