2013 Food Industry Outlook: 5 Things to Look Out For

Happy new year, everyone! We hope you enjoy having New Year's Day off, because January 2 is going to be the start of another challenging year for the food & beverage industry.

But aren't they all?

In many ways, there's more optimism and fewer impediments than we've seen in the past couple of economically challenged years. But 2013 brings a new set of challenges, some the result of a return to growth – plus some perennial ones.

Late last year, we surveyed our editorial advisory board and some other trusted confidantes and consultants in the food & beverage industry to come up with a list of top issues for the new year. We boiled those suggestions down to the following five, although we're sure you have plenty more to worry about.

GMOs

While that's a handy and recognizable acronym for genetically modified organisms, better terms are genetically modified food or genetically engineered food or ingredients. The subject is either the logical evolution of food science or the beginning of "frankenfood" – sorry, but you know that's how at least some consumers are viewing this development.

Early in 2012, we attended the Natural Product Expo in Anaheim, Calif., where guys were running around in hazmat suits to protest GMOs and petitions were circulating to get the FDA to require labeling of such ingredients. While this is a biased crowd, this is no fringe, table-top show. The 32-year-old show set records, with more than 60,000 attendees and some 2,000 exhibiting companies filling more than 1 million net sq. ft. of space. Only 18,000 attended the Institute of Food Technologists' annual Food Expo last year.

The year nearly ended with the November 6 general election, which, on the California ballot, included Proposition 37, an initiative requiring the labeling of foods and beverages sold in that state that carried genetically modified ingredients. Loud and public outcries by its supporters were met with a lower-key and highly localized information campaign by its detractors. Organic food processors were in the former camp, traditional/nonorganic processors and farmers and big agribusiness in the latter. With as many farmers as consumer activists in California, the proposition failed, although narrowly.

"This defeat has done little to slow down anti-GMO activists and the resulting pressures faced by food companies," says David Ter Molen, an attorney at the Chicago law firm Freeborn & Peters LLP. "2013 will see trends continue from last year on this hot-button topic and the rise of some new issues, including: calls for federal and state-level labeling of GMOs, boycotts and on-line protests based on demands for food ‘transparency,' lawsuits targeting ‘all natural' food products that include GMOs and the growth of products verified as non-GMO."

By the way, Mr. Ter Molen will be contributing a guest column next month on the subject.

There are plans for similar ballot initiatives in Washington, Connecticut and Vermont, and consumer groups are lobbying the FDA and even the president to weigh in. The year ended with the first media look at the long-rumored bioengineered salmon, "genetically altered by scientists who made it grow bigger and grow faster than ever before," as ABC News put it. "Behind padlocked gates and barbed wire fences in Panama grows what could be a landmark change in what we eat."

The company, Aquabounty, took an Atlantic salmon, a favorite species for diners, and added genes from a Chinook salmon and sea eel, both faster-growing species, to create a patented fish that grows to market size a full year ahead of plain Atlantic salmon. The company is awaiting FDA approval to sell and license its technology to fish farmers.

What it really comes down to is a pursuit perhaps as old as history itself: trying to understand our food and where it comes from. There's only one (each) Eric Schlosser and Morgan Spurlock; there are million of mothers who just want to responsibly feed their children.

By the way, we will devote our April Wellness Foods cover story to a discussion of GMOs.

This GMO debate brings us to our second challenge …

Naturality

Defining "natural" is about as difficult as defining "good." That may be most of the reason the FDA has never created a legal definition, even though the agency successfully outlined organic.

"Natural" concerns come in many forms. People worry if the growth hormones in milk are pushing their daughters into early puberty; that the antibiotics in their beef make them susceptible to an antibiotic-resistant superbug; or the synthetic ("artificial") colors in so many food & beverage products are causing autism. What about pesticides in your vegetables? Is high-fructose corn syrup natural? Even how humanely your Kentucky Fried Chicken was raised could be in some consumers' definitions of "natural."

Somewhere in the middle was the summer of 2012 dust-up over lean finely textured beef (LFTB). Sorry, but we can't help but make a quick reference to its ABC News-created pejorative "pink slime." Beef Products Inc., which perfected the process of turning trimmings into lean hamburger, nearly went bankrupt when TV chef Jamie Oliver and ABC News questioned the ground beef and especially the ammonium hydroxide antimicrobial treatment it receives.

Ammonium hydroxide is USDA approved and generally recognized as safe. But applying a term that sounds like ammonia to food for school children, well, it just didn't sit well.

FDA has never issued a regulation covering natural claims, but it has adopted an informal policy that defines "natural" as meaning "nothing artificial or synthetic, including all color additives regardless of source, has been included in, or has been added to, a food that would not normally be expected to be in the food."