In the News…..

Whole Foods dedicated to product-labeling effort
The natural-foods grocer has rolled out a series of standards regarding animal welfare, seafood sustainability and genetically modified ingredients — to name a few — that is unprecedented in scope for a major food retailer.

By Brian Gaar
Austin American-Statesman

Whole Foods Market believes consumers have the right to know how their food is produced. Here, store employee Ian Purdue scans non-GMO products for ordering at the store in downtown Austin, Texas.

AUSTIN, Texas — Over the past few years, Whole Foods Market has gotten much stricter about where its products come from.

The natural-foods grocer has rolled out a series of standards regarding animal welfare, seafood sustainability and genetically modified ingredients — to name a few — that is unprecedented in scope for a major food retailer.

Whole Foods officials say they’re staying true to their core values, while also reacting to changing times and concerns from their customers.

“I would represent these latest efforts as a further step in a direction we’ve been pursuing for 32 years,” said co-CEO Walter Robb. “Which is to provide some sort of clarity, some sort of definition, some sort of leadership in the marketplace.”

And while it’s impossible to predict the future, given Whole Foods’ prominence, it could influence the larger grocery industry as well.

While most national supermarket chains have their own sets of standards, Whole Foods’ appear to be the most stringent in the industry, analysts say.

“They’ve definitely taken it to a whole different level,” said Brian Yarbrough, an analyst for Edward Jones.

Since 2010, Whole Foods has unveiled the following standards:

• A color-coded rating program that measures the environmental impact of its wild-caught seafood. A green rating indicates the species is caught in environmentally friendly ways. The worst, a red rating, means the species is overfished. Red-rated species were eventually phased out by Whole Foods.

• An animal-welfare rating system for meats and other livestock products. The five-step rating system starts at step 1 (animals aren’t kept in cages, crates or crowded) to the highest tier, where animals spend their entire lives on the same farm.

• A rating system for household cleaning products, based on the environmental friendliness of ingredients. Red-rated products aren’t sold at Whole Foods. Products can’t receive an orange rating if they’ve been tested on animals or have artificial colors. The highest rating, green, is given to products with all natural ingredients and “no petroleum-derived ingredients.”

• And this year, the company announced that all products in its North American stores that contain genetically modified ingredients will be labeled as such by 2018.

Robb said the reasons for the new standards have been varied.

For instance, the meat standards came about partly because Whole Foods founder John Mackey was influenced by various books on animal welfare. Also, the label of “natural meat” was meaning less and less in the industry, Robb said.

As for seafood, the program was a reaction to concerns about overfishing and the environmental effects of certain fishing methods.

As for genetically modified ingredients, Whole Foods first endorsed labeling in 1992, Robb said. But it never got much traction until a new process for modifying alfalfa (which is used to feed livestock) popped up in the news. And a proposition in California to label genetically modified ingredients in products last year — while it ultimately failed — further brought it into the public consciousness.

“It’s up on the table now and people are talking about it,” Robb said. “It’s part of the national conversation.”

Yarbrough said the new standards are an evolution of the natural and organics industry that Whole Foods has built.

“Its just another way of building customer loyalty and building that faith in that, when they offer something they’re serious about this business,” he said. “And these are ways just for them to say, ‘Hey we’re really serious about it.’  ”

There is some evidence that isolated chains have followed suit in some areas, particularly in seafood sustainability, Yarbrough said.

And larger chains like Safeway and Kroger are now talking about animal welfare and seafood sustainability, he said.

Mary Mulry, who formerly headed natural foods for H-E-B and is now president of FoodWise, a consulting firm, said that consumer demand changes much more quickly than the industry.

“To walk back the food system is going to take a minimum of five years because of this process of change,” she said. “Awareness up until now has been minimal, and now everyone wants non-GMO. The food supply needs time to catch up to that.”

Gary Hirshberg, chairman of both Stonyfield Yogurt and the Just Label It campaign whose objective is mandated labeling of GMO foods in the U.S., also favored the move.

“From a sheer competitive point of view it’s a brilliant move because for so many retailers who are trying to compete with (Whole Foods) it says, ‘You’re going to have to do this, too, if you want to offer a parity proposition,’ ” Hirshberg said.