April 29, 2016

Dannon: The Beginning of a Non-GMO Trend?

 |  By: Jim Dickrell

Dannon’s announcement last week that it plans to source milk for its flagship brands Dannon, Oikos and Danimals from cows fed non-GMO feed within three years may be the beginning of trend that may--or may not—end well.

Dannon uses its partnership with McCarty Family Dairy in Rexford, Kan., as its prime example of how it works with dairy farmers to provide the kind of milk it needs for its yogurt products. (I wrote a bit about this two weeks ago in a blog on animal welfare.  And the McCarty’s were recognized as the Innovative Farmers of the Year in 2013 because of their unique partnership with Dannon)

In its press release, Dannon pledges to “offer products coming from more a sustainable agriculture by working with its dairy farmer partners and their suppliers to progressively implement the use of sustainable agriculture products and technology that leads to better soil health, better water management, an increase in biodiversity, and a decrease in carbon emission.”

These are all laudable goals. In fact, they’re essential to feed a hungry world. But whether they’re attainable using non-GMO crops is another matter. I have my doubts, especially if more rather than fewer pesticides must be used, if crop yields decrease and if farmers have to farm more acres or travel further in search of non-GMO feed sources.

Jim Mulhern, CEO and President of the National Milk Producers Federation, is even more forceful: “It is disappointing that Dannon is trying to differentiate itself with consumers by adopting an anti-science position on GMO feed. The evidence is clear that not only are GM crops safe, they also provide broad environmental benefits by reducing soil loss, as well as reducing farmers’ use of water, pesticides and fuel. Farmers have overwhelmingly adopted GM crop technology precisely because it increases productivity and improves agricultural sustainability.”

Even so, some farmers will be willing to go the non-GMO route if they can do so profitably. The McCartys, for example, have a somewhat unique deal with Dannon. The have a condensing plant on one of their four dairies, which removes two thirds of the fluid volume of the milk before it is transported to the Dannon yogurt factory in Texas. The McCarty’s own the plant, and have negotiated a cost-plus arrangement with Dannon that guarantees them a profit over their costs to produce, condense and deliver the milk to Dannon.

"The cost-performance model is currently employed with several of Dannon's farmers," says Michael Neuwirth, Senior Director of Public Relations at Dannon. "It is an option for us to consider with a dairy producer when it makes sense for both us and them.  And it's evaluated on a case-by-case basis."

So if raw milk prices rise, won’t retail yogurt prices have to rise as well? Says Neuwirth:"It is our belief that continued growth in sales will minimize and ultimately offset any difference.  We don’t believe that good food has to be more expensive or inaccessible – it just has to be made in the best way possible."

This, of course, remains to be seen. If Dannon is successful, others will follow. And if that trickle becomes a trend, dairy productivity and sustainability efforts could be set back decades. Farmers, consumers and the environment will all lose.