Regional co-ops are worried about losing big candy customers
Something was different about a lot of the Hershey’s kisses in your stocking this year: The popular chocolates no longer contain sugar made in Minnesota.
For decades, the Hershey Co. has used sugar made from both sugar beets and sugar cane, but it decided earlier this year to stop buying beet sugar because it comes from genetically modified, or GM, seeds that some consumers don’t like.
Hershey, with 2014 sales of $7.4 billion and more than 80 brands of candy sold around the world, was a huge customer for beet sugar farmers, and its decision was significant enough to be noted earlier this month at two annual shareholder meetings of sugar beet cooperatives.
David Berg, president and CEO of American Crystal Sugar in Moorhead, Minn., the nation’s largest sugar beet co-op, told members gathered in Fargo, N.D., that the anti-GM movement is one of the industry’s biggest challenges. And Kurt Wickstrom, president and CEO of Minn-Dak Farmers Cooperative in Wahpeton, N.D., said that anti-GM groups are a real threat whose claims need to be countered.
Hershey communications director Jeff Beckman confirmed that the kisses and many other products stocked on shelves since Halloween no longer contain beet sugar. The company also is transitioning away from artificial to natural ingredients, he said.
“More than three-quarters of the sugar we are using today is cane sugar,” which is not genetically modified, he said, “and as we get into 2016, our expectation is to be at or near 100 percent.”
No matter how or where the company sources the sugar, it’s still just going to say “sugar” on the product ingredient labels, he said.
Beckman said the sourcing switch has nothing to do with the safety of beet sugar, and the company’s website contains references to numerous scientific groups that have concluded that GM sugar is safe to consume.
“This is really just a matter of listening to and being responsive to what consumers want us to put into their products,” he said.
Minnesota is the top sugar beet producer in the nation, followed by Idaho and North Dakota, and industry officials would not disclose how much of their sugar is sold to candy companies. About 55 percent of domestic U.S. sugar is produced from sugar beets, and nearly 100 percent of the beet seeds are genetically modified to tolerate the herbicide glyphosate, the active ingredient in Roundup.
Berg said in an interview that Hershey is the only national brand that has dropped beet sugar, although other companies have been asking questions and there has been a lot of chatter about GM sugar on social media.
“This could be a concern if it gets bigger and bigger, but at this point that’s all very speculative,” Berg said.
Even if it reached the point that other companies followed Hershey, Berg said, sugar beet growers can’t get non-GM seed anymore, and it would take years to produce.
“The supply of seed that is not genetically modified is extremely outdated and just not a viable option at all for raising sugar beets today,” he said.
Dean Bangsund, an economist at North Dakota State University, said the beet sugar industry generates nearly $5 billion annually in total economic activity in Minnesota and North Dakota, but it can’t afford to lose too many customers.
“If it’s just one domestic consumer, maybe there’s ways around that,” he said, but there’s reason to worry if rejecting beet sugar becomes a consumer trend.
“If the industry is forced to cut back production because it can’t find a market for its sugar, the economic effect would flow back through all stages of production here in the [Red River] Valley,” Bangsund said, affecting jobs of those who grow, process, transport, package and sell the sugar.
Part of the pressure on Hershey came from a coalition of groups called GMO Inside that began a campaign in 2013 suggesting that consumers tell Hershey and Mars, another large candy manufacturer, to drop all GM ingredients from their products.
Hershey made its decision as part of other changes in February. Mars has not made any announcements.
“Right now we don’t have immediate plans to target other companies, especially with sugar,” said Elizabeth O’Connell, campaigns director for Green America, one of the groups in the anti-GM coalition.
O’Connell and others contend that consuming genetically modified ingredients poses possible health risks and that growing GM (also called GMO) crops damages the environment and gives too much power and money to agricultural giants such as Dow and Monsanto.
Those claims are countered fiercely by industry leaders, who say that there’s no scientific evidence of health problems and that GM seeds grow more productive crops and use fewer weed-killing chemicals.
“There’s this perception out there that GM is bad for people and bad for the environment, when that’s just not what the science says,” said Todd Geselius, vice president of agriculture at the Southern Minnesota Beet Sugar Cooperative near Renville. “To the best of my knowledge, nobody’s ever gotten so much as the sniffles from eating a GM product.”
O’Connell said consumer groups will continue to pressure companies to remove GM ingredients from food, or at least to label them so consumers know what they’re buying. A current priority is dairy products, she said, because cows are fed mixtures of soy meal, corn and other products from GM seed.
The groups previously targeted General Mills, asking it to drop GM ingredients from its original Cheerios. Oats, the main ingredient, is not grown from GM seeds. General Mills did switch to non-GM sugar, even though original Cheerios is one of the least-sweet cereals on the market.
The groups are now asking General Mills to convert its top-selling Honey Nut Cheerios to a GM-free product. That would include several ingredients, including sugar. Honey Nut Cheerios contains nine times more sugar per serving than original Cheerios.
General Mills declined interviews on the topic because the company does not discuss its future sourcing strategies, a spokeswoman said.
Geselius said that at this point, everyone in the beet sugar business is more or less wondering the same thing: “We’re asking whether this is just the beginning of a huge trend that’s going to be a landslide, or is this just some companies trying to do some creative marketing? I think we’re really too early in this whole situation to really understand where we’re at.”