Will Chipotles NonGMO Ingredients Cause Supply Chain Disruptions

Will Chipotle’s Non-GMO Ingredients Cause Supply Chain Disruptions?

When Chipotle Mexican Grill  announced on April 27 that it has achieved its goal of moving to only non-GMO ingredients for its U.S. restaurants, it sent out a strong signal to the food industry supply chain.

“There is a lot of debate about genetically modified foods,” said Steve Ells, co-CEO of Chipotle. “Though many countries have already restricted or banned the use of GMO crops, it’s clear that a lot of research is still needed before we can truly understand all of the implications of widespread GMO cultivation and consumption. While that debate continues, we decided to move to non-GMO ingredients.”

When Chipotle became the first national restaurant company to voluntarily disclose GMO ingredients in its food in March 2013, its suppliers planted non-GMO corn varieties to meet Chipotle’s needs for corn tortillas, and the company replaced soybean oil with sunflower oil to cook its chips and taco shells, and with rice bran oil for other recipes and uses. Both oils are extracted from crops for which there are no commercially available genetically modified varieties. Other GMO ingredients in tortillas were replaced with non-GMO alternatives.

While GMO advocates point to higher costs associated with producing non-GMO foods, Chipotle’s move to non-GMO ingredients did not result in significantly higher ingredient costs for the company, and it did not raise prices resulting from its move to non-GMO ingredients, the company said.

However the company’s  push for "food with integrity" has also hit snags, such as supply problems earlier this year when a pork supplier wasn't complying with its animal welfare standards, as reported by Gillian Rich of Investor’s Business Daily.

The GMO issue is difficult since they are very common in the food system.  In fact According to the USDA National Agricultural Statistics Service, 94% of corn and 93% of soybeans grown in this country came from GMO strains in 2014. As a result, more than 80% of foods consumed in the U.S. contain genetically modified ingredients, by some estimates, making it very difficult for consumers to avoid GMO ingredients in restaurants or in food purchased in grocery stores.

Chipotle's move gives it a competitive edge but also puts greater pressure on the supply chain, Darren Tristano, of  Technomic Inc., a consulting firm for the food service industry told  Alicia Wallace of the Denver Post. "It could take years for the supply chain to meet the increasing needs of Chipotle and other restaurants that currently avoid GMOs and will plan to after this push."

Aided by brands such as Chipotle and others as well as retailers such as Whole Foods Markets, GMO ingredients certainly appear to be headed for eventual extinction in the U.S., says Dale Buss of BrandChannel.

The push for non-GMO has led to an overall evaluation of the food supply which is causing other restaurants to re-evaluate their supply chains says Rich. They are moving toward healthier options.  For example McDonald's said that it would use only chickens raised without antibiotics. And Panera Bread has announced that it would remove artificial flavors, colors, preservatives and sweeteners from its menu by 2016. Last week PepsiCo made a pledge to remove aspartame from its diet soft drinks.

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