We have a lot to thank tabloids for - sensationalism, casual nudity (in Britain anyway) to name a couple. Frankenstein Food was the name adopted to ease the principles behind genetically modified foods gently into the pubic consciousness.
The term seems to have been coined in early 1999, when Britain was still shocked by numerous BSE breakouts, and people were quite clearly going to be suspicious of food that had been fiddled with. Through other tabloids jumping on what was clearly going to be a long-rolling and profitable bandwagon, the use of this phrase became widespread.