Where the subject may be perishable
but the insight isn’t.

Pundit’s Mailbag — Denny’s Weighs In

On Food Safety Effort

Jim Prevor's Perishable Pundit, November 1, 2006

Our discussion of the Buyer-led Food Safety Effort brought forth this constructive contribution from Gene Harris, Senior Purchasing Manager at Denny’s:

A colleague recently reminded me not to get in a battle of print with someone who buys ink by the barrel... stated another way “don't bring a knife to a gunfight”... In spite of that, I wanted to respond to your comments regarding the “Buyer-Led Food Safety Effort”.

I support the initiative and would have been listed along with my colleagues; however, I was not able to reply in time to meet the press release deadline. The food safety situation was discussed at length in San Diego in a variety of formats, from private conversations to town hall meetings and everything in between. Discussion is a good and necessary starting point, but it’s just that — a starting point. We feel it necessary to get the wheels in motion and get some action and commitment to reach some effective solutions. As buyers, we felt we could jumpstart the process. This was not done out of arrogance, but out of concern for a better approach and answer to our industry’s food safety problems.

Our approach and guidelines may not be all inclusive as to what is needed, but they would be a definitive improvement over where we are. The PMA, as you know, is a fine, vertically integrated association with strong leadership — paid & voluntary. The solution to this problem requires a collaborative effort — it is not just a grower problem, a processor problem, a retailer problem or a foodservice problem. It is an industry problem. We all eat fresh produce; we have children who eat it, family, friends, customers, etc. The PMA has shown it is serious in following the road to a solution with its pledge of $1 million over the next 14 months.

I am confident that if more resources were needed, with a solution in the cross hairs, PMA’s leadership would load the gun!

Denny’s is not the biggest produce customer relative to its size, but our chain of over 1,500 restaurants serves an average of 1 million meals a day, many of which include fresh produce. At Denny’s, we take food safety very seriously. We have a team of 5 Quality Assurance Managers, led by a Senior Director who is only one step removed from our CEO. They audit every current and potential food supplier to Denny’s.

We have a tough comprehensive audit that we feel cannot be replaced by a 3rd party audit. The 3rd party audits available range from very good (but not comprehensive enough) to scary. We also audit all of our distributors. We only allow our restaurants – company-owned and franchised — to purchase processed produce from our approved suppliers. Our leadership feels that our employees, our customers and our brand are too valuable to settle for anything less.

With regard to sharing the cost... the key word is sharing. Mr. Webster did not define sharing as passing the buck to the guy at the end of the food chain — whether it be a retail customer or a restaurant guest. We need to itemize and explain the cost and then truly share it — from the grower to the processor to the distributor to retailer or foodservice operator to the customer. After all, doesn't food safety affect us all?

Enough ink for now, I have to get back to work!

— Gene Harris

Senior Purchasing Manager

Denny's Corporation

Let us start by assuring Gene and anyone of the same thought that all feedback and contributions are always welcomed with open arms. The only “combat” here is intellectual, and it is worth remembering that we are all fighting on the same side for the improvement of the industry. Thinking is hard work, and the Pundit is a forum in which those discussions can play out.

Anyone who knows Gene Harris is not the slightest bit surprised that he would endorse this initiative. Take a quick glance at the original signatories:

Greg Reinauer, Amerifresh, Inc.      Frank Padilla, Costco Wholesale

Reggie Griffin, Kroger Company      Tim York, Markon Cooperative

Ron Anderson, Safeway, Inc.                Gary Gionnette, Supervalu Inc.

Mike Hansen, Sysco Corporation     

David Corsi, Wegman’s Food Markets

Gene Harris, as with his fellow endorsers, wants to do the right thing, wants to help the industry. He and his fellow buyers are willing to lead. That is why the Pundit wrote in his piece: “The signatories to this letter deserve real industry praise. They have stood up and are trying to make a difference.”

And clearly, as the Pundit has often pointed out before, in a voluntary system, regarding an issue such as field crops, in which there is no 100% guarantee of safety, the level of safety that producers will ultimately deliver is exactly and precisely the amount that the customer wants to pay for. So buyers play an enormous role.

Yet with the announcement that the Western Growers Association has called for mandatory food safety standards, the dynamics of this issue are switching swiftly.

Buyers can impose standards on their suppliers, but it seems as if the big grower members of WGA are more inclined to go with a mandatory program. Perhaps because this is more easily “saleable” to consumers, perhaps because the growers have no confidence that buyers will ever agree to a uniform standard on food safety and, perhaps, because growers know that buyers today can have the best of intentions but situations change and buyer’s change — and if legal product is available for much less money, that will put a lot of pressure on an organization to change its standards.

If growers made investments for food safety based on a voluntary requirement and that requirement gets waived for others, the grower who invested will be out the money. A mandatory program avoids the pressure on well meaning buyers that can come from less stringent competitors and is far more likely to give a grower a chance to earn a return on his food safety investment.

Gene’s point about sharing the cost is well taken. Ultimately, however, all costs are paid by the consumer. Temporarily someone may take a reduced profit, employees may work for less, stockholders may give up dividends — but in the end, there are markets for labor and capital that dictate returns.

If the industry doesn’t provide adequate returns to labor and capital, both will migrate elsewhere. So, yes, it is easy to propose running up bills on food safety, but it is good to keep in mind that it is the consumer who, ultimately, must pay those bills.