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Sugar processors, confectioners react to consumers’ GMO demands

The growing trend toward GMO-free and organic sugar has captured the broader sugar industry's attention, though the product's still represent a small niche.
John O’Connell

Capital Press

Published on December 24, 2015 11:33AM

Last changed on December 24, 2015 11:46AM

Courtesy of The Hershey Co.
Hershey has moved away from genetically modified sugar in response to customer demand, and now makes all of its milk chocolate bars sold in the U.S. with non-GMO cane sugar.

Courtesy of The Hershey Co. Hershey has moved away from genetically modified sugar in response to customer demand, and now makes all of its milk chocolate bars sold in the U.S. with non-GMO cane sugar.

John O’Connell/Capital Press
Duane Grant, chairman of Snake River Sugar Cooperative, stands by a snow-capped pile of sugar beets in Rupert, Idaho. Grant believes genetically modified sugar beets have saved his industry, and that they offer a far more environmentally friendly option than organic or conventional sugar.

John O’Connell/Capital Press Duane Grant, chairman of Snake River Sugar Cooperative, stands by a snow-capped pile of sugar beets in Rupert, Idaho. Grant believes genetically modified sugar beets have saved his industry, and that they offer a far more environmentally friendly option than organic or conventional sugar.

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John O’Connell/Capital Press
Sugar beets are scooped at a beet piling area in Rupert, Idaho.

John O’Connell/Capital Press Sugar beets are scooped at a beet piling area in Rupert, Idaho.

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Courtesy of The Hershey Co.
Hershey has moved away from genetically modified sugar in response to customer demand, and now makes all of its milk chocolate bars sold in the U.S. with non-GMO cane sugar.

Courtesy of The Hershey Co. Hershey has moved away from genetically modified sugar in response to customer demand, and now makes all of its milk chocolate bars sold in the U.S. with non-GMO cane sugar.

Courtesy of The Hershey Co.
Hershey’s chocolate kisses are manufactured. The company recently moved away from using sugar produced with biotechnology.

Courtesy of The Hershey Co. Hershey’s chocolate kisses are manufactured. The company recently moved away from using sugar produced with biotechnology.

Courtesy of The Hershey Co.
Hershey has moved away from genetically modified sugar, in response to customer demand, and now makes all of its milk chocolate bars sold in the U.S. with non-GMO cane sugar.

Courtesy of The Hershey Co. Hershey has moved away from genetically modified sugar, in response to customer demand, and now makes all of its milk chocolate bars sold in the U.S. with non-GMO cane sugar.

John O’Connell/Capital Press
Duane Grant, chairman of Snake River Sugar Cooperative, stands by a snow-capped pile of sugar beets in Rupert, Idaho. Grant believes genetically modified sugar beets have saved his industry, and that they offer a far more environmentally friendly option than organic or conventional sugar.

John O’Connell/Capital Press Duane Grant, chairman of Snake River Sugar Cooperative, stands by a snow-capped pile of sugar beets in Rupert, Idaho. Grant believes genetically modified sugar beets have saved his industry, and that they offer a far more environmentally friendly option than organic or conventional sugar.

Buy this photo

The Hershey Co. makes no claims that its sweets are safer or more healthful now that it’s avoiding sugar made from genetically modified beets.

In fact, the Pennsylvania-based confectioner agrees with U.S. sugar beet growers that all finished sugar is the same, whether it’s processed from GMO sugar beets or conventional sugar cane.

Perry Cerminara, director of commodities sourcing and procurement at Hershey, said the company started buying mostly non-GMO sugar — including 100 percent GMO-free cane sugar for its key U.S. brands — simply to give customers what they want, even if Hershey doesn’t necessarily share their concerns about biotechnology.

“As a consumer-centric company, we listen to our consumers and work to respond to their interests and expectations,” Cerminara told Capital Press via email. “Non-GM ingredients is something our consumers are telling us is important to them.”

Organic and GMO-free sugar still represent a tiny percentage of the overall U.S. sweetener market. But the sugar beet industry is starting to take notice of the continued growth of both niche categories — and is growing increasingly concerned that more corporate buyers will reach the same conclusion as Hershey.

The sugar industry estimates its annual impact on the American economy is more than $20 billion. Almost all of the sugar beets planted in the U.S. are genetically modified, containing a foreign gene to resist glyphosate herbicide. For the time being, America’s sugar beet industry — which encompasses 1.2 million acres in 11 states and represents 56 percent of U.S. sugar production — has no plans to invest in separate infrastructure for processing GMO-free or organic sugar, or to ask any growers to return to conventional beet production.

“I think you have to characterize Hershey’s choice as an indicator of what consumer goods companies may be thinking,” said Duane Grant, chairman of Snake River Sugar Cooperative, which controls Idaho-based Amalgamated Sugar. “I think it would be wrong to characterize Hershey’s decision as well-reasoned.”

Cerminara said his company now offers chocolate kisses and candy bars made with non-GMO cane sugar in the U.S., as well as a small selection of organic, artisan chocolate products.

But Cerminara emphasized his company’s products have always been safe and high-quality, even when they were made with sugar from GMO beets.

“The international scientific community, including the U.S. American Medical Association, the World Health Organization, Health Canada, the National Academy of Science and the Food and Agricultural Organization of the United Nations have all examined the health and environmental safety of plant biotechnology,” Cerminara said. “These organizations have concluded that these technologies are safe for human consumption.”


The future of sugar


In 2003, when his company was first investigating the potential benefits of biotechnology, Grant was accepted for an Eisenhower Fellowship, a program honoring former President Dwight Eisenhower by promoting global dialogue.

For his project, Grant headed to Europe to investigate why residents of the continent held such negative attitudes about biotechnology.

Grant concluded Europe had “an authority vacuum” in food regulation, and the public was more apt to trust activists who sought to “stir things up” than regulators.

By contrast, the U.S. beet sugar industry rapidly adopted GMO technology, which offered improved weed control with less labor and the use of fewer chemicals.

“We really needed some new tools to control weeds in beets,” Grant said. “Otherwise, I was going to get out of the business because what we had at the time was completely ineffective.”

Amalgamated processes sugar from 183,000 acres of beets in Idaho, Oregon and Washington, producing 20 percent of the nation’s beet sugar and 12 percent of the total U.S. domestic sugar supply.

In 2006, Amalgamated planted test plots of GMO sugar beets. The following season, the company made its first commercial planting, under a government permit. Now, all of Amalgamated’s sugar beet acres are GMO.

Grant said his company sources cane sugar from the global market to meet the needs of customers requiring non-GMO certified sugar. But he’s confident most U.S. consumers believe in the safety of GMO technology, and vows Amalgamated will never return to conventional sugar beet production.

“This company will go out of business before they go back to conventional,” Grant said.

Minnesota-based American Crystal Sugar — which raises 400,000 acres of sugar beets and produces 11 million tons of refined sugar per year — won’t raise any sugar for the conventional market in the next year or two, CEO David Berg said.

Berg said a single grower within the company sometimes still plants conventional beet seed because he’s had “competitive results,” but his beets are mixed in with the piles of GMO beets. Though Berg believes GMO beets are proven safe and the opposition is emotionally driven, he won’t rule out the possibility of producing some non-GMO sugar a few years from now. He said his staff is spending more time on analyzing the non-GMO market than a couple of years ago, but converting acres back to conventional production remains a remote possibility.

“It’s something we have to assess,” Berg said. “The market will dictate what we do.”


GMO-free, organic sugar


Jack Roney, an economist with the American Sugar Alliance, estimates less than 2 percent of the U.S. sugar supply is organic.

The country’s total organic sugar consumption is roughly 140,000 tons per year, the bulk of which is imported cane sugar. A single company, Florida Crystals, accounts for all of the domestic organic sugar production, raising 9,000 tons per year of organic cane, Roney said.

Florida Crystals officials could not be reached for comment, but their website advertises that they remain “America’s first and only producer of certified organic sugars,” and that their products are “not just sweet, but they’re also sweet to the environment.”

Roney said Florida Crystals hasn’t increased its acreage — despite a hefty organic premium and a strong organic sugar growth trend — because of high production costs.

“I’m not hearing about any big efforts by American producers to go into organic,” Roney said. “In developing countries, it’s kind of easier to do organic because they can’t afford herbicides or pesticides.”

There’s no GMO sugar cane on the market, though cane faces strong disease pressure, adding to the challenge of raising it organically.

According to the Organic Trade Association’s 2015 Organic Industry Survey, organic sweetener sales reached $200 million in 2014, and annual growth has been steady at 15 percent. OTA spokeswoman Maggie McNeil said beets haven’t been certified as organic, partly due to a “chemically intensive” refining process.

She said that as refined sugar has come under increasing scrutiny there’s been growth in organic sweetener options such as honey and agave.

The major sweetener verified by the Non-GMO Project is cane sugar, said Executive Director Megan Westgate.

“We do not yet have a beet sugar that is Non-GMO Project verified,” Westgate said.

In the past year, she said the non-GMO category of candy, chocolate, desserts and sweeteners has increased from 153 brands and 780 project-verified products to 238 brands and 1,402 products in 2015. The snack foods and bars category, which also requires a variety of sweeteners, grew from 2,080 products to 3,103 products during the same period, she said.

“Consumer demand for transparency is at an all-time high and shows no sign of diminishing,” Westgate said. “With this shift in demand to non-GMO sweeteners, it will become increasingly more important for supply to meet demand.”

Thom King, founder and CEO of Portland-based Steviva Ingredients, believes his company’s specialization in natural, low-calorie sweeteners makes it ideally suited for the future.

“We experience triple-digit growth year over year,” King said.

His company fills 60 percent of the U.S. market for stevia, a sweetener considered safe for people with diabetes derived from a plant native to South America. Coca-Cola now makes a low-calorie soda with a blend of cane sugar and stevia, he said. He also produces sweetener from an Asian melon called monk fruit.

King believes his products provide a more healthful alternative to sugar, but he sees no benefit to choosing GMO-free cane sugar over beet sugar.

“If you’re using GMO to increase crop yield to feed the world and the net effect is finished goods that have no trace of GMO, I’m not sure anyone could support that being a bad idea,” King said.


Environmental claims


In the case of sugar, Grant argues consumers who seek organic and GMO-free products are doing the environment a disservice.

On behalf of Amalgamated, Grant signed a report compiled by the American Sugarbeet Growers Association documenting 25 reasons GMO sugar beets are ecologically superior to conventional beets — including that they require fewer and safer herbicides and less fuel to grow.

The report was offered as public comment to the National Academy of Sciences, which will soon take a position on GMO crops.

Grant further reasons that consumers can fight global warming by avoiding organic sugar. Grant said most organic sugar consumed in the U.S. comes from cane-producing countries where rain forests are often cleared for crop land.

“Does it make sense to slash and burn the rain forests in Brazil to bring organic sugar here and put American beet farmers out of business, in spite of the fact that they’re producing in an environmentally sustainable manner?” Grant asked.

He also believes there’s too little accountability to be confident foreign suppliers in “markets where you can buy a paper trail” are meeting U.S. organic standards.

A few years ago, the major beet companies conducted a demonstration, testing finished GMO beet sugar from several plants against cane sugar to prove there’s no chemical difference. The samples were indistinguishable on the molecular level. Grant said only at the atomic level can the products be differentiated — by a single carbon isotope distinguishing a grass, sugar cane, from a root, sugar beet.

Grant said current sugar prices are “reasonably profitable,” and in the long term, he sees the market share only growing for GMO beet sugar.

Beet growers, who used to produce less sugar per acre than cane farmers, have seen their trend-line yield gains double since the advent of GMO sugar, while cane yields have been declining.

“You take that out 10 years and beet sugar in the U.S. will be by dramatic margins the most cost-effective sugar produced anywhere in the world,” Grant said.

Despite the growing niche for organic and GMO-free sugar, Grant said Amalgamated has a market for all of the sugar it can produce and has invested $155 million in the past four years to remove production bottlenecks and boost its output. With sugar prices up, he anticipates the sugar beet industry’s next step will be to build new processing capacity. “We believe in the end science will prevail,” Grant said. “We are just on the edge of what this technology can really bring.”









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