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The Role Of Retailers

Jim Prevor’s Perishable Pundit, September 25, 2006

Retailers are absolutely key to both the short-term and long-term ability of the industry to recover from the spinach/E. coli crisis.

In the short term, the question is to what degree retailers will feel comfortable stocking and displaying spinach? Extensive studies after the Alar event of 1989 showed that a large portion of the sales decline for apples occurred not simply because retailers refused to buy the apples but because retailers elected not to promote apples.

This is a cautionary note to trade leaders. You need buy-in by key retailers or all the messaging and promotion to consumers will have a tough row to hoe.

Of course, it is a bit of a chicken-and-the-egg situation. Retailers will feel more comfortable promoting spinach to the extent they feel that their customers are comfortable with spinach.

So we, as an industry, have a two-way task ahead: raise consumer comfort levels with spinach so that retailers feel comfortable promoting and displaying, while simultaneously getting retailers to display and promote so consumers will become acclimated to the idea that retailers they trust, trust spinach to be safe.

Long-term, it is a responsibility that produce retailers would prefer to pass on to the FDA, but in the end the strength of our food safety systems is at least as dependent on what retailers demand as they are on what the government does for the simple reason that what retailers pay for is what they are going to get.

The other day in a piece we wrote here, I urged PMA to bring in David Theno, Ph.D, to speak at its convention. David is the Sr. Vice President, Quality and Logistics at Jack in the Box. He is conveniently local in Southern California and considered a rock star in the Quality Assurance world, credited with saving Jack in the Box from near certain bankruptcy. Though I linked to it the other day, what he has to say is so relevant, I’ll display his complete article right here:

Industry Must Raise the Bar to Ensure Safer Burgers
Recipe for Safe Meat: Stricter Microbial Standards, Vigilance, Quality Control
by David Theno, Ph.D.

August 1997 — The grill and frying pan were never intended to be worn as protective armor. Yet Americans are being warned that these standard household items are their best, most reliable defenses against the dangerous bacteria that prompted the largest meat recall in U.S. history — E. coli 0157:H7.

Certainly, cooking is one of the final checkpoints on the road to food safety and wholesomeness. But the fact is, much more can be done at the meat procurement and processing stages to ensure the finished hamburger patties we buy are safer when they arrive on the retail market.

Companies that sell meat products — including restaurants, grocery stores and other vendors — have a key role to play in this regard. That’s because these retail outlets have the ability to put pressure on the companies that slaughter and process meat products. And as the places where 70 percent of all hamburgers consumed in the United States each year are sold, quick-service restaurant chains — so-called "fast food" outlets — are in a particularly unique position to use their purchasing power to compel meat suppliers to adhere to more stringent microbiological specifications.

Simply put, if buyers only accept products that meet the highest standards, then only the best meat will get to the consumer. The companies that don’t measure up won’t stay in business. But before the retail food industries can form a united front to help realize our collective goal of a better quality national meat supply, they must confront a few basic misconceptions:

Myth #1: Meat quality doesn’t vary appreciably from one supplier to the next.

The simple fact is, all meat suppliers are not created equal. As is the case in nearly every industry, some manufacturers produce a better quality product than others. Some slaughterhouses have superior systems in place to ensure that animal hides and digestive tracts, where most contamination lurks, are carefully removed so as to avoid all contact with the cuts of meat that will ultimately end up on a consumer’s plate. And some processors test for E. coli 0157:H7 much more frequently than others.

In my position as vice president of quality assurance and product safety for Jack in the Box restaurants, my chief responsibilities include establishing the product specifications our suppliers must meet and jointly monitoring their performance. It’s not enough to take a supplier’s word that his products are in compliance with your standards; you have to do your own product testing as well. This is the only way to develop, as we have, a supplier base that is doing everything technically possible to control bacterial contamination.

Myth #2: Testing for E. coli 0157:H7 is ineffective.

The argument goes something like this: since you can’t test every ounce of product for E. coli, there’s no point in testing at all. This is nonsense. While taking one sample per 100,000 pounds of product does not sufficiently reduce the consumer’s risk of getting a contaminated hamburger patty, serial sampling, which involves taking a sample of hamburger every 15 minutes, enables you to know the microbial status of your meat supply all through the production day. That practice has enabled us to reduce microbial levels 100-fold. Our suppliers are required to conduct a sample on the order of every 2,000-3,000 pounds, which some companies would deem excessive. But once again, companies should want the security and confidence that comes with knowing they are going the extra mile for their customers.

Myth #3: Testing for E. coli 0157:H7 is expensive.

In fact, it costs less than a penny per pound of hamburger for Jack in the Box to maintain its system of testing for E. coli. Even when you sell 65 million pounds of hamburger per year, as we do, the cost is still quite reasonable for such an effective insurance policy, particularly when compared with the devastating human and economic costs of an outbreak of foodborne illness. Working with our suppliers, it took less than one month to set up the programs.

Myth #4: Government will take care of the food-supply problem.

The legislative and regulatory processes, by their very nature, require extensive consultation and research. Comprehensive public policy doesn’t take shape overnight. But outbreaks of foodborne illness do. We in the food-service and retail food industries have an opportunity and an obligation to be the gatekeepers who filter inferior meat products out of the American marketplace. By rising to this challenge, we will ultimately provide Americans with the key ingredients they need to enjoy their beloved hamburgers once again: confidence and peace of mind.

Just change the word hamburger to fruits and vegetables and change the word meat to produce and you see the challenge ahead.

Much of our food safety system is built on “reps and warranties” — promises made by shippers to retailers, by packers to shippers, by growers to packers.

At each stage, the question is: Are we sincerely interested in these representations because we want the safest food supply possible, or are we interested in these reps and warranties as a liability-shifting mechanism so if there is a crisis we can deflect blame and lawsuits to someone else?

What Dr. Theno is telling us is that, as a big buyer, Jack in the Box took the bull by the horns and both made its product safer and rebuilt consumer confidence.

If this crisis had been on Wal-Mart brand spinach, Wal-Mart would be doing exactly what Dr. Theno urges with meat, on spinach. It would be there demanding E. coli checks on every 5,000th bag, either sending its own staff out in the field or demanding third-party audits on food safety protocols. In other words, Wal-Mart would be doing what is necessary to both have safe product and rebuild consumer confidence.

It would be a terrible mistake to wait for political consensus to achieve the same level of food safety and the same consumer comfort level.

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