Apron's Blog - The Dish

Will GMO Labeling Change Consumer Purchase Decisions?

The passing of H.R. 1599, the Safe and Accurate Food Labeling Act of 2015, mandates the labeling of any food containing genetically modified materials. As written, the legislation requires food packages to indicate the presence of GMOs through a QR code, symbol or plain text. Critics, including the Food and Drug Administration, believe the bill’s limited definition of “bioengineering” is overly narrow, as it does include gene editing, the process by which a cell’s DNA is replaced, added to or deleted. Nonetheless, some form of labeling is imminent and inevitable. What isn’t known is how these specifications, no matter their form, will impact consumer purchasing decisions.

Studies have shown purchase decisions are driven by a number of factors.
Along with the primary drivers of sensory characteristics and price, many buyers consider ingredient lists, allergen warnings and nutritional information. However, research indicates conventional shoppers are more likely to be attached to specific brands; whereas consumers with a preference for organic products are not brand-loyal so much as they seek organic products in general.  Similarly, the customers who regularly buy organic brands are less inclined to research whether they are considered sustainable or ethical, perhaps believing the designation implies as much.

While it’s not possible to foresee the exact outcomes of GMO labeling, a reasonable prediction can be made from the current labeling efforts of several major food brands. Beginning in 2016, General Mills, Campbells and Mars, Inc., as well as Kelloggs, Frito-Lay and ConAgra began identifying products containing genetically modified ingredients. This was done in accordance with the Safe and Accurate Food Labeling Act of 2015 and involved labels with language such as “produced with genetic engineering,” “partially produced with genetic engineering” or “may be produced with genetic engineering.”

In an interview with The Organic and Non-GMO Report, General Mills’ media relations representative Bridget Christenson revealed zero impact to company sales, stating, “We haven’t noted any strong consumer response, and haven’t seen any impact on sales.”
Similarly, Thomas Hushen, a media representative at Campbell’s, echoed similar reactions, disclosing, “Regarding sales, there are a variety of factors that impact sales and we can’t attribute changes to any one thing. It (labeling) was a popular decision in the eyes of consumers and customers.”

Although product appearance and price point are believed to be the most significant drivers of consumer purchase decisions by American shoppers, a 2011 study by Elise Golan and Kuchler, economists at the U.S. Department of Agriculture, looked into the habits of consumers in countries already requiring labels to identify genetically modified products. In their study, the economists noted little to no impact, stating “labels are generally a weak policy tool for changing consumer consumption behavior,” because they “generally fail to get consumers’ attention.” Moreover, their research indicated most individuals make impulse-driven food purchases and rarely consult labels at all.

In Brazil, where a ‘transgenic’ symbol has been required on all GMO-containing foods since 2001, Golan and Kuchler found many consumers were actually drawn to the products bearing the symbol, particularly if they claimed to possess a nutritional advantage.

While it’s fair to presume the current interest in organic and natural foods will be a strong, positive driver for non-GMO labeled products, current studies indicate the average consumer is unlikely to note or be particularly concerned whether a product has been produced with genetically enhanced ingredients, likely electing instead to maintain loyalty to brands they already know and trust.

What about the organic or health-conscious consumer?
The Organic Trade Administration reports that U.S. sales of organic products increased 11% in 2017, representing more than $39 billion in overall purchases. Currently, it’s estimated that almost five percent of all U.S. food sales are comprised of organic products. On that note, it’s safe to assume those already inclined to read labels and evaluate nutritional information are most likely to recognize and respond to a GMO designation. Nonetheless, although GMO labeling will likely increase the perceived value and justify higher costs for non-GMO goods among health-conscious consumers, it is still just a small fraction of the population.

That fact, coupled with the known impacts of widespread, self-initiated labeling at companies like Campbell’s and General Mills, lead to the reasonable conclusion that GMO labeling won’t have a significant impact on the majority of consumer purchasing decisions. Likewise, the smaller segment of consumers concerned with nutritional data are likely to respond to the information based on their own pre-existing beliefs and values.

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