Retailers Whey In: Are Animal-free Dairy Products Natural?

This article originally appeared in Presence Marketing’s August 2022 industry newsletter and New Hope Network's IdeaXchange.

By Steven Hoffman

Which term do you like better – animal-free dairy, next-gen dairy, cultivated dairy, bio-identical dairy, or parallel dairy? If you preferred “animal-free dairy,” you’re not alone.

Knowing consumer acceptance is key to the success of precision fermentation – a rapidly growing biotechnology that genetically engineers microorganisms such as bacteria and yeast to produce complex molecules, including proteins that mimic those found in meat and dairy products – earlier this year German biotechnology company Formo, along with Fordham University and Mercy for Animals, surveyed consumers in the U.K., Germany, Singapore and the U.S. to ask that very question.

What they found out? While the clear favorite among survey respondents was animal-free dairy (the least favorite was bio-identical dairy and the strange term, parallel dairy), “Many wanted to know whether the product was natural or artificial, leading from here into questions of how safe the products would be and what bodily effects it might have, with some looking for data that could answer these questions for them,” the survey’s authors reported, according to Food Navigator.

While a significant majority of the survey participants responded positively to questions about animal welfare and conventional animal agriculture’s impact on the environment as they were framed in the poll around such “animal-free” dairy products, according to the survey’s findings, a “nearly universal” consumer concern was around precision fermentation’s “unbridled meddling with nature,” and many were worried about “eating the unknown.”

Organizations like the Good Food Institute tout the benefits of synthetic biology (syn-bio) and its use in creating animal-free dairy, meat and egg products, food flavorings such as vanilla, fragrances, and other substances meant for human and animal consumption. The past five years have seen an explosion in start-up biotech companies using synthetic biology and precision fermentation techniques to create ingredients and products. The Non-GMO Project tracked a 250% increase in biotech companies, now numbering more than 400. Many of these start-ups hope to sell to consumers who believe they are buying purely natural products, reported Prepared Foods. Yet, the National Bioengineered Food Disclosure Standard, passed by Congress in 2016 and launched in 2020, will not apply, meaning these products are not required to carry a GMO label.

As hi-tech and other venture capital (VC) investors commit billions of dollars to biotech companies seeking to develop and control IP over such food production technologies, the market for synthetic biology products in North America is expected to reach US$ 15.2 billion by 2028 from US$ 4.3 billion in 2021, representing an estimated CAGR of 19.7%, according to a July 2022 report by Business Market Insights.

Yet, it’s a technology that most consumers know nothing about, and one with very little regulatory oversight, say a growing number of retailers and other leaders in the natural products industry who are calling these products into question, especially when a handful of synthetic biology companies had exhibits at the recent Natural Products Expo West, the world’s largest natural channel trade exposition, held in Anaheim, CA, in March 2022. 

The Definition of Unnatural?
"Syn-bio dairy products are GMOs because they are created by genetically engineering a microbe like yeast to excrete milk proteins," said Megan Westgate, Founder and Executive Director of the Non-GMO Project, North America's most relied-upon non-GMO authority, in May 2022. "That's the definition of unnatural."

According to Westgate, the syn-bio process forces cells to produce novel proteins that mimic natural ingredients like casein and whey. The possible risks they claim include significant biohazardous waste, the accidental release of new GMOs into the environment, and continued reliance on fossil fuels for GMO growth media and the incineration of waste. Syn-bio dairy could also put traditional dairy farmers and farmworkers out of business, Westgate cautioned.

Referring to the presence of syn-bio companies at Expo West, Editor and Publisher of the Organic Insider Max Goldberg wrote, “Despite the fact that this is a ‘natural’ products expo, there were numerous companies selling products made with synthetic biology, or ‘precision fermentation’ — a fancy marketing term to hide the fact that this is a very risky and unproven GMO 2.0 technology. “Precision fermentation typically requires the use of genetically-engineered microorganisms, which are cultivated in brewery-style fermentation tanks. Needless to say, there is nothing ‘natural’ about this,” he said, noting that the presence at Expo West of food bio-tech start-ups such as Motif FoodWorks, maker of syn-bio meat and dairy products, and Perfect Day’s Brave Robot, a line of “animal-free” dairy ice cream, had upset many natural and organic advocates.

Noting that a coveted slot at Natural Products Expo West can bestow a halo of “natural” upon a brand, Mark Squire, a respected retailer, GMO labeling advocate and co-owner of Good Earth Natural Foods in Fairfax and Mill Valley, CA, told Goldberg, “These companies are trying to use us all to give their ‘un-natural’ products the ‘natural’ glow. I hope our industry will reject them from future shows,” Squire said.

Patrick Sheridan, president and CEO of the Independent Natural Food Retailers Association (INFRA), representing nearly 300 natural products retailers, told Ken Roseboro, Editor and Publisher of The Organic & Non-GMO Report, that the consensus among his group’s members was that syn-bio companies don’t belong at a natural food show. “We’re trying to curb the expansion of GMOs in our food system but food start-ups are getting into Expo using smart marketing campaigns that aren’t transparent,” Sheridan said.

While Shelley Sapsin, Director of Market Integrity for New Hope Network (producer of Natural Products Expo West) responded saying that retailer concerns “matter very much to us” and that “asking hard questions about GMO-derived ingredients is appropriate,” she also said that New Hope provides a forum to discuss topics such as precision fermentation and GMO 2.0. However, she said, “Rather than banning businesses and closing down debate we’ve chosen to encourage robust dialogue. And most importantly, we provide a place for the natural products community to choose for themselves the products that make sense for their customers.” New Hope Network allows these companies to exhibit as long as they don’t make “natural” claims, Sapsin said. 

Lack of Transparency
Yet, according to The Organic & Non-GMO Report, one of the biggest complaints from natural channel industry members is that these “GMO 2.0 companies” aren’t transparent. “They are hiding behind a lack of transparency,” Good Earth’s Mark Squire said. “…these GMO 2.0 products have a whole new set of problems attached to them and no regulations,” he remarked.

“It seems that even with all the smarts and savvy in the natural products community, we have failed to understand that we are being targeted by a coordinated global campaign to force the adoption of synthetics in natural channels,” Alan Lewis, VP of Advocacy at Natural Grocers, told The Organic Insider. “The campaign is spawn of the notorious GMO lobby, now emboldened and backed by technology moguls. New Hope’s decision to actively promote ‘syn-biotech’ is a direct threat to the thousands of small brands it claims to champion.”

Writing in Forbes in March 2022, Errol Schweizer, natural channel retail specialist and former VP of Grocery for Whole Foods Market, said, "This leads us to questions of how food technology feeds into racialized capitalism. White people own over 98% of agricultural land and make up over 84% of food executives and over 70% of VCs. Yet the food industry is extremely diverse among the rank and file, from farmgate to retail. How diverse are the leadership teams, boardrooms, capitalization tables and investor pools of precision fermentation enterprises? Are any of these companies worker cooperatives or employee owned? Will this new food technology slow down, reverse or accelerate racial capitalism in the food industry? When you consider that up to 75% of food retail workers are food insecure due to low wages and high costs of living, or that hundreds of food processing workers died from COVID-19, what substantive changes will this technology bring to a food workforce that has tremendous turnover, low morale and a growing sense of injustice with the way they are treated and compensated? We were promised that GMOs, which are now in more than 75% of processed foods, would feed the world, yet they can’t even feed grocery clerks," Schweizer commented.

Three Areas of Concern: Feed, Ferment and Waste
Alan Lewis of Natural Grocers, a longtime critic of precision fermentation, expressed three main areas of concern at the June 2022 Environmental Health Symposium, where he was a featured speaker:  “Feed, ferment and waste. You never hear the companies and founders and the PR professional who are promoting synthetic biology actually talk about the source of their feed. And you never, ever, ever hear them talk about what happens to the waste that’s left over after their fermentation is done,” he said.

Though a few syn-bio companies such as Perfect Day and Israel-based Remilk have received FDA GRAS status for their synthetic biology dairy and protein products, and their own in-house life cycle assessments rate them more environmentally sustainable than conventional meat or dairy agriculture, Lewis and others have expressed concern that potential impacts of synthetic biology are not being fairly compared to the benefits of organic and regenerative agriculture, and that they could destroy the livelihoods of farmers and producers of natural products such as vanilla, which is the single most important export in a number of countries in the global South.

“Where does this feed [for fermentation] come from?” Lewis asked. “It's basically sugars and proteins. It comes from the cheapest possible industrial source of soy and corn for the most part, and some sugar beet as well. So we are back to the GMO problem: monoculture, proprietary GMO seeds, corn and soy sugars as the basis for these foods and a massive shift in ownership and concentration of wealth, land ownership and control over our food supply because of the GMO system. And we've got to talk about glyphosate herbicides, neonicotinoid pesticides, synthetic fertilizers from fossil fuels and other residues that end up in the soil, on the crops, in the resulting food...and in this case, the feed. And, of course, when you mess with the soil you're releasing carbon, you're collapsing soil health and reducing the nutrition of those foods to begin with,” he said.

"If you are a fan of plant-based foods like I am you should be furious with the synthetic biology precision fermentation people taking over the idea of foods made from plants and replacing it or hiding underneath plant-based foods all of these suspect highly processed foods that are grown in facilities that have nothing to do with agriculture," Lewis cautioned.

"Long term safe fermenting of foods that have long been accepted as safe, traditional methods of fermenting foods or herbs or other materials to get specific therapeutic or nutritional metabolites is not what we're concerned about. Our concern is that longstanding acceptance and necessity of natural fermentation has been used to hide the synthetic biology under a lot of different other terms including plant-based," Lewis clarified.

Lewis also expressed concern about what's in the waste generated from precision fermentation. "What's in that bio-waste? Well, if you're fermenting sourdough or beer or spirits or something like that, what's left over is distillers spent grain or a yeast residue, and these are typically natural organisms that are consumable by animals; they can be composted and they're not considered a biohazard because they have been part of the natural system and part of the food system for thousands of years. However, when you get into full synthetic biology precision fermentation, the waste is a whole different ball game. What you have is a whole set of gene edited (and potentially antibiotic-resistant) microorganisms. These are novel living organisms that have never been on Earth before so all of this takes place in a biohazard laboratory setting with secure access and registrations and personal protective equipment, and it all has to be incinerated after use. And there's a very high amount of mass in this waste...I've heard that upwards of 90% of what goes into the bioreactor actually becomes waste that has to be securely disposed of -- it can't go to the land fill; it has to be deactivated. And...there's zero significant regulation about this in terms of the food supply," Lewis continued.

In particular, he said, "We don't know about all the off-target or non-target metabolites. Just because you gene edit a pathogen to get a specific protein or color or flavor, doesn't mean that that novel edited gene, mutated living organism isn't spitting out a whole number, hundreds if not thousands, of materials and substances that are not known, don't have a reference table, and we don't know about their food safety or environmental safety profile."

Syn-bio Foods Are Often Highly Processed
“Companies call these things ‘synthetic biology’ and ‘fermentation technology,’ but these foods are all just GMOs,” Michael Hansen, Ph.D., Senior Staff Scientist at Consumer Reports, told Max Goldberg in a recent article in Westview News. “They are using terms people do not understand, so that people will not realize these are GMO ingredients. Moreover, the problems with synthetic biology are the same ones that we have had with traditional GMOs.”

Hansen added: “These are often highly processed foods, which are associated with increased calorie intake and weight gain, according to a study from the National Institute of Health. And while these companies may be perceived as tech start-ups, the products they produce are designed to fit into an industrial food system, and society is clearly moving against this trend and toward a more agroecological-based food system. Additionally, they are introducing novel, genetically-engineered proteins into the food supply that will have unknown potential impacts on the human microbiome and the environment, and these companies are self-affirming GRAS status with the FDA, a voluntary process that is incredibly problematic and falls very, very short of protecting the consumer.”

In an editorial as CEO & Executive Director of the Organic & Natural Health Association, Karen Howard commented, “Growing investment in grass-fed livestock and regenerative agriculture are the perfect examples of [the natural food industry’s] reinvigorated commitment to sustainability. However, the stress on our current system can leave us distracted. Synthetic protein is a prime example. GMO crops are their main ingredients, but they have re-entered the policy discussion disguised in the costume of ‘synthetic biology’ and ‘precision fermentation.’ We are essentially being told again that GMOs are the panacea for every problem. Yet, it is impossible for synthetic protein to be considered natural.

“So what is a natural retailer to do? Howard continued. “How can the dietary supplement industry stop a swell of synthetically derived ingredients from appearing on shelves? How will this affect the availability of bona fide natural and organic ingredients? Should these products and foods be eligible for display at the ‘natural’ shows where we all do business? Where is the venue for educating and engaging people on the topic of synthetic biology?  

In closing, Howard said, “The Organic & Natural Health Association will continue to partner on education efforts to bring these issues to light. With COVID, those opportunities have diminished, while the syn-bio industry continues to flourish with massive investments behind the scenes. We’ve lost the legislative and regulatory battle at this point, so perhaps there remains one core question to be answered. Is the proliferation of genetically engineered synthetic protein destined to be an accepted cornerstone of the natural food industry?”

Dean Foods Bankruptcy Impacts Natural, Organic Brands

Originally Appeared in Presence Marketing News, December 2019
By Steven Hoffman

Uncle Matt’s Organic Inc., a leading organic juice brand, on November 12 filed for Chapter 11 bankruptcy, along with dozens of other businesses owned by Dean Foods Company, the largest milk processor in the U.S.

Dallas-based Dean Foods (NYSE: DF) said the bankruptcy filings by it and all its subsidiaries in U.S. Bankruptcy Court for the Southern District of Texas comes as the company deals with losing its biggest customer, Walmart, which decided to build its own milk plant, and the impact of declining demand for milk as American consumers opt for plant-based beverage alternatives, reported Sustainable Business News, a subscriber-based organic and sustainable food industry online news site. 

Founded in 1925, Dean Foods’ brand portfolio includes more than 50 national and regional dairy brands, including Country Fresh, DairyPure, Friendly’s, Garelick Farms, Land O’Lakes, Meadow Gold, Oak Farms Dairy, Swiss Premium, TruMoo, Tuscan Dairy Farms, and others. Among its natural and organic brand holdings, Dean Foods also owns juice maker Uncle Matt’s Organic, based in Clermont, FL, and is a majority stakeholder in flax-based plant beverage brand Good Karma, based in Boulder, CO. 

The bankruptcy filing’s effect on those companies is uncertain at this point. Representatives from Uncle Matt’s have not issued comment, to date. In an email to BevNET, Good Karma CEO Doug Radi said Dean Foods’ bankruptcy has “no impact” on the brand, which remains an independent company with a separate leadership team and board of directors. “We remain dedicated to our mission of making dairy alternative food and beverage products that deliver a plant-based mighty bundle of nutrition,” he told BevNET. 

In a statement to BevNET, CROPP Cooperative — which includes Organic Valley, Organic Prairie and Mighty Organic — said that, while it is “disheartened” by the bankruptcy, the joint venture it established in March 2017 with Dean Foods, called Organic Valley Fresh,  a direct to store distribution system for Organic Valley products, is outside of the Dean Foods filing, meaning “it has no impact on the venture’s customers or vendors. Organic Valley remains strong and our business overall has been bolstered by new innovations we’ve brought to market, including Ultra, the first organic ultra-filtered milk,” the statement read.