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Consumer Studies On Spinach Reviewed…
And Costco’s Proactive Approach

Jim Prevor’s Perishable Pundit, February 7, 2007

A couple of studies are out, each designed to advance our understanding of consumer behavior related to the spinach/E. coli 0157:H7 situation.

Rutgers Food Policy Institute has issued a report entitled Public Response to the Contaminated Spinach Recall of 2006, which you can read right here. The report, based on a 1,200-person telephone survey, is well worth reading.

Yet it suffers from some serious flaws. The decision was made to use the word recall in conversations with consumers. Although there was a “recall” of some product derived from one processor, the distinguishing characteristic of this situation was, precisely, that it was not solely a recall of specific product. Rather, it was a general advisory by the FDA not to consume fresh spinach, the vast majority of which was never recalled.

The use of this term is thus inaccurate and, quite possibly, provides a filter that impacts the way consumers responded to the questions asked.

Another problem is that the authors of the study assume things that aren’t exactly correct:

“…only a little more than half thought it definitely true that authorities had declared that fresh spinach available in supermarkets was ‘safe to eat’.”

This is an odd “result” to expect since the FDA has never declared fresh spinach available in supermarkets “safe to eat.” In fact, the FDA has never distinguished between spinach in supermarkets and other places, and its most recent press release on the matter, dated October 12, 2006, said this to Americans:

While the focus of this outbreak has narrowed to these four fields, the history of E. coli O157:H7 outbreaks linked to leafy greens indicates an ongoing problem. As FDA stated in its letter to the lettuce industry in November of 2005, FDA continues to be concerned due to the history of outbreaks and the ongoing risk for product contamination of leafy greens.

Hardly an announcement that supermarket spinach is now “safe” — and the fact that the FDA has never said what the authors of this study seem to want to imply it said makes the whole study a little difficult to navigate.

The authors see the fact that consumers don’t recognize spinach as having been declared “safe” as an information failure:

Whether due to a lack of definitive statement, lack of press coverage, or lack of attention by consumers, it is clear that many Americans did not get or believe the message that spinach is now safe to eat.

When it can just as well be seen as a consumer education and public health triumph, the FDA seems to have gotten across the precise message it wanted to get across, which is a lukewarm endorsement at best.

The use of the word “recall” sneaks in again and again as a source of ambiguity in the study:

“…more than one-tenth (13%) reported incorrectly that ‘the spinach recall is still in effect…and nearly one-fifth (18%) said they were not sure…’”

Yet it is the study’s authors who are incorrect. The recall of Natural Selection Foods product has not been rescinded. It is in effect today. If you go in the freezer and find an old bag of product that was recalled, you can and should return it. What the authors have done is made up a definition — “recall” will mean “consumer advisory not to eat spinach” — and this distorts so many answers. It is a shame.

The study also seems to imply a degree of consumer autonomy that belies the reality of the enormous influence retail stores have on these matters. So it declares that “…the data clearly indicate that the majority of consumers did stop eating spinach during the recall.” Doubtless this is true, but whether this happened as a result of the FDA advisory is just speculation. What made this result a lead-pipe cinch is that virtually no retailers were selling spinach during this period. Unless you grew your own, you were not going to be eating much fresh spinach.

Far more in the loop on things produce, the Perishables Group came out with a study that was the subject of a January 29 article in USA Today titled, “E. coli’s long gone, but spinach sales are still hurting,” which you can read here:

Four months after an E. coli outbreak in fresh spinach, sales of that product and packaged salads continue to suffer.

For the week ended Dec. 23, packaged spinach sales were down 37% from the same period a year earlier to $976,699, while bulk spinach sales, a smaller market, were off 22%, says the latest data from market researcher the Perishables Group.

Sales of packaged salads that contain spinach are hurting, too, off 28% year-over-year to $1.4 million. Sales of packaged salads without spinach were down 7.9% to $31.2 million for the week ended Dec. 23. The Perishables Group tracks retail sales at 16,000 supermarkets but not Wal-Mart, Costco or natural food stores.

It is easy to decide that this is due to a decline in consumer confidence. Perhaps. Yet produce is very sensitive to availability, placement and promotion.

Following the Alar debacle in which a 60 Minutes program led to a massive decline in apple sales, people leapt to the conclusion that consumer confidence in apples had declined, and that led to the sales catastrophe.

But when all the data were in, it turned out that virtually the entire sales decline could be accounted for by retail factors: Were apples available? Were all varieties and packs available as they were before the crisis? Were they positioned the same way in the traffic pattern? Were they promoted in store and on ad as they were before the crisis?

The Pundit bets that when all the data are in, we will find out that the sales decline is tied principally to a reduction in retail placement and promotion.

Blends and foodservice are another story: There we will find that spinach was removed from many blends and foodservice applications and won’t be coming back soon:

McDonald’s, citing an “abundance of caution,” has yet to return spinach to its spring mix salad, spokesman Bill Whitman says.

This type of business is very difficult to get back. Formulations have been changed and, in the absence of a problem, why should a company bother to change its formulation back? Where is the upside?

One interesting piece in the USA Today article:

Many retailers started reintroducing spinach in early October. Costco waited until this month. It now requires suppliers to random test spinach at the processing plant, including for E. coli 0157:H7 and Salmonella, another bacteria that can cause serious infections in some people. Within weeks, Costco expects similar testing for other bagged and ready-to-eat products, such as lettuce salads and baby carrots. “It’s another part of the food-safety process,” says Craig Wilson, Costco vice president of food safety and quality.

So Costco didn’t even sell spinach until January, 2007. All it would take is for every retailer that put spinach on ad once a month and had six facings of different spinach products to cut the ads to every other month and reduce the facings to five, and you would see sales declines such as those the Perishables Group has noted.

Costco’s mention that it is now requiring testing is good news for the industry. It means that the participants in the Buyer-led Food Safety Initiative are not waiting for some universal agreement to start requiring steps that will enhance product safety.

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