Prop 37 Draws Support of Whole Foods, UNFI

CALIFORNIA In a conference call last week with the media, natural food products executives expressed their support for Proposition 37, the California ballot measure that would require the labeling of genetically engineered foods.

"We believe all consumers have the right to know where their food comes from and where it's produced," said David Lannon, executive vice president for operations, Whole Foods Market.

Michael Funk, chairman and co-founder of United Natural Foods, Inc. (UNFI), denied that the measure would increase food costs, and he expressed his belief that approval of the measure would inspire other states to adopt similar labeling requirements.

Executives in the natural food space also are hopeful that passage of Proposition 37 on Nov. 6 could lead to a federal standard requiring labeling of genetically engineered foods. There is no such requirement today in the United States.

"Only in America can you consume genetically engineered foods without knowing it," declared Andy Berliner, CEO of Amy's Kitchen of Petaluma, Calif. "It seems America has become the dumping ground for less desirable foods."

Arran Stephens, CEO of Nature's Path, said more than 40 countries require labeling of genetically modified foods. The number may be higher. According to the Findings and Declarations in Proposition 37, 50 countries have laws requiring labeling of such foods.

"We have always avoided GMOs because they are not natural," Stephens said. "They are alien creations."

It may come as little surprise that the natural food sector supports Prop 37 since the measure, if passed, is expected to benefit these companies. In a recent equity report, the global investment bank Canaccord Genuity expressed the opinion that SunOpta -- a global company focused on natural, organic and specialty foods -- and the broader natural food sector would benefit from the measure.

Consumers may gravitate towards foods that haven't been genetically engineered particularly when reading a label that could frighten them or at least raise questions in their minds as to what's in their chow.

The labeling requirements would take effect on July 1, 2014.

Citing economic studies, the campaign against Prop 37 has said the measure would cost the average California family up to $400 per year in increased grocery costs.

Stephens of Nature's Path contends such assertions are garbage. "This is just a scare tactic," he said.

Others on the call also denied that the ballot measure would lead to excessive and unfounded litigation. Funk of United Natural Foods said he wouldn't support the measure if he thought that was the case.

Critics of the measure have noted that lawsuits filed under Prop 37 wouldn't require a plaintiff to establish damages or follow procedures that are found in similar laws. Fears also have been raised that Prop 37 would affect a broader category of foods that aren't genetically engineered.