Grocers Irked Over Not Being Told That Bestselling Soy Milk is No Longer OrganicNovember 9th, 2009
Fort Worth STAR-TELEGRAM
By Barry Shlachter, email@example.com
Organic-food shoppers are making a rude discovery at their grocers’ refrigerated display case.
“White Wave Silk Vanilla Soymilk is no longer Organic,” declares a hand-lettered sign at the two Sunflower Shoppes in Tarrant County.
Silk has more than 70 percent of the market. Until this month, Sunflower routinely re-ordered it, thinking it was certified organic.
But its maker, Dallas-based Dean Foods, quietly removed the word “organic” from the familiar blue cartons Jan. 15 and switched to cheaper beans — not genetically modified but likely grown with chemical fertilizer and possibly pesticide — then called it “all natural” soy milk.
Dean did not change the product’s identifying bar code or package design, nor did it significantly alter the price — moves that would have triggered scrutiny by store owners, some of whom now feel duped. A number of other Silk products were similarly changed from organic without a new bar code, Dean confirmed.
A reintroduced Silk organic line — in green cartons — carries new bar codes but is not as widely available.
“We don’t want to be part of customer deception,” said Erika McCarthy, a member of the third generation of her family to operate the Sunflower health food stores in Fort Worth and Colleyville.
Dean says it gave advance notice to its distributors and blamed them for not following through with independent grocers like Sunflower. It released to the Star-Telegram a form letter that distributors were supposed to send to retailers explaining that the nonorganic soy milk would carry the organic product’s bar code. National distributors Tree of Life and UNFI did not respond to repeated requests for comment. Specialty food markets contacted in California, Delaware and Texas said they did not discover the switch for six to nine months.
None has yet to be notified about the reformulation of what had been their stores’ biggest-selling soy milk product, they said.
Roy Beard, who has operated Roy’s Natural Market in Dallas for 41 years, said he hadn’t realized there was a change until contacted by a reporter last week. He said retaining the same bar code “was troubling,” but “I don’t believe in soy milk anyways, although I stock it for customers.”
McCarthy said: “Did we miss something? Our concern is that if it’s going from ‘organic’ to ‘natural’ we need to be informed. But we only found out about it now.”
What it means
The “all natural” label on Silk cartons is a loose term, in contrast with “certified organic,” which has strict federal guidelines that products must meet.
“Dean has only added to the marketplace confusion between ‘natural’ and ‘organic,’ as they definitely do not mean the same thing, and ‘natural’ requires no verification whatsoever,” said Urvashi Rangan, a senior scientist at Consumer Reports.
Sara Loveday, a spokeswoman for Dean’s WhiteWave unit, said “all natural” means that the drink contains no artificial ingredients and that the soybeans used were not genetically modified.
However, such soybeans are still typically grown with chemical fertilizers and synthetic pesticides when necessary, said professor Gary Stacey, associate director of the National Center for Soybean Biotechnology at the University of Missouri.
Dean carefully tests the beans for toxic residue, Loveday said.
Moreover, she said, the bean’s pod “naturally shields” it from chemicals, and a hull layer serves as a further barrier against contamination, which is true for all soybean varieties.
The new soy milk does not violate government labeling regulations because Dean rewrote its ingredient list and removed any organic reference.
But as American shoppers become increasingly concerned about food safety and the content of what they consume, the Silk product changes raise questions about marketplace integrity. Tipped off by the Cornucopia Institute, an organic-industry watchdog group, the nonprofit Organic Consumers Association launched a boycott of Silk-brand products this summer over the labeling issue. Silk products have not been affected, Loveday said.
Shannon Shipp, an associate professor and director of the ethics program at Texas Christian University’s Neeley School of Business, says he has no idea whether Dean intended to mislead consumers. The company would be on sound footing, he said, “if you assume that people carefully read the label every time they pick up a carton. But that’s not how people buy. Repeat customers are just looking at the color, not all the details. Why would they? The package itself is the proxy for all that.”
Why did Dean do it?
The company intended to avoid a price increase because of the rising costs of soybeans, transportation and other expenses, Loveday said.
Also, nonorganic varieties are considerably cheaper. Soybeans that haven’t been genetically modified cost $11 to $12.50 a bushel compared with $19 for organic beans, according to Ken Rose, editor of The Organic & Non-GMO Report. That works out to a savings for Dean of 34 to 42 percent.
Independent retailers, who were pioneers of organic food, now a nearly $23 billion industry, say they were let down by one of the country’s most established brands. Some, including the Natural Grocery Co. of El Cerrito, Calif., told the Star-Telegram that they swapped out the entire Silk line — representing $50,000 in annual sales — because of the reformulation labeling.
“I think the proper way to do it was to say, ‘Hey, we’re coming out with an all-natural line since organic soybeans are hard to find, cost too much,’ or whatever they choose to tell us,” said Bob Gerner, Natural Grocery’s founding general manager.
“But there was no warning,” said Gerner, 63, a 39-year food industry veteran. “We kept ordering what we thought was the same organic soy milk. I’m still dumbfounded they could do something like this.”
Dean, which bought Colorado-based WhiteWave in 2002, vigorously defended its actions, saying it saw no need to change bar codes on the soy milk items since using a different type of bean didn’t constitute a “major” reformulation.
But Jon Mellor, a spokesman for New Jersey-based GS1 US, the nonprofit agency that issues Universal Product Code numbers and bar codes, said changing products so they are no longer organic is considered a big enough shift to require new codes.
TCU’s Shipp said retaining the old bar code is an even bigger issue than the packaging matter.
“Why didn’t Dean call the UPC agency? It would have taken 20 minutes, cost nothing and there wouldn’t have been this problem. It’s just silly,” he said. “If this was some tiny producer in Oregon making a product change for the first time, I’d give them a pass. But Dean is one of country’s biggest producers, making this product for years.”
‘Bait and switch’?
Supermarket executives and food processors expressed surprise at Dean’s actions, saying that even when a package size is altered, a new bar code is affixed.
“Does it pass your internal smell test?” asked Doug Renfro, president of Fort Worth-based Renfro Foods, maker of Mrs. Renfro’s salsas. “My gut feeling is that switching from organic is a big change. I don’t think we’d do it. You’d want people to know it’s not organic anymore.”
Some retailers reacted to the labeling issue with unadulterated pique.
“I call it bait and switch,” said Bob Kleszics, 52, owner of the 14-year-old Harvest Market in Hockessin, Del. “I feel hornswoggled. I have never heard of a company switching from organic to conventional and maintaining the same UPC code.
“It’s clear Silk wanted to preserve the product’s look to keep customers grabbing the blue container off the shelf mindlessly. I am sure virtually nobody noticed it was no longer organic.”
Dean says it had developed a “comprehensive plan” to communicate the launch of nonorganic Silk soy milk products.
“We absolutely informed our retailers — without them we wouldn’t have a marketplace for our products,” a company e-mail said. “Our sales team informed retailers, distributors and brokers.”
When given examples of markets not contacted, Dean said those are independent stores that should have been contacted by their distributors.
Some big customers said they were informed directly.
Dean told Kroger, the country’s largest traditional supermarket chain, around the start of the year that its WhiteWave unit would phase in a conventional soy milk and would later reintroduce a certified organic one, Kroger spokesman Gary Huddleston said.
Maintaining the original bar code on a reformulated product, while very unusual, made no difference to Kroger since Dean had informed its dairy buyer about the changes, Huddleston said. Kroger carries Silk’s conventional soy milk but no longer the organic version because the chain has rolled out its own organic product, Naturally Preferred, he said.
But there was confusion — even among big players. Target ran a newspaper insert ad picturing the discontinued “organic” Silk blue carton as recently as Sept. 19, nine months after the change. Whole Foods made a similar mistake with an in-store sale poster in July. Neither returned calls seeking comment.
Dean’s organic products have long been under scrutiny from Cornucopia. It earlier attacked Dean’s dependence on factory dairy farms to supply organic milk for its Horizon brand. Cornucopia also discovered that Dean was using Chinese soybeans for Silk and questioned the credibility of China’s organic certification program, citing U.S. Department of Agriculture audits.
Dean confirmed that it had sourced a “small portion” of its beans from China but said it stopped at the end of 2006.
There is clearly no mutual admiration. Dean says Cornucopia “continues to spread misinformation about our business, our brands and organic in general, which confuses consumers and ultimately leads to decreased consumer demand.”
Mark Kastel, Cornucopia’s co-director, responded, “They don’t like us because we are pathological truth tellers.”
The “vast majority of organic brands that the public depends on are produced with high integrity, and problems with Dean are bad aberrations,” Kastel said.
In its e-mail to the Star-Telegram, Dean said: “We apologize for any confusion around our product offerings — that certainly was not our intention. We think offering both natural and organic products is the right thing to do for our consumers.”