A company's public perception is just as important as a brand image in the retail marketplace. As we explored in the retail sector, Walmart (WMT) and Amazon's (AMZN) public perception is a curious thing. The two companies do many of the same things, and yet one will take a much larger amount of flack and criticism for committing the same faux pas. It is all about corporate image—as the Seattle Organic Restaurants' website says, “the difference between a rainforest and a jungle is that a rainforest has a PR agent.”

To that end, it is quite interesting that Monsanto (which was purchased by Bayer AG in 2018)﻿﻿ is one of the most-hated brands on the planet, with the internet and social media full of stories and passed-around memes that declare it to be one of the worst companies in the world. And yet, DuPont is just as big in genetically-modified seeds and agricultural chemicals—now even more so with the Dow-DuPont merger, and pursues largely the same policies as Monsanto with respect to pricing, intellectual property enforcement, and so on. So it merits the question—Why is Monsanto considered to be evil, but DuPont isn't?

Key Takeaways Why is Monsanto considered to be evil, but DuPont isn't?

The two companies operate in the same industries and produce similar products.

Corporate image and public perception is a real economic force that businesses must deal with and manage.

Public perception is shaped by several social forces including a company's history as well as the portrayal in the news media.

Comparing Histories

One of the most commonly circulated bits on Monsanto in the media space is the argument that the company has a long corporate history of developing dangerous products. In prior corporate incarnations, Monsanto did indeed produce Agent Orange, polychlorinated biphenyl (PCBs), DDT, and artificial sweeteners like saccharin and aspartame.﻿﻿ While there is still vigorous debate about the safety of artificial sweeteners, nobody disputes that Agent Orange, PCBs, and DDT are bad news.

DuPont started as a virtual monopoly manufacturer of gunpowder, making money hand over fist during the U.S. Civil War and then expanding into various other military explosives.﻿﻿ Unlike Alfred Nobel, who felt so guilt-ridden about his invention of dynamite and its subsequent use in warfare that he established the Nobel Prizes, the DuPont family was apparently more interested in arranging marriages between cousins to maintain the family fortune.

DuPont was also involved in the development of nuclear weapons. Later, DuPont developed synthetic materials like nylon and polyester that will, in many cases, still be on this planet for a long, long time. Likewise, DuPont has had its share of dangerous pesticides, herbicides, and other chemicals including coatings like C8. By the way, DuPont also manufactured Agent Orange, DDT, and PCBs … just like Monsanto did.

The point is, it's difficult to be a large player in the chemicals industry and not eventually produce a dangerous product and/or experience a significant industrial accident. Many of the chemical companies large enough and old enough to be around at the time (including Monsanto, DuPont, and Dow) made products like Agent Orange, DDT, PCBs. Likewise, investors and those worried about the environment ought to be at least as worried about the neonicotinoid insecticides made by the likes of crop science company Syngenta (SYT) that have been implicated in colony collapse disorder affecting honeybees.﻿﻿

When Germany's Bayer AG closed its $63 billion takeover of Monsanto in 2018, it dropped the company's name from the combined firm.﻿﻿

Both Aren't Shy About Their Power or Patents

Monsanto has been roundly attacked for “buying” the U.S. government by spending millions on lobbying efforts, getting former executives into positions of power in government administrations, and vigorously enforcing its intellectual property patent rights.

Monsanto does indeed spend millions on lobbying—around $5 million a year. In 2016, Monsanto was the top lobbyist spender in the agricultural services/products group with $4.6 million. Dow Chemical paid much less at only $200,000.﻿﻿ Likewise, it is true that several former Monsanto executives have found their way into presidential administrations.﻿﻿

Similar concerns have arisen around lobbying efforts for specific GMO legislation. Monsanto was frequently singled out as a major donor and supporter of efforts to defeat California's GM labeling law. Monsanto was, in fact, the largest donor to this initiative at $8.1 million, while DuPont was second at $5.4 million. Other GMO crop companies (Dow and BASF) chipped in between $2 million, while food companies like PepsiCo (PEP), Nestle (NSRGY), and Coca-Cola (KO) all contributed over $1 million each.﻿﻿

While Monsanto obviously was not alone in undermining legislation that would significantly increase the labeling and transparency of genetically engineered foods it is just yet another example of the commitment it has to minimize legalities and transparencies around drug and chemical disclosures. In many cases, Monsanto’s lobbying efforts seek to deny consumers awareness and the right to receive full transparency.

As far as the intellectual property situation goes, it is true that Monsanto has been aggressive in suing farmers who violated the terms of their sales agreements with the company and held back seed to plant the next year. Monsanto has been quite successful in these suits, winning nearly all that went to trial. But here again, DuPont does the exact same thing, recently hiring former police officers to inspect fields and determine whether or not farmers are violating terms and withholding seeds (and reportedly Syngenta and other GM seed companies do this as well).﻿﻿ While some may argue this is inherently unfair, all of these farmers signed contracts and agreed to abide by these rules.

Unlike DuPont, Monsanto has also been accused of aggressively suing farmers that have experienced accidental cross-contamination with Monsanto traits. In point of fact, it doesn't appear that Monsanto has actually done this to any meaningful extent. They have been extremely aggressive in pursuing those that they believe have illegally used their seeds without paying royalties (the Schmeiser case in Canada in particular), but I have not uncovered an example of Monsanto suing for accidental contamination. In fact, Monsanto has been sued by farmers on multiple occasions for such contamination, and Monsanto generally offers to remove any of its GM seeds/plants from fields where they don't belong, at the company's expense.﻿﻿

The Genetically-Modified Market

The debate over whether genetically-modified (GMO) crops/plants are inherently bad is beyond the scope of this piece. I make no apologies for being pro-GM crops, nor for pointing out that those who argue that GM crops cause allergies, cancer or other negative health effects are decidedly lacking in 3rd-party peer-reviewed research. My point here, though, is simply to observe that strictly from the point of view of making and selling GM seeds, Monsanto and DuPont are on equal footing.

Although Monsanto is widely regarded as having some of the best GM crop R&D efforts in the world, DuPont, Syngenta, Dow, and BASF are all significant players in this market. That said, DuPont and Monsanto clearly stand apart in the U.S. Notice that I said DuPont and then Monsanto—while Monsanto has a slight edge in U.S. corn market share (37 to 36%), DuPont is bigger in GM soybeans (36 to 28%). While there are other areas where these companies are involved in GM crops (cotton and vegetables, for instance) and the shares differ, for all intents and purposes I would argue that Monsanto and DuPont are basically neck-and-neck in the GM market.﻿﻿

Likewise, both companies pursue very similar pricing strategies. Activists routinely thrash Monsanto for charging so much for its seeds, but the reality is that Monsanto and DuPont pursue nearly identical pricing formulas—requiring farmers to pay them about 25 to 33% of the extra value produced by the GM crops. In other words, farmers keep 67 to 75% of the benefits of using GM crops (generally in the form of higher yields).

The Bottom Line

The objective here is not to sway opponents of GM/GMO crops over to one side or the other. That is an entirely separate debate. Instead, the hope is to inject a bit of objectivity into the discussion—a discussion where it seems that Monsanto is the go-to whipping boy and evil incarnate while competing companies like Dow-DuPont and Syngenta manage to quietly walk by unnoticed.

For all of the bad things Monsanto has done, both alleged and real, its rivals have done largely the same. Every crop science company works to protect its intellectual property, every crop science company looks to get a good price for its technology, and every crop science company opens its wallet to attempt to sway public and governmental opinion to their side—just as companies in technology, healthcare, banking, and virtually every other industry do, and have done for decades.

Monsanto may be a victim of its own success. All they do is crop science (seeds and chemicals), whereas it's just a part of what Dow-DuPont and BASF do (and Syngenta has a relatively modest presence in the U.S.). Likewise, they've been very good at what they do. Perhaps it is time for Monsanto to start spending a few dollars on a PR campaign, as it still flummoxes me that the consensus opinion is that Monsanto is evil, while Dow-DuPont is basically okay.