The Gerber Experience with Agricultural Biotechnology A Case Study

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The Gerber Experience with Agricultural
BiotechnologyA Case Study

• Nicholas Hether, Ph.D.
• Food Allergy Training Consulting Services

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Acknowledgements

• Gerber - permission to use this material
• PEW, Keith Pitts - invitation to speak

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Topic Outline

• Gerber business outline
• Other peoples issues affect the business
• Pesticides, GM Crops
• Learnings
• Gerber GM position
• Management challenges
• Elements of Peaceful Coexistence

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Gerber Fundamentals

• Provide a nutritionally balanced line of food
  products for infants and toddlers
• Provide education and information about the
  importance of good, balanced nutrition
• Provide a line of products to assist with infant
  care, feeding, and with breast feeding

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Gerber Business Outline I

• Domestic food business 0.8 - 1.0 billion
• 80 market share, 2 production facilities
• Conventional organic foods (80 market)
• International food business 250 million
• 80 countries, labels in 16 languages, 4 plants
• Non-food - Baby Care Products 150 million
• Breast feeding supplies, nipples, bottles,
  pacifiers
• Baby lotions, shampoos, Oral Hydration Solutions

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Gerber Business Outline II

• Advertising Age study of American brands
• companies rated for loyalty trust
• Gerber - highest level trust loyalty in US
• Gerber is very media sensitive
• Close contact with consumers
• Consumer 800, 24/7, multi-lingual
• 80,000 conversations/month with consumers
• Quarterly consumer tracking surveys on issues
• GM topic tracked since 1998

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Other Peoples Issues I

• 1995 - EWG wanted dramatic pesticide issue
• Tested baby food, found residue
• No illegals, highest level 40 ppb, average 10
  ppb
• Staged dramatic press conference
• Effects for Gerber - became focus of the debate
• Sharp market share drop - 70 to 63 in 2 weeks
• 50 million revenue loss, Closed 1 of 3 US plants
• Grower base drop from 750 to 450
• Gerber US business - 8 years to recover

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Other Peoples Issues II

• 1999 - Green Peace wanted dramatic GM issue
• Tested baby food cereal, found GM corn
• Staged press events, world-wide coordination
• Effects for Gerber
• No material impact on business
• Took ingredient sourcing steps to remove
  potential for Gerber to become focus of future
  debates

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Learnings

• Activists - heedless about effects of their words
• Political, organizational driven
• Govt, BioTech Ag industries
• Poor to no understanding of consumer market place
• Cannot be trusted to manage issues in a way that
  does not put Gerber at risk
• We never know when an issue will get traction
  affect the business
• Action - remove Gerber as focus of issues debates

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Gerber GM Position

• GM crops do not pose a health concern
• Prevent Gerber becoming focus of debate
• Remove GM ingredients whenever possible (0.9)
• Crops with GM varieties - find IP non-GM sources
• Do not use GM status of foods for Marketing
• If consumers seek information, give it to them
• Gerber may develop GM based foods in future with
  a clear consumer benefit
• Tell consumers about both benefits sources

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GM Management Challenges I
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GM Management Challenges II

• Products designed for US market may not work
  outside US
• Incidental soy in corn product caused product
  withdrawal from China
• New GM crops require continued vigilance
• GM rice required imposition of geographic
  quarantine
• PMP crops pose significant risk to brand name
  food companies

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Elements of Peaceful Coexistence

• Responsible Stewardship
• Mind your technology, dont force it on people
• Dont play on consumer fears to sell your product
• Meet your customers demands
• Be it a country or a parent in Boulder
• Honor their concerns, but dont pander
• Be open with information
• Base it in facts, science - not hearsay
  anecdote
• Information games for political purposes are not
  long term winning strategies