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Perishable Pundit
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Produce Business

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American Food & Ag Exporter

Cheese Connoisseur



Dissecting The Meaning Of Local, Sustainable And Flavorful

We’ve written many pieces about the “local” phenomenon. So when PMA’s Annual Foodservice Conference focused on this matter, we wrote a piece titled, Everyone Is In Favor of Better Flavor But Is ‘Local’ A Solution Or An Ideology?

That brought a lengthy letter from a noted academic that we published under the title, Tom Reardon of Michigan State University Speaks Out: Wither Local.

Now we are pleased to publish a letter from two distinguished UC Davis faculty members who moderated the original panel discussion at PMA’s Foodservice Conference:

Mr. Prevor must have gotten an “A” in his microeconomics class since he clearly articulated the conventional theories of economics, including that of comparative advantage. Comparative advantage, however, supposes that markets already exist. The topic that this year’s Produce Marketing Association bravely tackled was the emergence of new markets to respond to a burgeoning consumer demand for more local, sustainable and flavorful food.

As the opening speakers admitted, the industry has focused on appearance for many years; now, some industry members are beginning to examine what it would take to produce and distribute food with flavor and “the face of the farmer.” In his column, Mr. Prevor noted that some flavorful crop varieties have been eliminated in favor of those with better appearance, larger size, and/or longer shelf-life/shipping quality. Yet, demand for local, sustainable and flavorful food is growing.

Data from the USDA’s 2007 Census of Agriculture indicate that the dollar value of agricultural products marketed directly by US farmers to consumers increased by 49% between 2002 and 2007 to $1.2 billion. Much of this growth was attributable to sales at farmers markets. Many consumers are willing to trade off perfect appearance and shelf-life, as well as low prices, in order to have more flavorful produce provided by foodservice operations (and well as grocers). Providing these new, local products to consumers will require new (or renewed) infrastructure, new knowledge and training about maintaining food quality from farm to fork, as Tina Fitzgerald remarked. It will also take some investment from the industry, which will require some time to build up.

Some innovators are already on the cutting edge. They exist from coast to coast. Given that the PMA conference was in California, it made sense for us to select speakers from nearby. However, we met others who are working with small and mid-scale family farmers to supply locally grown produce.

The California-based supply chain represented at the PMA panel was one example of an emerging trend. UC Davis Dining Services is taking seriously the University-wide goal of “reducing the environmental impact of food purchases and dining operations while maintaining accessibility and affordability for all students.” It is, therefore, documenting its efforts to meet the University of California’s goal of having its food service programs procure 20% sustainable food products by the year 2020.

A complete definition of what that means at UC Davis is available at: "http://www.universityofcalifornia.edu/sustainability/
documents/policy_sustain_prac.pdf"

Yes, “sustainable” and “local” still need more specificity in many places. Metrics may be useful, as well, as one gentleman in the back of the room suggested (the same one who asked us “why local?”). We agree and would welcome your ideas. As for UC Davis Dining Services and the other firms in their supply chain, the courage to listen to the consumer demand for more sustainable choices is admirable.

We commend the PMA for bringing this topic to the forefront of its conference and talking about how the industry can offer more choices, including “local.” This is, in fact, what offering “local” and “sustainable” products is all about. It is not about narrowing our options like Mr. Prevor seems to believe.

Consumer demand for a wide range of healthful, flavorful produce, including local, and the willingness of the industry to respond, can keep this new market working and growing for everyone. Furthermore, expanding offerings of locally grown produce can support, rather than undermine, the PMA’s Foodservice 2020 Initiative with its goal to double the use of fresh produce in foodservice by 2020.

— Shermain Hardesty
Extension Economist and Lecturer
Department of Agricultural and Resource Economics
University of California, Davis

— Gail Feenstra
Food Systems Coordinator
Sustainable Agriculture Research & Education Program “SAREP”
University of California, Davis

We greatly appreciate that Dr. Hardesty and Dr. Feenstra took time to write. This is an important issue for the industry, and their expertise can doubtless enlighten us all. Yet we confess to being confused when reading the argument laid out in the way it is in this letter.

The first thing we note is that the letter conflates three different things without explanation. We are told that consumers want things that are local, things that are sustainable and things that are flavorful.

Even accepting that this is all true, it is not clear why we should assume these things will always travel together. When it comes to flavor, isn’t it at least as logical to think that the most flavorful items will come from the peak of the season — wherever that might be in the world — at any given time? When it comes to sustainability — whatever definition one wants to use — does it make any sense to think that the most sustainable choice will always be within 50 miles of a particular institution?

Our critique of the UC Davis/Sodexo procurement, with its elaborate five-tier procurement preference was, specifically, that these tiers were not justified by any particular criteria. As we wrote:

Item after item was asserted as if it was somehow self-evident why one would think the way the panelists thought. Linda Adams, for example, laid out a complicated five-tier program of preferences, whereby UC Davis preferred to buy within a radius of 50 miles, then 100 miles, then 250 miles, then California, then USA — without ever pausing to explain by what criteria it had been established that it was a good idea to lay off poor Mexican field workers in Baja so we could truck produce across the continent.

In other words, if UC Davis said it wished to procure only fruit with a high brix content because that corresponds to flavor and, if it turned out that only fruit grown within 50 miles of the UC Davis campus met this flavor standard, then, of course, it would be reasonable for UC Davis to procure this local produce. This is, however, pure conjecture. Nobody presented any evidence that, in fact, locally grown product is more flavorful. Much less that produce grown from 50 to 100 miles away from campus is less flavorful than produce grown under 50 miles from campus.

The same point goes on sustainability. Now there are many definitions, and as UC Davis is entitled to decide its own priorities — minimize carbon output, minimize water usage, ensure proper treatment of farm hands, whatever UC Davis wants to make its priority — that is its right. Intellectually, though, the school has no standing if all it is going to do is assume that product grown between 50 and 100 miles of campus is somehow automatically more sustainable than product grown between 100 miles and 150 miles from campus.

The second point we observe is that the good professors place great emphasis on the fact that sales direct-to-consumer are increasing, especially at Farmer’s Markets, which are increasing quickly in number. This is true and we recently dealt with the point here.

Yet we are not certain that the significance of the increase is what Drs. Hardesty and Feenstra wish to claim. Almost all Farmer’s Markets are political creatures in which the streets or the public parks are made available to farmers, typically for a tiny fraction of the rent that these spaces could bring if auctioned off to the highest bidder. That failure to charge the farmers the market rate for the property represents a public subsidy to Farmer’s Markets. It is not surprising that supermarkets and others that have to pay full rent will lose some market share to a subsidized competitor.

Yet even with such subsidies, this is a very small market. That $1.2 billion our correspondents site includes not just fresh produce but all agricultural products sold direct to consumers, including Christmas trees and eggs, etc. Still, $1.2 billion is a big number, but the very same report tells us that market value of all agricultural products sold in 2007 was over $297 billion!

Even if we limit it to just fruits, vegetables, tree nuts, berries, melons, potatoes and sweet potatoes, we have sales of in excess of $33 billion. There is still another factor. This “market value” listing is a market value to the farmer. So we are comparing FOB prices for conventional produce sales with retail prices for direct-to-consumer sales. What this all tells us is that the best data we have is that this whole matter is more important to professors, media types and activists than it is the mass of consumers.

The third point being made is that since the conference was in California, it made sense to have only Californians on the panel. We can concede on this matter, as there is, of course, nothing wrong with drawing on the expertise of the local community.

We are more concerned, however, with intellectual diversity than geographic diversity, and we think the audience would have gotten more out of the session if there was someone up there to present the other side of the issue. In other words, when one of the panelists talked about how terrible it was to ship our money down to Chile, why not have a representative from Chilean Fresh Fruit, such as Tom Tjerandsen, a “local” resident of Sonoma, on hand to explain why that just might not be the smartest way to look at the issue.

In fact, we probably don’t even have to go that far. We are sure that Drs. Hardesty and Feenstra’s colleague at UC Davis, Roberta Cook, who has worked extensively on international trade issues, would have been willing to stand up and point out why the panelist who believed keeping all the money in town was a great economic theory actually was going to impoverish us all.

The fourth point is that the authors explain that UC Davis Dining wants to be serious about its goal of “reducing the environmental impact of food purchases and dining operations while maintaining accessibility and affordability for all students.” We doubt no one’s sincerity and are certain all involved want to do good.

The question is whether buying local and, specifically, along the five-tier purchasing guidelines enunciated at the conference actually has anything to do with achieving these goals. Once again, if the school wanted to define explicit standards of environmental impact that it wants to use in purchasing, we can discuss the wisdom of those standards, but at least the school is being clear about what it wants to accomplish. These elaborate purchasing metrics only would make some sense if we assume that commercial transportation of produce is uniquely responsible for environmental harm. Yet there is no evidence for such a thing.

There is a lot of evidence that personal preferences are being elevated to purchasing metrics. Although we might defend to the death the right of a private party to purchase based on whim, a public institution such as UC Davis ought to be held to a higher standard. Even the seemingly unobjectionable goal — “reducing the environmental impact of food purchases and dining operations while maintaining accessibility and affordability for all students” — actually raises more questions than it answers. Why, after all, are environmental goals the one thing elevated among all other goals? What if some other school said its goal was to “maximally increase the amount of employment generated by food purchases for the dining operations while maintaining accessibility and affordability for all students”? Is this OK?

To us this is the key. If what Dr. Feenstra and Dr. Hardesty are saying is simply that lots of people want to buy local and so the food chain — producers, distributors, retailers, restaurants, etc. — should make it available to them, that is unobjectionable to us. Different consumers want lots of things — sometimes consumers want mini skirts and sometimes long skirts, sometimes consumers want pet rocks — and providing legal products is capitalism. We are all for it.

We even can understand rooting for your team. So if the reason UC Davis should buy California produce is because they are in California or US growers because they are in the US and they want to support the home team growers with a little jingoism, well we can put that up to the same kind of emotional feelings of affiliation that leads people to care for sports teams.

But we don’t think the advocates for local want to say that this is just an au courant style or an irrational attachment; they want to make serious intellectual claims. Our point was that the specific claims made in the seminar — that we will become richer if we all spend all our money in the town we live in… that the environment will be better if we buy in a five-tier purchase schema such as UC Davis does… that local purchasing always means more flavorful produce… that we should not send money to Chile, etc. — are either not true or unproven. They don’t stand up to intellectual scrutiny.

The intelligent and incisive gentleman in the back of the room at the panel discussion who asked “why local” and who suggested we look at “metrics” was Jorge Hernandez, SVP Food Safety and Quality Assurance for US Foodservice. He’s a former FDA official, former NRA Foundation executive, and a former PMA Foodservice division director. He is a world class resource when it comes to food safety.

We think he was precisely correct. Dr. Hardesty and Dr. Feenstra flatter us by asking for our advice, and the advice would be this: Local and sustainable are both code words for something else. If one wants to simply pander to people who like those words, that is fine. Call a spade a spade. If, however, one wants to procure to achieve specific environmental, social or culinary goals, then define those explicitly — make meeting those goals the prerequisite for a purchase order. Setting the criteria as concentric rings of locality that may or may not achieve any actual goals allows for sloppy thinking that no UC Davis professor would ever allow in the classroom.

We would like to add one more point. Namely that the Pundit’s family functioned as a wholesaler, auction buyer and much else in the produce industry for four generations in the US and many generations more back in Russia. Although we came to be substantial exporters and importers, we were always helping local growers market their crop.

From Hunts Point, this Pundit worked with Amish farmers who brought in their melons from Pennsylvania, New York State apple growers who brought down their fruit from the Hudson Valley, Long Island potato farmers who brought not just potatoes but cauliflower and other vegetables. We had New Jersey peaches, blueberries and tomatoes. Pennsylvania mushrooms. There was also so much innovation. At different times, we marketed US-grown Belgian Endive and baby vegetables grown in a greenhouse in the Bronx. So many more products and producers. The notion that selling local produce is some unheard-of adventure, some uniquely “new market” that somehow repeals the laws of comparative advantage just isn’t true.

United is doing a workshop at its Washington Public Policy Conference on precisely this point, that wholesalers and distributors have been marketing local, long before local was cool. Indeed terminal market wholesalers serve an important place in the success of local growers, because unlike retailers and foodservice operators who buy only what they need and want, terminal market wholesalers help growers sell the varieties, sizes and grades that the growers need to sell. Few things could more help local growers than new markets such as are about to open in Philadelphia and are being planned in New York.

Most local growing that died out did so for good reason. There were other places where the crops could be produced more efficiently. For the most part, the revival of local growing depends on transportation prices. If high oil prices lead to expensive transport costs, then everyone will love local. If it is cheaper to produce somewhere else and bring in the product, that is what is likely to happen in most cases.

We support offering consumers a choice, if consumers want a choice. So we have no objection to local, for the same reason we have no objection to selling organic produce, imported produce, greenhouse-grown produce or branded produce. Consumers who want options should be given them. But we object if an organic producer makes unproven claims that eating organic produce extends the human lifespan, and we object to claims that local is inherently more delicious and more sustainable. Sometimes it is and sometimes it isn’t.

Being a foodie and wanting local may just add to the stock of harmless public fun, but here at the Pundit, and we trust at UC Davis, we will look to the facts before proclaiming an action to have special virtue.

Many thanks to Dr. Shermain Hardestry and Dr. Gail Feenstra, both of UC Davis, for weighing in on such an important issue.




Opportunity Arises As New Report Says Produce Consumption Falls Short Of Recommendations

The Centers for Disease Control and Prevention are out with a report titled, State-Specific Trends in Fruit and Vegetable Consumption Among Adults — United States, 2000-2009.

The media is picking up on it, with pieces such as Most Americans Skip Fruits and Vegetables:

Fruit and vegetable consumption increased significantly in only one state during the past decade, as all 50 states and the District of Columbia continued to fall far short of recommended daily intake, according to a study from the CDC.

Only Idaho had a significant increase in the percentage of residents who consumed at least two servings of fruit and at least three servings of vegetables daily from 2000 to 2009. However, the absolute increases were small — 27.9% to 32.9% for fruits and 24.7% to 27.8% for vegetables.

At the opposite end of the consumption spectrum, 10 states had small but statistically significant decreases in the proportion of residents who consumed the recommended number of servings of fruit and vegetables, investigators reported in the Sept. 10 issue of Morbidity and Mortality Weekly Report.

Overall, only about a third of American adults ate at least two servings of vegetables daily in 2009, and about a fourth consumed at least three servings of vegetables a day.

“The findings in this report indicate that 2009 overall and state-specific estimates of the proportions of U.S. adults consuming fruit two or more times per day or vegetables three or more times per day were far short of the targets set by Healthy People 2010,” Kirsten A. Grimm, MPH, and co-investigators wrote in the discussion of their findings.

“Furthermore, trends in fruit and vegetable consumption during the past decade were relatively flat. The prevalence of fruit and vegetable consumption varied by demographic characteristics and body mass index; nonetheless, neither the fruit nor vegetable consumption target was met by any of the subgroups analyzed.”

The Healthy People 2010 campaign builds on an initiative begun in 1979 by the Office of the Surgeon General to promote preventive care and healthy lifestyle behaviors. Among other objectives, Healthy People 2010 established targets of 75% for the proportion of Americans ages 2 or older who consumed two or more servings of fruit and 50% for consumption of three or more servings of vegetables every day.

To examine states’ progress toward the goals, investigators analyzed data from the Behavioral Risk Factor Surveillance System. The analysis covered trends from 2000 through 2009.

For the fruit goal of two or more servings a day, the data showed that in 2009:

  • 32.5% of Americans met the goal
  • That proportion decreased from 34.4% in 2000
  • Four states had small increases in progress toward the fruit goal
  • 12 states had rates of 35% to 45% for the fruit goal

Oklahoma had the fewest residents who met the goal (18.1%)

The District of Columbia and California had the highest on-target fruit consumption (40.2% and 40.1%, respectively)

For the vegetable-consumption goal of three or more servings a day, in 2009:

  • 26.3% of American met the goal
  • That proportion was virtually unchanged from 26.7% in 2000
  • 11 states had slight increases in progress toward the goal
  • No state had 35% or more of residents who met the goal
  • South Dakota had the fewest residents who met the goal (19.6%)
  • Tennessee had the highest on-target vegetable consumption (33.0%)

The proper produce industry attitude toward such a report reminds us of the old joke about two shoe salespeople sent to visit some tribe never touched by civilization. One salesperson sent back a note. “I’m coming home. There is no market here. Nobody wears shoes.” The other salesperson confronted with the same circumstances sent back a note: “I’m staying. Send samples. Big market opportunity. Nobody has shoes.”

So we can be optimistic and say that the abysmally low consumption numbers represents a big opportunity for the industry… and a big opportunity to improve public health.

This is especially so because in all probability this study overstates consumption. It is based entirely on self-reporting in phone interviews, and the social pressure to eat healthy probably leads people to lie about eating less Cheetos and more produce.

Still we found a bit troubling the big conclusions of the study:

What is already known on this topic?

Fruit and vegetable consumption, although beneficial to health, has historically been lower than national recommendations.

What is added by this report?

Estimates of fruit and vegetable consumption among U.S. adults were far short of Healthy People 2010 targets, and trends in fruit and vegetable consumption over the past decade were relatively flat; no state has met the Healthy People 2010 targets.

What are the implications for public health practice?

To meet national targets for fruit and vegetable consumption, intensified, multisector (e.g., agriculture, business, food industry, and health care) and multisetting (e.g., worksite, school, child care, and community) approaches are necessary to improve access, availability, and affordability of fruits and vegetables.

Although the first two points are unobjectionable and grow out of the research, the third is really pure conjecture. There is nothing in the study to indicate that any of those approaches will result in meeting the national targets for fruit and vegetable consumption.

Other than the fact that those over 65 are closer to the goal than others — so as the population ages we will probably move closer to the goal without doing anything — the only other variable that we can actually change is that people who are college graduates come closer to the goal than people with less education. Of course we have no idea from the study whether that is because college graduates are more intelligent, are better able to absorb information, are more disciplined at following recommendations and requirements or what. So we don’t even know if sending everyone to college would do any good.

The obvious question raised by this report is whether the money going to the Produce for Better Health Foundation is achieving anything. It is difficult to say. Would consumption have been less if PBH hadn’t existed the last decade?

Last year the industry had a substantial debate on the possibility of a national mandatory generic marketing program. In the end, the finding was not so much that more promotion couldn’t grow the industry; the consensus was that ease of entry on many products was such that it would be difficult for the producers to get an adequate return on investment as they often would be developing a market for someone else to seize.

This means that efforts at increasing consumption, which is a public health concern, will have to be funded publicly if they are to be funded at all.

Perhaps an excellent point to make before Congress if you are attending United’s excellent Washington Public Policy Conference.




The Industry Wouldn’t Be The Same Without Interstate Highways

National Public Radio has been running an interesting series, titled I-95 The Road Most Traveled. It is the nation’s longest interstate that runs north and south, connecting Maine to Florida and passing through 15 states, more than any other interstate.

Although the route of much of I-95 was trod by combatants in the revolutionary war, the decision to build what is now officially called The Dwight D. Eisenhower National System of Interstate and Defense Highways has transformed America. It unified the country, sped commerce, made suburbia a commonplace; made modern logistics possible.

It is hard for younger members of the industry to realize this, but before the Interstate system it was imperative for a produce facility of any size to be built on a rail spur. The Department of Transportation has an interesting post that talks about the impact of the Interstate on freight, titled Moving the Goods: As the Interstate Era Begins

In fact, the population distribution itself has been determined in no small part by the routes the highway system traverses. A quick glance at the routes of I-95 and I-75 tells us it is not an accident that the population on the east coast of Florida is heavily populated by ex–residents of Boston, New York, Philadelphia and Baltimore, while the west coast of Florida is heavy to ex-residents of Detroit, Toledo, Dayton, Cincinnati and various Midwestern cities.

Considering the impact of the interstate system, it is not surprising that it would impact the produce industry, yet we still found it interesting that NPR’s series would have a lot of things of interest to the trade.

The opening piece, Starting A Journey On I-95, The Road Most Traveled, includes a neat map that shows how the density of population has grown along the route as the route has grown.

The second piece, At Last, I-95’s Missing Link Hits The Road, tells the story of, how, just now, they are beginning construction on a 7-year plan to plug a 12-mile “missing link” on I-95 near the border of Pennsylvania and New Jersey.

The third piece , It’s The Heart That Keeps I-95’s Economy Pumping, is about the Port of Savannah and how its growth and success would be inconceivable without I-95. Yet the same could actually be said of every port up and down the coast. These ports, of course, are major export and import portals for the trade.

The fourth piece, Paying A Local Price For I-95’s Global Promise, points out that the routes chosen were political decisions and that there were both winners and losers for each choice taken.

The fifth piece, Northernmost Maine? I-95 Won’t Get You There, tells how the potato farmers and lumber producers celebrated in the 1940’s when the Maine legislature approved a highway plan that would go all the way up the state. Their dreams, however, were shattered after the Interstate Act was passed and plans were reshuffled. The route of I-95 took a sharp turn to connect to the Trans-Canada Highway, leaving the northern part of the State without an Interstate.

The sixth piece focuses on next generation rest stops with a piece titled, That’s No Rest Stop, It’s A ‘Travel Plaza.’ The piece highlights the newly reopened 42,000-square-foot Delaware Welcome Center Travel Plaza, conveniently located right near the headquarters of the Produce Marketing Association. The Plaza features seven foodservice outlets, including heavy fresh users such as Baja Fresh. The plaza’s Z Market convenience store also has fresh foods and fresh fruit.

The seventh piece is produce-specific, I-95, A ‘Trap’ For Migrant Fruit Pickers, highlights that as the most efficient route for traveling the east coast, I-95 attracts illegal migrant laborers. Then, not surprisingly, the piece notes that these illegal migrant workers are afraid they may get caught when they travel.

The eighth piece, Eat Your Way Down I-95, And Other Stops To Make, features an interview with the authors of a book titled, Drive I-95: Exit by Exit Info, Maps, History and Trivia, that encourages people to find great food and interesting things off of the Interstate.

This gets to the heart of the dilemma posed by the interstate: It is fast, it ties us together and makes us one people. Yet it is a little boring. When the Pundit was a boy, the family used to drive sometimes down to Florida. The Interstate was not completed and we often had to divert to local roads. It was slow and inconvenient, but it was also interesting with local restaurants and local people.

Now with the same restaurants and hotels at every interchange and the same food chains at those travel plazas, everything is homogenized. It is, in the end, what the people prefer — the knowledge that a Holiday Inn will be clean or a Cracker Barrel will be, well, what it always is, makes travel less risky. Less interesting as well.

The ninth and final piece, Flying Cars? Conveyor Belts? The Future of I-95, focuses on new technology that will, presumably, have both people and produce zipping down the highways safely at 200 miles per hour. They talk of separate freight-only lanes that function as de facto conveyor belts carrying unmanned vehicles. Which strikes us as pretty much the definition of a railroad.

The series has some ancillary pieces, such as Things You Didn’t Know About I-95, and a list of famous road songs titled 95 Songs For Driving On I-95.

Fred “August” Campbell wrote — and Jimmy Buffet performed and popularized — a song officially called the I-95 song. It is more popularly known by a less delicate name we can’t use on this family website. Those interested can find the lyrics here.

The closest we come to a favorite I-95 song would be Simon & Garfunkel’s America. It doesn’t use the words I-95 but it does mention the New Jersey Turnpike, which is I-95 in certain places. We kind of like the way the lyrics use The New Jersey Turnpike as a metaphor for how Americans pursue happiness and come to understand themselves.

The Simon & Garfunkel version is the classic. Though the group, Yes, did a more rock and much longer version.

Yet the most poignant was probably David Bowie’s spare rendition, which opened The Concert for New York City at Madison Square Garden, performed shortly following the attacks on 9/11 to raise money and provide a tribute to those who had died and those who worked in recovery and rescue. Bowie opened the concert, seated center stage, with a microphone and a Suzuki Omnichord:




Jack Pandol’s Son, Jim Pandol,
Reflects On A Life Well Lived

Our pieces, Remembering Jack Pandol, and Touching Tributes To Jack Pandol, brought notes of appreciation:

Thanks for the extra coverage on Jack Pandol… He was a worthy soul to praise.

— Stanton Kaye
Chairman and President
Infratab
Oxnard, California

Also notes from some who were very, very close to Jack:

I thank you for all the nice tributes you have printed about Jack Pandol. I spent 22 years working at Jack’s side and am very proud, as many others are to have been a small footnote in his special life shared by so many.

— Darrel Fulmer
Owner/Partner
Sun Fresh International.
Vlisalia, California

Yet after we ran all the official eulogies and the many kind comments that people sent in, we felt that there was more to tell about this most influential man. So we reached out to Jim Pandol, Jack’s youngest child who worked side by side with Jack for many years. Jim was kind enough to make an extensive contribution to help the industry better understand Jack Pandol and better understand the dynamics of a family business:

INTRO PART I

There are several ‘Pandol’ offices and entities now. Fewer of them are connected to Pandol Brothers today. In the last several years, Pandol Brothers Packing closed, Agricel (box making) closed, Pandol Chile closed, Agro Fro sold, Pandol and Sons closed/liquidated. A lot has changed over the past few years.

Below are a few things I wrote in two parts. First Part, my thoughts and things remembered that were important to me. Second Part, I lay out some thoughts of what he meant to the industry. There are some wartime things I also included. Please forgive some overlap between the two parts.

PART I

DAD AND BOSS

Beyond being my ‘Dad’, Jack Pandol was also my boss for most of my life. This was a unique relationship that I had with my father that my siblings did not have.

Pandol and Sons was a farming company and Pandol Brothers does marketing and sales. My father ran Pandol Brothers while his two brothers, Matt and Steve, ran the farming.

I started working on the farming side when I was 8 years old, working summers and weekends. When I was 19, I started working in marketing for Pandol Brothers, when I was not at school. When I finished university, I went to work at Pandol Brothers full time. In the earlier years, I did not report directly to my father but we would always talk about the business… what we were doing, and why.

My father was an entrepreneur of the greatest kind. He always had ideas of what we could do and how to get them done. I and the rest of the staff would work toward executing his ideas to make them happen and keep those happenings under control. I have said many times that Jack Pandol is one of the greatest visionaries of our industry, but God help us if we leave him to take care of the details. Such is typical of great entrepreneurs. I learned a lot from those visions — the possibilities of what could be done and what we eventually accomplished.

I eventually took the reins of Pandol Brothers in 1994. Now I was answering directly to my father. Being new in the position, I took a conservative approach. He still wanted to move full speed ahead. We bumped heads at times. However, after a few years, I could see that the programs and methods that I was trying were working — and my father saw it too.

During the few years before his health failed in 1999, he was accepting me as an accomplished professional and he was still near the top of his ‘game’. Since I was the youngest of his kids, it was a lot to overcome being the ‘baby’. My greatest professional satisfaction was being accepted as his peer. I was getting compliments from him as to what I had accomplished — the company was doing better than it ever had. I look back at these years that we worked together with the most satisfaction. I had gone from being his ‘baby’ to being his partner.

COOKING

My father loved to cook. He often cooked for large charity events — Boy Scouts, fund raising for athletic teams, etc. These events meant cooking for hundreds of people at times. I helped him on many of these. I learned to cook from him. He never measured out anything — everything was by feel. That is the same way I do it myself still today. I look back on those times and miss working with him. Since so much of his life centered around work and always being on the go, working with him either cooking or in business was our ‘father/son’ time.

Even today when I am cooking with someone, I have my memories of maneuvering around the kitchen helping my father. These thoughts bring back warm feelings of family.

UCLA — HOSPITAL

When my father became very ill in 1999, we almost lost him. He spent about 5 weeks in the hospital and a large part of that in ICU. He was having hallucinations sometimes. Dad was in his late 70’s at this time and being ill etc., he probably looked like he was in his 80’s.

My mother and I came to the hospital to see him one morning. We located the nurse that had been watching him during the night. We asked the nurse how my father had been doing during her shift. She had that look of getting ready to deliver disappointing news. The nurse said that the hallucinations had continued.

He had been talking about having to go to Hong Kong to see someone named Loman. Then needing to go to Chile then to Mexico for the grape harvest etc. My mother and I brightened up and told the nurse that these were not hallucinations. Up until a couple of weeks earlier before becoming ill, he was traveling around the world doing these things that he was talking about! This was a good sign that he was getting better and wanting to get back to work.

INTRO PART II

I have long wanted to commit to writing things that have happened around the Pandol families. You have given me a little push to start.

What follows is my starting to develop a picture of how a large international farming and marketing organization is built up. I want to point out the dynamics of what caused it to develop and what caused it to unravel. I hope that it could be used by others to understand both the problems and successes that can be experienced in a business of this type.

As my grandfather, Steve Pandol, would say, “Learn from your mistakes but don’t go to school all your life.” Or, as I say, “Learn from the mistakes of others; it’s cheaper.”

What I started writing barely touches what I would really like to go into. However, the items below are the beginnings of some ideas being developed:

• His background.

• The relationships that I had with him — son and workmate.

• Issues that brought divisions between the families and lead to the closing of businesses.

• Could Jack Pandol make it in the corporate world today?

Thank you Jim for asking me to write this. I think I keep writing because it is helping through the grieving process.

Part II

Over the last couple weeks, I heard people talking about the ‘tragedy’ of my father’s death. The more I thought about it and the relationship that I had with him, I would respond that I did not think it was a tragedy. His life was one long, great ride that few could hope to duplicate.

GREATEST GENERATION

Jack Pandol (Jacob Vladimir Pandol), born in 1923, was a member of the ‘Greatest Generation’. This is the generation that grew up during the Depression and later was toughened by WW II. Relationships were crucial. The family and the country all had to work together to survive the Depression. When the nation entered the World War in the 40’s, he learned discipline and to fight for survival. Members of his military unit in combat relied on each other constantly for survival.

GROWING UP / MONEY

He was the son of European immigrants. His parents came from what is today, Croatia. They spoke the Croatian language at home. They lived on a farm. Jack started school without speaking any English. Bilingual education did not exist back then. He learned the English language and moved into the culture of the other children.

He was born into a poor, mutually supporting family. They had to work together and support each other to survive.

People would joke with my mother that she married my father because of his money. The reality was that he was poor. Her family was not wealthy, but was better off. She would respond to such comments by explaining that he was poor; pointing out that he had borrowed $5 from her the day before they were married and 50+ years later still had not paid it back. She explained that she married him because he was cute.

He grew up not having money and knowing that happiness did not come from money or fame. This was one of the more important lessons he wanted me to understand. He pushed even harder on the lesson that jealousy was a cancer. He emphasized that if family members were jealous of each other over position, pay, or whatever, it would be very destructive. It was a disease that could grow quickly. He gave me examples of where he had seen it start and aggressively put attention to the problem to end it. I had no idea that such a cancer would play a big role in the unraveling of what he built. I am not sure that he knew either.

BUILDING THE BUSINESS

They worked long hours. They spent only what they had to and saved everything they could. Eventually enough money was saved to buy land in the Delano area in 1941 and start their own farm growing grapes (my grandfather Steve, and his three sons, Jack, Matt, and Steve). The ‘Pandol’ in Pandol and Sons was my grandfather. When my father was not busy working on the family farm, we worked for DiGiorgio Corporation making boxes. There was no down time or vacation. It was always working — earn and save.

My father came home after the war. His service was hard combat in the Philippines up until the surrender of Japan, then occupation forces in Japan until the end of his tour of duty. When he came home, his father told him that between my grandfather and two uncles, they had managed the farm on their own.

Back then, grape marketing was loading railcars and sending them to the auctions. My grandfather felt that there should be a better way for the company to market their grapes. He sent my father on a trip (New York) to figure out how the system worked and they might be able to do something better. He got to know some wholesalers on the terminal markets and worked on dealing with them directly and bypassing the auction. Steve D’Arrigo of D’Arrigo Brothers Company of New York was one of his first direct customers. My father became the salesman for Pandol and Sons while my grandfather and two uncles managed the farming.

Though he was doing some direct business with wholesalers, the auctions were still an important part of the market through the 1950’s. My dad told me that he had news that the market was good in New York so he sent a railcar to New York. By the time the shipment got there, grapes from a lot of other shippers were already there and the market was depressed. Then he heard that the market was good in Chicago. He sent a railcar to Chicago but again, by the time the shipment got there, there was a lot of product from others and again had a depressed market. He started a system that we would call ‘contrarian’ today. He would ship to markets that were poor. Others tended to stay away and by the time his shipment got there, the market had improved. This might seem primitive or simplistic, but that was a ‘go to market’ strategy of the 1950’s.

Pandol Brothers, Inc. was formed in 1958 as a separate marketing company outside of Pandol and Sons. This was done because my father was starting to sell products for growers outside of Pandol and Sons. This was required by PACA rules.

Pandol and Sons grew over the next decades. At one time it had gotten to be around 5,000 acres of crop production. After Steve died in 1981, Matt died in 1998, and my father’s health failed in 1999, Pandol and Sons farming started in serious decline. The decision was made to disassemble it and distribute the assets among the families. About a third to a half stayed within the families and the balance was sold on the open market. Pandol and Sons formally came to an end less than a year ago.

Though my father ran Pandol Brothers (sales/marketing company), he always considered himself a farmer. When we traveled, he would always write ‘farmer’ in the ‘occupation’ space on immigration forms.

It was important for him not to forget where he came from. I should also mention that he kept to his Catholic faith throughout his life. Being a practicing Catholic and a lot of time spent in prayer was something that was instilled into him by his mother, Margaret.

******

An important question comes up — if a man with the personality and work habits of Jack Pandol were in the business today — how would he do?

My father came out of a work ethic and lifestyle that was simple, direct, and to the point. Though many of the people around him loved and respected him, they also referred to him as hard-headed. He knew what he was doing. Though not always right, he was right a lot of the time. He was more right than most of those who did not agree. He did not have time for much debate, let alone a concept that came along late — get clearance from a Board of Directors. Discussion was short. I can still hear his words, MOVE, GO!

In his day, he did what he had to do. He did what was right. He was a leading opponent of the UFW. This made him a lightning rod for the ire of the UFW. It also lead to the Pandol and Sons cold storage being burned down in 1973, which I helped to rebuild. My signature is in the concrete foundation.

This was a dangerous time. There was a lot of destruction of property on farms. I was not even a teenager yet. My brother Jack Jr., and a cousin, Doug McDonald, patrolled the ranches at night each armed with a .38 revolver and a pump shot gun.

My father is hailed as a leader of the industry for speaking up for the fresh grape industry. He is one of the reasons why the UFW was not successful in the long term in the grape industry. As stated above, this prominent role made things dangerous.

Could you imagine 40 years later sending your kids (teenage minors) out armed to protect your property? A board of directors of today would say keep your mouth shut — you’re bringing too much ‘heat’ on us from the union. The corporate lawyer would have said ‘too much liability’.

Could my father have been in trouble/jailed for child endangerment? Would a Board of today fire him? But, remember that my father was a man who grew up during the Great Depression — worked hard, lived frugally, and saved for developing what they had. I remember him talking about himself during the War, only being a few years older than Jack Jr and Doug, when he was sent to kill a lot of people he had no argument with.

Jack Pandol made quick decisions. No bureaucracy — that was something he hated. It was MOVE, GO and we/I went out and got things done. Rick Sunbury (ex-manager of Dole Fresh Fruit in Bakersfield) has told me on more than one occasion that he was jealous of my father’s ability to go on his own decisions. When new opportunities opened, my father could go right to them. Rick had to go through an approval process.

The Pandol Brothers board was formed after his health failed in 1999. He never had to deal with a board. I was one of five members of the PBI board, and I was the only one who had experience in the produce business. Would the board have understood what he wanted to do?? In later years when I was dealing with the board, I would try to explain the changes happening and coming in the industry. New technologies, varieties, changes in customers, and changes in consumers — everything is in flux and all interrelated. I do not think that much was understood — it was easier to look at some numbers on a paper that an accountant put together.

I remember specifically at a board meeting, where we were discussing customers. PBI was VERY big with Wal-Mart. Accounting reports showed that in past years, Wal-Mart had been good business and therefore a recommendation was made to take on more DC’s. I objected to such a position since I could see that Wal-Mart was changing. My position on Wal-Mart and on every other industry trend was to not look at where it has been but look into the future and see where it is going. An expression I used more than once was ‘managing a company on past information is like driving a car down the freeway but looking in the rear view mirror’.

My father had a heart for people. It was something personal between my dad, customers, and growers. Today we see bankers, accountants, and lawyers running things. For those professionals, the growers and customers tend to be names and numbers on paper.

The term of going from ‘family’ management to ‘professional’ management gets used. I remember the example of Richland Sales. The Lewis family owned it and had loyal growers. Cargill was looking at getting into the fresh produce business. Mark Lewis, now with Seald Sweet, was working at Richland at the time. Cargill thought its professional management could improve produce companies. Cargill bought Richland and ended up closing it and walking away from it about three years later.

Jack Pandol was not only my father; he was my boss for over half my life. Even during periods when I was not answering directly to him, we still would talk about the business a lot and specifically what I was doing.

It was not always easy. I was the ‘baby’ of the family. It was hard to get his respect. Darrel Fulmer was my father’s right hand for over 20 years. When Darrel left the company in 1994, I took his vacated position. I was cautious about making many changes from what Darrel had been doing. I felt that I knew the business but I did not have a lot of confidence yet and was scared to make any serious errors. I made some changes over time and after about three years saw that what changes I had made were good. Now having confidence, I made even more changes and pushed harder.

My dad did not like my cautious approach to operating the company in my first years. We bumped heads on some issues more than once. I was cautious and he was in his 70’s still pushing MOVE, GO! However, by the time we arrived into the late 90’s, he could see that profits under my watch had doubled over that previous few years. I now had the confidence to move along faster, which made him happier. The company was doing better than ever. For the couple of years before his health failed in 1999, I had gotten his professional respect. I do feel that he started to think of me not as his ‘baby’ but as his peer. These years were the most satisfying in my career. Unfortunately, this only lasted a couple of years.

In June of 1999, my father became very ill and spent 5 weeks in the hospital and much of it in ICU. Though it was never clear exactly what he had, blood clots and encephalitis were involved. He improved and was eventually released from the hospital. He never recovered fully the energy and mental capabilities that he had before the illness. He was never the same again. I felt that I had lost the professional relationship I had with my father just when we were enjoying it the most.

His health slowly declined over time. Dementia turned into Alzheimer’s Disease. During his last couple years he generally did not know who I/we were. The relationships of working together and of his being my father were both basically gone. I missed him. Now that he has passed on, I miss him more. I say to him, “You go on ahead Boss. We’ll catch up with you later”.

— Jim Pandol
Agricola James Alan Pandol E.I.R.L
Pandol Assoc. Marketing, Inc.
Pandol Family Farms
Quinto Farming
www.pandolmarketing.com

We’ve been fortunate enough to share an experience Jim had. We too had the opportunity to work with an extraordinary man who was also our father. It is decades later, and yet we remember the lessons, some intentional and some implicit, every single day.

There are many lessons in Jim’s tale, and we hope he sends more as time passes. We could speak at length about the points that Jim has made.

For now, it is enough to say that surely Jack would be pleased. We ran two articles with people with nothing but good to say about Jack and, now, we have his longtime associate Darrell Fulmer saying the same and his son, his youngest child, demonstrating how intently he listened.

There is a Sondheim song from Into the Woods called “Children Will Listen” that warns adults that children hear everything — both what you wish to communicate and what you, through your actions, do communicate. Some of the key words:

Careful the things you say
Children will listen
Careful the things you do
Children will see and learn
Children may not obey, but children will listen
Children will look to you for which way to turn

Jack built a great business and was an industry leader. Yet, the values he believed in will live on, not in a vineyard or a business, but through his children. Perhaps a reminder to all of us who work hard as to what ultimately matters.

Many thanks to Jim for sharing so much when the hurt is still raw. And condolences to Jim and the whole Pandol family.

Requiem aeternam dona eis,
Domine, et lux perpetua luceat eis
.

Eternal rest grant unto them, O Lord, and let perpetual light shine upon them.

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