June, 2000

From the Editor

Beware Of Trends

Predicting the future is perilous for one’s credibility, and when it comes to using projections about the future in business the window of opportunity is relatively narrow.

We often make the assumption that people in the future will behave as a comparable group does today. So, if we can read the numbers and determine that the number of citizens over 80 will quadruple, it is easy to pull out the latest study on what people over 80 eat and then start multiplying.

Of course, the logical flaw here is clear: We are assuming that people over 80 today eat what they do as a function of their age, not of their past consumption patterns. In other words, people over 80 today may not eat much Thai food, but that may simply mean they didn’t eat much Thai food when they were 20. Another generation, which always ate Thai food, might continue enjoying it for their entire life.

So the secret in looking at the future is not to project the present – that’s just budgeting – or to apply present day attitudes to a future that will be composed of people influenced by different things. The key is to find leverage points that just might transform attitudes.

An example is the current controversy over genetically modified organisms, GMOs for short. After several years of strong growth among agricultural production – including the feed grains that are used to feed the animals that produce much of the meat and cheese in the deli – recent events have put GMOs on the defensive. Most particularly, strong opposition in Europe has led multinationals to fear that their products, which depend on international markets, might in fact be excluded from European markets. Other large companies, fearing the negative publicity that opponents threaten to attract and ignoring any particular upside, have taken a better-safe-than-sorry mode.

This in turn has led domestic agricultural crop marketers to want to segregate GMO and non-GMO product, which has scared farmers, leading many to question whether markets will still be there for GMO crops. One has to say that the extrapolation of current trends and attitudes is a strong negative for the possibility of growth in GMOs.

But things are starting to happen that may well change the whole dynamic of societal attitudes toward GMOs.

In many ways the backlash against GMOs was an avoidable consequence of short-term thinking by biotech companies. These organizations were looking for the quickest possible payback on GMO technology, and that led the companies to focus on products that would offer an immediate advantage to farmers. These products would produce higher yields, reduce pest damage and, in general, provide farmers with tangible benefits. Farmers are a small group, with an intense economic interest in their crops. Thus educating farmers is relatively easy, and, as the benefits of GMO technology were real and tangible, farmers adopted quickly. In crops such as soybeans, where GMO alternatives offer these types of benefits, over 50% of U.S. production quickly transitioned to GMO seed.

Although an economist would claim that whatever benefits a farmer by lowering costs or increasing production will ultimately benefit about the consumer, that is a distant and theoretical benefit which great masses of people must be carefully educated. It is not an inoculation against scare groups.

Recently it was announced that AstraZeneca’s Zeneca Agrochemicals division has introduced a very high profile genetically modified “golden rice.” Even more important, the company is participating in a complex transaction in which the inventors of this rice strain would give the rice for free to government-run breeding programs and other agricultural institutions in rice-dependent developing countries such as India and China.

The “golden rice” contains beta-carotene, which gives it a distinctive golden color. In the West, it is thought that consumers will appreciate the rice and pay for it, because beta-carotene is an anti-oxidant and there is believed to be a role for anti-oxidants in fighting cancer.

But in developing nations, the important point is that “golden rice” is vitamin A-enriched and thus perfect for eliminating the Vitamin A deficiency that is responsible for upwards of a half million people going blind every year.

Much as we added iodine to salt to fight rickets, “golden rice,” once it becomes common in Asia, will remove a scourge of humanity.

And this is only the first of many such products to come down the pipeline. Predicting the future may be hazardous, but I’ll hazard a guess that as the world sees these tangible benefits from GMOs, opposition will be severely weakened and will eventually become as commercially significant as, well, those who oppose iodine in salt.

In a sense, what GMOs do is open the window to a far wider variety of foods being functional foods. The delis of tomorrow are likely to hold products that will be substantially richer in anti-cancer and anti-heart disease properties than the products of today.

And the line between indulgence and prudence will blur substantially, because that delicious cheesecake will be made from GMOs in the milk and sugar and the cheesecake really will be good for you. That’s one reason why assuming tomorrow’s consumers will behave much like today’s may be a faulty assumption. They will be confronted with different options. Forewarned is forearmed.  DB