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Perishable Pundit
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Wal-Mart’s Heritage Agriculture Program Gets Good Press But Doesn’t Make A Dent

From time to time,

we are pleased to work with National Public Radio to enhance the public’s understanding of issues related to produce and the broader food industry.

Most recently, we weighed into a discussion on “locally grown,” participating in a piece titled, Wal-Mart Helps Small Farms Supply Local Foods:

In recent years, Wal-Mart has tried to soften its image as a corporate steamroller with a number of local and environmental projects.

The company wants to revitalize small and midsize farms in the U.S. and has begun a program to increase the amount of local produce sold in Walmart stores. The program also benefits consumers, who have access to fresher food, as well as Wal-Mart itself. But some critics are skeptical of the program’s logistics.

A Win-Win Program?

At a Walmart in Maumelle, Ark., a stock boy pushes fruit cups and salad toppings onto produce racks. On this day, most fruits and vegetables are labeled with faraway locations: Washington state, Florida, Honduras.

It’s cheaper to grow food in those places, but getting it to central Arkansas burns a lot of fuel. And while environmentalists worry about carbon emissions, Wal-Mart sees dollar signs.

“A surprising percentage, on many crops, of the cost of the goods is the freight,” says Ron McCormick, the head of Wal-Mart’s Heritage Agriculture program.

The company is building up smaller farms to get more local produce into stores for both economic and environmental reasons. McCormick says most local farmers just aren’t prepared to supply the retail giant with the huge quantity and consistent quality of produce it requires….

“[It] seemed to be a win all across the board if we could use our buying power to reinvigorate some of those old agricultural areas that had been abandoned over time,” McCormick says.

Diversification

Wal-Mart is eyeing areas like southern Arkansas, where farmer Randy Clanton drives the back roads of the town of Hermitage. He’s checking on field workers preparing tomato seedlings. A shotgun rides in the truck beside him.

Clanton says his family started growing tomatoes in this area 50 years ago. “That was back when most of your produce business was done in small, mom and pop operations,” Clanton says. “They’d bring these tomatoes in on trailer trucks, even on half-bushel baskets back then.”

Clanton says Wal-Mart has helped make his operation more professional, especially in the area of food safety. Wal-Mart has urged Clanton to diversify and plant watermelons, peppers and cabbage. Now he supplies food to distribution centers covering six states. And the larger market means Clanton makes more money.

“It gives us a sense of security whenever we go out here and start kicking the dirt out here and cranking up ole John Deeres up to get ready,” he says. “If you know you’ve got a market out there — that gives you a reason to get up out of bed every morning.”

Clanton is one of about 350 farmers Wal-Mart is working with as part of its Heritage Agriculture program.

The Realities Of Local Produce

But when Wal-Mart sells Clanton’s Arkansas produce in Illinois, is that still “local food” — or is it business as usual?

“You can do a Heritage Agriculture program and buy certain products grown in Connecticut for your Connecticut stores,” says Jim Prevor, who used to work in produce distribution but now writes the blog Perishable Pundit. “But in the end it’s not going to be a significant part of that Connecticut store’s produce sales because most of the months of the year you can’t grow anything in Connecticut.”

“When you’ve got a private organization the size of Wal-Mart, anything they do in a positive direction for the environment, if they can find a better business model, then the ripple effects are huge,” says Michelle Harvey of the Environmental Defense Fund.

Harvey notes, for example, that Wal-Mart now grows cilantro for Eastern stores in Florida rather than California. Costs are lower, and the herbs are fresher for customers.

Wal-Mart won’t say what its long-term goal is for the Heritage Agriculture program, but it says as of today, 6 percent of its produce is grown in the same state it’s sold.

We actually think Wal-Mart’s Heritage Agriculture program is nifty. What a great job Ron McCormick got for himself to be able to go around the country and help these local farmers and to bring back some crops that haven’t been grown in those areas on a commercial basis for some time. For example, although the NPR piece focused more on tomatoes, Wal-Mart encouraged Clanton Farms to grow some cabbage and so came about the first commercial cabbage crop in Arkansas in decades.

We’ve written before about how fresh-cut processors have reached out to the local communities to encourage them to grow cops for processing. This piece focused on how Dole was attempting to get North Carolina tobacco growers to grow produce for processing. McDonald’s always has to go to local farmers in Poland or wherever it is opening restaurants and get them to grow the type of potatoes and other products it needs.

Although the free market is pretty efficient in determining where things are grown, buyers seeking lower prices and better product are part of that free market, so it is very desirable for a buyer of Wal-Mart’s size to have a few people out there looking to find procurement opportunities that are unconventional and make sense.

For the most part, though, as nice as this may all be, it really is not significant. To an extent, it is no more than an extension of Wal-Mart’s old “store of the community” program — trying to be locally relevant. In a few cases, it represents a legitimate experimentation by a big buyer to see if circumstances have changed, and it now makes economic sense to grow something in a region where the local farmers may not have considered that crop. Inevitably, though, it will have little to do with “small farms” because Wal-Mart is big and needs large production. If these folks are actually small, say supplying direct to a few local stores, they can never be significant in volume.

And Heritage Agriculture, or procurement from non-conventional places, can never be more than a small deal because if it ever becomes a large deal it would just be conventional. Even an item like Arkansas tomatoes is questionable as some kind of Heritage Agriculture project. We’ve had Arkansas tomato companies advertising in Pundit sister publication PRODUCE BUSINESS for 25 years!

We also think that too much can be made of all this. Carbon footprints are complex and involve a lot more than transportation. Although locally grown products may help with local development, it is basically a zero-sum game. We have questioned the First Lady’s focus on local because we wonder what message she is sending to customers for US exports. And even within the US, boosting Arkansas cabbage is probably just hurting some other growing area. That is not Wal-Mart’s problem, but it raises a question about any national effort to boost local production as a path to economic development.

The funny thing is that the success of “local” has almost nothing to do with a retailer buying more locally grown product. Wal-Mart defines “local” as anything sold within the state in which it is grown. So what’s the number one thing Wal-Mart could do to increase its “local” percentage? Build a lot more stores in California! Wonder if the local advocates realize that is what they are pushing for!




Tesco Puts Up “Tens of Millions” And Purchases British Transplants Wild Rocket And 2 Sisters Foods — Was A Secret Promise Made To Make The British Suppliers Whole? Did This Constitute Fraud Against Its Own Shareholders?

The Financial Times ran a small note in which it indicated that Tesco would be purchasing its two US “transplants” — those UK suppliers that came over to the US at the behest of Tesco when it was first opening its Fresh & Easy division in the US.

The two suppliers are Wild Rocket Foods and 2 Sisters Foods, both of which had built substantial facilities near Fresh & Easy’s headquarters and distribution center. As usual, Tesco tried to put a good spin on the news:

Tim Mason, the head of the Fresh & Easy business, told the Financial Times it was a sign of its commitment to the US business. While not large enough to require disclosure, he said the transaction involved “tens of millions of dollars” and “a real amount of money”.

In reality, it is a sign that Tesco never delivered the volume it promised these vendors, had no prospect of delivering that volume any time soon, and the vendors were thus going broke.

Still, under normal circumstances, where suppliers are completely independent organizations, Tesco should allow them to go broke. There are no services these companies provide that US companies can’t, and even if Tesco wants these facilities, it could buy them cheaper out of a Chapter 11 filing than by buying them directly.

The most reasonable explanation of why Tesco is spending, as Tim Mason said “tens of millions of dollars” of its shareholders’ money on these acquisitions, is that the investments in the US were made by companies Tesco has close relationships with back in the UK, and there was a promise made, either explicitly or implicitly, that if these private British companies made the investment to help launch Fresh & Easy, Tesco would “take care of them” if things didn’t work out.

The best explanation for the timing? Tesco’s CEO, Sir Terry Leahy, is going to be resigning. Since Sir Terry was in on the moral commitment, he needs to act now or the two companies need to force action now to make sure that this unwritten obligation is carried through. Who is to say the next CEO will care about the moral commitments made by Sir Terry or by Tim Mason with Sir Terry’s permission? Or perhaps it is the incoming CEO who asked Sir Terry to make sure all the moral obligations were “put on the books,” so he doesn’t have to take a hit on his compensation later on.

Of course, if this is all true, the implications of this matter are that Tesco has been effectively defrauding its investors. In a sense, it created an off-balance-sheet entity that has absorbed losses and made capital investments on behalf of Tesco. Had Tesco signed a contract obligating it to pay these bills, it would have had to account for them; instead, by not acknowledging the obligation to “make whole” these investors, Tesco kept these capital requirements and losses off its books. People have gone to jail for less.

Of course, Tesco will deny all this and claim it is doing this to gain synergies, etc., but that really makes no sense. If there were valuable synergies to gain, Tesco would buy the British operations of these companies and get much larger synergies. That it only chooses to buy these tiny loss-ridden US companies tells us there is more here than Tesco cares to speak about.

We had already noted here that Tesco had filed UCC liens against Wild Rocket and so, presumably, was in some fashion already helping to finance the operation. One other reason for the buyout… it avoids the possibility that Tesco would have to write off loans or advances it may have given these companies.

Jim Jensen, Fresh & Easy’s Director of Fresh Foods, had left to help develop the fresh food program at Walgreens, and Chris Harris, who had been Category Manager Produce and Horticulture at Fresh & Easy (and was a PRODUCE BUSINESS 40-under-Forty Winner) recently left Tesco to assume a new position with C.H. Robinson. Perhaps there will be some minor payroll reductions as a result of the acquisitions. Still, these acquisitions will only give Fresh & Easy more overhead and bigger losses.

There are a lot of signs Tesco still hasn’t learned its lessons in America. You would have thought the turnover in produce would be an excellent opportunity to hire some American leadership. Instead, Tesco sent Tim Lee to Fresh & Easy from Tesco’s corporate headquarters. Tim Lee’s position was corporate director of produce group procurement, and he had been charged with developing a global procurement effort for Tesco. We are sure he is brilliant, but Tesco has a penchant for treating the US like an underdeveloped country where managerial talent has to be imported, and this remains a major cause of its problems. Why not hire Bruce Peterson? Or bring in Dick Spezzano and Bob DiPiazza as consultants.

We see this whole transaction as Tesco “paying its bills” in preparation for the next step. The current operation is untenable. It is either going to give up and close up or do something dramatic that will hide the losses in a big US acquisition. We’ve previously suggested Meijer as ideal for Tesco — as Tesco needs a supercenter concept to effectively compete against Wal-Mart. In the past, there have been rumors Tesco was interested in Whole Foods; more recently that Tesco might come to the rescue of Supervalu, either by buying the whole operation or by paying cash for Save-a-lot.

Save-a-lot is composed of mostly franchise stores. The way out of Fresh & Easy might be to franchise them out and just operate as a wholesaler.

Of course, maybe while in Minneapolis to kick the tires at Supervalu, Tesco might visit the folks at Target. In Britain, Tesco is seeking to boost non-food sales. It needs supercenters to compete with Wal-Mart. There is only one national player that meets these criteria… perhaps it will be a Target in more ways than one.




Kings Super Markets Announces Innovative CSA Program

We first wrote about various box schemes and community supported agriculture as a phenomenon happening in the United Kingdom, with pieces you can see here, here and here.

But CSAs and other non-traditional mechanisms to connect consumers with the farm are blossoming all over America and posing a problem for conventional retailing: How to deal with this new competition.

Beating them is tough because consumers who purchase from CSAs are generally seeking things that retailers will strain to deliver. For example they may believe the product is fresher or enjoy telling their children about a specific farmer.

Now, at least, one innovative US retailer has decided that if you can’t beat them, join them.

Kings Super Markets, based in Parsippany, New Jersey, a 25-store chain that also owns 5 Balducci’s, has announced a new program:

JOIN KINGS IN SUPPORTING LOCAL FARMERS…
IT GOES DEEPER THAN DELICIOUS

Parsippany, New Jersey — This summer Kings introduces a new, first-of-its-kind program for our customers in the Short Hills area who love fresh, local produce. Memberships will be offered in our Kings CSA (Community Supported Agriculture) program, which will offer a choice supply of the best of the week’s harvest and an up-close connection to the nearby farms that supply us.

Customers commit in advance to purchasing a full season of produce from the Kings CSA. Kings members or “share-holders” of the CSA partnership pay a $25 “membership” fee in advance to join this local farmer support program. In exchange, consumers get a family-size mix of whatever is best, ripest and ready at the farm each week. Kings CSA will be supplied products from several nearby farms in New Jersey, New York and Pennsylvania, including local farmers, Joe Maugeri, Alex Tonetta and James Weaver.

To become a Kings CSA member, consumers sign up for an 8-week subscription starting June 25th in our Kings Short Hills cooking studio or call 973.258.4009 or 973.463.6500. Then each week for an additional $25 you will receive perfectly harvested, locally grown fruits and veggies to be picked up Saturday mornings 9am — 11am in our Short Hills cooking studio located at 778 Morris Turnpike, Short Hills, New Jersey.

Through our partnership, Kings CSA will bring consumers an exciting new experience, providing local farm fresh produce at fantastic value. It goes deeper than delicious.

You can see here the flyer Kings is using to promote the program.

It is a very good idea. Although we may think of CSAs as competition for conventional retailers, the fact that a CSA delivers what the farmer produced and a supermarket sells what a customer wants to buy, means that there is a great possibility for synergy.

By cleverly arranging to have consumers pick up the CSA box at the store, Kings is making it easy for consumers to plan meals when they receive their box of local produce. Perhaps the box contains beets — and the consumer will buy onions to make a beet-and-onion salad. Or perhaps the box contains local lettuce, and the consumer will buy tomatoes, mushrooms, cucumbers, onions, peppers, croutons and salad dressing to make a salad.

It goes beyond produce. If there are some apricots in the box, maybe the consumer will buy a pork loin to go with an apricot glaze. Or they will buy ice cream and whipped cream to go with peaches.

One thing we would suggest is that retailers, as they explore things such as CSA schemes, should not feel limited to aping the existing programs. Though CSAs have certainly shown that there is a market for supporting specific local farmers, the world has many customers, and supermarket chains should play to their strengths, which are different than the local CSAs that exist around the country.

For example, most local CSAs don’t typically have the capability of offering a “USDA Certified Organic” box, but supermarkets could and, somewhere in this great country, there is a market. In the winter, maybe a northeast chain such as Kings could say “our buyers travel the globe to select the greatest delicacies from all corners of the earth” and offer a box from the tropics and southern hemisphere. There are probably customers for that as well.

Beyond the specifics of this idea, the Kings program offers another win for the industry: namely, Kings is back. There was a time, under the ownership of the Bildner family, in which Kings was a font of innovation. A leader in ethnic foods, baking in-store the first croissants baked in an American supermarket chain, its produce department, under the leadership of Sid Feinstein and its deli/bakery department under Ed Edelstein attracted visitors from around the world.

The chain atrophied after the sale to Marks & Spencer in 1988 but now, under new ownership, it seems to be coming back. In produce, this is personified by the hiring of Paul Kneeland, formerly Vice President of Produce and Floral at Roche Bros. and winner of the PRODUCE BUSINESS/New England Produce Retailer of the Year Award, award presented at New England Produce Council meeting in 2005. Paul is civic-minded; he serves as Vice President on the Eastern Produce Council and as Chairman of the EPC Convention Committee, in which capacity we’ve had the pleasure of working with him on The New York Produce Show and Conference. But Paul is also aware of the unique opportunity he has to build the produce program at Kings.

Despite its smaller stores, due to the affluence and density in its marketing area, Kings can do things that many others would struggle to get adequate movement to support. Paul is intent on leveraging its marketing opportunities to restore Kings to the position it once held as among the most innovative produce marketers. Innovation spreads, so having a new innovator can only help us all.




Flawed Yale Study On Junk Food Promotes Policy Without Evidence

Over the years, we’ve paid a great deal of attention to the use of cartoon characters to sell fresh produce:

The Bitter Truth About Promoting Produce To Children

Is It A License To Print Money?

Pundit’s Mailbag — Characters and Marketing

Grape “Character” Analysis

Pundit’s Mailbag — PBH/Imagination Farms Alliance Questioned

Being Consumer-Focused

Disney Disconnect

There was a burst of excitement over this marketing technique, especially when various studios decided to become more flexible with their financial demands as they realized they wanted to be seen on the side of the angels.

Yet that initial enthusiasm seems to have waned. Kroger, for example, held a unique license to use Disney characters on many food products — completely separate from the Disney Gardens project. Yet that project was quietly terminated — not likely because sales were too high.

Grimmway Farms was once making many headlines for taking on the Nickelodeon characters — another project that has seen its day.

Now to some extent the challenges of cartoon-character marketing in produce are unique to produce:

First, generally retailers only carry one brand of each item. So whereas the cereal aisle can have a kids-oriented cereal and the stores can perhaps pick up extra business because they still sell adult cereals, produce departments have to switch what they currently sell to the cartoon version, and there is the possibility that this could dissuade as many buyers as it attracts. In other words, even if young children push their parents to purchase Dora the Explorer baby carrots, maybe 15-year-old boys banish the item from their lunch boxes and this results in less total demand.

Second, the companies that took on the brands fell into one of two categories. Either they were industry leaders, which meant they had precious little incentive to push customers to favor the cartoon brand and simply had it available at customer request, or they used it in markets where one chain wanted to differentiate itself or the companies that took on the cartoon licensing were secondary players in that commodity, without the production, sales staff and marketing program to boost demand.

All the sudden, though, the latest headlines are filled with words claiming that characters are very powerful influencers with children. USA Today headlined its article, Cartoon Characters Tilt Kids’ Food Choices Toward Junk Food:

Kids think snacks taste better when popular cartoon characters such as Shrek and Dora the Explorer are plastered on the packages, a study shows.

Nutrition experts have long argued that such images shouldn’t be used to market junk food to kids, especially given the childhood obesity epidemic. About one-third of children and teens in the USA are either overweight or obese.

For the latest study, researchers at Yale University’s Rudd Center for Food Policy and Obesity gave 40 children, ages 4 to 6, three identical pairs of snacks: graham crackers, gummy fruit and carrots.

One package of each food had a cartoon character — Scooby-Doo, Dora the Explorer or Shrek — on the front; the other didn’t. Children were asked if the foods tasted the same or if one tasted better.

The findings, reported online today in the journal Pediatrics:

  • More than two-thirds said they would choose the snack with the character on the package.
  • About half of the kids said the foods tasted better from packages with the cartoon characters.

“This shows how powerful and influential these characters can be,” says Yale researcher Christina Roberto, the study’s lead author.

Although some cartoon characters are on healthful foods such as fruits and vegetables, the majority of characters are pushing junk foods, she says.

Parents face an uphill battle when they go to the supermarket with their children because kids are drawn to the characters on products, Roberto says.

We’ve read the study, titled Influence of Licensed Characters on Children’s Taste and Snack Preferences and found it raised at least as many questions as it answered.

The researcher’s, Christina A. Roberto, MS, Jenny Baik, BA, Jennifer L. Harris, MBA, PhD and Kelly D. Brownell, PhD from Yale University’s Rudd Center, tried to make the study robust but there were some real questions about the validity of the study. It had a very small sample size — only 40 children were studied. And this was only 50% of the group they invited to participate.

No research seems to have been done on the 50% of parents that did not give permission for their children to participate, but it seems at least plausible that these might be parents more skeptical of the whole idea of cartoons and didn’t want their children being exposed to more of them. If so, the sample is self-selecting for families more enthusiastic about cartoon characters, an attitude that could easily be reflected in the children.

The researchers also note that the study deviates from protocol typical for double-blind peer-reviewed studies. Double-blind procedures mean that “…neither the subjects of the experiment nor the persons administering the experiment know the critical aspects of the experiment; a double-blind procedure is used to guard against both experimenter bias and placebo effects.”

In other words, the methodology chosen for this study meant the researchers knew both the point of the study and which product had the character on it. This means that intentionally or unintentionally the experimenter could have influenced the children.

Our experience in merchandising also points to another possible flaw in study design. The researchers seem to have contrasted a blank package with one with the character on it. But this is problematic. It might be that children prefer bright colors or an “object of interest” on their products. In other words, maybe if the non-character boxes had bright color flowers on them or pictures of landmarks or beautiful people or pictures of familiar items, say toys, that children would have preferred those.

One gets the sense that the researchers are straining to reach a conclusion that they wanted. For example, there is a reference that claims that there exists “correlational data that suggested the appearance of SpongeBob SquarePants on vegetables at Grimmway and Boskovich Farms coincided with an increase in the sales of those items.”

The “data” — if one wants to dignify it as such — consists of an article in The San Diego Union-Tribune, titled Hey, Popeye! It’s SpongeBob Spinach, which the researchers accessed on March 1, 2005! The article says nothing about increased sales from the cartoon characters — it can’t, since the article is a piece about the fact that such characters will, in the future, appear on produce. The photo caption clearly says: “SpongeBob SquarePants will be promoting healthy veggies, like spinach and carrots, starting next month.” Note the word “will” — that is pretty sloppy scholarship.

The other piece of supposedly “correlational data” is an old Grocery Headquarters article from 2007 that quotes both Grimmway and Boskovich — but says nothing about sales. The article is behind a pay wall, blocking free access to the web page, but here are the relevant quotes:

Phil Gruszka, vice president of marketing at Bakersfield, Calif.-based Grimmway Farms, says his company’s alliance with SpongeBob Square Pants has been a learning experience. “There’s an opportunity for children to eat healthier today, and carrots play an important part in this. Kids are naturally attracted to baby carrots, both for their taste as well as their size, which makes it an ideal snack for lunch boxes. However, as we looked into it, we discovered not enough kids were including healthy snacks in their lives, so developing a relationship with the folks at Nickelodeon was a logical next step for us.”

Parents, Gruszka adds, have greeted the program with much enthusiasm. “They are happy that their kids are motivated to eat more produce and are especially relieved that they don’t have to negotiate food choices with their kids,” he says. “Retailers were looking for a program like this and are actively seeking ways to address childhood nutrition issues. They are amazed to see the influence a licensed character like SpongeBob has on kids who are literally begging their parents to buy our carrots because they recognize the character on the packaging.”

Oxnard, Calif.-based Boskovich Farms is leveraging SpongeBob’s popularity through its line of spinach products. “Many Americans do not consume the suggested number of servings of fresh produce, but it is even more important for today’s growing youth, many of whom are affected by childhood obesity,” says Lindsay Martinez, director of marketing. “Spinach is one of those super-vegetables which has so many nutrients and health benefits. It is low in calories and a good source of vitamins A and C, iron, folate and fiber. We felt that produce could be more kid-friendly when marketed with a character such as SpongeBob SquarePants.”

To help get its healthy message across, Grimmway trademarked the phrase “Carrots, the Kid-Friendly Vegetable” and lists carrots’ nutritional benefits on its packaging. The company features holiday-themed packaging several times a year. Gruszka says that has become another way for retailers to create excitement in the produce aisle, have a fresh new look and build eye-catching displays. The program is supported in-store with a variety of POS collateral.

A NUDGE TOWARD SPINACH

Though spinach is not traditionally a kid-friendly item, Boskovich’s Martinez says SpongeBob Spinach gives parents a needed nudge in getting kids to at least try the vegetable. “Our package graphics are specifically targeted to appeal to kids and busy families. Bags offer a microwave-in-bag option, kid-friendly recipes and ‘Nicktrition’ suggestions for healthy lifestyles,” she says. Boskovich Farms backs its program with signage, contests, interactive Web tie-ins and in-store demos featuring SpongeBob character “meet and greets” and in-pack giveaways of temporary tattoos.

It is impossible to read those paragraphs and claim that they provide “correlational data” supporting the thesis that the appearance of cartoon characters coincided with an increase in sales. Not to mention that the pieces are from three- to five-years ago and that a mere glance at the two company’s web sites would indicate that these two companies, whether they own any licenses or not, are certainly not promoting any of these lines.

Whatever happened to scholarship? Whatever happened to Yale?

There are tidbits of interest. The researchers claim the preference for cartoon characters on product was less dramatic in produce than with graham crackers or gummy fruit snacks. This might be due to familiarity, as more processed products are sold with cartoon tie-ins, or it might be that beautiful orange color of carrots is an independent appeal. We just don’t know.

Our anecdotal experience with the Jr. Pundits is that they do like cartoon characters and will often insist that we buy them. We often do — once. But our experience is that, though cartoon characters may make eating foods children already like to eat a little more fun — and so they look for the Shrek Yogurt in the fridge, for example — the impact of cartoon characters does not magically transform their preferences. And although in the store they may see a character on the spinach and cry for it, they will, in fact, not eat spinach if they don’t like it, just because of the character on the bag so the spinach will go to waste.

The “study” is really a hack job to promote a particular policy outcome. The researchers take these 40 kids and leap to a conclusion that literally has nothing to do with the research. The researchers proclaim a policy outcome that could not be drawn from the research no matter what the results. The researchers proclaim: “These findings suggest that the use of licensed characters to advertise junk food to children should be restricted.”

Where does one begin? First, the study did not deal with advertising at all. It provides no information as to whether advertising has any effect. It dealt solely with packaging.

Second, the study was between identical product, with and without characters on the packaging. The study didn’t show… couldn’t show… that characters make kids prefer junk food over the healthy food they would prefer without characters.

To do that, the researchers would have had to do a study with both, say, cookies and, say, collard greens. They would have to identify what percentage of children selected the cookies vs. the collard greens and then show that putting the characters on the cookies boosted that preference.

This “study” seems to be more interested in asserting unsupported policy solutions than in providing useful research and scholarship.




Public Policymakers Pick Up On Pundit’s Proposals For Safer Food

Our piece, How to Improve Food Safety: Aggrandizing The FDA only Distracts from Real Solutions written for The New Atlantis, a Washington, DC-based journal of technology and society, has begun to percolate through the public policy community. Part of this process is getting picked up in academic-related venues such as CIDRAP, the Center for Infectious Disease Research and Policy:

Produce business expert says strengthening FDA won’t make food safer

Jim Prevor, founder and editor of Produce Business magazine, writes that giving the US Food and Drug Administration (FDA) more power — as proposed in the FDA Food Safety Modernization Act now before the Senate — will do little to make produce safer. Writing online recently in The New Atlantis, a journal dedicated to clarifying the moral and political understanding of technology, Prevor asserts that nothing can make fresh produce absolutely safe, but recommends several steps to make it safer than it is.

His first recommendation is to change the legal framework for produce safety so that liability is not wholly fixed on producers but is shared by wholesalers and retailers, thereby giving the latter more of an incentive to buy only the safest products. Another is to increase the reliability of food safety certifications by rooting out bribery and corruption in agencies that certify products.

Other steps Prevor recommends are to increase the capacity of state laboratories that investigate disease outbreaks, revitalize the Agricultural Extension Service so it can teach farmers about best practices for food safety, and provide more food-safety education for consumers. Prevor writes on food safety at PerishablePundit.com.

Another step is getting politicians themselves to start thinking about options in public policy. William (B.J.) Lawson is a 36-year-old Republican candidate for Congress in North Carolina’s Fourth District. He ran last time and, despite running an aggressive campaign, including raising enough money to do a little TV advertising, still lost by a substantial margin to Democratic Congressman David Price, who has represented the district for most of the past 22 years.

Because the district includes both Duke University and the University of North Carolina at Chapel Hill, plus a large black population in Durham, the district is typically Democratic. Price did, however, lose in the big 1994 Republican year and so, with this year looking good for the Republicans again, his young challenger may have a better shot. We don’t know Mr. Lawson but do note that he has picked up on some the ideas we raised on proper public policy toward food safety:

Jim Prevor, a respected commentator on the food industry, argues that simply empowering the FDA to further regulate farms and processors to “reduce pathogens” is ultimately counterproductive:

The reality is that we know very little about food safety. Nobody knows the migration rate of E. coli O157 or how far a filth fly can carry a pathogen. In the absence of definitive answers, food safety on the farm is a continuum, not an absolute.

Common sense would indicate that if a five-foot buffer around a farm is good, a ten-foot buffer is better and a fifty-foot buffer better still. If putting a trap every hundred yards to catch rodents in the field is good, then trapping every fifty yards is better, and every twenty-five yards better still. If land floods, possibly bringing unknown pathogens to the soil, postponing planting for three months is prudent, six months more prudent, five years, super-prudent.

There is no place on the continuum of actions at which we can declare food to be definitively and absolutely “safe.” All of the food safety actions available to us are just steps toward reducing risk. Each of those steps has the effect of increasing the cost of the product to the consumer — and may also involve costs to other values, such as environmental preservation.

We are capable of building cars that could withstand 100-mile-per-hour collisions. But the law does not require this, because we recognize that such expensive, heavy, fuel-guzzling vehicles would contravene other values, such as affordable transportation and reducing our dependence on petroleum. Similarly, though we may value food safety, there are also other things we value. We don’t grow each leaf of romaine in a controlled indoor environment akin to a semiconductor manufacturing facility “clean room.” We don’t require agricultural workers to decontaminate and don hazmat suits to avoid passing pathogens on to the produce. These actions would increase the price of produce dramatically, thus depriving many of the opportunity to eat healthier diets. And even if these precautions were taken, there remains the possibility that cooks and servers — both at restaurants and at home — might contaminate the produce.

The FDA already possesses enormous power: It can and has stopped commerce in whole industries and blocked the entry of produce from companies and countries. With its vast influence on consumers and trade buyers, it can bankrupt almost any produce farmer, rancher, packer, or processor. Few will take the risk of crossing the FDA.

Everyone shares the desire for a safe, resilient supply chain for nutritious food available at affordable prices. We all want to prevent disease outbreaks. Are there ways we can increase food safety by constantly encouraging safety throughout the supply chain?

Mr. Prevor identifies six steps we can take to fundamentally align our food system’s incentives towards greater safety. The most important step we can take is switching to a negligence standard from a strict liability standard, and switching primary liability to the trade buyer:

Switch to a Negligence Standard from a Strict Liability Standard, and Switch Primary Liability to the Trade Buyer

In the 1963 case Greenman v. Yuba Power Products Inc., the California Supreme Court unanimously ruled that a “manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being.”

This decision, which consumer advocates considered a major advance for food safety, had two significant unintended consequences.

First, it established that absolute liability lies with the producer. Parties down the chain, such as retailers, are only contingently liable in the event they were to lose a lawsuit. As long as the producer can pay, the retailer is off the hook. Consequently, the primary food safety concern among retailers in America is that their vendors carry sufficient liability insurance. By contrast, in the United Kingdom and certain other foreign countries, supermarkets can be held liable in court if a person becomes ill or dies and it is shown that the retailer did not exercise proper due diligence in vetting suppliers.

Second, because the standard is “strict liability” and because food safety outbreaks are costly and unpredictable “black swan” events, farmers and processors get no return on their investment in food safety if they have the bad luck to have an outbreak. In other words, the liability is strictly theirs whether they invested millions, going above and beyond all food safety standards, or they did nothing at all.

Combining this “strict liability” standard with a concentrated buying environment, where large chains such as Wal-Mart, Costco, Kroger, Safeway, and Supervalu account for the vast majority of purchases, results in a potentially troublesome situation. At these big buyers, although official corporate policy may place a priority on food safety and the individuals employed may care about food safety, the day-to-day institutional imperative is to get lower prices from vendors. Most producers are more than willing to give buyers exactly as much food safety as they are willing to pay for. But buyers, who are not liable for food safety problems, have precious little incentive to pay extra for higher food safety standards.

A simple switch in the legal standard from strict liability to negligence, combined with a change to make trade buyers hold primary liability on food safety matters, would dramatically alter the incentives.

Under this plan, producers — now knowing that they can’t be held liable if they follow all the best practices on food safety — would have enormous incentive to invest in this area. Buyers, knowing that their own stock could tank if they have to pay out multimillion-dollar judgments, would have a whole new interest in food safety and more reason to pay top dollar to get the safest product.

In other words, food safety is primarily a tradable good in the marketplace. In deciding that the producer is liable no matter how diligent his efforts and that the retailer is not liable no matter how lax his efforts, the judicial system has distorted the way the market meets the consumer interest in food safety. Solving this problem is far more likely to enhance food safety than giving the FDA additional power. After all, the FDA doesn’t produce or buy food; it is always going to be a much more indirect player in moving the needle on food safety than members of the industry.

His other recommendations are well worth reading as well. It should be clear that the asymmetry in the current legal framework cannot be fixed simply by giving the FDA more power, and forcing new regulations on our nation’s food producers.

We cannot predict that regulations will ultimately be effective. We can predict, however, that resulting regulations will serve the organizations [that] are best able to lobby the FDA’s rulemaking process. We can also predict that these organizations will be the largest corporate interests [that] are best equipped to absorb the regulatory burden and pass its costs on to their customers.

We will leave North Carolina politics to the North Carolinians, but at least Mr. Lawson and his staff are reading widely and seeking ideas outside of the conventional wisdom.

Our nation has many problems and thinking about them in new ways will be important to finding solutions. A hat tip to both CIDRAP and Candidate William (B.J.) Lawson for being open-minded.




Center For Produce Safety Concludes First Research Symposium With Much To Be Proud Of

Tim York, President of Markon Cooperative and Chairman of the Board of Advisors of the Center for Produce Safety, opened its inaugural Produce Research Symposium with a startling analogy: What the assassination of President John F. Kennedy was to a generation of Americans, so the great Spinach Crisis of 2006 was to a generation of leaders in the produce industry — an epochal event:

I remember it like it was yesterday — it was my 8th birthday — home with the flu — a new ’64 Buick station wagon in the driveway — Grandma called crying — President Kennedy had been shot… for those who were alive on November 22, 1963, you will never forget that day, that moment..

On the evening of Thursday, September 14, 2006, I left work and took a short drive to the Steinbeck Center in Salinas for an event called “Taste of the Valley” a salute to agriculture. As you all know, later that evening the FDA and Centers for Disease Control issued a statement implicating spinach in an ongoing outbreak of E. coli 0157-H7 and advising consumers to not consume spinach.

Those of us in ag and particularly those in the Salinas Valley will never forget where we were that night either… for as Kennedy’s death changed the course of history, San Benito spinach and September 14, 2006, changed the course of history for the produce industry.

One way it changed the course was it led the industry to seek new partners, in academia, government and non-governmental organizations to try to find solutions.

One key obstacle to finding solutions? We didn’t know all that much about pathogens and food safety.

Thus there came to be envisioned a Center, as Tim told it:

CPS was founded to be a “center,” not just in name but in practice: a place where all willing-and-able stakeholders can come together to realize a common goal. Whether you measure your success by the number of customers who visit your farmer’s market stand or in millions of cases shipped per year, CPS exists to help you improve your safety practices according to the best available science. For the past two years, CPS has worked with partners of all sizes to serve as a catalyst for best-in-class scientific research addressing the most critical produce safety questions.

The event focused on the unveiling of research reports that the Center for Produce Safety had financed.

We hailed the formation of the Center for Produce Safety, just as we urged attendance at this Symposium.

The results revealed were not earth-shattering, and that is a good thing, because science depends on being able to replicate results. Many of the presentations reinforced some of the findings of research that Fresh Express had financed and publically presented two years ago.

Among the key questions addressed:

  1. The LGMA buffer metrics appear to be appropriate and work
  2. E. coli does not become internalized — no root uptake, and does not move through soil
  3. Certain factors may trigger events — e.g., rain followed by humid conditions. We need to identify these threshold events.
  4. A new testing methodology for rapid detection — PMA-LAMP shows promise but is several years away from commercial application.
  5. Filth flies could be, but do not appear to be, a problem.
  6. A new knife and coring device was presented that does reduce opportunity for contamination. This researcher also suggested that the cutting of lettuce and coring should be performed separately — cutting by on-ground persons, and the coring up on the machine — getting away from Dr. Doyle’s concern about “processing food on a dirt floor”.
  7. A study in the Imperial Valley appears to remove sheep as an animal of concern.
  8. A kill step is not likely in the near/short term future.
  9. We can’t control everything — e.g., birds…

The event ran like clockwork as Dr. Bob Whitaker, PMA’s Chief Science Officer and Chairman of the Center for Produce Safety Technical Committee, kept the researchers to 8 minutes each, allowing time for questions and discussion. Dr. Whitaker was clearly trying to point out practical implications of each research report.

In his closing comments, Tim noted that special praise was due to four parties:

Neal Van Alfen, the dean of the College of Agricultural and Environmental Science at UC Davis — He was one of the concept engineers for the Center and provided support with funding, the infrastructure of the world-class UCD campus and research facilities.

Bryan Silbermann, President and CEO of PMA — Also one of the concept engineers, PMA has provided funding for operational costs so that 100% of research dollars go directly to research. In addition, PMA staff, especially Dr. Bob Whitaker, has been invaluable in setting up the program.

AG Kawamura — the Secretary retary of the California Department of Agriculture, was also one of the concept engineers, and served as a vital industry champion in gaining funding from California, and in encouraging other states to support CPS.

Taylor Farms — both Bruce Taylor, CEO and Chairman, and Alec Leach, President — An unrestricted donation of $2 million — giving the Center permission to use it where we need to, for the good of the industry. Alec, also has provided special insights to the board as a result of his experience as a man running a $1.2 billion company.

Of course, modesty meant that both Bonnie Fernandez-Fenaroli, executive director at the Center for Produce Safety, and Tim York, himself, didn’t get half the praise that was their due.

Ignorance is often used in life as an excuse to do nothing, and for too long the produce industry hid behind a wall of ignorance, reacting slowly to entreaties from the FDA and others, pointing out that our knowledge was so imperfect.

The establishment of The Center for Produce Safety was so important because it was an announcement that we would not wallow in our ignorance but, instead, would act to gain knowledge so that we could move ahead effectively.

Of course, for every action there is a reaction, and if there was a hesitation about the success of the undertaking, it was whether the FDA would rise to the challenge of a more scientifically knowledgeable produce industry.

The reviews on that were mixed. One attendee put it this way in a note to the Pundit:

Someone asked the FDA whether sheep were still of concern based on this research, which showed they were not a concern. Essentially the answer was “yes” and that if there was zero detection of E. coli, then we just need to keep testing.

Uptake by roots, filth flies, sheep, deer, etc., are “low/very low risk,” according to the researchers’ comments, yet FDA will not remove these as areas of concern.

Jim Brennan at New Leaf — a prominent industry consultant — asked the apparently rhetorical question of how we measure success. Billions of servings of produce annually, statistically insignificant numbers of illnesses/death from fresh produce. We are dealing with very low-risk items to begin with, then even lower risk of contamination from the roots, sheep, etc… yet the FDA expectation is zero.

When challenged on zero-tolerance, FDA argues they aren’t zero-tolerance, and here is where they lost me.

Not zero-tolerance, yet any detection of pathogens, and products must be removed from commerce.

I didn’t understand the distinction. We don’t know what level of pathogen is tolerable so the de facto standard is zero. Devon Zagary, formerly Senior Vice President for Food Safety & Quality Programs for NSF Fresh and now Principal at Devon Zagory & Associates, raised this issue also. So how do we measure success?

To some extent these are early days, and it is reasonable for the FDA to want to see confirmatory studies on things like the risk from sheep. The ability of other researchers to confirm research findings is integral to successful science.

Yet in the end, the industry should be preparing to use the political process to force FDA to deal with improving science.

In our piece, How to Improve Food Safety: Aggrandizing The FDA only Distracts from Real Solutions, written for The New Alantis, a Washington, DC-based journal of technology and society, we defined the problem as the bureaucratic instinct for self-preservation:

In truth, the institutional pressure at the FDA is overwhelmingly directed toward self-preservation. That is why in all its recommendations to growers everything is purposely kept vague. So, for example, the FDA recommends that growers make sure they are “taking effective measures to exclude pests,” that farmers ensure “that any well is properly designed, located, constructed and maintained,” and also that farmers ensure “that the water is of a sufficient microbial quality for its intended purpose” — but, of course, these “recommendations” are so imprecise as to be almost useless.

Farm groups have pleaded with the FDA for clear and specific guidance. They desperately want instructions that say something like “a field must be surrounded by a fence six feet high that extends two feet under ground and the aperture of which is never more than 2.25 inches.” But the FDA won’t say this because the agency understands that safety is a continuum, that two feet underground is good but three feet is better, and five better still. The FDA knows that right now, if there is an outbreak, it can blame the farmer and say… that the fact that there was an outbreak is ipso facto proof that the producer’s plan was inadequate.

FDA executives realize that if the agency made a specific proposal, the recommendation would be no more than an attempt to juggle our imperfect knowledge of pathogen prevention with the realities of the world’s need for not only safe food but also plentiful and affordable food. No matter what standard was set, one day some creature would go under the FDA-specified fence, or over it or through it, leaving the agency itself responsible. With or without a new food safety law, the FDA will remain primarily focused on issuing guidance and regulations more designed to protect its own reputation than to solve food safety problems.

We can and should do many studies to replicate the findings that sheep are not a risk factor, that intake of pathogens is not through the roots and on and on. Perhaps the industry will get lucky and the weight of the science will change minds at the FDA. We have our doubts. FDA will always have an incentive to say test again.

But politics is how we decide things in our society and allocating money to deal with infinitesimal risks will eventually become unsustainable — because society has other uses for that money.

That case will one day have to be made in Congress — and the industry will need to know what it is talking about when it makes that case. Thanks to the Center for Produce Safety, we just might actually be the authorities on the matter.

If so, the achievement of the Center for Produce Safety will have proven significant indeed.




Have You Washed Your Reusable Shopping Bags Lately?

We’ve often written about the American Council on Science and Health,

even urging donations. Now we owe a hat tip to the Council for sending along this study by researchers at the University of Arizona and Loma Linda University.

The study is titled, Assessment of the Potential for Cross Contamination of Food Products by Reusable Shopping Bags, and here is the researcher’s summary:

Most foodborne illnesses are believed to originate in the home. Reuse of bags creates an opportunity for cross contamination of foods. The purpose of this study was to assess the potential for cross contamination of food products from reusable bags used to carry groceries. Reusable bags were collected at random from consumers as they entered grocery stores in California and Arizona.

In interviews it was found that reusable bags are seldom if ever washed and often used for multiple purposes. Large numbers of bacteria were found in almost all bags and coliform bacteria in half. Escherichia coli were identified in 12% of the bags and a wide range of enteric bacteria, including several opportunistic pathogens.

When meat juices were added to bags and stored in the trunks of cars for two hours, the number of bacteria increased 10-fold indicating the potential for bacterial growth in the bags. Hand or machine washing was found to reduce the bacteria in bags by >99.9%. These results indicate that reusable bags can play a significant role in the cross contamination of foods if not properly washed on a regular basis. It is recommended that the public needs to be educated about the proper care of reusable bags by printed instructions on the bags or through public service announcement.

Of course, there was already some doubt about the environmental benefit of these reusable bags. Other studies found that consumers sometimes forgot the bags and so had to buy multiple bags, and since production of each of these sturdy reusable bags was much more energy-intensive than the production of a typical disposable bag, the point of the whole enterprise was called into question.

If consumers start running washing machines, perhaps as an extra run as they don’t want to wash something like this with their clothes, the additional water and detergent used might turn the whole environmental argument on its head.

We doubt it is a big food safety issue as most bulk produce is put in plastic bags before being put into a consumer’s take-home bag, but still, most prepackaged produce is not airtight — clamshells routinely have air holes, and some items such as melons are put in loose. Some salmonella-laced chicken juice could drip down into some berries or be transferred to the flesh of a melon by a knife.

To us the issue demonstrates how difficult it is to make things better. We consciously will an environmental improvement by urging reusable bags and, inadvertently, increase food safety risks by creating another environment for pathogens to grow.

Who is to say we won’t improve food safety, but in so doing raise the cost of fresh produce and lead people to switch to processed foods — and maybe that will cost more in lives due to obesity than will be saved with better food safety?

One thing is for sure: Good intentions are not a sufficient vector for evaluating such things. As they say, the road to Hell is paved with good intentions.




Pundit’s Mailbag — Does A 1,200-item Audit Necessarily Result In More Safety Than A 40-item Audit?

The always thoughtful Bob Sanderson has frequently contributed to the Pundit, including these pieces:

Pundit’s Mailbag — The Acceptance Of Risk

Pundit’s Mailbag — Sprout Lessons Echo Food Safety Dilemma

Pundit’s Mailbag — More On Manure

Pundit’s Mailbag — The Tyranny Of Economics And The Goals Of Fairtrade

Pundit’s Mailbag — Can Irradiation Follow The Path Of Pasteurization?

Pundit’s Mailbag — A Look At Organic Versus Conventional Yields

Pundit’s Mailbag — Irradiation, Pasteurization and Labeling

Pundit’s Mailbag — Pesticides And Cancer

Pundit’s Mailbag — Food Prices And Free Markets

Pundit’s Mailbag — Organics And Manure

Testing Sprout Seeds

Now he asks a question that strikes at the heart of industry efforts to improve food safety… and which applies to the current debate over exempting small growers from proposed food safety standards, an issue we discussed in our piece, FDA’s Michael Taylor Preaches ‘Scale Appropriate’ Food Safety Standards, Code Words For Exempting Small Farmers And Organics:

I’ve been following the discussion about the problem of “local” in its relationship to food safety standards. I think you’ve taken the position that, even if you would like small farms to be viable, it doesn’t seem quite right that they should be exempt from the safety standards that are required of large producers.

An underlying question is whether an expensive, increasingly detailed audit has the effect of reducing risk more than a simpler, more inexpensive audit.

One thing which is not in question is that an expensive, detailed audit will require an individual, if not a whole department, to handle the documentation required in the audit. So right off the bat, any company that does not have the resources to keep that person or department on the payroll does not qualify for certification in that auditing program. This means essentially that if these audits are a prerequisite for selling to retailers, then only big companies will have a chance of qualifying.

If there is any value in supporting small food businesses, it is critically important to demonstrate that the increasingly expensive and detailed audits will result in quantitatively safer products.

In other words, does a 1,200-item audit necessarily result in more safety than a, say, 40-item audit, or does it mainly just disqualify producers who can’t afford full-time QA staff?

For your information, having looked at two of the big audits, I can say that neither one of them addresses the key components of sprout safety.

— Bob Sanderson
President
Jonathans Sprouts


Rochester, Massachusetts

Bob raises an interesting point, and it is a different point from those that are often discussed in relation to audits.

One big complaint on audits is that multiple expensive audits are a burden without increasing food safety. David Gombas, PH.D., Senior Vice President, Food Safety & Technology for the United Fresh Produce Association, spoke to this issue in Pundit sister publication, PRODUCE BUSINESS, to update the industry on the effort to harmonize the audits, and you can see that piece here.

In our piece, How to Improve Safety: Aggrandizing the FDA Only Distracts from Real Solutions, written for The New Atlantis,we dealt with the problem of corruption in many parts of the world when it comes to audits and certifications. You can read the piece right here.

Bob is, however, posing a different question: Do large audits lead to safer food than smaller audits?

It is a very interesting question and one for which we are not aware of any actual research. (Of course we are not aware of any research that shows that audits of any type produce safer food.)

It is very hard to imagine how one could do studies on these things. Simply comparing food safety records of audited and un-audited firms would not suffice, as they self-select and would show biases either way. Yet we couldn’t do a random assignment either because customers, government, etc., have different requirements.

So we have no real knowledge on this subject and not much likelihood of getting such knowledge. Yet it is a crucial question as we confront the intersection of a more rigorous food safety regime with the realities of small growers.

The current options are undesirable. On the one side, we have the mainstream industry and most of the food safety experts who point out that pathogens are equal-opportunity problems and that the same rigor in testing and monitoring water, soil amendments, compost, personnel and their equipment and animals, both wild and domestic, must be applied at every farm. If there are differences, they are based on real world factors — say proximity to a dairy farm — not based on size.

This is clearly the consensus of science today. An unintended consequence, though, may be that food safety protocols are more of a burden than many small producers can bear.

The most popular alternative is to exempt small growers from the food safety requirements. That may, in fact, save them from the burdens of compliance — but it does nothing at all to improve food safety. It also will have the unintended consequence of keeping small growers permanently outside the mainstream of the industry. Surely many buyers will refuse to purchase “exempt” product. Small growers won’t be able to grow with their customers to become bigger growers. In effect, the industry will be bifurcated and small growers publicly stigmatized as operating under a lower regulatory standard.

The answer, if we are to find one, has to be a third way. Perhaps we can co-op a food safety organization or find a way to test, say, river water and apply that test to many nearby farms. Of course, Bob Sanderson is saying that if we could simplify the audits and focus on the essential attributes that contribute to food safety, we could make the whole audit process more feasible for small producers.

Without any hard evidence, we would be willing to state that this is at least theoretically possible. There is a tremendous inclination to audit and test for what is easily auditable and testable — whether that is important or not. There is an inclination among all parties to show how thorough they are when it comes to audits. And we suspect that initiatives such as the harmonization one Dr. Gombas wrote about will make things more complex in this regard. If audit one checks for red and audit two checks for blue, the obvious route to harmonization is to check for both red and blue. So the effort to make companies undergo just one harmonized audit almost certainly guarantees a larger audit.

So, if we cut out the superfluous fluff, we should be able to do a more focused audit that would be cheaper and easier and do just as much to further food safety. It is a great idea, but a very difficult one to implement.

How do we get the kind of specific expertise in every crop, every growing region, every season, to know what is crucial to food safety? How do we train auditors to be so specific? How many buyers could evaluate or appreciate such a report?

On an issue of this complexity, we felt the need to bring in an expert, so we asked Dr. Robert Stovicek, President of PrimusLabs.com, for his thoughts on the subject:

Thanks for giving us an opportunity to respond to the writer’s concerns. I’ll limit my response to audits dealing with safe production and handling practices for fresh produce suppliers. I should also add up front that 20,000 ppm free-chlorine exemption granted sprout operations speaks volumes regarding the challenge that this commodity presents.

Around 1999, at least one auditing firm serving the fresh produce industry attempted to distinguish itself by developing what we felt was an excessively detailed audit. This audit failed to gain traction in the marketplace because retail and foodservice firms found it to be overly complex.

At the other extreme, audits can and have been made extremely brief, but the trade off is the auditor is given more leeway and the auditee has less understanding of what is expected. The assumption is that the auditor is a master auditor, an individual who will probe into general areas of concern. As you can imagine, cost and performance variations from auditor to auditor are hard to control under this scenario.

Participants in United’s Harmonization Project have consistently indicated that over 90% of the audit content is identical. It appears that the market has successfully eliminated audits that exist on the extremes.

When Primus first ventured into the auditing business, we assumed that the greatest value to the producers and the buyers was effective communication. Suppliers needed to understand what was expected, and buyers needed to understand who was, or who was not, executing.

From the beginning, it was understood that providing a service to small operations would be a challenge. To address the expectation issue, Primus posted audits, guidelines, self-audit programs, rudimentary tools for developing draft operating documents, etc., on the internet. We also recognized that in addition to the cost of the audit, the cost of travel, meals and lodging was going to be prohibitive for small operations.

To address these concerns, Primus has developed a wide network of qualified and trained auditors across the Americas, thereby cutting down the overhead expense associated with auditing. The overheads of running a certification company with audit development, administration, certification and quality control, are still inherent in the fee structure. In order to further increase the use of our templates and yet remove the fees noted in the last sentence, we created a system where auditees can contract directly with local auditors and utilize the Primus auditing system.

Hiring a local auditor should eliminate travel expenses and other costs. In numerous cases, auditors have for years been contracting directly with suppliers conducting the audits and submitting them into the Primus system. The only fee Primus charges in situations like these is a submission fee of $25 and a transfer fee of $15. The contracted price between the auditor and the auditee is negotiated at prevailing local rates, or at least, it should be.

Small growers or fresh produce operators who are resourceful enough to survive find ways of collaborating with neighbors and/or form cooperatives. They share equipment, expertise and other resources. The neighbor that is a master welder may provide his or her services in exchange for time or materials from his neighbor. The same will happen with the neighbor that has access to the Internet and a skill for research and writing. Small growers that insist on not collaborating with their neighbors are certainly making success more difficult than necessary.

Measuring the success of auditing programs is inherently difficult. We all know when the systems fail, but measuring success is far more complicated. If a crisis does not occur, what part did the audit contribute to the avoidance? Proving a negative is normally an exercise in futility. On a macro level, measuring the effectiveness of the auditing efforts is further frustrated by the increased funding in government organizations assigned the job of detecting foodborne outbreaks and incidences.

The additional staffing and funding, along with improved technologies, make the industry’s success at addressing safe food production and handling a difficult message. This goes to the heart of the debate over whether fresh produce is dealing with an emerging issue or an age-old issue just now revealed by new, less costly technologies.

For those of us that have been in this business long enough to exchange notes on the improved conditions that currently exist at the fields, coolers, packing houses and the processing operations, we harbor no doubts about our success. Fresh produce destined for American consumers has never been grown or handled under more sanitary conditions.

Many an auditor recognizes that his or her observations (e.g., uncovered glass, miss-measured free-chlorine levels, etc.) and the subsequent actions taken by the producer prevent consumer pain and suffering. For many, the understanding that their effort prevented a problem is measure enough of success.

At a different level, we do gain a sense of success when we complete a deposition and explain the level of effort our clients have gone through to assure the safety of their product. There is certainly a degree of satisfaction knowing that the confirmation work Primus provided contributed to minimizing our clients’ or supporters’ potential liability. Recognizing responsibility regarding damages is one thing; it is a completely different thing to pay punitive damages when you know that your efforts as a producer exceed or match your competitors and exceed the average consumers’ expectations. It is satisfying to know that clients who have been through the harrowing experience of a deposition relied in part on materials generated by Primus and will never willingly enter future situations without independently derived confirmation of their efforts.

On a more positive note, it is always gratifying to listen to a client concede that documentation led to more questions from a prospective client and to recognize the modest role Primus played in assisting a client in landing new business. And, of course, it is always gratifying to provide enough information for a diligent and well informed buyer to separate the real performers from the talkers.

Multi-tiered food safety efforts are commonly developed based on the hazard analysis for a given commodity or its typical handling. Commodities that are universally cooked prior to serving provide a kill step that may not require the same level of scrutiny for microbial concerns but they will still experience an equal level of scrutiny for physical and chemical contaminates. The US legal system holds the answer to whether there can be a “size appropriate” safety system. Realists understand that the answer for the private sector to “size appropriate” safety systems is “no”.

Safety is the non-negotiable factor. I cannot imagine a legal department advising any major buyer in the United States to establish a two-tiered or multi-tiered food safety program based on size. Being on the wrong side of that deposition, explaining why weaker safety expectations were formalized and institutionalized at the corporate level for a major American food-service or grocery retailer sounds like an invitation to a massive settlement for punitive damages.

That being said, auditing firms that creatively find ways of lowering the costs of auditing while retaining the credibility of the process will survive. Small growers that collaborate with their neighbors, form cooperatives, choose aggregators that bring more to the table than sales expertise, will find a way to answer the market’s demands. Confirmation of safe growing and handling practices is now part of the market decision-making process and it is not going away.

— Robert Stovicek
President
PrimusLabs.com
Santa Maria, California

Many things that are theoretically possible are, practically, impossible. We thought this line from Dr. Stovicek’s letter particularly pregnant with truth:

“…audits can and have been made extremely brief, but the trade off is the auditor is given more leeway and the auditee has less understanding of what is expected. The assumption is that the auditor is a master auditor, an individual who will probe into general areas of concern. As you can imagine, cost and performance variations from auditor to auditor are hard to control under this scenario.”

In other words, the answer to Bob Sanderson’s question is theoretically yes… if you could have only great master auditors doing audits, people astute enough to catch a specific concern out of a general question and then delve deep. But, practically, the answer to Bob Sanderson’s question is no… because we can’t assume that every auditor is a master.

Dr. Stovicek does offer hope though. We highlighted in an early piece the efforts Primus makes available for small growers and with the use of these methods and a willingness to work cooperatively with neighbors, it may be possible to keep costs within a viable range, especially when one considers the enormous cost of operating outside the food safety system.

It may seem to small growers that getting an exemption is a big win, but in actuality it will stigmatize them as sub-standard operators. The cost of that stigma will be substantial, even if less specified, than the cost of implementing food safety systems.

Many thanks to Bob Sanderson of Jonathan’s Organic for initiating the conversation about food safety audits and to Dr. Robert F. Stovicek and the people at Primuslabs.com for helping us wrestle with this important issue.

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