Whole Foods has moved quickly to reassure the Boulder, Colorado, community of its commitment to the area, an important task as Boulder is both the headquarters for Wild Oats and an important market for Whole Foods and Wild Oats.
The comeuppance? No Wild Oats stores will close — at least for now — but a large Wild Oats flagship store that was just completed will never open. The plan is now to sell or lease that store to a non-food retailer. This store was supposed to be something special:
BIGGER, BETTER, GREENER
Wild Oats will open our new signature Twenty Ninth Street store in our hometown of Boulder this spring. The Twenty Ninth Street store will be a brand new look, feel and design for Wild Oats. Not only is the store’s interior going to be incredibly unique, state-of-the-art and like nothing you’ve seen before — complete with a cooking school, expanded foodservice department and upscale wine and spirits shop called Vino 29 — the store is part of Boulder’s new Twenty Ninth Street development.
Wild Oats is the first food retailer in the nation to pursue third-party LEED® certification through the LEED Retail Pilot program of the US Green Building Council (USGBC). The LEED Green Building Rating System is the national benchmark for the design, construction, and operations of high-performance green buildings and stands for Leadership in Energy and Environmental Design. The Twenty Ninth Street Wild Oats Marketplace is an inviting showcase of high performance, energy efficient systems; healthy indoor air quality; natural daylighting; and non-toxic, environmentally friendly building materials.
Built with the environment and our customers in mind, this store will be a food lover’s dream.
Now we will never know.
An existing Whole Foods store will expand to 73,000 square feet and thus become the largest Whole Foods in Colorado. An existing 34,000-square-foot Wild Oats flagship store will be converted to a Whole Foods Market.
Perhaps more interesting is that Whole Foods seems to be using the acquisition to experiment. In some ways that may have national implications.
On the one hand, there seems to be a move toward localism. Whole Foods is planning to keep open Ideal Market, a 65-year-old store that Wild Oats ran as a kind of hybrid between a superette and a Wild Oats.
Whole Foods promises “significant upgrades” to the Ideal Market format. It is said that the name is sufficiently iconic in Boulder, so Will Paradise, the Regional President for Whole Foods, said he didn’t want to be known as the man who closed the Ideal Market.
Continuing with the local theme, another store will be renamed Alfalfa’s in tribute to its heritage, as it was, originally am Alfalfa’s store. To what degree it will differ from a Wild Oats, other than in name, is unclear. At one point, the founders of Wild Oats, Michael Gilliland and his wife Elizabeth Cook, explained the differences between the concepts to a Denver reporter:
Gilliland explained to Tammy Tierney of Denver Business Journal, “They take the high end; we take the low end. We have lower prices, are more low key, and are not so inclined to gourmet items.” Elizabeth Cook expanded on the difference to Tierney, “We’re a hard-core natural foods store. They concentrate on food service. We concentrate on bulk and mainstream grocery.”
Hmmm … Alfalfa’s was “inclined to gourmet items” and would tend to “concentrate on foodservice” — sounds like the new Whole Foods in London, or any of its larger stores.
If keeping Ideal and converting to Alfalfa’s are local twists, another move clearly has national implications.
A small store, the original 1987 full service Wild Oats store, is going to become a Whole Foods Market Express, which Whole Foods describes this way:
The Baseline Road Wild Oats Markets (18,500 sq. ft.) store will be converted to an entirely new experimental concept for Whole Foods Market entitled “Whole Foods Market Express.” This new convenience-focused concept for the company will offer a value-oriented product mix, grab-and-go offerings, and will be a practical fit for its neighborhood, especially with the high concentration of University of Colorado students nearby. Whole Foods Market views this new “Express” concept as the type of innovation that is especially true to Boulder’s natural and organic products industry roots.
Wild Oats probably has around 35 stores that could instantly roll out this concept if it works, and this might give a clue as to why Whole Foods, which has been concentrating on large foodservice-oriented stores, even wanted Wild Oats.
It also seems to be a concept similar to Tesco’s Fresh & Easy Neighborhood Market concept, just as Wal-Mart’s new small footprint “Urban Convenience” concept also appears to be a contingency plan in case Tesco hits with consumers.
Most supermarket and supercenter retailers are constrained in their growth by the lack of availability of large sites, whether they are 200,000 square foot supercenters or 80,000 square foot large foodservice-oriented supermarkets. So if the small-footprint stores pay, we can expect a boom as America’s food retailers attempt to preempt local competition by rolling out fast.
For Whole Foods, that rollout may well depend on Boulder.
When word of the Metz Fresh recall on spinach broke, the reactions recorded in the press were predictable:
Some growers said Metz Fresh’s ability to catch the bacteria showed new testing regimes implemented by the industry were working.
“I think the test of the industry is how we react to these types of situations,” said grower Joseph Pezzini, who heads the board that administers the new produce safety rules. “No one was harmed by the product and that’s important.”
Public health experts questioned that assessment.
“The industry has taken some important steps, but they have certainly not solved the problem if we’re looking at another major recall a year later,” said Caroline Smith DeWaal, food safety director at the Center for Science in the Public Interest.
Jean Halloran, director of food policy initiatives at the Consumers Union, faulted the produce industry for resisting mandatory government regulations and instead enacting its own leafy green marketing agreement.
Metz Fresh is “certainly to be commended for detecting the problem and issuing the recall, but why wasn’t the system set up to test this before it left the plant?” said Halloran, whose nonprofit organization tests food and provides information about threats to consumers.
The California Department of Public Health and the Food And Drug Administration are investigating the Metz Fresh processing facility in King City.
Salmonella sickens about 40,000 people a year in the U.S. and kills about 600.
We are not sure who Jean Halloran thinks is resisting mandatory regulation, since both United and PMA have endorsed mandatory regulation. However, since it is not here yet, we thought it sensible to analyze the exact role the FDA actually plays in this type of food safety issue.
We asked Pundit Investigator and Special Projects Editor, Mira Slott, to try and learn more. Our source at the FDA asked to be identified simply as “spokesperson” in accordance with FDA protocol:
Q: What is FDA’s role in relation to company recalls, and what is the company’s responsibility?
A: The way this generally works is that food recalls are voluntary. FDA can’t force a company to do a recall except in the case of baby formula. That’s the sole source of nutrition an infant may be receiving so there are increased risks, whereas for everyone else, there’s myriad of foods we may be ingesting during the day.
In the case of Metz Fresh, the individual company had its own testing, which showed a problem and it issued a recall. FDA has been in contact with the company since learning about it and is gathering more information. The company initiated the recall and there have been no illnesses reported so far linked to this product.
Q: Are there instances where the FDA would take a more active role?
A: Typically, where FDA may get involved is say if a company is not willing to do a recall, or maybe they don’t have sufficient means to notify the press. Our main concern is protecting the public health. If a company doesn’t have an effective mechanism to reach out to the press, sometimes the FDA will issue press releases. Or if the problem is widespread, then we may issue press notification to get the word out.
There are plenty of times a recall takes place and the company is on top of it and gets the message out. What’s important is the message gets out and is heard, that the people hear the message and take appropriate action to protect themselves. Metz Fresh took a proactive approach on its own.
The company’s basic responsibility is putting out product that is safe and properly labeled.
Q: When a company gets a presumptive positive on a test and the product is in the consumer stream, what is FDA requiring or recommending of people?
In the case of the Metz Fresh recall, there was a time lag of about four days between when the company discovered the presumptive positive and put product on hold to when they confirmed it as positive and issued the voluntary recall with public notice.
Hypothetically, a consumer who had purchased that product before the recall wouldn’t have known to throw it away and could have eaten it and gotten sick.
A: I can map a few general scenarios but I don’t have a definitive answer. That discussion usually takes place with an FDA expert in the field and with the company.
What people need to look at and ask: What is the pathogen involved? Is it something that will cause a short, mild illness perhaps, or is it something that could potentially kill you? Is the product widely out there in the market, or in warehouses where you are instructing people not to distribute further, while getting a confirmation done? It’s a measured response.
Ultimately, the company bares the responsibility for whether the product is safe and properly labeled. If individuals do become sick because of actions or inactions by the company, it is potentially liable for those decisions. If the problem is something very risky and someone rolls the dice and an outbreak occurs, that is a very serious issue.
These scenarios are all based on tests the company did themselves. Let’s say the company does some tests and they say, ‘We think we can solve the problem and don’t need to alert consumers because there’s not a lot of product out there.’ The FDA conducts its own tests or is looking at epidemiological and inspection evidence. If after our review of the information and that of CDC, we don’t think the company took protective enough steps, we may do press on our own.
I’ve seen this happen before where we were not convinced that the action the company was taking was protective enough of the public health, and we issued an alert. In a case where we don’t have all the information, we may investigate further. Being a regulatory agency, we want to try and have enough information to discern what the appropriate protective action would be.
Q: Could you give an example of what you mean by issuing your own press?
A: We would issue something like FDA is notifying consumers that there have been 27 illnesses of salmonella from ABC brand green beans… these are the symptoms, and if you’ve eaten the product and gotten sick, you should report to your health department and see your doctor, and if you have that product in your house throw it out.
Q: I’ve actually seen that recommendation for consumers on your website. Wouldn’t it be more prudent to have the consumer give the item in question to a public health authority for further testing?
A: What actually works better for testing is if you have someone with the illness that has eaten the product in question and has some of it left over. It is hard to find contamination through end-product sampling because it appears at such a low rate. If you have a half eaten can or bag, that is what should be saved for testing.
The issue with perishable items such as produce is the short shelf life. Depending on the fresh fruit or vegetable product, you may have 5 to 20 days and then it becomes wilted or moldy and is not appetizing anyway. There’s a window of when the illnesses will appear.
We can’t force a recall, but we can notify people. If they hear about the message and are concerned, they probably won’t buy the product. If we definitely know there’s a problem, we can actually seize the product.
A presumptive positive is a heads up there’s a potential problem. You have to look within the context of how these test results come up. If it came from lettuce at a salad bar at the restaurant, should you recall all lettuce from the company? If it’s related to an illness from the employee, it was situational to that restaurant.
A few days ago, I got sick eating at a restaurant. It turns out the establishment’s walk-in refrigerator was set at 60 degrees and the food wasn’t staying cool enough.
Just like FDA, companies have to get a certain amount of information to know what the next logical step is to follow. Anyone involved has to have a certain amount of information. They have to measure what their responsibility is to have a safe product out there based on the information they have.
Q: Can you address the steps Metz Fresh took more specifically?
A: In the case of Metz Fresh, we don’t have enough details to point to a definitive problem with how they responded. Obviously if anyone got very sick because Metz Fresh waited for the confirmation test before doing the recall, it would be very bad for the company and the industry and even worse for the consumers affected. Manufacturers have to weigh this sort of thing everyday. The goal is you decrease the likelihood of someone getting ill the best you can. You can’t be foolproof.
On the good side, Metz Fresh caught something because of its own testing and moved quickly to track and hold product, and initiated a recall. That is better control than when you see no testing and 15 people get sick. Whether they got lucky with testing or they have a great testing program, the point is they were proactive, taking responsibility, and at this point there are no reported illnesses.
Q: A spokesperson for Metz Fresh said when it issued the voluntary recall on Tuesday August 28, it worked with the FDA to get the company’s recall notice out to the public. Why did it take so long on Wednesday to post the notice and send out e-mail distribution to the media?
A: We didn’t do any of our own press on this. We posted the firm’s own press release. We have model press releases to help companies in getting the necessary information out there. The other issue which arises is that the people who update the website here are on the East Coast, and Metz Fresh is on the West Coast. In many instances we’re not receiving information to post until mid-afternoon or late in the day. That may account for some of the lag there.
There’s a place on the FDA website for recalls, market withdrawals and safety alerts, where media can subscribe to receive FDA recall information. But basically you have to proactively look for the company press release.
If the FDA writes our own press release, the trade and consumer media will likely get a copy. If we generate the release, it’s up on the top of the FDA page. We try and get the information out there as widely as possible through media coverage. The media can also dial into press conferences.
On some days, three or four recalls are going out and we’re not doing press on them.
The company has a huge responsibility in this. You’ve heard FDA say this a zillion times now; food safety is from farm to fork. Any one of those spots can be a problem. Everyone along the way has to do their part and they all have a responsibility.
If it turns out the fields have contaminated product, you have to find a way to correct it. If in the manufacturing plant it may not be a problem with the product you’re bringing in, but you’re cross contaminating it. Or the restaurant is not handling the product properly. And then, even if everything up to that point is done right, the consumer can mess up.
We take from this interview that the consumer advocates have a point.
1) The FDA is very reactive. When asked if it was OK with the FDA if a company had a presumptive positive and didn’t notify the public, thus, potentially, giving individuals time to consume dangerous product, the FDA spokesperson said this:
Ultimately, the company bares the responsibility for whether the product is safe and properly labeled. If individuals do become sick because of actions or inactions by the company, it is potentially liable for those decisions. If the problem is something very risky and someone rolls the dice and an outbreak occurs, that is a very serious issue.
Doubtless it is very serious. If people die or get seriously ill from eating your product, it is serious under all circumstances. If you knew that there was reason for heightened caution — a presumptive positive — and didn’t tell anyone, it is even more serious.
But this is all after someone gets sick or dies. The FDA was saying that it was not going to take proactive action to protect the health of the American people. We doubt that position would win in an up-or-down vote.
2) The FDA is measured in its response and not focused on a consumer’s “right to know”:
What people need to look at and ask: What is the pathogen involved? Is it something that will cause a short, mild illness perhaps or is it something that could potentially kill you? Is the product widely out there in the market, or in warehouses where you are instructing people not to distribute further, while getting a confirmation done? It’s a measured response.
We suspect that even if there is only one bag of spinach in one household in America, most Americans would say that there is an obligation to publicize a known reason for extra caution. Spinach is cheap; life is dear. Having even one family contracting an illness that we could have prevented by warning about a presumptive positive test is surely unacceptable to the industry and the American people. This is an area where, most decidedly, consumers would assert their “right to know.’
3) The FDA isn’t really prepared to take on the responsibility of disseminating information:
We didn’t do any of our own press on this. We posted the firm’s own press release. We have model press releases to help companies in getting the necessary information out there. The other issue which arises is that the people who update the website here are on the East Coast, and Metz Fresh is on the West Coast. In many instances we’re not receiving information to post until mid-afternoon or late in the day. That may account for some of the lag there.
Since, obviously, we can learn about the need for a recall any hour of the day or night on weekdays, on weekends, or on holidays, is it actually possible that the FDA is not prepared to get the word out 24/7/365?
The notion that the system is set up so that the time zone matters is horrifying. It reminds us of when we learned that the Pulsenet bulletin board wasn’t staffed on weekends. It is inexcusable.
The bottom line is that now that United and PMA have endorsed mandatory regulation, we better do something about it because the FDA’s comments make it clear that the agency is not prepared to preemptively protect the health of Americans.
The inclination in the trade is that when one of our members is under attack, we circle the wagons. But if we do that, we will one day all be tarred with the same brush.
Everybody keeps repeating that nobody got sick. First, we don’t know that. Just because no illness has been traced back to this recall does not mean nobody got sick. Second, since some product was released to the public, a failure to notify the public as soon as the presumptive positive was discovered created a window in which people could get sick or die.
That is not the way Nunes handled its presumptive positive. It is not the way Church Brothers/True Leaf handled its presumptive positive, and it should not be an acceptable standard of conduct in the produce community.
That the FDA isn’t prepared to proactively protect the health of the American people gives each of us, individually, and all of us, collectively, a greater responsibility to act.
Our piece, Costco Recalls Mexican Grown, U.S. Packed Baby Carrots From Canadian Stores, was written as the Shigella outbreak was just being reported. In the confusion, we incorrectly stated that the carrots were grown in Mexico and packed in the U.S.
In fact, they were both grown and packed in Mexico.
To understand what happened and to see if there are broader industry lessons to be learned, we asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:
Q: I’m so glad to finally be able to speak with you. I imagine you’ve been working overtime managing the initial and expanded recall and fielding hundreds of inquiries, as exemplified by you now taking the time to personally conduct this interview on a Saturday (Editor’s note, the first interview was conducted on Saturday, Aug. 25, 2007 and the last question was answered on August 30, 2007).
BOB: It is our pleasure. We appreciate you taking the time to dig into the story and give accurate information; to give us the opportunity to tell our side and not sensationalize the news.
What’s happened to date is that every local news channel, T.V. and radio station in southern California is basically telling a scare story, setting the stage for questions.
A news channel T.V. crew came to our company during this challenging time, demanding an interview and entrance to our facilities. They started opening bags of carrots and stepping on them, trying to incite a reaction, the whole time video taping. We wanted to put our focus on food safety, our customers, managing the recall, talking with the people on our hot line, and getting to the source of the problem.
Q: How and why did this recall happen?
BOB: I’d like to take you back to the beginning, Friday, August 17. In mid-afternoon we received a call from the Canadian Food Inspection Agency [CFIA]. They reported to us they believed that the carrots we sold in that marketplace had been linked to stomach illness. It got to their attention through the health authorities. Four people reported getting sick. All tested positive for Shigella, and all four had completely recovered. There were no hospitalizations, and the one thing they all had in common was they all purchased baby carrots distributed by our company at Costco.
It may be of interest that the people in Canada who reported some kind of incident said they did not microwave the product. (There are instructions on the package for microwaving, but consumers can also eat the product raw). In addition, there have been no reported illnesses in the U.S. and no additional illnesses in Canada.
JOHN: We then asked CFIA if they had any samples of products they had tested, and they said they had received for sure one sample from one consumer who was sick. They sent four samples to a lab, and three came back negative. One came back presumptive positive. The one that came back presumptive positive was sent for DNA testing.
We asked CFIA when that information would be available from the PRC testing. They told us the results of lab tests would probably be available mid-week or possibly earlier. Then we had more in-depth discussions on protocol, methodology, etc., and learned that the recall was based on a statistical profile.
BOB: The recall issued on that Friday did not come from our company. CFIA contacted Costco and urged them to perform a voluntary recall. We were informed during that time frame of all that was going down. We asked CFIA to please stay in touch with us. We wanted to be right there in the loop so we could properly address anything that might come up.
Our focus then shifted to how we identify the source of that contamination. What steps could be taken immediately. We wanted to understand as much as we could about where it came from, how and why the problem occurred and to guarantee it never happens again.
We’ve had a management crisis team in place for a good number of years made up of six members. There were only three of us there when this came to our attention. The other three were out of town or away on vacation. All the burden of dealing with this entire issue fell on basically three people.
Q: Did all product in question come from Mexico?
JOHN: Yes. Everything was grown and packed in Mexico. This facility [in Los Angeles] just played as box-in, box-out.
Q: Were you able to narrow the potential sources of the problem based on your procurement operations there?
BOB: We knew exactly where it came from, where it was grown, processed and packed. We’ve had for quite a number of years a full recall food safety program. We do mock recalls at least three times a year, and have a very solid traceback procedure in place.
We knew exactly what ranch, packaging facility, the date and time of harvest, the date it was shipped, when it arrived, a description of product temperatures, plus retention samples. We take retention samples at each step along the supply chain for every farm and every packing house, as well as in the distribution system.
Q: What do you do with these retention samples?
JOHN: A retention sample is a snapshot or reflection of all product produced on a particular day, a random sample of that lot indicative of the quality of that lot. We do random physical and analytical chemical testing based on statistics as a matter of course. We are doing precursor testing, and if the sample doesn’t pass one area, it goes on to another test, etc.
Q: What kinds of testing? At what point do you screen for pathogens such as E. coli, Salmonella and Shigella?
JOHN: We do TPC (Total Plate Count), coliform, E. coli… and we have the capability to test for Lysteria, Salmonella and further testing externally at a third-party lab. We also can do internal testing on E. coli H: 0157.
Q: When do you determine that’s necessary?
JOHN: We do that if there is a potential problem in our initial testing, for example, if TPC comes out of compliance. We do an initial screen, and if the product doesn’t pass, we test further. We’ve been doing this for many years.
Q: Have you considered the 12-hour rapid test as Costco is requiring on spinach and leafy greens and as Natural Selection Food is doing? Have you looked into a test-and-hold plan?
JOHN: We made a lot of changes after the California Leafy Greens Agreement, and even before that changed the scope of our food safety plan significantly. Currently we are using a 24-hour test, but we are definitely looking into more rapid test methods and considering a test-and-hold program.
BOB: We have an in-house, fully-staffed lab. We have eight technologists with a quality assurance manager, a sanitation manager and other food safety experts. John [Shaughnessy] is Vice President and Acting Board Member for the California Environmental Health Association (CEHA). He has a credential from the National Environmental Health Association (NEHA) and Certified Food Safety Professional (CFSP). An article in the Orange County Register a few months ago spoke of our strong food safety program. (Editor’s Note: See the article here.)
Q: In this case, your retention sample testing didn’t help you to catch the Shigella and pre-empt the problem. Why?
BOB: You must remember, from a statistical standpoint, this testing is like finding a needle in a haystack. We began on Friday preparing information. We contacted the ranch and asked them to begin a thorough investigation in the packing house. We immediately took the retention samples we had on the west coast and in our Miami distribution facility, and the retention samples in the packing house in Mexico.
We did testing on these similar lots and delivery dates in questions. This happened on the weekend. We checked on Monday but didn’t have results yet.
We continued to have discussions with CFIA. These were all verbal. There was no written communication. Also, it is extremely important to tell you we had contact with FDA. John can walk you through that conversation.
JOHN: I heard from Larry Howell at the FDA on Tuesday late afternoon. He informed me that the CFIA contacted them and said they had a positive result on their PCR test for Shigella. That was concurrent with the information being relayed by the California Department of Health.
BOB: FDA was asking us what our recourse would be at this time. We said we’ve been gathering all the information and people in our organization to determine the course of action we were going to take. We caucused and a decision was made to do a recall system-wide.
All reported illnesses came from two store warehouses in Calgary we were shipping. There were 14,652 units of 1.5 pound bags, in 50 to 60 stores. Costco, because of its membership card program, was able to isolate and inform those who purchased product very promptly.
On a positive note the people at Costco are the best. They were all over it. They were able to guarantee the safety of the food supply, and because of the systems in place, and the quality of the organization, they were very supportive and helpful to us in determining the scope of this.
We stayed in contact with all our customers. When we decided to issue the recall nationwide, that’s when we extended communication.
Another thing; up until now, I hadn’t had much dealing with the FDA, but I don’t know how they could have done a better job.
Q: Why and how did you decide to extend the recall? How do you trace forward and determine the recall’s limitations… Every customer who bought that item produced when? How did you divide the time on the production line? Just on one shift, one day, two days, a week… by when the plant was sanitized…?
JOHN: Based upon information CFIA generated, and by Costco, analyzing product code dates and roughly the times when consumers ingested product, we were able to conduct an investigation to determine the scope of the recall. There are many issues involved in the analysis. Sanitation in our plants is continually going on. For example, every time we run a certain commodity, our plant is washed down, or if an item runs for a specific period of time, the production line is re-sanitized.
BOB: Back to Tuesday and our decision to do that expanded recall… We contacted every customer that bought that item and gave specific information on the product in question. They knew before the press release came out that it was coming.
JOHN: We gave the press release to the AP as suggested by FDA. There was some miscommunication in the initial expanded recall release published Wednesday morning, and the FDA worked very closely with us to fix the errors, involving corrections in some of the regions affected.
BOB: When we made the decision to do the recall, we saw nothing in writing to confirm the problem. Everything was verbal with CFIA and FDA, which have a close relationship. It was based on the evidence at hand. Through FDA and CFIA, we followed the lines of the recall; what products would have been produced during that time through that facility. In our statement to our customers, we shared details.
BOB: We have over 12,000 people involved in our business endeavor between South America, Mexico and U.S. farming, harvesting, packing, and distribution. Our suspicion is that this Shigella problem is going to be traced back to one person. It’s incumbent upon us to find that source.
This is a responsibility we take very seriously with all our operations in constantly sharing information, managing and updating quality assurance and food safety programs. Every time we see an incident in our industry, our heart goes out to those who are hurt.
Food safety is the cornerstone of our business. I’ve been at Los Angeles Salad Company since 1992, when it was owned by a public company. I bought the business in 1999. I’ve always preached that the most important thing is the safety of our product and people. That’s our philosophy whenever we are packing or shipping products. We are committed to have quality and safety practices in place to prevent food safety problems.
We have to be vigilant to protect the food supply. It’s not just about being in compliance. That’s the smallest part. Food safety programs must continue to evolve. There has to be a heartfelt commitment.
I have every confidence in the food safety throughout most of Mexico, and in particular the companies we deal with. Right now we have no reports of any illnesses with the expanded voluntary recalls. We’ve received 300 to 400 calls from concerned consumers, but none of these people have been sick. Fortunately, no one has been seriously injured.
This has been an intense and trying week. We couldn’t be more proud of our food safety team, and the countless others who came through in this crunch time.
Q: What have you learned? Are you implementing any additional food safety steps and, if so, what are they?
BOB: We are increasing environmental testing in all our plants, the frequency and intensity. On the processing and packing side, we are putting people on full alert and stepping up food safety measures. Our presence in all our various packing houses has increased. We’re routinely in those, more than once a week, but we’re going to have even more inspections.
Q: Do you have third-party certification such as ISO 9000 or EurepGAP? Do you work with third-party auditors to verify food safety programs?
JOHN: I’m not a big fan of some of these certifications. A certification on the wall doesn’t mean a lot if it is not that thorough. Our customers do not require us to have certificates. We do high level food safety audits, based on rigorous HACCP standards and curriculum on critical control points, prerequisite programs that support the core food safety principles of the produce industry.
BOB: Los Angeles Salad Company schedules three third-party food safety and quality systems audits per year. These audits are conducted by NSF Cook & Thurber and Primus Labs. The most recent audit was conducted on July 30, 2007, by NSF Cook & Thurber. The audit resulted in a score of 96 percent.
Baja Mexico also schedules third-party food safety and quality systems audits. These audits are conducted by Primus Labs on an annual basis. The most recent audit was conducted on August 22 and August 23, 2007 by Primus Labs. The audit resulted in a score of 92 percent.
In addition, there are numerous second-party audits conducted by our customers at our facility in City of Industry and in Baja Mexico.
Q: If the Los Angeles facility requires three audits a year, what is it about the Mexico facility that makes it only require one?
JOHN: I know that is definitely going to change. We will be increasing the frequency of our required audits in Mexico. They also have vendor audits.
Q: Why are you sourcing carrots from Mexico at this time of year?
BOB: These carrots are a special variety that we have been getting from our suppliers for a number of years. They are grown in a great spot, which allows for the carrots to grow year round.
Q: What were the results of your further testing, following the one CFIA sample that came back positive? Have there been any more positives?
JOHN: All our testing came back negative. There were no positives. Our investigation, however, is still ongoing.
Q: Has Los Angeles Salad Company been involved in other food safety recalls previously?
BOB: No. This is the first and only time. Our company has been in operation continuously since the late 1930’s, and there has never been a single incident or recall.
We appreciate that both Bob and John took the time to explain what happened to the industry. Going through a recall is always a trauma, and the temptation is always there to hunker down and hope it all goes away.
Yet the industry can only do better if we learn from what happened, which means we have to understand what happened. So Bob and John do a service by being willing to speak out.
It is all fine to run drills and simulations and have plans; if they are played out in real time few of us would perform perfectly. So analysis should not be construed as criticism. Let’s see what in this story holds some lessons for the broader industry:
The industry is filled with crisis management plans. Yet, in this case the plan was designed with the expectation that six executives would take part, yet three were out of town or on vacation in what normally would be a slow summer week — so that left three to handle the crisis. There are a couple lessons here: First, staffing is part of a crisis management plan. Procedures for travel planning and vacation schedules need to be part of every plan. Second, the crisis management plan needs a fallback position. What if it was a real crisis, such as an earthquake and people couldn’t be located, who is the understudy? What happens? Answering these questions in calm times is what putting a crisis management plan together is all about.
Costco’s membership card program allows it to quickly notify consumers of a food safety problem. How can any retailer offer its customers less? It could be a matter of life and death. At least offering a traceability card (membership, loyalty, etc.) and explaining to consumers its purpose should probably be mandatory.
Although it is reassuring that the company’s executives have “…every confidence in the food safety throughout most of Mexico, and in particular the companies we deal with…” we wonder if buyers are giving imported food the careful consideration that consumers will probably expect after the China revelations. This product was recalled from Costco, several Kroger divisions and Publix. Plus Trader Joe’s. Did all of these organizations make the decision that the Mexican product was equal or better when it came to food safety than the product put out by Bolthouse or Grimmway? We don’t know, but it strikes us as the exact question that is worth asking because it gets to whether food safety is top-of-mind with procurement executives.
The strongest argument for certifications such as British Retail Consortium, EurepGAP, ISO 9000 and whatnot is that they express publicly to what standard one is being inspected. Simply saying that our plant has a third-party auditor is not going to build public and regulatory confidence because it is not a public declaration of the standards to which one holds one’s organization.
As if to prove the danger of not having a publicly proclaimed standard, we are told that while the Los Angeles facility has three third-party audits each year, the Mexican facility has only one. The good news is that Bob Hana says that this will change immediately. The bad news is that the industry has equally arbitrary auditing standards all over the country and around the world. Once again, we wonder what questions the buyers were asking? Although some do their own second-party audits, one would think they should set up to look for an anomaly such as this.
Los Angeles Salad is a serious company, with a serious food safety program. Nothing we mention may have had anything to do with the problem. Occasional Salmonella positives may just be a fact of life under the most rigorous food safety programs.
Yet, we can always do better. Although the promise to increase testing and other efforts are valued, we see a few key points:
Uniform standards on US and foreign plants. If they audit three times a year here, it should be three times a year on foreign operations.
Publicly recognized standards to build confidence. Those carrot growers should be required to get EurepGAP or other recognized certifications, and the plants should get BRC or other recognized certifications. One can always exceed these standards, but consumer and regulatory confidence depends on a recognized standard.
Retailers need loyalty cards or other similar cards to help recall effectively on food.
Crisis management plans need to include staffing plans.
These guys had a problem and it is easy to be critical. Our impression, though, is that very few companies are in a position to say it couldn’t happen to me. So we need to focus on learning, not blaming.
Many thanks to Bob Hana, John Shaughnessy and the Los Angeles Salad Company for helping us all to better understand the challenges of food safety.
We’ve had numerous discussions of the problems the earthquake has caused in Peru. We started out with Earthquake In Peru Prompts Appeal For Help To Farm Workers There, which was followed by Pundit’s Mailbag — Tents Needed In Peru.
We also ran a piece entitled Sun-World Launches Peru Earthquake Relief Program. Most recently, we published Pundit’s Mailbag — Report On Peru’s Earthquake Damage.
These pieces have discussed the humanitarian crisis in Peru, the status of the produce industry post-earthquake and discussed what, if anything, is the appropriate industry response to such a crisis.
While our focus has been on Peru, other places hit by natural disasters have also been suffering, including countries that produce substantial quantities of Caribbean bananas that mostly went to Europe. Of course, we live in a world market, and if Europeans can’t get bananas from their traditional supply sources, it has implications for pricing and for American banana vendors.
We’ve typically discussed the Caribbean banana trade in reference to Fairtrade — the movement to pay a “social premium” to growers in one place. Sainsbury’s in the UK is 100% Fairtrade on bananas, and many of those come from St. Lucia and Dominica, both hard hit by Hurricane Dean.
Our discussion on Fairtrade has included articles, such as Sainsbury’s Commits To Fairtrade But Is It Fair For Everybody, Fairtrade’s Unfairness, and a piece built around a letter from Richard Yudin of Fyffes Tropical Produce that addressed an article we wrote about European preferences for importing bananas from certain countries, including the Caribbean.
Our original piece was entitled, Banana Import Policies In Europe Defy Logic And Ultimately Hurt Consumers, and we argued against such preferences, while Mr.Yudin’s letter, published in Pundit’s Mailbag — Fairtrade And Harsh Capitalism pointed out that a lack of banana revenue had unhappy consequences for these islands: “ It is sad to hear that international donor bodies are now discussing poverty-alleviation schemes for these island states which once were very pleasant places to live in, thanks to their steady flow of banana income.”
Now, in the aftermath of Hurricane Dean, there is homelessness and human suffering, a banana industry producing a fraction of what it once did, with an even more uncertain future.
We asked Pundit Investigator and Special Projects Editor, Mira Slott, to find out more:
Q: We are so sorry to hear about your hardship. Could you provide our readers with an update on the impact of Hurricane Dean?
A: As far as bananas are concerned, for all practical purposes, destruction is complete. We’ve stopped all exports. 100 percent of our crop was destroyed. We are the dominant banana producers in Jamaica and account for 85 percent of banana exports, and both estates are blown down. Speaking for small farmers, they’ve experienced a similar outcome. There are odd pockets still standing, but by and large, the Jamaican banana industry is devastated.
These pictures are from JP Farms,
the agricultural arm for Jamaica Producers Group.
Q: What happens now? Will you be able to rebuild?
A: This is my fourth hurricane in three years; Ivan in 2004, Dennis and Emily in 2005 and now Dean in 2007. This whole thing has been pretty grim. It takes about seven months for bananas to come back. We have to assess what we are doing for recovery, starting again and how much we cut back.
The European Union provides preference to ACP countries of which Jamaica is one. Whether that preference is reduced is under discussion. There’s a case now being heard at the WTO, and that should determine what direction we go. Some resolution should happen in four or five weeks. We’ll have to wait to make decisions, and that seems like a long time to wait. We’ve lost $25 million (U.S.) in export revenues and 3,000 jobs island-wide.
Q: How does Jamaica’s loss compare to other parts of the Caribbean?
A: For bananas, this is the first time I recall Martinique, Guadeloupe, St. Lucia and Dominica all suffered from the same hurricane. Our loss is similar to that of Guadeloupe and Martinique, and from the information I have, St. Lucia and Dominica lost about 50 percent of their banana crop.
Q: In the U.S. and around the world, many produce industry executives have expressed sadness for your plight, and want to know what they could do to help.
A: The governments coordinate the relief program for the nations, but private aid is essential. Here is a list of contacts for people who are interested in contributing:
United Way of Jamaica
122 Tower Street, Kingston
Tel: 1888-225-5895, 922-9424
The Jamaica Red Cross
Central Village, Spanish Town
Tel 984-7860 — 2
Q: Have you assessed the damage from Hurricane Dean on the Windward Islands?
A: The damage was pretty substantial. In Dominica, damage was in excess of 90 percent. In St. Lucia, 50 to 60 percent. St.Vincent experienced less than 10 percent damage. The hurricane passed north of St. Lucia. It passed south of the fringe island of Martinique, and St. Lucia is to the south of Martinique, so damage in St. Lucia was more serious in the north and central part. Dominica, north of Martinique, was more seriously affected.
Banana farm destruction in the Windward Islands
Q: So in certain areas, the crop is OK? How will this impact shipments going forward?
A: We will continue to ship bananas from St. Lucia and St. Vincent as part of the Windwards. Every week we will be shipping from these areas, so we will be able to meet some of our supply commitment to the UK from the Windward Islands.
The marketing company in the UK that is associated with the Windwards will source the rest of the bananas from elsewhere. They will get some supply from the Dominican Republic and from wherever ever else they can.
Q: Could you provide perspective on the financial losses?
A: For the first six months of this year, the Windwards exported 32,000 tons of bananas, bringing in a little over $50 million EC. Our production is down by about 50 percent.
Q: What aid are you receiving for the rehabilitation effort?
A: Just today, the marketing company that purchases and markets Windward bananas in the UK approved a $4 million EC package for the Windward Islands. That pile of money will involve the supply of critical inputs that the farmers will need to rebuild. This will not be enough, but what I expect is the company will be monitoring the progress of rehabilitation and establish additional funding at some time in the future.
That assistance will be provided in concert with whatever programs are approved by the Windward Islands. The governments are all working now on putting together their own contribution packages. National Fairtrade organizations in each of the islands have indicated their willingness to provide assistance as well.
Q: For those interested in how they can contribute, who should they contact?
A: As communications manager for the WIBDECO, they can contact me for further information:
We’ve run several photos of the banana plantations post-hurricane Dean. Click here to see photos of the human impact in Jamaica.
We extend condolences to those who have suffered loss and extend the trade’s wishes for a speedy recovery. Ivan in 2004, Dennis and Emily in 2005 and now Dean in 2007 — we hope the powers that be decide you deserve a break for a few years.
Our piece, New Sunkist Jarred Fruit Line May Lift Sales Of all Produce Items, brought this thoughtful response:
It would be my bet that Sunkist has a winner with the introduction of its jarred fruit line. My reaction is based on first-hand front line experience in the introduction of fresh-cut fruit to the retail trade during my days at Del Monte Fresh Produce. Just 10 years ago, the fresh-cut fruit category was being touted as the next big thing and that it would rival the growth seen in the packaged salad and baby carrot business. However, there were many challenges to this effort, most of which still remain, that stymied the growth.
First, consumers have a much higher “taste expectation” when it comes to fruit versus lettuce, broccoli and carrots. We expect fruit to always taste good in its natural form, but we are much more forgiving with vegetables. That is why God invented salad dressing.
While it is very possible to sometimes deliver true fresh-cut fruit to retailers that tastes good, it is virtually impossible to do it all the time. The discipline required in a typical fresh-cut fruit operation regarding raw product procurement and the maintenance of strict absolute production standards is frequently trumped by the pressure to operate at a profit. What a novel concept.
Second the shrink on fresh-cut fruit typically runs between 20 and 40 percent. The retail price points required, given these levels of shrink, makes the value proposition difficult to swallow, which has placed further limitations on growth. The one exception to this seems to be the higher priced combination party trays that seem to be doing well. They are typically purchased as gifts as an alternative to that $15 bottle of wine that we take to a dinner party.
Now back to the Sunkist product. I remember when Del Monte Foods (not Del Monte Fresh) introduced its Orchard Select line of fruit packed in the nostalgic mason jars. It was a brilliant marketing move on their part to position the product in the produce department even though it was essentially canned fruit in a jar. They then followed up with their single serving version which was simply the same product in smaller pieces, which is now canned fruit in a cup.
The retail community embraced this new “perceived” fresh-cut fruit entry with shelf life measured in months rather than days, and it became a big hit in the product department. And because it was refrigerated and merchandised in the produce department, Mrs. Consumer embraced it as well as it delivered a consistent taste profile with a long shelf life. The retail shrink, instead of 20 to 40 percent, suddenly dropped to single digits.
Now we have the Sunkist product, which appears to be very similar to the Del Monte offering. Sunkist, which in my opinion is one of the big five marquis consumer brands in the produce department which also includes Dole, Del Monte, Chiquita and Green Giant. Will it sell? I think so. One thing my 30 plus years in the fruit business has taught me. “The best selling fruit is the fruit that is on the shelf”.
— Woody Johnson
Vice President Sales & Marketing
Green Giant Fresh by Growers Express
We appreciate Woody’s letter and find his points about the fresh-cut fruit business astute. We are also in agreement that the refrigerated jarred fruit category can easily sustain a second player and that Sunkist has good prospects in this space. As Woody shrewdly notes, the consumer can’t buy the product if it is not in the store and Sunkist, with its brand and contacts, seems likely to be able to get the product on the shelf.
A big question mark, though, is how Del Monte Foods will react. Coming from the grocery end of the business, they are used to things such as slotting fees, and if they see Sunkist as a real competitor, we bet they will try to tie up the space by buying it up and, thus, freeze Sunkist out of the game. Whether Sunkist and its licensee, Old World Industries, are prepared to compete on that level, we may well find out.
Sunkist also hasn’t publicly defined exactly how it will sell the product. Will it have salespeople specializing on this product, or is this just one more thing for a citrus salesperson to do? It will probably do better if it has a dedicated sales force.
What is also interesting about Woody’s comments is the issue it raises regarding the meaning of “fresh” to consumers. We thought it funny that in the link we ran in the article in which we pointed out that Sunkist’s last licensee was a start-up advertising on the internet to find co-packers, the company also advertised that it was looking to secure "canned fruits" to use as raw material for the re-packed product. These fruits included Mandarins, peaches, pears, apricots, pineapple, tropical fruit and mixed fruit.
This is clear evidence of what Woody points out… that an old-style glass canning jar and a “MUST BE REFRIGERATED” label can transform a canned product selling on the grocery shelves for pennies into a “fresh” product that sells for big bucks.
One wonders when the global warming folks are going to start protesting against the needless expenditure of carbon used in refrigerating products that do not require refrigeration!
One of the interesting things about produce brands is that because, traditionally, stores carried only one brand of each produce item, all the long established major brands are not upscale. When Wal-Mart started its produce effort and Bruce Peterson decided to use produce brands to gain equity in produce — an area where Wal-Mart had no equity — he had no problems getting branded produce. It never occurred to, say, Chiquita or Ocean Spray, to decline to be sold in that venue.
In deli, however, Boar’s Head wouldn’t sell to Wal-Mart — just as loads of brands of clothing won’t sell to them.
At retail we can find the Del Monte logo on both jarred, refrigerated product and in canned product — the brand may provide some level of comfort and safety to consumers, but the value added seems to be a glass jar and the need for refrigeration.
We wish Sunkist nothing but success. The real problem is that with the citrus used in the jars likely to come from China and other countries, the ownership of Sunkist is likely to be unwilling to invest a lot of money to battle Del Monte Foods if it decides to fight, which it probably will.
One possible outcome: as Woody mentions, Del Monte Foods started out with its Orchard Select line. It then acquired Unimark’s Sunfresh brand in 2000. The wild card is Old World Industries. If it doesn’t have the stomach for the fight, perhaps, in time, Del Monte Foods will also acquire the Sunkist license in this product line.
We appreciate Woody’s letter and look forward to watching Sunkist roll out. We wish them well.
Our piece, Traceability Falls Short At Distributor Level, pointed out that many products lose their unique identity — and thus their traceability — when they get slotted at foodservice distributors or at retail warehouses.
This makes recalls far more difficult and expensive. Two wholesaler/distributors wrote to remind us that this failure is not one of technical capability:
As is often the case when those in the industry write about the supply chain, the Wholesale Distributor is ignored.
Those of us in the industry whose roots are in Terminal Markets as commission merchants have had the ability to track product well before anyone had ever thought about traceability for food safety reasons. The PACA requires commission merchants to track all sales by lot numbers in order to segregate one grower’s product from another’s. This insures that each grower receives the correct proceeds from the sales of their product.
The Produce Pro software that we use for lot-based sales enables us to track every package in seconds from Supplier to Customer for any lot of product that we have sold since we went on line with our system in the early 1990’s.
We have in fact done recalls on product, notifying the customers involved within hours if not minutes of the time we were made aware of the recall. Customers and suppliers of those of us in the industry who still do some commission sales can be confident of our ability to track both where our product comes from and where it goes. We’ve been doing it for years.
— Alan L. Siger
President & CEO
Consumers Produce Co., Inc. of Pittsburgh
Alan possesses one of the sharpest minds in the produce industry, and we are fortunate to have him as a frequent Pundit correspondent including, almost a year ago, when Alan kicked off our spinach crisis coverage with a piece we entitled Spinach Recall Reveals Serious Industry Problems.
Today it is clear that the Pundit deserves three smacks with a wet noodle for failing to mention that commission merchants have done this for years. Forget about computers… the Pundit’s great-grandfather managed to, if not exactly have full traceability, keep each farmers produce separate and each shipment separate so he could pay what was owed.
In fact we heard from many wholesalers that their computer systems, such as Edible Software of Houston, Texas, were also doing this on a regular basis.
Specifically, we used foodservice distributors as an example, noting that they often bought private label product from their foodservice-buying groups and that this product was often produced by more than one grower/shipper or processor. That led to another letter:
You are correct in that most distributors only track by code; however we (Liberty Fruit Co., Inc.) have taken the additional steps necessary to track all product lines by code and LOT.
We can within minutes trace all products to where they actually were shipped. I believe the industry as a whole needs to move in this direction if we are truly going to ensure food safety.
Thank you for all that you do for the industry.
— Scott Danner
Chief Operating Officer
Liberty Fruit Co., Inc.
Kansas City, Missouri
We appreciate Scott’s kind words and note that Liberty Fruit Co. is a distributor member of Produce Alliance, so he fits the profile of what we were writing about perfectly.
Alan Siger pointed out that commission merchants have long had not merely the incentive but the requirement of being able to track sales by lot number. Liberty is taking a leadership position on this issue in tracking by lot solely for food safety and food security reasons.
As Scott explains: “… the industry as a whole needs to move in this direction if we are truly going to ensure food safety.”
The bottom line here: If Consumers Produce can do it and Liberty Fruit Co. can do it, there is no reason every distributor in American shouldn’t be doing it. It would reduce the impact of recalls and speed up the recall process. We have the technology; all we require it the will.
We last heard from Jon Schwalls when he sent us a quote from Theodore Roosevelt in the midst of the immigration debate. We called the piece Pundit’s Mailbag — English and Immigration.
Now it was our piece Costco Recalls Mexican Grown, U.S. Packed Baby Carrots From Canadian Stores that brings another correspondence:
As Food Safety continues to be a hot topic and Food Security continues to receive its fair share of attention, many questions arise. As an industry, we either grope in the dark for answers or choose to ignore the questions.
The recent Costco recall adds to these mounting concerns. Concerns that raise questions of where the responsibility and liability lie such as who will absorb the costs, and how far reaching will the effects be in the event of failure?
We want an economical food supply that is safe from microbial concern and malicious tampering. In the late 1990s the Food Safety push began. Food safety programs have since been put in place in a large percentage of operations.
The primary segment of this chain for many commodities is the packing house, which is often grower owned. As the spot light becomes brighter on Food Security, frenzy ensues from pressure to fence in packing houses and shipping points in rural areas. These facilities are often not listed on a local map, much less an atlas. Generally speaking, in the end the man at the bottom of the totem pole (the grower) absorbs the cost of the initiative.
However, an entire industry will likely absorb the cost of any mishap. There is a daunting question within these companies, ‘What is the real value of this investment and what exactly it is buying?’ There is certainly value in moral and social responsibility, value in customer confidence, and value in industry goodwill.
These all become faint in the wake of a fiasco such as the fairly recent disaster faced by the leafy fresh cut industry. All of the business acumen in the world will do you little good in the tidal wave of the FDA announcing on Fox News that a triple-washed, cello-packed, bagged commodity, which you also happen to grow, is the suspected source of a bacterial outbreak.
From consumer response to the latest outbreaks, it becomes evident that during that kind of publicity, labels and packaging have little to no value in the eyes of the public. Panic sets in and it will take time to regain consumer trust. No one will be able to prevent the mass exodus of the consumer even if the source is confirmed as an isolated incident.
Microbial testing conducted personally by Dr. House and the Surgeon General, and frequently aired commercials of Andrew von Eschenbach and the entire CDC leadership board eating the product will likely not convince the consumer that the product is safe. Food Safety certifications from every major certifier in the US and Canada have little to do with the trial in the court of public opinion and fear.
No mother wants to chance feeding her child something that may be tainted. At that point it is just a matter of hours until the offending commodity is sent to the gallows. If history repeats itself, other items resembling the questionable commodity will be ousted as well.
An entire sector of the industry is left with a better chance of finding Jimmy Hoffa than a customer.
While we struggle with these issues we must remember that the last segment of the supply chain, in many ways, remains the most exposed. If that exposure leads to a compromise, whether unintentional or malicious, it will be followed by crisis.
There are many vulnerabilities where no real viable, economical solution has been found. These vulnerabilities can lead to scenarios resulting in a collapse of the industry. A company can invest until it has the greatest Food Safety program in the nation. However, the company will strain to see the value when a customer with an existing E.coli infection shops for fresh fruits or vegetables at a retailer who has been supplied by that company.
A grower may be able to fence in a shipping point, run thorough background checks on personnel, and control access from every angle. Where will that grower find value in his diligence when it is his name attached to a product that is tampered with by someone like the Tylenol Terrorist?
We can all be assured that it will not be the type of situation that will just affect a particular label or where a solution like the Tylenol recall of 82 will fix the problem. The whole industry would be in jeopardy of toppling down and all of the king’s horses and all of his men would have quite a task to put it back together again.
— Jon Schwalls
Southern Valley Fruit & Vegetables
We appreciate Jon’ s letter which articulates the way many growers feel about these issues. It is very easy for easy for others to direct growers and packers on how they should spend their money putting up a fence or engaging in some other food safety or food security effort.
Yet we do not think the industry finds itself with a need to “grope in the dark” yes, we have imperfect knowledge — but the direction is clear, including the need to pursue more knowledge. That is what has given birth to new industry initiatives such as Fresh Express establishing an independent scientific advisory panel and PMA shepherding the establishment of the Center for Produce Safety.
A willingness to “ignore the questions” is a big problem with too many commodity groups still thinking themselves exempt from possible problems. Carrots, implicated in the Costco recall our correspondent refers to, are not included in the FDA’s list of highest concern items — so it is a reminder to us all that food safety problems can happen to anyone and we should not be so secure in our positions. Still, even here, we have spoken to people from the California strawberry industry, the watermelon industry, the almond industry, the Florida tomato industry, the California tomato industry plus state authorities such as the New Jersey Department of Agriculture and found a great deal of pro-active work being done on food safety.
The real question of interest in this letter is Jon’s assertion that, “Generally speaking, in the end the man at the bottom of the totem pole (the grower) absorbs the cost of the initiative.”
It certainly must feel that way to a grower as he is, generally speaking, the one who writes the check. Yet, in the end, all costs of production, including the cost of food safety systems, must be paid by the consumer.
In fact the more expensive and difficult to implement are the required food safety standards, the more profitable grower and shipper operations — that can meet the standards — are likely to be.
Why? It is just supply and demand. Let the standard be anyone who can grow cucumbers can sell them to a chain and the competition is vast, let the standard be that only EurepGAP certified product will be purchased and the competition just got much reduced.
The risk for the grower or packer is NOT higher standards, it is INSINCERE standards. If buyers promulgate a standard and stick to it — growers that meet the standard will probably do better than they would have without the standard. If, however, retailers set up a rule that they will only buy EurepGAP certified product processed in a facility with British Retail Consortium accreditation — but then buy other product because it is cheaper — the investment by the grower or packer would have been made in vain or, at least, without, earning an economic return.
This is why growers, packers and processors either need buyers to agree to constrain their supply chain to those who meet standards — thus explaining the effort to get retailers to only buy from those who signed the California Leafy Greens — or to have agreements or marketing orders or laws that require all growers, shippers or processors to meet a standard — thus explaining the strong push to get Fresh Express to join the California Marketing Agreement.
Although we agree with Jon that food safety efforts produce “…value in moral and social responsibility, value in customer confidence, and value in industry goodwill…” the specific answer to Jon’s question: ‘What is the real value of this investment and what exactly it is buying?’ — is that the grower, shipper or processor is buying either the “right to stay in business” if the investment is in response to regulatory demands or the investment is buying “access to certain customers” if the investment is necessary to secure access to certain retail chains, foodservice operators or wholesalers.
Jon’s assessment that “From consumer response to the latest outbreaks, it becomes evident that during that kind of publicity, labels and packaging have little to no value in the eyes of the public. Panic sets in and it will take time to regain consumer trust. No one will be able to prevent the mass exodus of the consumer even if the source is confirmed as an isolated incident.” — does not strike us as the whole story.
People didn’t stop buying dog food during the recent crisis. We have had many food safety outbreaks on produce since the spinach crisis and we didn’t see panic in the streets. The spinach crisis was unique precisely because our public regulators presented it to the public as a crisis of unknown origin and advised consumers not to consume the commodity. Since few retailers or restaurants are going to sell product that the FDA is recommending people not consume it constituted a de facto recall of all spinach in the United States.
As Bruce Peterson pointed out here it is not necessary for the whole industry to collapse or even for a whole commodity to collapse because of a food safety crisis. The key is improved traceability solutions so that regulators and consumers will feel comfortable that any known problem is contained. Spinach from New Jersey did not collapse last fall because there was a problem in a processing plant in California — it collapsed because the FDA told consumers not to eat spinach.
In pieces such as here, here and here in which Gary Fleming of the Produce Marketing Association helped guide the industry to a better understanding of traceability, or in this piece in which Jane Proctor of the Canadian Produce Marketing Association also helped advance industry knowledge on this topic, or here in which Bruce Peterson’s associate, Michael McCartney, helped guide us further — we have extensively pointed out the importance of this issue.
Nothing the industry will do is likely to prevent all future outbreaks of food borne illness. But while acting to minimize outbreaks, we can do many things to improve traceability and thus limit the impact of any issues that may arise.
Jon explains his expectation: “No mother wants to take the chance feeding her child something that may be tainted. At that point it is just a matter of hours until the offending commodity is sent to the gallows.” Yet this is not the way these things have played out.
First the use of the term “gallows” is overstating things. Even spinach — at least before the Metz Fresh recall — was back to around 90% of its pre-crisis sales. And, typically, Moms pay attention to public health advisories. All during the Taco Bell crisis people kept going to Taco Bell — why? Simple. The FDA did not issue an advisory that people ought not to eat at any Taco Bell because there was an unknown systemic problem in the Taco Bell system.
So the key is really for the industry to A) Maintain regulatory confidence so that their inclination is to think that any problem is limited in scope, and B) maintain effective traceability systems so that we really can limit the scope of any problem.
Food security is related but its a different issue than food safety. We think Jon is a tad too pessimistic when he writes: “A grower may be able to fence in a shipping point, run thorough background checks on personnel, and control access from every angle. Where will that grower find value in his diligence when it is his name attached to a product that is tampered with by someone like the Tylenol Terrorist?”
First, all those fences and background checks are designed to reduce the likelihood of a food security problem. The fact that they don‘t provide 100% protection isn’t a good reason not to do them.
Second, we think regulators and the public are perfectly capable of distinguishing a malicious act of terrorism from a product flaw. If we heard a company’s product had been attacked by terrorists, our inclination would be to support that company because we wouldn’t want to let the terrorist win and drive out of business a good company. We doubt we would be alone in that opinion.
Apocalyptic scenarios are easy to draw up. Yet although a food safety or food security problem is never a good thing, we are fortunate to live in a country in which the public health authorities carry a lot of weight. Our job is to keep them on our side. We do that by operating a fundamentally sound food safety system, by keeping them apprised of all our efforts and by maintaining effective traceability protocols.
If we do all this, the odds are that, though we will have food safety issues — and indeed individual companies may be severely damaged — we will not have a food safety crisis that would put the industry at risk of “toppling down.”
We appreciate Jon Schwalls for speaking out on an issue of such important industry concern.