The report by the Cornucopia Institute, an organic industry watchdog, said there is a growing trend of marketing conventional foods as natural to lure health-conscious and eco-conscious consumers.
Breakfast cereals displaying the USDA's "certified organic" logo are produced under a strict set of verified standards prohibiting the use of petrochemical-based fertilizers, sewage sludge, synthetic toxic pesticides, genetically modified crops and many other common conventional agricultural and manufacturing inputs.
Charlotte Vallaeys, director of farm and food policy at Cornucopia, said some companies that started out organic and built brand loyalty as organic brands, switched to non-organic ingredients and "natural" labeling.
One such brand, Peace Cereal, is an example of what Cornucopia calls "bait-and-switch." In 2008, the Peace Cereal brand switched from organic to cheaper conventional ingredients, without lowering its prices, Vallaeys said.
"Today, the cereal is sold in natural food stores and mainstream grocers at prices above many of their certified organic competitors that are using more expensive organic ingredients," Vallaeys said.
Natural cereals from brands including Kashi (Kellogg's), Mother's (PepsiCo), Nutritious Living, Barbara's Bakery (Weetabix) and 365 (Whole Foods Market) contained high levels of genetically engineered ingredients -- between 25 percent to 100 percent, the report said.
The report is accompanied by a scorecard rating cereal and granola brands for healthy and environmentally sustainable practices at www.cornucopia.org.
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