Health is at hand

In Europe more than 30M people - about 18% of us - have tried soyfoods according to ENSA, the European Natural Soyfood Association. Formerly considered health-foods (and thus a bit special), soy products are far more popular than we might think, says ENSA.

Somehow the word 'popular' doesn't really seem adequate to describe soy's dominant role in feeding the world today. 'All-pervading' would be better at signifying the rise and rise of soy from a poor peasant food a few millennia ago to today's multi-billion dollar global agribusiness.

But with that omnipresence has come trouble - and the potential for future price rises and supply restrictions for what is now a major global food ingredient.

First to hit the headlines was the use of genetically modified (GM) soy. Genetic modification made it more resistant to weed killers, vastly improving yields for soy farmers, but rapidly turning off consumers, particularly in Europe. Then non-governmental organisations (NGOs) such as Greenpeace and WWF started raising public awareness about the way huge swathes of the Amazon rain forest in Brazil were being chopped down to make way for soy production, threatening global warming and global biodiversity.

Now the two concerns have come together in a series of global actions on sustainable and responsible soy, bringing with them the very real threat to food manufacturers of supply restrictions and higher prices.

Earlier this month in Brussels, we had the 2nd International Non-GMO Soy Summit. It was in effect the coming-out party for a new organisation called Abrange, the Brazilian Association of Non-GMO Soy Producers and Processors. This aims to become the world's leading supplier of genetically modified organism-free soy.

And next May we are promised a global certification scheme for the responsible production of soy from the Round Table on Responsible Soy Association (RTRS). RTRS members consist of soy growers in Brazil and other Latin American nations, but with some members in China and India; as well as the big global soy producers such as Cargill, ADM and Bunge; and bankers and civil bodies.

But there is a distinction to be made between the soyfoods that ENSA members such as Alpro produce, and processed soy derivatives and ingredients. Alpro, for example, will take only 'food grade' whole soy beans to make soyfoods such as soy 'milk', tofu, soy 'yoghurts' and soy desserts.

Global soy suppliers such as Cargill, Bunge and ADM on the other hand produce soy protein isolates, soy oil and lecithin on an industrial scale from industrial-grade soy beans.

There's also a distinction to be made between the relatively small amounts of soy used for soyfood products and processed soy compounds and the vastly huger amounts of soy grown for high-protein animal feed.

And then, of course, there is the distinction between GM soy and non-GM soy. Under EU rules, any food product containing more than 0.9% of GM soy has to be labelled as containing GM soy. But GM soy animal feed is whole different question. Food products from animals fed on GM soy do not need to be labelled as such, although a number of retailers including Marks & Spencer, have banned GM soy-fed animals from their meat and dairy products.

Dr John Fagan is chief scientific officer for Cert-ID, one of the principle sponsors behind the soy summit. Cert-ID has been certifying products as non-GM since the late 1990s through its ProTerra certification programme. This year it will certify over $1bn worth of soy and soy derivatives as being sustainable, responsible and non-GM.

"This year between 50% and 55% of all soy grown in Brazil will be non-GM," says Fagan. "But three years ago it was more like 70%. GM soy is coming to Brazil. However, since the demand for non-GM soy is growing and premiums for this material are increasing, there is significant motivation for farmers in Brazil to grow more non-GM soy.

"The only way GM soy can enter Europe without being disclosed to consumers is as animal feed. But there are a number of companies that are excluding GM animal feed because they know that consumers are getting concerned about it. There is certainly concern among German retailers about excluding GMOs from their supply chain and they are exploring the possibility of excluding GMOs from animal feed. Certain premium grades of meat have already gone that way. And there is now some control within the egg sector over the animal feed that is being used."

Alpro is also a sponsor of the summit. Commercial director John Allaway says that Alpro has been in the soya business 27 years, building relations with farmers in Brazil, China, and Canada and paying them a premium for their soy beans over and above the benchmark, the Chicago Board of Trade price, which includes soy for feed.

"We pay them a premium because we want them to produce non-GMO soy, the core of our activity. Across the globe something like 95% of soy in the world goes to animal feed. So we are a very small part of total soya. In the last seven years our market has seen been double digit growth. But we are now seeing a slow-down. Our competitive landscape now is speciality healthy dairy. We are now competing with dairy products. It is a big challenge for us to get dairy consumers to start trying soya milk as well as dairy milk."

A growing role for soy

Nevertheless, Allaway sees a growing role for soya in feeding people in future. "The World Health Organisation says people need 50g of protein a day. That's not going to be fulfilled by the dairy and meat industries. So we think there is a role for a soya-protein type product. Now we are not going to overtake the dairy and meat industry in feeding everybody, but the good source of protein that we offer through soya, is going to help.

"And that is part of our philosophy - being part of that story of the future. But at the moment we have to focus on delivering better-tasting products and ensuring that consumers get the message that these products are healthy and very tasty."

But Allaway is cautious: "There is a lot of pressure on suppliers of meat and dairy products to feed their animals on non-GM soya because the consumer is waking up to GM in feed going into the animal. This will force producers to find a source of non-GM soya and the price of non-GM soya beans could increase." One estimate reckons non-GM soya bean prices could rise by 600% within two years, he says.

According to Steve Fairbairn, head of external communication at Cargill Europe, Cargill along with the rest of the soy industry in Brazil signed a moratorium on soy in 2006. "We as an industry committed to not purchase soy from land that had been deforested from the 24th of July 2006. We have been working with NGOs such as WWF, IPAM [the Amazon Institute for Environmental Research in Brazil], The Nature Conservancy and Conservation International, to put in place a monitoring process to ensure that soy is grown sustainably in the Brazilian Amazon biome.

"The moratorium is sharing best practice and a lot of the same players are involved in the Round Table on Responsible Soy as well, such as Cargill, Bunge, and ADM. There is a recognition that soy needs to be grown sustainably. It's not just consumer driven - we recognise that if you want to continue having a good supply of soy, then it has to be done in a sustainable manner. So there is good commercial sense to this as well."

Standard for sustainability

Proforest in Oxford is a consultancy helping people to manage natural resources responsibly and sustainably. It has been employed by RTRS to develop its standard for responsible soy production. Dawn Robinson, associate director, says the aim is for certified producers to be able to say they produce soy responsibly as defined by this standard. "It includes things like good agricultural practice, good soil and water management, protection of biodiversity, responsible community relations, workers' rights, health and safety, and responsible business practices. We are discussing how to create a language that would not penalise people who have already got plantations established, but which would limit the expansion into untouched forest areas."

But won't this restrict supplies and raise prices? Robinson doesn't think so. "There are a lot of opportunities for soy to expand into different areas including degraded land. It won't affect at all the global supply of soy. But it will create the opportunity for people to purchase exclusively from sources that they know are responsible.

"It's going to be a global standard, applicable to anybody. It's a voluntary standard. The idea is that retailers and people who use soy as animal feed will want to make a statement to reassure their end customers that they are doing the right thing. The RTRS doesn't discriminate against GM soy - responsible production can be GMO or non-GMO," says Robinson.

One of the speakers at the soy summit is Jonathon Bayne, technical development and regulatory affairs controller at Musgrave Retail Partners, which includes Budgens and Londis supermarkets. "As a small retailer we see difficulties working with our producers in trying to have non-GM feed fed to the animals that end up in our finished products. We work with the major meat processors and so for us to make such a demand would put us at a commercial disadvantage.

"We have spoken to our suppliers in the past about going down the non-GM soya route and, yes, it can be done but there is a commercial impact. It also puts a limitation on the availability of the raw material.

"The momentum is there, but there are an awful lot of hoops and hurdles that we would have to jump through and jump over. And I'm not sure that our customers are prepared to pay more for the product. We'd like to give it a go; it can be done, but ultimately at this moment in time it is one step too far." FM

KEY Contacts​ Alpro 01536 720600 Cargill 01932 861000 Cert-ID 01827 874849 ENSA 0032 2 741 6215 Musgrave 0870 0500 158Proforest 01865 243439