GM-FREE FOOD:
DELIVERING WHAT THE CONSUMER WANTS
(1,980 words, slightly edited for clarity):
I'd like to thank Michael for his kind invitation to speak ever so briefly today. I'm here not to lecture another country on how to deal with a very complex and emotive issue of genetic engineering. I'm here merely to share with you some of the lessons we've learned in the UK from getting GM badly wrong. Before I talk through some of that, just two sentences about who we are and to give you some context.
Marks & Spencer is perhaps the largest food retailer in the world that can say with some certainty that 100% of the food we sell is free of GM ingredients and derivatives. That's because we are 100% own-brand retail. We don't have anybody else's brand, which makes us perhaps unique in the world of large-scale retailers. We only sell about GB£3.5 billion worth of food, which in the context of a Wal-Mart or Tesco's is tiny. This means that we have to have an absolute point of difference from our competitors, beyond just cost. We can't take on people like Wal-Mart on costs. One of our points of difference is trust ‚ being able to offer our customers food that is not only great value, great tasting, but also trustworthy.
Now as I talk about GM, it's very important to put it in context of what has been happening in the UK affecting our decision-making. Even through we've got four stores in Ireland, our decision-making on GM is entirely driven by what happened in the UK during the 1990s. From being one of the most trusting societies in the world, the UK became perhaps the most distrustful. This was driven by food scares that many of you will know well. GM, mad cow disease, foot-and-mouth, amongst others. But it was also driven in much wider ways by a set of political, medical and financial scandals as well, which left British consumers deeply skeptical about what they were being offered.
When GM food was presented to all the retailers in 1997 - 1998, we were quite keen to sell it. It looked fantastic, a new innovation, something different to move the food market on. We actually got a very very bloody nose from our customers in trying to achieve that. With the notable exception of Iceland [i.e. the supermarket chain ‚ Ed.] which was looking for a real point of difference at the time, we were all ready to pile in there. We all had 500-page risk assessments which said ìthis technology is safe, there is nothing to worry about, it's just economics.î What our customers told us though: we received 16,000 letters of concern from our customers. Now for a business with 12 million customers a week that does not seem huge. But we multiply every letter of concern we receive by a factor of between 100 and 1,000 for the number of people who are concerned but who couldn't be bothered to write in, or don't know how to write in to complain. So 16,000 letters of concern was unprecedented. If we get 20 or 30 letters about a single issue it goes to the Board, pure and simple. So 16,000 letters really made us sit up and take notice!
A lot of those letters expressed a general concern about GM. Nobody quite put their finger on it, but I would just like to offer you some a couple of thoughts as to why I think it happened. First was that obviously Monsanto talked about so many benefits to themselves ‚ some to farmers, some to retailers, and none to consumers - it was entirely seen as driven by Monsanto's back pocket, helping them protect their intellectual property as their pesticides were running out of patent. The second problem was that the science around GM which was offered in the media talked about spicing fish genes into tomatoes. Now the man in the street can get his head around spicing a potato gene into a tomato. But a fish into a tomato? This was just too far apart for people to really understand. And the third big mistake they made was the Terminator seeds, this concept that you can have a seed which will self-destruct in six or twelve months. It just seemed totally wrong to the British people. These were the original concerns. But actually these have mushroomed into a series of new concerns.
I think a lot of people, certainly in the retail industry, accept that the current offer of GM foods that is being put before us ‚ not taken but put before us ‚ is probably safe; it's probably as safe as conventional food. But what people are concerned about is what could go wrong. The classic examples are in the States, with StarLink and pro-gene. When genetically modified animal feed and genetically modified pig Ö got into the human supply chain, or could have done. And none of us want that. I think that is our biggest concern, the enormity of what could go wrong. In the past a conventional food scare could be put in a box, within reason, in a geographic box or a national box at worst. Now we are looking at technology that could cause concerns and fears across the whole world literally overnight.
There is also great concern about economic control. There is enough concern about the power of retailers; even though Marks & Spencers is quite small, we have an immense amount of power over our supply chain and over our farmers. But compared to Wal-Mart and Tesco's and the power that they yieldÖ there is a lot more concern. Now the Wal-Marts and Tesco's of this world are also seen as providing huge benefits to society, bringing down the cost of food, making it more accessible to all. The food producers don't share that brand visibility, that consumer visibility. People look at them with an increasing amount of concern and skepticism about them being able to control the whole world's food supply chain.
And of course we have the problems with national boundaries, the concerns about the spread of GM, the liability, its impact on organic food which has really prompted a lot of debate in the UK as I'm sure it will in Ireland. It's very interesting. I talk a lot with other governments around the world. I talk a lot with the Icelandic and New Zealand governments, and they have quite clear plans to differentiate their food offer to the world in terms of sustainability and trust. They can't take on the big prairie barons of America, Russia, Argentina and Brazil. They need a real point of difference. And they are looking at sustainability and being able to say it costs a little bit more, but it's a GM-free offer, it's an organic offer, it's an offer that's better for the world we live in. So there is an interesting analogy there for Ireland to discuss and debate in the months ahead.
So where are we know? We do a lot of polling and tracking, as any retailer does, with our customers, and we see absolutely zero appetite to eat GM food, absolutely none! Consumers are often asked to take in very complex discussions and arguments in literally a split second. When you actually take them for a couple of hours into a focus group, sit down in a room like this and explain to them what we are doing about pesticides, what we are doing about animal welfare, people usually leave that room less concerned. GM is the only technology that we are currently discussing with our customers in that way ‚ two hours in a focus group ‚ which leaves them more concerned when they leave the room. There is actually very little we can do to reassure them, even when we've got quality time to explain the science and the complexity behind it.
We are quite clear in our own minds that we will continue to be a business that sells food free of GM ingredients and derivatives ‚ and as we are increasingly doing, driving GM-free animal feed through our supply chain. And here I absolutely admit we are imperfect. We sell fresh milk from cows fed on a non-GM diet, but the milk that goes into our dairy produce still comes from cows that use or could use a GM diet. All our fresh meet comes from animals fed on non-GM diet, but the meats that we use in ready-meals could be from GM feed. So we are still in a very complex position of moving steadily through our feed supply chain at this moment in time. It's very difficult, it's very challenging, it costs money, and it takes time.
So to wrap things up, what are the scenarios if we look out into the future, not just in the UK but for you in Ireland as well?
Well, there is the status quo, carrying on as we are now: most big food brands in the UK not selling GM food, though the branded goods that they sell are not absolutely sure, labeling may throw up a few brands currently sold in some supermarkets that might be GM or might not be, but labeling will start to get to the bottom of that. You might get a bit of tightening around the edges from where we are now, as other retailers go further into non-GM animal feeds.
You might get a further collapse in trust in GM, if people really demand that all retailers get out of GM, anything to do with GM from now and the foreseeable future. That would most likely be driven buy another StarLink or pro-gene scandal. Our focus groups have told us that what limited trust there is in GM is absolutely thin ice. It won't take much to make it all collapse even further. So that is on the negative side.
On the positive side for the GM industry, well, who knows, they might find the magic bullet out there - the cancer cure, the obesity cure - thanks to GM. It's not likely to come from conventional agriculture though, so again, some thought needs to be given to this in terms of positioning Ireland in the world of GM in the future.
And then there is what could happen more widely, globally. We are seeing that it is now increasingly difficult for us to source non-GM soy for our animal feed, as more and more of the world goes GM. That is the most likely scenario as the world around us uses more GM.
But there is also another scenario that is beginning to say that trust in GM in other countries is starting to waver as well. A lot of that is being driven by farmers who are increasingly skeptical about the benefits they were sold five or ten years ago when they went GM: they are not actually delivering the bottom line they perhaps expected. You are starting to see some consumer concern about exposure, even in places like America where they've had StarLink and pro-gene. It's not inevitable that the whole world will go GM ‚ but it is more likely that it will.
So there are some thoughts, some lessons that we've learnt ‚ quite harshly over the last four or five years. It has been a long and complex journey for us, and will be, I think, into the foreseeable future. I wish you well in this debate, and am very glad that Michael has launched this kind of discussion. It was singularly lacking in the UK, until the British government tried to do something around the GM Nation debate last year, which went some way to alleviate concerns about how food is being managed in the UK. And there are lessons to be learnt from that. Again, all the best for the future!
Thank you very much.
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