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Wal-Mart, Food Deserts and East Harlem:
Trying to Have It Both Ways

A hat tip to Tim York, President of Markon Cooperative, for passing on this piece from the New York Daily News: Walmart in Harlem would put other food stores out of business, report predicts:

A Walmart opening in Harlem could put many of the smaller stores selling fresh food in the neighborhood out of business, according to a report by Manhattan Borough President Scott Stringer.

Stringer’s office surveyed the area around 125th St. and Lenox Ave. and predicted that 30 to 41 supermarkets, green grocers, and bodegas that sell fresh produce would go out of business within a year if a Walmart opened there. That’s 25% of area food businesses.

Another 18 to 25 stores could shutter in the second year.

Walmart officials have said they are interested in opening several stores in the city but refused to publicly discuss what sites they might choose. The researchers decided to zero in on the W. 125th St. site because it is large enough for a Walmart, in a low-income neighborhood, and would not require zoning changes.

“I’m all for low prices, but there are ways to do that that don’t include killing local businesses...and making it harder and harder for communities to find fresh food,” Stringer said.

Walmart has touted its ability to bring fresh food to so-called “food deserts” — even gaining plaudits from first lady Michelle Obama — but Stringer’s report predicts the big box chain opening would actually cause a net loss in the square footage dedicated to fresh food.

The predictions are based on a study by Loyola University that found that after Walmart opened in Chicago, 25% of competing businesses in a one mile radius went out of business within a year, and 40% closed within two years.

Walmart backers have slammed that study because it didn’t account for new businesses that opened. Hugh O'Neill, president of economic development consulting firm Appleseed, said there’s “no empirical evidence to suggest their arrival means doomsday for local retail.”

Walmart spokesman Steve Restivo, agreed: “The truth is that anyone who has been to the west side of Chicago knows the positive economic impact we've had there, just like anyone who walks the streets of Harlem knows residents need more affordable options when it comes to healthy, nutritious food.”

Walmart backers note that a Target with a grocery section that opened last year prompted no such scrutiny from elected officials — with Stringer even showing up to cut the ribbon on the development. A Stringer spokesman said there’s no comparison, since Walmart’s status as the world’s biggest retailer means its impact is unique.

Walmart has been in talks with developer Related Companies to open its first city store in East New York, but execs are also eyeing other unidentified sites around the city.

The whole idea of food deserts as an important cause of low produce consumption or obesity has never made much sense to us. Yes, of course, there are rural areas where there are few stores, and this may well lead to more canned and frozen consumption than if there was a great corner market where people could daily pick up fresh foods. But this is the nature of rural living, imposes the most modest of hardships and, by definition, affects only sparsely populated rural communities.

In urban areas, there may be regions with few conventional supermarkets but with the intense competition in retailing, if there are no supermarkets in an area with the population to support one, it is either caused by A) Local zoning and political restrictions; B) High costs imposed by a failure of the police to control crime or prevent graft and corruption; C) Lack of spending power to support a store; or D) Cultural patterns that cause people to prefer alternative shopping venues. Any of these things can lead to a lack of stores. We’ve written about the importance of crime fighting in dealing with this issue here.

The other possibility is that the whole issue is mostly nonsense used by advocates and politicians to give themselves money and power. They define a problem and then give out money to build stores, etc. In other words, they use the taxpayers’ money to win friends and influence people.

What this article really shows is the phoniness behind all these food desert claims. Here is East Harlem, the prototypical urban food desert… you can be sure that all the politicians here would be plaintively explaining the urgent need for federal funds to deal with this urgent food desert problem. Yet, suddenly, the supposedly conservative, anti-union Wal-Mart wants to open a store and the exact same politicians who would decry East Harlem’s status as a food desert now suddenly claim that Wal-Mart will drive all these stores selling fresh produce out of business:

…30 to 41 supermarkets, green grocers, and bodegas that sell fresh produce would go out of business within a year if a Walmart opened there. That’s 25% of area food businesses.

Another 18 to 25 stores could shutter in the second year.

Well which is it? Is this a horrid food desert with people unable to buy fresh produce or are there dozens and dozens of stores selling fresh produce? These advocates and politicians can’t have it both ways.




Auditing And Food Safety:
California Agencies Weigh In On Cantaloupe Crisis

Now that the “cantaloupe crisis” has passed – though not without significant costs to the trade and a horrid death toll of 30 – it is important to reflect on lessons learned. We wrote extensively about the cantaloupe crisis and you can see those pieces here.

We have received an important letter from the leadership of two organizations at the forefront of industry food safety efforts.

Many of the scenarios regarding industry food safety efforts have revolved around the question of audits and what is reasonable for the world to expect from audits. So we were very pleased that this joint letter was from two men involved with innovative efforts to use audits successfully as part of food safety programs:

Jim, thank you for your very thoughtful analysis of the tragic Colorado listeria outbreak. We felt it was appropriate for us to take a moment to share what we’ve learned over the last five years of our programs’ existence.  First, an audit and score are only one piece of any overall program.  A comprehensive program should instill a culture of food safety that permeates throughout an entire operation. 

And, to your point, Jim, that really begins with a rigorous set of industry-wide standards developed through a transparent and inclusive process.  Verifying compliance comes next through announced and unannounced audits.  In the case of both the California Tomato Farmers and the California Leafy Greens Marketing Agreement, those announced and unannounced audits are mandatory for our members and conducted by USDA-certified government auditors, not private auditing companies.

We want to be clear that we are not saying our auditing systems are perfect, and we are constantly working with USDA to refine and improve these systems.  But, what we are saying is that our members strongly believe that the government auditors are ideally positioned to conduct effective and independent food safety audits, as neither the buyer nor the seller hires them directly. The auditors report only to their government supervisors. Most importantly, if these auditors identify an imminent health risk during an audit, he or she is required to inform local, federal or state health authorities of the situation.

Another aspect of a comprehensive program is a system for handling corrective actions. For both CTF and LGMA, any member who does not pass every facet of the audit must take corrective actions to not only correct violations but to enact measures to prevent their reoccurrence. Follow-up audits validate these corrective actions.

In some cases, we have been criticized for allowing members to “retake the test” until they pass.  That’s not accurate.  We require necessary improvements in their food safety practices with all employees and contractors focused on achieving across-the-board compliance.  Again, this helps create a culture of food safety throughout an operation.

For members who fail to achieve 100 percent compliance, they are decertified from the programs and buyers are informed.  For LGMA, buyers are notified directly of the decertification action and the company’s name is posted on the LGMA website.  CTF customers have on-line access to audit history and compliance.  This level of transparency is also a crucial element of a food safety program. 

For any food safety program to be successful, it must evolve. And to do that we must listen to what our customers are saying – constantly.  Jointly, our members have conducted food safety tours for buyers, and we have personally met with customers to hear how we can do better; we have attended food safety summits, seminars and meetings throughout the country. 

And what we’ve heard is that buyers want rigorous industry-wide standards, quality auditors inspecting operations and they want transparency — but they also want continuous improvement and refinements in each of those areas.  Both of our programs are working hard to deliver these attributes to buyers.  As the Perishable Pundit has already pointed out, the next step in the evolution of food safety in the produce industry is for procurement divisions to recognize and accept these comprehensive systems.

—Ed Beckman
President
California Tomato Farmers

—Scott Horsfall
President and CEO
California Leafy Greens Marketing Agreement

We appreciate this letter and think it important as it raises eight key points:

1)   AN AUDIT IS NOT ENOUGH

We received so many calls from consumer media suggesting that the idea that a firm passed an audit and yet still had a food safety issue was somewhat incredulous. This incredulity makes no sense as almost all food safety outbreaks involve audited firms because the vast majority of industry volume is audited by somebody for something.

Obviously if a firm or its employees do food safety just to pass an audit, they will not do a lot of important things when the auditors aren’t watching. Therefore the game is clearly to change people’s motivations from “passing the test” to “doing the right thing.”

2)   INDUSTRY-WIDE STANDARDS PROPERLY DEVELOPED

A prerequisite for any successful audit scheme is that the standards against which the audit are done must be meaningful and acceptable. This letter argues that they best be industry-wide standards as well.

There are many reasons to think this point is true. Most notably that it creates a level playing field for producers and for retailers. Many producers in the world don’t want to stint on food safety, but they feel compelled to avoid costs because their competitors don’t incur them and buyers will still accept the product.

Many retailers would prefer to always buy the best stuff produced under high food safety standards, but competitive retailers buy cheap stuff and consumers accept the product thus creating competitive pressure to both buy and sell cheap.

3)   ANNOUNCED AND SURPRISE AUDITS

It is an open secret in the industry that people prep when they know the auditor is coming. This is not so terrible as it gives a moment in time for everyone to take stock and make sure everything is up to snuff. It is, however, obviously not sufficient.

Although true “surprise” audits are rare — and we note that Ed and Scott use the term “unscheduled” in their letter — the fact that an auditor might show up at any time is useful in keeping people on their toes and in building a food safety culture.

4)   USDA-CERTIFIED GOVERNMENT AUDITORS

This is a controversial point. Do government auditors produce better food safety outcomes than private auditors? The research on this subject is scanty. It is not obvious to us that if the CLGMA, for example, chose to hire Primus auditors that the audits would be worse or that food safety would decline.

Still, one can see the appeal. The government is somewhat of a neutral standard whereas different people have different opinions about different auditing organizations. The image of people denying access to government officials seems less credible than denying a private business, and the assumption is that the government auditor will have job security and thus be willing to be tough whereas a private auditor may have fears about being displaced — although there is a lot of political theory about how private interests capture regulatory bodies and bend them to their will.

5)   CORRECTIVE ACTION

One of the big flaws with audits is that the corrective action mechanism is deeply flawed. Although some companies use audits as self-assessment tools and work hard to make sure they are doing everything right, the Jensen Farms cantaloupe situation clearly shows the need for an automatic mechanism to force corrective actions.

The requirement that everyone score 100% on an audit is a good start. Completely aside from the substance, the requirement to get 100% is a way of building a culture that says that compromises on food safety are not acceptable.

Of course, we are still not certain this is enough. Many of the flaws identified in Colorado were not the subject of an audit. For example, there was no requirement to have a pre-cooling facility. Buyers still can’t look at an audit, see the producer got 100% and assume that nothing else can be done. That is not often the case.

6)   TRANSPARENCY

What happens if someone fails an audit or gets a low score or gets comments? This needs to be immediately communicated to all buyers and be available to all prospective buyers. So many buys today are program buys that run through continuous replenishment models. Audits must be circulated in such a way that a computer will stop these programs as result of a problem.

7)   CONTINUOUS IMPROVEMENT

Obviously, audit metrics can’t remain static as science advances. Note, though, that the Europeans and programs such as GFSI seem to prefer stability over continuous improvement.

8)   PROCUREMENT

None of this, of course, matters if it doesn’t impact the behavior of the actual buyer.

**

These are all more than valid points for consideration but it is worth noting that both of these organizations, California Tomato Farmers and California Leafy Greens Marketing Agreement, have several advantages. As state-focused organizations, they have a relatively homogenous environment to consider and they both have a concentrated industry to support their efforts.

The California cantaloupe industry does not have the same structure — government auditors, etc. — but it has had few food safety issues.

And neither the CLGMA or CTF would have protected their industries against a problem with leafy greens or tomatoes from Colorado.

The Leafy Greens effort was expanded to Arizona and there is an effort afoot to make it national.

Maybe the real lesson of the Cantaloupe Crisis is that since such food safety outbreaks affect everyone in the business, the mechanisms we use to deal with them need to encompass not only the large well capitalized players but smaller more regional players — like Jensen Farms in Colorado.

Many thanks to Ed Beckman and Scott Horsfall for weighing in on such an important industry issue.

 




As Organic Produce Grows Beyond Local And National Borders, Will Government Step In To Set Definitions And Change Certifications?

Elisabeth Rosenthal over at The New York Times recently wrote a piece titled, Organic Agriculture May Be Outgrowing Its Ideals. Nothing in the piece is new to industry members, but it is interesting, partly because it raises the question of what, precisely, the role of government ought to be in defining standards that presumably are supposed to help consumers make purchasing decisions.

The piece focuses on the fact — shocking — that a producer can be organic and yet not meet various standards some might wish had been set for water usage, small scale, sustainable, etc. In fact, horror of horrors, some organic produce is grown utilizing “intensive irrigation”:

Clamshell containers on supermarket shelves in the United States may depict verdant fields, tangles of vines and ruby red tomatoes. But at this time of year, the tomatoes, peppers and basil certified as organic by the Agriculture Department often hail from the Mexican desert, and are nurtured with intensive irrigation.

Growers here on the Baja Peninsula, the epicenter of Mexico’s thriving new organic export sector, describe their toil amid the cactuses as “planting the beach.”

Del Cabo Cooperative, a supplier here for Trader Joe’s and Fairway, is sending more than seven and a half tons of tomatoes and basil every day to the United States by truck and plane to sate the American demand for organic produce year-round.

But even as more Americans buy foods with the organic label, the products are increasingly removed from the traditional organic ideal: produce that is not only free of chemicals and pesticides but also grown locally on small farms in a way that protects the environment.

The author makes no distinction between an inclination and a policy. Wanting to help the environment may be fine, but how is that best accomplished? We could write a treatise the thesis of which would be that the use of “intensive irrigation” and other advanced techniques helps save the environment by increasing yields and thus reducing the number of acres that need to be devoted to agriculture.

The great unspoken point here is that, of course, this is a free country. Anyone can set up any set of standards they choose, get a trademark and then only allow producers who meet these standards to use the trademark. Then consumers could buy only organically grown produce, raised on bio-diverse farms, watered only by raindrops, that consist of less than two acres each that a shaman visits once a year and does a moon dance around.

The issue here is the use of the power of government to set a definition.

New York state has had some issues in regard to Kosher foods. We have pre-existing laws against fraud, so anyone can bring a civil suit alleging they were sold Kosher food that was not so, and a court, in the fullness of the evidence, can make a ruling.  But when New York State has tried to define Kosher legislatively, it has run into religious freedom issues. Why can’t the Reform Movement define Kosher its way and the Orthodox another way?

We ran a piece on the Pundit that dealt with how some Jewish groups felt that the Kosher standards ought to include ethical requirements, but facing resistance they decided to create a separate certification. You can read the piece here.

We read The New York Times article and think that those who care about these issues ought to think in the same direction, not so much changing organic standards but creating some supplemental certification.

Organic certification doesn’t raise religious freedom issues, but it is not entirely clear that the current organic rules reflect much more than subjective preferences. For example, genetically modified items can’t get organic certification, irradiation can’t be used, etc. These have nothing particularly to do with things being “organic” or not — they are just marketing choices.

In time the organic community may find that having the government be involved in organic standards is a kind of deal with the devil. It means that either organic will be an unimportant niche product, in which case advocates can make whatever rules they want and no one will care, or organic will be a large and important industry, in which case there will be large and important players and the rules will facilitate production on a scale capable of feeding lots of people.

We wrestled with this issue five years ago in a column in Pundit sister publication, PRODUCE BUSINESS titled Organics Redux. Note the opening contrast between two statements, one from Joan Dye Gussow from Columbia University, and one from Eugene Kahn of Cascadian Farm. It really tells the whole story. 




What Programs Will Get The Kids To Eat More Produce?
Empty Research and Fibbing Parents Make Rollouts Difficult

The country is filled with programs that aim to reduce childhood obesity. As we have often pointed out, however, most of these programs are doomed to have little impact, even if they work, because they don’t incorporate any evaluation tools, and so it very unlikely they will get the financial support needed to roll out across the country.

The Wall Street Journal Health Blog has caught on to the same issue but profiles one program that is doing some self-evaluation. The piece is titled Progress From Portland on Improving Kids’ Healthy Behaviors:

…while many cities and towns have programs and events to attack childhood obesity, few really know whether they’re making a difference.

One program that has been tracking its impact reports new signs of progress. Earlier this year, the WSJ profiled the Let’s Go! program in Portland, Maine, which has rallied schools and other sites in the state to get more families to adopt its daily 5-2-1-0 message: every day, eat at least five servings of fruit and vegetables, get two hours or less of screen time, get at least one hour of exercise and consume zero sugary drinks.

New data from an independent telephone survey of about 800 parents in the greater Portland area show some steady improvements in healthy behavior. In 2011, 31% of children had adopted at least three of the 5-2-1-0 behaviors, compared with 22% in 2007.

Specifically, in 2011, 26% of parents reported that their children ate the recommended number of servings of fruits and vegetables, compared with 16% in 2007. In addition, 45% of parents said their child’s daily recreational screen time was 2 hours or less, compared with 38% in 2007.

Unfortunately, it is not enough to simply do an evaluation. It is essential that the evaluation be meaningful. This one, like so many others, throws off more smoke than light. To note, just two of the more obvious issues:

  1. Surveying people about their own virtuous behavior encourages people to lie.
    All surveys have problems as people can make errors and their perceptions may not be accurate. Still, it may be possible to get honest answers if the question is neutral: Does your family prefer vanilla or chocolate ice cream? In this case, though, the surveyors might as well call up the parents and ask: Are you a good parent? The 5-2-1-0 program is not about neutral behavior. The whole point, promoted incessantly, is that these are virtuous behaviors that good parents ought to promote and require. That people say they do so is not really surprising and is quite possibly not accurate. The difference in the 2007 and 2011 survey results may just testify to the impact of four years of promotion of such behavior has on parental guilt.
  2. Behavioral change doesn’t matter unless it leads to an outcome difference.
    Potential funders for national rollouts of these types of programs don’t actually care about these specific behaviors. If kids spend more than two hours a day in front of computer screens because they are preparing their entries for the Siemens or Intel National Science competitions and still make adequate time for physical fitness, nobody will care that they fail this part of the 5-2-1-0. Even an issue such as increasing produce consumption is, beyond the produce industry, only likely to be of interest if it results in healthier children.

This type of evaluation almost seems designed to avoid the kind of real-life testing that matters. What you want to do, of course, is weigh and measure students who are going to be exposed to the program before they start the program, then reweigh and measure after a fixed interval. You want to do the same thing with students who are demographically similar but are not being exposed to the program.

How often one measures depends on what one wants to know. You can measure the effect this school year, or after five years of exposure to the program, or what the impact of a program done in elementary school and then stopped in 5th grade is on various health parameters when the students graduate middle school or high school. You can study if exposure to such a program in grade school affects health status at age 20, etc., etc. 

It is hard to know which is scarier. That decisions on what programs to create or extend are being based on such empty research or that even with powerful incentives to exaggerate, the parents still report that only 26% of their children eat at least 5 servings of fruits and vegetables (only 5!) each day.




In Business, Public Policy And Life, Viewing Data From The Wrong Perspective Can Lead To Poor Decisions

The New York Times ran a great essay titled, When Care Is Worth It, Even if End Is Death, by Peter B. Bach, M.D., who  was  a senior adviser at the Centers for Medicare and Medicaid Services and currently works as the director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center in New York City. The piece is not a paean to the way sick people will appreciate heroic efforts to save their lives, nor is it focused on the importance of allowing survivors to live with the knowledge that they did all they could.

The piece focuses instead on the fact that the angle from which one views data causes such data to give different impressions. This is a point exceedingly valuable for business people to recognize.

In this example, the press is constantly filled with reports pointing out how much money is spent on sick people within the last days, weeks and months of life. The pretty overt message: Society should save the money, let these people die a little earlier, and we would probably not only save money but reduce suffering at the end of life.

The argument is fair enough as far as it goes — although one should always be wary regarding people saying that the last days of other people’s lives have no value. One also needs to distinguish between a public policy choice — how the government will spend funds — and individual choice — how people will spend their own money.

The real issue, though, with this line of thought — that we should spend less money on people right before they die — is that it involves retrospectively going back into records after people died and noting how much was spent.

This is, however, an almost useless exercise. Yes, of course, if we knew in advance that a patient would die the day after a major operation that costs a lot of money and causes discomfort, nobody would do it. But we don’t know.

If we do a particular procedure on 100 people and five people die within 24 hours, sure, by looking only at the records of the five that died, we will see waste — but what about the 95 who lived?

Dr. Bach put it this way:

How could it be that we were prudent with health care dollars because he lived, but would have been described as wasteful had he died? Doctors in an emergency room cannot know which will occur. They do not have divining rods that direct them to patients they can save and away from those they can’t.

Rather, caring for the sick means caring for people who may die. Providing care means reducing the chance they may die — not eliminating it.

This issue, of how a statistic should be looked at, applies in medicine and all other areas of life. If you look at training and only look at the people who quit right after the training, one would conclude the training is a waste. But, of course, one has to balance that statistic with the benefit accrued to the employees who stay.

Viewing data from the wrong perspective guarantees a big mistake, in public policy and the corporate world.

You can read the whole piece here

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