This information is valuable for the simple reason that consumers are willing to pay an additional premium for it. “Food companies are now spending millions of dollars to develop a capacity to produce identity-preserved products,” he said. “Say you go and buy flour from a grocery store. Using advanced software and technologies such as radio-frequency identification, food companies could tell you the fertilizer used on the fields, what kind of genetically modified seed was used, the location of the field in which the grain was grown, and so forth. That’s identity preservation, and that’s going to be important because producers can get huge premiums for foods produced in certain, verifiable ways.”
If the current wave of designer commodities and boutique foods reaches the tipping point and becomes commercially mainstream, an enormous reorganization of grocers’ shelves will take place. (And it seems to be doing just that, judging from the growing organics sections at Cub and Rainbow, for example. They are already trying to capture some of the business from cutting-edge retailers like the Twin Cities’ upscale grocers and co-ops.) It won’t just be Pillsbury flour anymore. The technology exists to allow bag-by-bag and bottle-by-bottle micro-branding. In the near future, it is likely that you will be able to buy—and, more to the point, choose to buy—unbleached flour, made from non-GMO wheat grown in Pembina County, North Dakota, and fertilized using only manure from alfalfa-fed dairy cattle.
That may seem like a stretch, but it’s already come to pass in parts of the gourmet food and produce market. Heritage Foods U.S.A., a Michigan-based producer of poultry and pork, sells meat that comes from old-style, heirloom breeds. Each “Red Wattle” or “Gloucestershire Old Spots” pig it sells comes with a label that provides online access to data about the pig’s life history, from birth to slaughter. The company’s website even provides a link to a web-cam so customers can keep an eye on their bespoke Thanksgiving turkey as it enjoys its summer, scratching around the barnyard.
A recent market research survey published in the Journal of Consumer Affairs showed that consumer willingness to pay for IPP-labeled products was measurable and significant. In this study, fifty percent of consumers were willing to pay a premium of ten percent on the average for fair-trade foods like coffee. A smaller but still significant number—ten percent—were prepared to pay a premium of up to twenty-seven percent. For a commodity like coffee, that’s a massive profit margin.
While the profit potential of de-commoditized foods is an enticement to food producers, there’s also increasing concern about maintaining safety. Recent advances in biopharmaceutical agriculture, or “pharming” as it’s often termed, will make IPP crucial to ensure that food crops stay clear of pharmed products in a separate supply chain. Six years ago, for example, a large quantity of corn chips were found to contain bio-engineered corn that had been intended not for human consumption, but for livestock feed. A 2005 study by the Pew Initiative on Food and Biotechnology at the University of Richmond says the most compelling reason to establish identity-preservation and traceability systems stems from food safety, not marketing considerations. “In the future, incentives for IPP and traceability will increase as genetically modified crops are used to ‘grow’ pharmaceuticals or industrial chemicals that should stay out of the food supply,” said the Pew study’s authors.