Whole Foods to Label on Genetically Engineered Foods(A)
WHOLE FOODS SHAREHOLDERS APPLAUD COMPANY’S NEW POLICY TO LABEL ON GENETICALLY ENGINEERED FOODS
Prompted by a shareholder resolution, Whole Foods Market (NASDAQ: WFMI) announced yesterday a new policy of labeling its private label foods to indicate that they are not sourced from genetically engineered seed.
The proponents of shareholder proposal congratulated the company yesterday. The resolution called for labeling of Whole Foods’ private label products with respect of genetically engineered ingredients. The change was announced at Whole Foods’ annual stockholder meeting in New York City.
In October 2001, Whole Foods and Wild Oats (NASDAQ: OATS) simultaneously announced that their private label brands’ ingredients would be sourced exclusively from non-genetically engineered seed. This information has not been conveyed on product labels or packaging, however, where consumers are most likely to seek information about ingredients. This prompted a group of Whole Foods shareholders to begin pressing for explicit product labels that state that genetically engineered foods were deliberately avoided.
“We are enormously pleased with this development and applaud Whole Foods for continuing to take leadership on the issue of genetically engineered foods,” said Shelley Alpern, Director of Social Research & Advocacy at Trillium Asset Management, the proposal’s lead proponent. “Whole Foods customers are exactly the demographic that wants to see this information on product labels, and we’re confident that this additional information will enhance sales.”
The shareholder group that filed the proposal included Portfolio 21, Progressive Investment Management, Green Century Capital Management, the General Board of Pensions and Health Benefits of the United Methodist Church, and Jennifer Clark of Austin, Texas. Their combined holdings in Whole Foods are over 200,000 shares currently worth $20.3 million.
In announcing the change, CEO John Mackey asked, “If Whole Foods doesn’t do this, who will?” Noting the possibility that labeling could invite legal actions, Mackey stated that they would be “worth fighting.” The uncertainty stems from the Food & Drug Administration’s failure to provide final guidelines for labels on genetically engineered foods. The shareholders had argued, however, that careful and accurate wording on Whole Foods’ part could insulate the company from legal action.
The shareholder proponents were overwhelmingly positive in their reactions to the policy change.
Indigo Teiwes of Progressive Investment Management stated, “Improving transparency, increasing consumer education, and realizing the full benefit of the company’s market advantage resulting from this decision is a strategic business move. Given increasing consumer concerns about genetically engineered foods, Whole Foods is taking advantage of a natural opportunity to enhance its market share.”
“As an industry leader, whose growth is driven by increasing consumer concern of the purity and safety of food, Whole Foods deserves to be celebrated for its commitment to bringing the topic of genetic engineering to the forefront,” said Beth Williamson Green Century Capital Management.
Vidette Bullock Mixon of the General Board of Pension and Health Benefits The United Methodist Church commended Whole Foods for its commitment to identify genetically engineered ingredients in its products. “This action is consistent with the Social Principles of the Church, which affirm the public’s right to be informed about the content of the foods they are eating.”
The Center for Rural Affairs released a statement that read, “It’s our hope that this will bring new opportunities to family farmers in niche markets for non-GMO crops. We applaud Whole Foods for taking another step to provide opportunities for America’s family farmers.”
Whole Foods did not specify a timeframe for the changes. The company stated that additional information and updates would be available on its web site.
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CONTACT: Shelley Alpern, Trillium Asset Management, 617.970.8944
Beth Williamson, Green Century Capital Management, 617.426.2503