Grocer pushes ahead on product labeling

Whole Foods’ initiatives could affect grocery industry 

Austin American-StatesmanApril 17, 2013 

BIZ WHOLEFOODS-LABELS 3 AU

Whole Foods Market believes consumers have the right to know how their food is produced and this includes whether or not it contains Genetically Modified Organisms or GMOs. Here, store employee Ian Purdue scans non-GMO products for ordering at the 6th St. and Lamar downtown store in Austin, Texas, April 10, 2013.

RALPH BARRERA — MCT

In 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,” co-CEO Walter Robb said, “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 affect the larger grocery industry as well.

While most supermarket chains have their own sets of standards, Whole Foods’ appear to be the most stringent, analysts say. “They’ve definitely taken it to a whole different level,” said Brian Yarbrough, an analyst for Edward Jones.

Since 2010, the Whole Foods has unveiled:

• A color-coded rating program that measures the environmental impact of its wild-caught seafood. Green indicates the species is relatively abundant and is caught in environmentally friendly ways. Red means the species is overfished or the methods used to catch it harm other marine life or habitats. Whole Foods eventually phased out red-rated species.

• An animal-welfare rating system for meats and other livestock products. The five-step system starts at 1, animals that aren’t crowded or kept in cages or crates, and goes 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 do not meet the standard and 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 varied.

For instance, the meat standards came about partly because Whole Foods founder John Mackey was very influenced by various books on animal welfare. Also, the label “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.

Other standards, like the ones on household cleaning products, were partly for competitive reasons.

As for genetically modified ingredients, Whole Foods first endorsed them for 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.”

But Whole Foods isn’t reacting to market forces as much as it’s staying true to its core values of providing high-quality foods, he said.

“From the beginning of the company, the No. 1 core value is selling the highest-quality natural and organic foods,” he said. “So in a way, the company is built on a standard. And that standard ultimately is the thing that sets Whole Foods apart.”

‘Consistent with who they are’

Andrew Wolf, an analyst with BB&T Capital Markets, said the new standards, especially regarding seafood sustainability and labeling products with genetically modified ingredients, represent Whole Foods getting into the “bleeding edge” of food standards.

But it’s consistent with Whole Foods being a mission-driven company of “leading the consumer toward more healthy eating and living,” he said.

“It’s just consistent with who they are, is the simplest way to put it,” Wolf said.

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

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

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