Monsanto Company (MON): Whole Foods Market, Inc. (WFM)’s Brilliant Cross-Contamination Plan

Page 1 of 2

Earlier this month, Whole Foods Market, Inc. (NASDAQ:WFM) made a big decision — it’s giving its suppliers five years to either source non-gentically modified (GM) ingredients or clearly label any products that contain genetically modified ingredients. Whole Foods is so far the only major grocer to make this requirement, and it may prove to be yet another key differentiator between the company and its more conventional rivals.

Whole Foods Marlet Inc WFM

California residents may be reminded of last year’s Proposition 37, a ballot measure that would have required similar labeling for any foods with GM ingredients, statewide. The measure failed, contradicting polls that consistently show that huge majorities of Americans support GM labeling, but the vote was close — 53.1% to 46.9%. There’s a lot of debate over why the measure failed, but one thing is for certain — a lot people are interested in what goes into their food, and Whole Foods Market, Inc. (NASDAQ:WFM) isn’t necessarily just preaching to the choir.

Everything gives you cancer
During the Prop 37 campaign, some comparisons were made with 1986′s Proposition 65, which did pass and required warning labels on products containing chemicals known to cause cancer or birth defects. Unfortunately, it turned out that that was pretty much everything, and now almost any place you go has signs out front warning that the building contains cancerous chemicals. They’re so commonplace that no one really pays attention to them now. I’ve lived in more than one apartment with a warning sign not far from my front door.

The same problem exists for GM labeling. About 75% of all packaged food contains ingredients that come from genetically modified organisms, and the worry with Prop 37 was that the labels would be so commonplace that consumers would stop noticing them.

The easy solution is to buy organic food, which legally can’t contain genetically modified ingredients. This is what makes Whole Foods Market, Inc. (NASDAQ:WFM)’s labeling decision a key differentiator. Customers won’t necessarily have more information — Whole Foods already labels non-GMO products on its own. But conscious consumers may not connect the lack of a “non-GMO” label with the presence of GMOs, and by making suppliers label their own GM products, Whole Foods can highlight the stores’ large selection of organic products, including its own Whole Foods 365 Organic line. Because organic products tend to carry a higher margin, this move could prove to be as profitable for the company as it is helpful for consumers.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!