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Is the Cheerios News Really a Win for the Anti-GMO Movement?

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The company's decision to declare the original Cheerios product free of genetically modified ingredients is a shrewd move.

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Call it consumer pressure, a public relations coup, or -- for the less cynical -- a simple change of heart, but General Mills (NYSE:GIS) seems to have reversed its decision on what exactly goes into its signature whole-grain Os.

After pooling resources with a consortium of food and chemical heavyweights -- including Monsanto (NYSE:MON), Nestle (OTCMKTS:NSRGY), PepsiCo (NYSE:PEP), and DuPont (NYSE:DD) -- to successfully defeat ballot measures requiring the labeling of products containing genetically modified crops, General Mills has made a 180-degree turn on its once-hardline position.

Suddenly the company is not only in favor of re-stamping the Cheerios boxes, but the new labels will actually read "Not Made With Genetically Modified Ingredients." The announcement on Thursday from company spokesman Mike Siemienas makes the 73-year-old cereal the highest profile food brand to abandon recombinant DNA technology in its production. The labels will also warn of the presence of trace amounts of GMO due to the manufacturing process.

But this ingredient change isn't exactly sweeping across the General Mills food and beverage lineup; it is, in fact, strictly confined to the original Cheerios product. All other varieties, like Apple Cinnamon Cheerios, Multi Grain Cheerios, and Honey Nut Cheerios -- the top-selling cereal in the nation, consumed by nearly 6.4 million Americans -- will continue to be genetically engineered.

Original Cheerios is the easiest fix since, unlike the aforementioned brands, its main ingredient is oats, rather than corn, which is biotech-friendly.

Still, General Mills wasn't legally required to phase out GMO from any flavor at all. Citizens in both Washington state and California rejected voter initiatives that would force transparency in the labeling of GMO products (though the monied food lobby threatened voters with increased grocery costs), so General Mills was free to make its Cheerios with all the lab-grown Os it pleased.

And nothing likely would have changed if not for a couple of persistent consumer-advocacy groups demanding it. Unable to outspend the Grocery Manufacturers Association during elections, Green America and GMO Inside harnessed the power of petitioning and the ringing mouthpiece of social media to launch its No GMOs, Cheerios! campaign.

"Everyone should have the right to choose foods that are safe for themselves, their families, and the environment," said campaign director Elizabeth O'Connell. "That's why GMO Inside urges food manufacturers to be environmentally responsible, transparent with their ingredient sourcing and disclosure, and end their use of genetically modified organisms. If General Mills can sell Cheerios without GMOs in Europe, there is no reason why the company cannot phase out GMOs in Cheerios and its other products in the US as well."

That message resonated with enough Facebook (NASDAQ:FB) posters to rankle the top brass at General Mills, and the decision to de-Frankenstein Cheerios was put in motion.

But the anti-GMO movement shouldn't count its free-range chickens before they hatch. Original Cheerios is, arguably, the most conspicuous brand in the General Mills product line, thus grabbing the most headlines and delivering the biggest bang for the buck in placating the opposition. The fact that banning GMO products from its ingredient list, versus that of other products, mitigates what otherwise would be a relatively costly burden in production makes this particular cereal an obvious choice for this PR campaign.

Unless General Mills follows up this cleverly publicized move with more offerings from the hundreds in its product roster, Cheerios will be little more than a red herring in a bright-yellow box.
No positions in stocks mentioned.

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