If you have any doubt that consumers can change the food supply, you need only look to a few events earlier this year:
- Starbucks stopped using dried insects in their drinks after an online petition with just 6,500 signatures urged them to do so.
- Grocery stores removed pink slime from products after another online petition with over 200,000 asked for the same.
- And when social media took on the King, asking Burger King to go cage-free with their eggs and pork by 2017, the company agreed.
Why? Change is being made by the power of Social Media.
Facebook groups, online petitions, blogs and viral Twitter posts and videos are changing the game, giving consumers a new stage and a microphone for their voices.
And shareholders are paying attention. In response to consumer demand, companies are reformulating their products. Not because of legislative pressure, not because of scientific studies, but because of consumer demand.
Food companies recognize that it is their fiduciary duty to shareholders to know their audience, to meet consumer needs and respond to consumer demand.
The legal definition of “fiduciary” is: An individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit.
So it is understandable that companies collectively poured $45 million dollars into the campaign in California to defeat a labeling initiative in California earlier this month. And while that investment proved successful, what may prove challenging now is that at the polls, 4.3 million eaters and consumer, 4.3 million Americans, voted that foods that contain genetically engineered ingredients, ingredients introduced into our foods in the 1990s without labels and without any long-term human health studies, should be labeled.
4.3 million voters called for the labeling of genetically engineered ingredients in our food.
At what point does this become a fiduciary duty? In light of the millions of consumers that voted and the millions more who were inspired by their conviction in light of record ad spending, is there a legal liability for the executives of food companies if they fail to address this consumer demand?
Does a “fiduciary duty” become a “fooduciary” one?
It is the fiduciary duty of these executives, their legal obligation, to drive shareholder return. And when the consumer has said, “cage-free”, “pink slime-free”, high fructose corn syrup-free,” these executives and food companies have responded.
Is it now their time to respond to labeling these ingredients?
The industry will argue there is no difference, according to their industry-funded studies, and no need to label the crops processed using genetic engineering. But orange juice is labeled if it comes from concentrate. Milk is labeled if it is pasteurized, and other foods are labeled if they are irradiated.
So the issue might come down to this, as suggested by the New York Times a few weeks ago:
“One question is whether food firms, having narrowly escaped a disruption of their business on Tuesday, will make changes on their own — like voluntarily labeling or reducing their use of genetically modified crops.”
It’s a good question. And having sat on a trading desk as an analyst that covered the food industry, experience dictates that it is one that shareholders will be asking management teams from the food industry, not only at shareholder meetings but also in conference rooms and at portfolio management desks around the country.
The old adage states that the customer is always right. Starbucks, Burger King, grocery stores and other members of the food industry have responded and reformulated their products.
In light of the concern of 4.3 million eaters, who voiced their concern in the voting booths earlier this month, the food industry would be wise to heed this concern ahead of the social media campaigns that are sure to take place. And if they have any doubt about the power the consumer holds and need an example of what could happen if they fail to address it, they only need look back to earlier this year and remind their shareholders of the swift and immediate response that Americans had to “pink slime.”
To add your voice to the millions of Americans who believe that these ingredients should be labeled, so that our food companies can meet their fiduciary duties and produce products that meet this growing consumer demand, please visit Just Label It.