This Company is Changing the Way People Think About GMOs (Hint: It’s Not Whole Foods)
Source: Intelligence Squared .
Interestingly, this seems to show that those indifferent to either side of the GMO conversation overwhelmingly decide in favor of using genetic tools to improve yields and health and reduce costs and risks rather than limit the rewards because of potential and unsubstantiated risks. Similarly, it shows that those going in with their minds already made up are already dug into their positions.
What does it mean for investors?
This debate demonstrated an important reality for investors in the 21st century, an era that increasingly relies on technological gains to drive positive changes in the world and top and bottom lines: that emotion and fear are no match for facts and reason when effective communication takes place. For investors in Monsanto or other next-generation biotechnology companies, the debate demonstrated once again that the majority of consumers enter the larger conversation indifferent to either side (already displayed in GMO labeling law votes in several states).
We hear too often from the loud and vocal minority from each side of the argument, but rarely do we stop to consider what the largest group, those in the middle, actually thinks. It's probably the place where most companies should focus their marketing efforts moving forward if they want to extract the most value.
Monsanto investors haven't actually felt much pain from the heated national conversation about the use of genetic tools in food. After all, the company's 10-year total return stood at 485% entering the debate.
Whole Foods investors haven't had much to complain about, either, with the stock returning 149% in the last decade compared to just 114% for the S&P 500 when dividends are included. Shareholders today are more concerned about what growth potential lie ahead, though, and the conversation about biotech crops and labeling requirements will play a big role in determining the effectiveness of the company's marketing strategies.
However, Monsanto admits that while it mastered the communication channel with farmers (its customers), it botched the opportunity to effectively, if at all, communicate the benefits of GM crops to consumers. Failing to address consumers for over 10 years after the first commercial biotech crop was planted in 1996 allowed public fears and misunderstandings, rather than facts, to shape the conversation.
Of course, while the outcome of the debate may not have any impact on Monsanto stock, it does hold promise for less fortunate development-stage companies that can be severely affected by similar PR missteps or pressure from activist campaigns. It shows that open, honest, and effective communication with consumers can in fact help products and novel biotechnologies gain market share and consumer acceptance.
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The article This Company is Changing the Way People Think About GMOs (Hint: It's Not Whole Foods) originally appeared on Fool.com.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors.Maxx Chatsko has no position in any stocks mentioned. Check out hispersonal portfolio,CAPS page,previous writing for The Motley Fool, and follow him on Twitter to keep up with developments in the synthetic biology field. The Motley Fool recommends Whole Foods Market. The Motley Fool owns shares of Whole Foods Market. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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