FMI MIDWINTER CONFERENCE

LAKE BUENA VISTA, Fla. -- Whole Foods Market Inc. is urging the labeling of genetically modified foods while remaining open-minded about the potential benefits of those products, Christopher Hitt, president of the chain, said here last week.Hitt, who spoke here at the Food Marketing Institute Midwinter Executive Conference, explained the natural-food retailer's viewpoint on this emerging category

LAKE BUENA VISTA, Fla. -- Whole Foods Market Inc. is urging the labeling of genetically modified foods while remaining open-minded about the potential benefits of those products, Christopher Hitt, president of the chain, said here last week.

Hitt, who spoke here at the Food Marketing Institute Midwinter Executive Conference, explained the natural-food retailer's viewpoint on this emerging category -- a stance that may seem in part to run counter to the inclinations of the chain's customer base.

"If you think we'd be unalterably opposed to genetically modified foods, you'd be wrong," he said. "We're very concerned about this field of science, but we are not close-minded. There may be some very important discoveries that can improve people's health.

"Whole Foods is not adamantly against this concept. We want to watch it and see what the result is. We don't want to throw the baby out with the bath water. Some people are surprised we have this stance."

Nevertheless, Hitt stressed that Whole Foods is taking a firm stance on the labeling issue, and has been involved in lobbying the government.

"We're adamant that genetically modified foods need to be labeled," he said. "People have a right to know; we need to educate our customers. Our concern is that we're not doing enough in labeling to make sure people know."

Hitt spoke at a business session called "Future Foods: Complexities in Commerce and Communication." The session, which included a panel of speakers, focused on nutraceutical, bio-engineered and genetically modified products. The panelists included William Kirk, president of Agricultural Enterprise and senior vice president of DuPont; and Richard Goldstein, president and chief executive officer of Unilever, U.S. The discussion was moderated by Tim Hammonds, president and CEO of the FMI, Washington.

Whole Foods, Austin, Texas, carries both organic and nonorganic products, and can only guarantee to customers that the organics are free from genetic modification, according to Kim Barnett, who is on Whole Foods' research and support team. That's because even suppliers of the nonorganics don't always know the complete background of those products, Barnett said.

Hitt, who defined genetic engineering as a modern form of biotechnology, provided an example of the shortfall of information available about products. "Manufacturers don't always know when herbs and spices are irradiated," he said.

How important are genetically modified foods to the marketplace today? Hammonds said the category is extremely relevant in terms of current production.

"In the United States today, 50% of soybean acreage, 20% of our corn and 40% of cotton will be planted with genetically modified seeds this year," he said. "If you've eaten french fries at McDonald's you've eaten genetically engineered potatoes. And all of this is brought to you by familiar companies."

DuPont's Kirk said the biotechnology trend is spurred by increased pressure on the global agricultural system.

"We'll be at six billion people fairly quickly and nine to 10 billion by 2050," he said.

Kirk said the old model of slow, gradual improvements in agriculture has given way to a transformed sector whose rate of change rivals that of Silicon Valley.

"Biotech will be a revolutionary -- not an evolutionary -- process," he said. Kirk noted that DuPont has been partnering with companies to create optimum-quality grains and other products with enhanced features providing everything from health benefits to longer shelf life.

Unilever's Goldstein spoke to the issue of functional foods, the industry term that has come to define food products that carry some perceived health benefits, such as medicinal teas or low-fat or low-sugar items. Goldstein said the trend is closely aligned with the preferences of key demographic groups.

"Functional food is becoming the important consumer trend in our industry," he said. "Aging boomers seek holistic medicines and the population seeks nondrug alternatives."

He said functional-food sales, currently at about $8 billion, may grow to $20 billion by 2002. Goldstein stressed that food companies -- rather than drug firms -- need to take the lead in advancing this category.

"The food business belongs to the food industry; we understand it," he said.

Hitt endorsed the industry's focus on the category, saying his natural-food customer base "is very interested in nutraceuticals."

Panelists discussing the controversy surrounding genetically modified foods pointed to the strong European reaction against this category.

Hammonds said the European response was to enact regulations that shut down this category in order to allay consumer fears and protect local industries.

Hitt called that response an overreaction. Goldstein said the negative reaction could have been avoided.

"The European situation was created because there was no communication between the industry and the community," he said. "If there had been communication, you would have sharply neutralized the Green movement. We have the opportunity as an industry to assure consumers that we are supported by science."