In an effort to increase transparency and reinforce its commitment to consumers, high-end grocery store Whole Foods announced Friday that it would be mandating labels for genetically modified organisms, GMOs, in food products by 2018.
The decision was seen by some as an effort to reintroduce Whole Foods as one of the quality produce distributors in the United States. According to the company, by offering its consumer base an honest appraisal of its products, the higher costs of Whole Foods products can be justified.
Though this approach might seem unorthodox and risky, Whole Foods is making a wise decision in implementing a new strategy of transparency. By committing itself to being a “quality” grocery store, it is opening itself up to a consumer base with higher incomes that will ultimately help its brand.
The trend toward increasing transparency for consumers has recently seen an incredible upsurge with the rise of social media, and Whole Foods is making the correct choice to spark profits with that change.
“We’re responding to our customers, who have consistently asked us for GMO labeling, and we are doing so by focusing on where we have control: in our own stores,” Whole Foods Co-Chief Executive Officer Walter Robb said in a blog post on the company’s website.
The company plans to begin labeling produce and other products genetically modified and containing GMO substances by the next quarter, extending to company-wide labeling by 2018. Though this plan might cause friction between Whole Foods’ current suppliers, who may be negatively affected by the strategy, the approach is a powerful and strategic choice. It is highly unusual for grocery chains in the industry to label all GMO products, and by making a public announcement to do so, Whole Foods will set itself apart from its competitors and stand as a symbol of quality and transparency among its rivals.
The decision has already seen positive responses from consumers and activists. Activist and Chairman of Just Label It Gary Hirshberg responded to Whole Foods’ new strategy by calling it a “game changer.” Hirshberg said in a New York Times interview that “we’ve had some pretty big developments in labeling this year. Now, one of the fastest growing, most successful retailers in the country is throwing down the gauntlet.”
In fact, this approach might have positive impacts on the industry as a whole. Rivals of Whole Foods, including grocery chains such as Trader Joe’s and Safeway, might feel pressured to adopt similar standards for their own products. Michael Hansen, a senior scientist at Consumers Union, referred to the decision in an interview with The Consumerist as “a good step forward in the marketplace, as it will put pressure on their competitors. And it helps with national call for mandatory labeling.” Mandatory labeling could transform the business practices of many different grocery chains and ultimately provide consumers with more information while keeping prices down through competition.
This might be the ideal situation for consumers and for companies. Though Whole Foods is beginning with GMO transparency, greater transparency overall could help improve the quality of products for more consumers. Though the exclusivity of the “health food” market might suffer as a result, the effect in terms of long-term benefits for consumers is positive and until now, unparalleled.
“I suppose there will always be a market for the cheapest possible food, but issues around water quality, farm workers, all that stuff, keep surfacing. There will be no place to hide in terms of what your practices are and what you’re doing,” Robb told Bloomberg News.
The effects of such a shift can be tremendous.
“We believe fundamentally in the customer’s right to know and the right to have the information necessary to make the choices they want to make on the products they want to buy,” Robb said.
Though it might seem like a small step towards corporate transparency, Whole Foods’ decision to implement mandatory labeling is actually a landmark case of a company using its considerable influence to set a standard for quality products.
At the very least, it sets a powerful precedent for corporate change in transparency. Whether this decision will pressure all grocers to behave in a similar way remains to be seen.
Payal Mukerji is a junior majoring in business administration.