Certified organic foods have made huge inroads in recent years, and are poised to finally join the mainstream customer’s shopping basket. Producers and retailers of these chemical-free foods are welcoming this trend. Companies involved with genetically modified organisms (GMO), however, are singing a different tune. Investors in this arena need to keep their eyes on this accelerating trend toward natural foods.

Organic foods were once relegated to a narrow niche populated by fringe members of society. Environmentally-conscious new-age thinkers planted the seeds of suspicion that have since then blossomed. Over the years, mistrust of the large multinational corporations have provided the organic industry with an invaluable public-relations boost. Although conclusive evidence showing the dangers of ingesting GMOs has yet to materialize, organic foods are now viewed as the healthier and more responsible alternative.

Part of this transformation can be attributed to the agri-science industry’s perceived secrecy and manipulation of regulatory oversight. Companies like Monsanto (MON), Dupont (DD Free Dupont Stock Report), and Bayer have spent large sums of money lobbying for favorable regulations. While these actions have yielded significant financial benefits, public opinion has eroded over time and pushed customers towards natural organic alternatives.

This failure in educating the marketplace may be nearing the point of no return. Instead of embracing transparency, and proactively encouraging well-documented independent studies proving the safety of genetically modified foods, the major corporations’ continued evasiveness has elicited greater suspicion from the public. As the saying goes, “Where there’s smoke, there’s fire.”

Even in the absence of empirical proof, a growing number of consumers are choosing to err on the side of caution in going with foods that do not use synthetic fertilizers, pesticides, antibiotics, or other chemical additives. Transgenic crops that have been genetically modified for superior growth traits top this list of taboos. Specialty supermarkets, like Whole Foods (WFM), have benefited from this trend over the years. Competition has ramped up recently, however, as large players like Wal-Mart (WMT Free Wal-Mart Stock Report), Kroger (KR), and Target (TGT) have also entered the space by launching their own in-house brands of organic foods.

The anti-GMO movement has gained much traction lately. In April of 2014, Vermont became the first state to require labeling indicating the presence of GMOs. Other states like Connecticut and Maine have also passed conditional labeling laws that will go into effect if a critical mass of neighboring states also require labeling. The labeling bill in New York is also inching closer to a vote by the State Legislature.

Even in states that have not ratified mandatory GMO labeling, the trend towards greater transparency is clear. At the end of May 2014, Calfornia’s Senate voted to reject a bill that would have required labeling, but only by a miniscule margin of two votes. This is the second failed attempt since 2012, when Proposition 37 was defeated.

GMO manufacturers and processed food companies have spent a fortune on massive advertising campaigns, but it seems ever more likely that this tide of mandatory labeling will eventually arrive. These large corporations have expressed concerns that consumers may unfairly view these GMO labels in a negative light, misconstruing them as warnings of inferiority or potential hazards where none exist.

There are signs, however, that these large multinationals are reconsidering their positions and hedging their bets. The GMO behemoth, Monsanto, has leveraged its industry leading understanding of plant genomics to develop superior seed stocks through the use of traditional cross-breeding techniques. At the beginning of 2014, General Mills (GIS) announced that its plain Cheerios product would no longer contain any GMOs. Since then, however, sales of its flagship product have not exhibited a noticeable increase in consumer demand.

Although we seem poised for widespread adoption of mandatory labeling, consumers may ultimately just ignore them. For many families who are still struggling to make ends meet in this challenging economy, avoiding GMOs is not likely to be one of their top concerns. Overall population levels continue to grow, even as crop yields are diminished by global climate change. GMO solutions have become a lifeline for many governments in coping with these issues.

That said, demand for organic foods will likely continue to rise over both the near and long term. Given the choice, many consumers would prefer natural alternatives. As the organic foods industry gains economies of scale, retail prices will fall further, and attract even more participants. Increased competition, however, will have a countervailing effect on margins. Meanwhile, GMO technology will likely stick around due to necessity. As the leading agriscience companies continue to innovate and adapt to changing market demands, expect them to continue to dominate the food space and provide nice returns over the next 3 to 5 years.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.