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SPECIAL EDITION II:
As Tomato/Salmonella Outbreak
Expands, Government Agencies
Require More Scrutiny

Retail And Foodservice
Buyers Share Their Experiences

Jim Prevor’s Perishable Pundit, June 10, 2008

The press releases may fly, but how are retailers and foodservice operators actually experiencing this tomato/salmonella outbreak? We asked Pundit Investigator and Special Projects Editor Mira Slott to speak with an industry leader in each segment to find out more:

Mike O’Brien
Schnuck Markets
St. Louis, Missouri

Q: We’re looking to get a pulse on the market of how the tomato outbreak has been affecting retail business and your customers.

A: Since we’re in Missouri, we weren’t one of the states affected until Saturday [June 7] evening, when all the e-mail alerts starting coming in from PMA, United, FDA and others. I called my tomato buyer and we met Sunday morning, evaluated where we were and pulled any tomatoes not approved at that point by FDA. We followed the FDA list.

At that time, we just had four SKUs of Florida tomatoes. We carry so many varieties. We don’t have any Roma tomatoes for sale at this point. They’re in the back room, and we’re no longer putting them on the shelves. Along with the Roma’s that we pulled, we had some Florida organic tomatoes, and wonderful ugly ripe tomatoes from Florida and we had to pull those too.

Q: Did you communicate with consumers through in-store signage or by other means?

A: We put a small sign up. It mentioned to consumers, ‘Due to health concerns we had to remove certain tomatoes, but be assured all tomatoes on the shelves are safe to eat.’ I’m always concerned about putting a sign up drawing more attention to a problem that’s already been blown out of proportion. But then we want to inform consumers. It’s a slippery slope.

As usual, this outbreak has turned into a whole debacle, and the media has gotten half its information wrong. I feel so bad for the affected growers

Q: What were you thinking when that first FDA alert had come out?

A: That first warning only focused on Texas and New Mexico, but they had illnesses in other states, including Illinois and Indiana. I just had a bad feeling about it at that time. Now with produce-related outbreaks, when you get the first alert, things tend to grow.

FDA has the responsibility for protecting consumers, and when they can’t pin down the problem, a lot of growers get hurt. Even if the problem ends up being narrowed to a particular region, it’s still not the entire growing community; it’s just one person. It’s all about prevention.

Q: The reports from CDC indicate that the most recent onset of illness was May 27. With the time that has elapsed, does it protect your customers any more by stopping the sale of tomatoes starting Sunday June 8 moving forward?

A: When FDA and CDC do the trace back investigation and interview people who got ill, they look at commonalities… what kinds of tomatoes, where they bought them, and it can be a long, drawn-out process.

The same thing happened during the spinach crisis. By the time retailers stop selling tomatoes, the tomatoes related to the outbreak already washed through the system. At the same time, whoever made an error, nobody knows if it has been fixed. It’s a bad situation.

A lot of innocent people are getting hurt, consumers and companies all the way down the supply chain. Retailers will be affected. We’ll lose sales, but if I’m a grower of tomatoes, this can be devastating and put me out of business. If anything, because of supply issues, costs will go up for non-affected regions.

Q: What feedback have you received from your customers?

A: Up until this FDA alert warning all consumers across the nation not to eat tomatoes, we hadn’t had many comments at all; not a lot of customers asking questions about it. Concerns have increased. One elderly customer called today, worried that the tomatoes she gave her relatives last week were OK, and I assured her they were.

Mike is one of the really great guys in the industry who genuinely care about suppliers, and he has an ownership team prepared to back him up. Unfortunately, in a situation such as this, there is little he can do.

Like so many in the industry, Mike’s experience leads him to think this way:

As usual, this outbreak has turned into a whole debacle, and the media has gotten half its information wrong. I feel so bad for the affected growers…

And to recognize that the whole exercise is typically pointless:

The same thing happened during the spinach crisis. By the time retailers stop selling tomatoes, the tomatoes related to the outbreak already washed through the system. At the same time, whoever made an error, nobody knows if it has been fixed.

But Mike has a decent person’s understanding of his role in the whole situation:

A lot of innocent people are getting hurt, consumers and companies all the way down the supply chain. Retailers will be affected. We’ll lose sales, but if I’m a grower of tomatoes, this can be devastating and put me out of business.

With that kind of perspective, at least vendors know they can count on some support when the crisis passes.

Maurice Totty
Director of Procurement
Foodbuy
Charlotte, North Carolina
purchasing arm for the UK-based
Compass Group.

Q: What actions have you taken regarding the tomato/salmonella outbreak?

A: The direction we’re taking is in conjunction with our quality assurance team. We have put the use of tomatoes on hold with the exception of the states approved by FDA. The only issue is that most of those regions are not producing tomatoes or a very limited supply. It will be at least a few weeks until there are enough tomatoes to fill the gaps; mid-June to late-June before the supplies start to be produced to meet our needs.

Q: How does the food safety vetting process work in terms of your ability to bring in new suppliers to make up shortages? How complicated is it for a large chain to go outside its set supply system in cases like this?

A: The level of food safety protection that a McDonald’s or Compass utilizes in sourcing product creates little flexibility in this case. The approval process to bring on a new supplier is quite lengthy and detailed. This is more a supply/demand situation. If we haven’t been dealing with a producer, and that supplier has other customers, when supply is tight, they won’t have any additional volume to sell to anyone else, including us.

Compass is the largest food service management company in the world. We service a range of organizations from healthcare to schools, higher education, business institutions, corrections and the list goes on.

Q: What feedback have you received from your broad range of customers?

A: Internal communication is working with Quality Assurance; getting communication out to chefs not to use any raw red Roma, red plum or round red tomatoes from unapproved sources, and interacting closely with distributors insuring none are being shipped to our accounts until further updates from FDA.

Everyone is waiting right now for FDA to issue another update on what the situation is. Florida tomatoes at this point haven’t been approved for use in the marketplace. These growers are major suppliers. A lot of people are waiting for the OK on that from FDA. That would have an impact on the market. California production hasn’t really started to any degree.

Q: Different retailers and foodservice operators are taking varied actions, some choosing to pull all raw red Romas, plum and red round tomatoes nationwide, some pulling selectively, some not at all. How does one determine the right approach?

A: FDA’s warnings have created some confusion. FDA first advised that just consumers in Texas and New Mexico not eat certain tomatoes, but it was OK for everyone else. This didn’t seem to make sense. Many people had the same questions; if you couldn’t eat certain tomatoes in Texas, but went over the state line to Oklahoma and ate those same tomatoes, couldn’t they make you sick?

I can’t speak for the FDA, but it seems they were going on where the largest number of food borne illnesses had broken out. From a supply-chain point of view, it makes it very challenging and difficult to understand the logistics — It is not OK in Texas and New Mexico, but perfectly fine in neighboring states?

Without knowing the source of where product came from, it’s very difficult to pinpoint — tomatoes from this supplier are affected, so don’t use them. It can take weeks to identify the source of the problem, and oftentimes, it is never definitively determined, or by the time it is, it’s too late.

Q: Couldn’t the damage be significantly lessened if the industry’s traceback systems were stronger?

A: Traceability continues to be the missing link. The amount of time it takes to identify the source is just too long. Simply, most of the product is destroyed or out of the supply chain by then. This situation has a rippling effect. Growers have product in the field they can’t sell, re-packers have hundreds of thousands of tomatoes just sitting there, distributors have pallets they can’t ship to accounts. Warehouses are holding restricted product.

Retailers and foodservice operators can’t use cases in the back room — it’s an ongoing, perpetuating problem. The industry has all these tomatoes in the system and FDA has put out a directive not to consume the products.

The big difference between retail and foodservice right now is flexibility.

On the merchandising side, retailers can sell more SKUs or larger displays of cherry tomatoes, grape tomatoes or tomatoes on the vine.

Restaurants that use slicers for sandwiches have few options.

On the procurement side, those foodservice operators with aligned supply chains have to decide whether to go outside those loops or simply not carry the product.

Maurice is a sharp guy, and he caught on the absurdity of the FDA’s initial approach quickly:

Many people had the same questions; if you couldn’t eat certain tomatoes in Texas, but went over the state line to Oklahoma and ate those same tomatoes, couldn’t they make you sick?

Traceability remains crucial, but this particular outbreak reminds us that, as Dr. James Gorny explained, you can’t start doing trace back until FDA has done the epidemiology that tells us where the product was purchased. In this case, that took six weeks — just for New Mexico.

Just looking at the geography. It is hard to imagine this outbreak could be sourced anywhere but Mexico, but FDA has not yet been willing to take Florida off the hook.

Many thanks to both Mike O’Brien of Schnuck Markets, Maurice Totty of Foodbuy and the Compass Group for sharing their experience during this tumultuous time with the whole industry. They truly perform a generous and much needed service during challenging times.

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