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A New Hypothesis On Local: To Boost Sales, Sell It Through Supermarkets … Cornell’s Miguel Gomez Previews His Upcoming Talk At The New York Produce Show And Conference

We’ve written several pieces pointing out that the industry has a new event coming up this November:

New Event Planned For 2010: Eastern Produce Council And PRODUCE BUSINESS Announce The New York Produce Show And Conference

New York Metro’s Economy Is 12th Largest In The World

Retail “Thought Leaders” Panel Announced For The New York Produce Show And Conference

Famed Food Writer Joan Nathan To Speak At New York Produce Show And Conference

At the heart of the event is an attempt to uncover and encourage great thinking and serious work that can allow both the attendees to profit from attending the show and, simultaneously, help the broader industry to advance and prosper.

Part of that effort has involved an outreach to local centers of learning where we have sought out brilliant young scholars who are working hard to better understand issues of concern to the trade.

Ed McLaughlin, the Director of the Food Industry Management Program at Cornell University is well known in the industry. A frequent presenter at industry functions, he has often either written for or been quoted in Pundit sister publications PRODUCE BUSINESS and DELI BUSINESS.

Professor McLaughlin also works to encourage the success of the next generation of economists. Within the category of up-and-comers it is no secret that among the brightest lights is Miguel I. Gomez. Professor Gomez will be coming to Manhattan to discuss a research project on local supply chains that he and Professor McLaughlin have collaborated on. We asked Mira Slott, Pundit Investigator and Special Projects Editor, to see if she could give Pundit readers a sneak preview as to what attendees would learn at The New York Produce Show and Conference:

Miguel I. Gomez
Assistant Professor
Charles H. Dyson School of
Applied Economics and Management

Cornell University
Ithaca, New York

Q: What spurred this research: Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains?

A: USDA’s motivation for commissioning the study about two years ago was the increasing interest from consumers and the industry in local foods, and the perceived attributes of buying local produce. Very little is known about this supply chain, and people had preconceived notions about local without the data to back it up.

To shed light, the strategy was to compare the supermarket supply chain with respect to local. Our project director, Robert King, an agriculture economist from the University of Minnesota, studied these issues on food systems. He put together a team from five universities in five different states: Shermain Hardesty from University of California Davis focused on leafy greens with her team in Sacramento, California. Rob King in St. Paul, Minnesota, targeted the beef chain. Michael Hand, agricultural economist with USDA’s Economic Research service, did milk in Washington D.C. Ed McLaughlin, and I are working together on apples in the Syracuse, New York metropolitan area, Larry Lev assessed blueberries in Portland, Oregon.

Each development team conducted three case studies focusing on three distinct supply chains. In our case, we looked at apples in the supermarket channel, apples in farmers’ markets and apples in school districts.

Q: Did you enter the study with a hypothesis?

A: Ed and I collaborated on this research but we do a lot of work in the produce industry and wanted to be very pragmatic in our approach.

Q: What do you mean by pragmatic?

A: To be detached. When people speak about local, they have strong opinions but they are not based on scientific information. In public discussions, many times people profess that local should be the way, but should we support this?

Q: Could you highlight the significant findings? What does the science say about buying local? Is it the better way to go? Were you able to flush out the facts and misinformation and differentiate subjective reasons?

A: Should local matter? The best answer to this question, which may not be satisfying for those who want a clear-cut, black-and-white approach, is that it depends. Results are multifarious. The food system is very complex and it is difficult to come out with simple conclusions.

Getting local produce to the supermarket system depends on so many factors, and the importance or weight of each factor. For example, when you think about the share of revenues that is kept in the farm and left for the grower, in some of the cases the retail value was higher than in the local supply chain. That was the outcome of our specific research related to the apple supply chains we studied in Syracuse, New York. In terms of food miles, we found in certain instances the mainstream supermarket supply chain did much better in the amount of fuel consumption for each pound delivered compared to local.

Q: How did you determine that? What variables did you include?

A: We took into account all the transportation that takes place from the moment the product is harvested to the moment the product is sold to the consumer. We didn’t include the consumer’s transportation in the analysis.

For leafy greens in California, the supermarket chain did 0.35 gallons per hundred pounds leafy greens shipped. The farmers market did 0.63 gallons per hundred pounds leafy greens shipped.

Q: Why?

A: The main reason is that the supermarket supply chain takes advantage of economies of scale, does large volumes and is very efficient on a volume basis. Again, this is not the case for all the supply chains we analyzed. For example, in Syracuse New York, we found the same metric higher for the supermarket chain than the farmers’ market chain. That is why you can’t make sweeping generalizations and need to examine case by case.

If you look at charts comparing allocation of retail values or food miles and fuel use, you see it’s very different for both location and commodities.

People in general think there is a price premium for local produce. But it’s not true in all cases. For instance, we found that for apples in Syracuse the lowest price was in the farmer’s market, much cheaper than in the supermarkets.

Q: Wouldn’t that also vary depending on the supermarket chain, its size, operations and infrastructure, among other things…

A: Yes, it would be different for different supermarkets without a doubt, but I can tell you the supermarkets used in the study were either regional or national chains. We are not talking about independents.

For blueberries, the retail value or price per pound was $3.20 at the Portland supermarket versus $3.30 for the farmers market. In Syracuse, the price per pound of a bag of apples was $1 per pound at the supermarket, and 50 cents a pound at the farmers market. New York produces apples, an important commodity, so all the infrastructure is in place.

Q: Even within this limited study, you’ve discovered contradictions to commonly held ideas about local. Could you elaborate on some of these?

A: The main point is there are many groups interested in local foods that have a very strong voice in the debate, and the public believes the myths are true. Our research findings question these generalizations. One myth is that local foods are more expensive.

Q: Why is it important if that myth is left unchallenged?

A: It matters in two ways. Growers, especially newer ones, will think if they enter this market they’ll get premium prices, so it sends the wrong signal. And if consumers think this, it distorts the reality of the market.

Advocates of local farms often ignore the fact that local is not available all the time. For consumers, it is important to have a wide assortment of fruits and vegetables all year round, and the mainstream supermarkets offer this variety to consumers. We went every week to look at farmers’ markets and supermarkets to see if local foods were available, and they were not always available. You and I know this because we work in the industry.

Q: Did consumers participate in your study?

A: We chose not to involve consumers. Another contention regarding local foods is they are fresher and tastier, but our study didn’t ask consumers their opinions. Many surveys and focus groups are problematic because the actual behavior of the consumer is not observed.

Q: Tell us other myths your study debunked or raised into question…

A: The myth that getting rid of the middleman is good for growers and consumers. The argument there is if you take middlemen out of the system, the share of the grower in retail value is higher. We found this is not true always.

This is related to another point. For me, one of the bigger opportunities for increasing consumption of local food is by selling it through the supermarket channel supply chain. However, there are big limitations; volume is too low, and it’s too expensive for supermarkets to handle. I’m convinced the middleman can provide service by aggregating production and being paid a fair profit for that.

Even though the farmer may receive a smaller share percent wise, he or she is guaranteed to have market access.

One of the things we learned is when you have farmers delivering directly to the store, it can become a headache for the store manager. Receiving many little deliveries is much harder to orchestrate and becomes a serious management challenge. I think the localness of the supermarket is really part of the marketing strategy, but it doesn’t come free. It’s difficult for the store to deal with these small volumes of product.

Q: Isn’t food safety another issue?

A: Yes, but we didn’t look into food safety questions in detail. There is a notion that local foods contribute more to the local economy and social fabric of the community. For example, with Syracuse, the farmers’ market community-building is great.

Q: But that doesn’t necessarily preclude the fact that supermarket chains may be helping local communities in other ways…

A: That’s an important point. The supermarket company buys from two very large New York State growers, but these growers also buy from small local growers, providing access to the smaller farmers. And it has a big impact to the economy in our state.

Secondly, our collaborator chain does a lot of work on technology transfer to all the farmers to meet quality requirements, sends produce people to the farms to develop relationships, and becomes involved in a lot of community-building along the supply chain. The chain supports community initiatives, and provides jobs to many people living in the area. It participates in national associations. It tries to create a stronger apple sector in the U.S., contributing to trade organizations to increase supply and consumption. You cannot be so black and white.

Q: In your comparisons, you haven’t included the school supply chain. Is that because the channel operates in a completely different way?

A: Yes. For the purpose of our study, it’s easier to compare the supermarket chain to the farmers market. They work basically the same in all the five cities, while school districts can operate very differently.

We looked at apples in the Syracuse school district, and determined that it makes a lot of sense to encourage local apple distribution, because the apples are produced very close to the school district. New York State has the infrastructure to bring apples through the middleman, who buys other products as well. We have apple farmers in the supply chain that own retail operations and also sell product in other chains. Selling in the school district is another distribution channel for them. It is one more avenue for business diversification, but volume in small.

Q: With your expertise and knowledge going into this study, did anything surprise you? Was there any result that caught you off guard?

A: I was expecting local foods were a bigger sector given all the noise around them, but learned locally grown amounts to a very small portion of fruits and vegetables we consume. The other surprise for me is the challenges.

My hypothesis, which I didn’t have beforehand, is the following: the only way to significantly increase local foods is to go through the supermarket channel. It depends on the ability of local food producers to integrate into the supermarket chain. That was a surprise for me because I thought there would be alternative ways to grow this huge demand.

Local gets all the hype, but at the end of the day from the consumer perspective, convenience is Number One, and year-round availability, fair prices and consistent quality remain paramount.

Q: Based on your research revelations, what advice would you give to industry and government policy leaders?

A: It is difficult to say what impact this study will have regarding USDA policy. What I’m afraid will happen is that if there is not enough information, policy makers will take as a given that local is better and will subsidize local at the expense of other more important subsidies. This totally ignores all the contributions and benefits of the very efficient mainstream supply chains of fruits and vegetables.

The other message I’d like to emphasize is that the only way to grow the supply of local foods is by going through supermarket chains for both volume and consistent quality.

I think policies that encourage the link between local farmers and supermarkets can make sense. There is a risk of glamorizing local. Local produce is not more sustainable necessarily and not more expensive necessarily.

Q: Isn’t the definition of local hard to pin down as well?

A: That is one thing we struggled with. It is very difficult to define what local is. For our study, it had to be within the state. Of course, if you’re a regional chain in California, you could practically call everything in the produce department local! Defining local can be very complex and leads to misuse. In some people’s minds, it’s the same city or county or food shed, while for others it’s the same country!

Q: While our readership is primarily focused on the produce industry, how did the case studies in the beef and milk supply chains compare?

A: Results were very similar whether produce, beef or milk. I’m not against local foods. I just want to make sure the general statements we start adopting as a society make sense. Otherwise, the myths may wrongly influence industry and public policy decisions.

Of course, many of the issues Professor Gomez touches upon are similar to those we have mentioned in our series on Sodexo/UC Davis procurement policies, which grew out of a workshop at the PMA Foodservice Conference. You can see the work we’ve been doing on this matter in these pieces:

Everyone Is In Favor of Better Flavor But Is ‘Local’ A Solution Or An Ideology?

Tom Reardon of Michigan State University Speaks Out: Wither Local.

Dissecting The Meaning Of Local, Sustainable And Flavorful

Are Critics Of Local Programs Devoid Of Taste Buds?

Pundit Mailbag — Where Does ‘Affordability’ Fit Into UC Davis’ Local Decision

Pundit Mailbag — Taste Trumps Over ‘Local’

Just as important as the findings that Professor Gomez and Professor McLaughlin have unearthed through their research is the very fact that they are researching at all.

Our primary critique of the UC Davis procurement plan was that it was based on assertions without evidence:

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.

The Cornell research doesn’t reach into such value judgments, but it is intriguing that the entirely quantifiable stuff doesn’t reliably support other assertions on things such as fuel use per pound of product.

The fact that prices on local were not reliably higher and that grower share of the pie was not necessarily higher raises all kinds of issues. In our mind, we hear the echo of the speaker from the back of the room at the foodservice conference:

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.

In other words, one of the reasons advocates for local endorse the practice is that they claim that growers earn higher returns by selling locally and that, as a result, a preference for local procurement helps preserve open spaces. If this is not true, if grower returns of selling local are not higher, it becomes much less persuasive why we should promote this kind of procurement.

Obviously there is much more research to be done. We have barely scratched the surface of understanding these matters.

An interesting possibility for the next study would be to do it on a product category that exists because of the local movement.

USA Today once picked up on our concerns about local. Although obviously a California orange is local to a store near the orchard, it strikes us as meaningless and maybe even deceptive for a retailer to sell the same old stuff it was always selling and declare it is now “local” because it created a categorization. Or, as we put it in this piece, it seems that no advocate of local will feel better about Wal-Mart simply because it opens more stores in California.

Comparing New York State apples to those from Washington probably is a best possible case for local. New York apples were a substantial industry before local became au currant. That means A) the apples were competitive in quality and price, and B) there was a marketing and distribution network that made sense.

Our sense is that advocates for local are not primarily interested in getting the citizens of New York to switch a percentage or two of their apple consumption from Washington to New York. They want to see moribund production areas blossom. So states such as Florida, Texas and New York that once grew lots of iceberg lettuce should revive those crops.

In fact, what they really want goes beyond that. They would love everything to be grown in diverse farms avoiding any monocultures.

Some of this is what Wal-Mart was talking about in its Heritage Agriculture program, which we talked about here, here and here and which focused on things such as Arkansas peaches.

It is not wise for anyone to prejudge, and we await some further research. But the very fact that these crops died out implies they were less efficient or less desirable, so we have to suspect that they would show up worse in any study. Only time … and research… will tell.

Right now, however, we are immensely proud to have Professor Miguel Gomez speak at The New York Produce Show and Conference. We hope our readers recognize that it took no small measure of courage for Professor Gomez to put his name to this research.

The “assistant” in his title does not mean he is actually anyone’s assistant. It means he has not yet been granted tenure, the means by which job security is assured for academics. We trust Cornell, at least in the Charles H. Dyson School of Applied Economics and Management, is still open to free inquiry and to the assessment of academics based on the quality of their work.

Yet, in talking to many academics, one gets the nagging feeling that in some departments, Professor Gomez would be blackballed for daring to dissent from the reigning orthodoxy regarding local.

Of course, it would be hard to stand upright for the facts while one is genuflecting to an ideology. We hope many will make it to New York City on November 9-11 to hear Professor Gomez explain what we now know… and what we have yet to learn about local.

You can learn more about The New York Produce Show and Conference here.

You can register online to attend the event and hear Professor Gomez right here.




Are Critics Of Local Programs Devoid Of Taste Buds?

As part of our continuing series on local and sustainable, we continue to receive letters related to the series of pieces on the UC Davis/Sodexo procurement system that grew out of a workshop at the PMA Foodservice Conference.

You can see the pieces here:

More On PMA Foodservice…Everyone Is In Favor Of Better Flavor But Is ‘Local’ A Solution Or An Ideology?

Tom Reardon of Michigan State University Speaks Out: Wither Local?

Dissecting The Meaning Of Local, Sustainable And Flavorful

Pundit Mailbag — Taste Trumps Over ‘Local’

Here is another one… this one from a most interesting individual:

Have you personally ever conducted a blind taste test from a selection of food that has been shipped long distances, even though it’s organic; of conventional produce that has traveled equal distances, and from local, organic produce obtained from within a 100-mile food shed?

I’m part of a small discussion group working with a course guide “Menu for the Future.” Last night’s discussion focused on U.S. farm subsidies, trade policy as it relates to food, and our choices to support local, organic and available from within our 100-mile Philadelphia food shed.

There is a connection between natural flavor, freshness, and nutrient content. Food that is devoid of nutrients tastes like cardboard, or has no taste and very little aroma/flavor. Food that isn’t fresh — having lost nutrient content on a long road trip — tastes different from food that I grow in my home garden.

It would seem conventional agriculture, some Ivory Tower types, “experts” and those committed to intellectual evaluation of metrics have simply lost their taste buds.

If eating local, organic and sustainable food and keeping food dollars in micro-economies does end up “impoverishing us,” at least we’ll just be poor, rather than poor and sick.

You have to be blind to dismiss the correlation between the diminishing quality of mass-produced edible product and the steadily climbing chronic health issues in this country, including a down-tick in the life expectancy of Americans.

Sure, $1.2 billion is a drop in the bucket, but it won’t take more than a decade to reach a tipping point in our food system — despite the billions of dollars being spent to keep us addicted to edible products that are killing us — while someone else makes a tidy profit.

Kudos to U.C. Davis for responding as much to native intelligence and body-based experience of its food consumers as it is responding to metrics and disembodied intellectual discussions completely devoid of taste buds and any sense of natural health.

Anaiis Salles
Grass Roots Organizer
Menu for the Future Collaboration

Ms. Salles is a highly creative person and she explains herself this way:

In 1999, Anaiis withdrew from public life as a healer and teacher to focus on her continued personal healing/transformational path, preparing for the energy shifts in collective consciousness that would follow the emerging national moral and spiritual crisis of 9/11.

Now with the economic collapse of the United States upon us, as her spiritual teachers assured her would happen, as she witnessed the collapse of the Soviet Union in 1991, Anaiis is returning to public life as a transformational guide for the upcoming bloodless revolution in America.

She is obviously sincere and she is committed. We think all that is terrific, and we think she should eat whatever she chooses from wherever she prefers.

What Ms. Salles is not, however, is analytical… or persuasive to people who think differently from her ways.

Whether Ms. Salles or the Pundit prefer food from a local area isn’t important. We all have preferences. The question is, in fact, whether there is some public policy at issue to justify overriding people’s preferences.

In other words, if the issue is that when UC Davis puts on its menu, “Beets grown within 50 miles of campus,” the beets sell better — then there is no need for a ”buy-local” policy. Nobody argues against buying those products that sell well.

The question is really very different: When the students want and would pay for grapes in the winter — should that decision be made verboten? When a local grower has unattractive apples that don’t sell very well when put side by side with those from a commercial growing regions, is there a reason to ban the apples people elect to buy?

The problem is that Ms. Salles states things without evidence:

1) There is a connection between natural flavor, freshness and nutrient content.

Perhaps, but it is quite unclear what that connection is. Many nutritionists will actually praise frozen foods that are harvested at peak of freshness and immediately frozen as preserving nutrients.

Even if true, how significant is the loss of nutrient content?

And aren’t there lots of nutrients in items not grown within the “Philadelphia food shed” — say citrus?

2) Food that is devoid of nutrients tastes like cardboard, or has no taste and very little aroma/flavor.

Note how Ms. Salles leapt from a plausible point — that there may be nutrition degradation during a long journey — to the completely implausible “food that is devoid of nutrients.”

3) Food that isn’t fresh, having lost nutrient content on a long road trip, tastes different from food that I grow in my home garden.

This is in line with common experience. But note the leap from commercial production to a home garden. Even local farmers often wind up putting product on a journey to a depot or an auction. Local farmers, it turns out, cannot harvest every piece of fruit at its peak of ripeness. They have constraints of labor and equipment just like national shippers.

Also note that “different” and “better” are not synonyms.

4) It would seem conventional agriculture, some Ivory Tower types, “experts” and those committed to intellectual evaluation of metrics have simply lost their taste buds.

No, not really. The world population is expected to be about ten billion people in 2050. Those who have the job of feeding those people, have to consider taste as one among many concerns.

Ms. Salles, who has no such responsibilities, can tend her garden with heirloom varieties.

5) If eating local, organic and sustainable food and keeping food dollars in micro-economies does end up “impoverishing us,” at least we’ll just be poor, rather than poor and sick.

Here Ms. Salles makes another leap — she claims that produce shipped from outside her “foodshed” makes people sick — a proposition for which there is no evidence.

6) You have to be blind to dismiss the correlation between the diminishing quality of mass produced edible product and the steadily climbing chronic health issues in this country, including a down-tick in the life expectancy of Americans.

Once again, there is no evidence, just an assertion that one has to be “blind” to disagree with Ms. Salles.

The truth is that according to the Centers for Disease Control and Prevention, since 1900 the life expectancy of Americans has increased from 47.3 years to 77.8 years. The World Bank says that since 1960, the life expectancy at birth has gone from just under 70 years to 78.4 years.

Whatever the drawbacks to our industrial society may be, en toto, it results in greater longevity for people, not less.

7) Sure, $1.2 billion is a drop in the bucket, but it won’t take more than a decade to reach a tipping point in our food system — despite the billions of dollars being spent to keep us addicted to edible products that are killing us — while someone else makes a tidy profit.

That $1.2 billion is a reference to a statistic quoted by two UC Davis faculty members in their letter to the Pundit. It refers to the direct-to-consumer sales of agricultural products.

So, we take it that Ms. Salles is claiming that in 2020 the majority of food products will be sold directly to consumer from farmers and producers. We would take that bet. It seems highly unlikely — and it has nothing to do with anyone wanting to keep people addicted to anything. It has to do with cost and efficiency and people’s desire to eat products that are not always produced locally.

8) Kudos to U.C. Davis for responding as much to native intelligence and body-based experience of its food consumers as it is responding to metrics and disembodied intellectual discussions completely devoid of taste buds and any sense of natural health.

Of course since “native intelligence” and “body-based experience” are both completely subjective concepts, there is no way to ever-evaluate such a decision. One wonders what Ms. Salles would say if the university said that the “body-based experience” of the student body was that they really enjoy canned Le Sueur Peas

*******

One wonders if Ms. Salles has considered the damage she might do. What if she is successful and persuades everyone that only fresh produce, only organic, only grown within 100 miles, is acceptable. When consumers can’t get that or can’t afford it — what happens then? Do they starve? Or do they eat Haagen-Dazs instead? And are any of the options better than the options they have right now?

*******

Nowadays, the Pundit is something of a foodie, enjoying all kinds of specialty items, heirloom, local, organic, all kinds of stuff. But growing up, we ate in the school cafeteria and it was fine. The Pundit Momma used plenty of canned and frozen vegetables and made mashed potatoes from a box called Hungry Jack’s, and that was all fine as well.

We wish Ms. Salles well, and we are glad she can find and afford the local food she likes. We doubt that human happiness will be increased by telling the world that the only good food is food they can’t possibly all have.




Rational Thinking On Locavore Movement A Welcome Sight

Virginia Postrel is among the most provocative and insightful people writing today. The Wall Street Journal, on whose op-ed page the Pundit wrote a piece titled The Roots of Editorial ‘Independence,’ just gave Ms. Postrel a bi-weekly column in its new Saturday “Review” section, and she happened to devote her first iteration to the locavore movement with a piece titled No Free Locavore Lunch:

Michael Pollan, the best-selling author of “The Omnivore’s Dilemma” and a leading advocate of buying locally grown food, recently upset many of his fans by daring to put numbers on his oft-repeated prescription to “pay more, eat less.” Eight dollars for a dozen eggs? $3.90 for a pound of peaches?

Those figures were way too specific and way, way too high to go unnoticed. The humanistic foe of industrialized eating suddenly sounded like a privileged elitist, and the local-food cause seemed insensitive to cash-strapped shoppers.

But Mr. Pollan was only being honest. Patronizing local farmers who produce in small batches tends to cost more. You may find some peak-season bargains at the farmers’ market, but there’s no such thing as a free locavore lunch. Getting fruits and vegetables only from local farms necessarily limits variety — few crops are available everywhere all the time — and it doesn’t come cheap. Economies of scale apply even to produce.

Mr. Pollan’s critics sound a lot like Jackie Mason back in the 1990s, mocking Starbucks for “charging you three dollars for 50 cents worth of coffee.” Taste is subjective. So is economic value. The right price is the one you’re willing to pay.

One reason Ms. Postrel is so good is that she combines unusual perspectives. She is comfortable with technology, with economics and with culture. In fact on her DeepGlamour blog — “at the intersection of imagination and desire” — she captures perfectly the real appeal of the locavore movement in a piece titled, From Exotic to Local: The Changing Nature of Produce Glamour:

The locavore movement draws much of its appeal not only from the tastiness of ripe, local fruits but from their contemporary exoticism. They come with a special aura of authenticity and care. They’re more glamorous than the mass-produced stuff you find in supermarket produce aisles.

Yet not so long ago, glamorous fruits were those that came from faraway climes: the California oranges pictured below at the 1893 World Columbian Exposition in Chicago or, more recently, now-ubiquitous pomegranates and avocados.

Yet back in her Wall Street Journal column, Ms. Postrel points out that the modern supermarket is, as we have written, a triumph of civilization:

Like tastemakers from Anna Wintour to Steve Jobs, Mr. Pollan is just trying to persuade the public to share his sense of excellence and, with it, his willingness to pay. The real problem with his prescriptions isn’t economic elitism but produce xenophobia. The locavore ideal is a world without trade, not only beyond national borders but even from the next state: no Florida oranges in Colorado or California grapes in New Mexico, no Vidalia onions in New York or summer spinach in Georgia.

Fully realized, that ideal would eliminate one of the great culinary advances of the past half century. Unripe peaches notwithstanding, today’s supermarket produce departments are modern marvels. American grocery shoppers have choices that would have been unimaginable only a few decades ago. When I was growing up in the 1960s and 1970s, the only way to get fresh spinach or leaf lettuce was to plant a garden. Avocados were an exotic treat, asparagus came in a can, and pomegranates existed only in books..

Now my neighborhood supermarket sells five types of lettuce, plus spinach, endive, escarole, radicchio, frisée, rapini, three kinds of chard, mustard greens, dandelion greens and kale. That’s not including all the cabbages — or, of course, the prewashed salads in a bag that have particularly boosted fresh-spinach purchases. In this ordinary produce department, you can buy not only avocados, asparagus and pomegranates, but everything from purple baby cauliflowers to spiky kiwano melons that look like some kind of scary deep-sea creature. Need portobello mushrooms, Japanese eggplant or organic ginger at 2 a.m.? The store is open 24/7.

This cornucopia of choice and convenience is a tribute to logistical ingenuity and gains from trade, the very progress the local-food movement is sworn to overturn. For those of us blessed with a Mediterranean climate, giving up imports means higher prices. For everyone else, it means a far more limited diet. New Yorkers sometimes complain about farmers’ markets that seem to sell only varieties of apples. Were they expecting locally grown oranges and mangoes? Coffee and spices from the plantations of East Hampton??

In general, Ms. Postrel got it right. On a guttural level, the local movement is mostly a high-end rebellion against the ubiquity of formerly exotic and gourmet produce. The produce industry should supply local product, not because of any reasons related to sustainability, food miles, food safety or other matters… the produce industry should supply local for the same reason the dress industry supplies mini-skirts one year and maxi-skirts the next — it is a matter of consumer demand.

Once upon a time, a carriage trade store had Chilean grapes in winter and nobody else did. Now Wal-Mart sells them all winter so nobody can pick up prestige by having the grapes. So, instead, they want some heirloom lettuce that only the rarified can afford, and they would like to buy it at places — like a Farmer’s Market — that requires more leisure time to shop or that requires one have a staff to send.

However, we were not so inclined to simply accept the comparison of local advocates to Steve Jobs or Anna Wintour. Steve Jobs is overtly a salesman, selling his products and his message is received in that light. Although Anna Wintour, as editor-in-chief at Vogue, may sincerely believe her style preferences are superior, she defends them as a matter of taste. She doesn’t make substantive claims such as if you wear silk you are less likely to get cancer.

Yet local food advocates rarely defend their advocacy as a matter of fashion. If you tell them you are going to sell local for the same reason you used to sell “pet rocks” — because that is where the market is — they are not happy. They make statements of fact, statements subject to verification. They want to believe, desperately, that there are substantive reasons for their own preference for local.

In general, local food advocates assert that locally grown produce is more flavorful and more sustainable. Some also claim it is safer.

Whatever particular circumstances exist — Ms. Postrel waxes nostalgic at the South Carolina peaches of her youth where they were purchased in “baskets from roadside stands” — there is precious little evidence that, in general, any of this is true in the actual real world of commercial procurement.

The evidence that produce purchased 150 miles away tastes better than produce purchased 200 miles away is non-existent. Whatever one’s criteria for sustainability, it is far too complicated to just say closer is more sustainable. For example, a large commercial growing area may be distant but also produces enough to fill up highly efficient tractor trailers, whereas produce from a local farm may travel less distance but the truck may be half empty. The supposed food safety of local is mostly a statistical quirk. The food supply is so generally safe that unless one produces it in very large quantities, it is very difficult to trace an illness back to a producer.

Ms. Postrel closed her Wall Street Journal piece with a pleasant thought:

The local-food movement’s ideological parochialism would be dangerous if it were somehow enacted into law. But as persuasion, it tends to focus on the positive: the delights of local peaches and fresh cider, not the imagined evils of Chilean blueberries and prepeeled baby carrots.

Yet our experience is that many local advocates, if not precisely wanting a law, certainly want to use the power of public money such as the school lunch program and state university procurement policies to see that their ideology is executed. We strongly suspect that if they succeed, they will not stop with public institutions. We had an e-mail exchange with Ms. Postrel and she used some of that on her blog in a post entitled Was I Too Complacent About Locavore Coercion?

In response to my WSJ column, Jim Prevor, the founder and editor-in-chief of PRODUCE BUSINESS magazine, the online Jim Prevor’s Perishable Pundit, and all-round perishable-food-business guru, emails:

[Y]our off-hand comment at the end that the local-food movement would be dangerous if it were somehow enacted into law is not such a distant hypothetical as that remark implied.

For example, at public universities all across the country there are increasing restrictions on food procurement. Although these policies are not “laws” they allow ideologues to impose real costs on the students, on their parents and on the public — without anyone voting for these policies. Recently we’ve run a series on food procurement at UC Davis:

Everyone Is In Favor of Better Flavor But Is ‘Local’ A Solution Or An Ideology?

Tom Reardon of Michigan State University Speaks Out: Wither Local?

Dissecting the Meaning of Local, Sustainable and Flavorful

The national school lunch program and related programs use the power of the purse — potential loss of federal funds — to get schools to adopt an anti-trade procurement policy. Some of this is explicit, the law contains a “buy-American” provision. There are exemptions, so a school can buy Chilean grapes when no US grapes are available, but competition is forbidden. The buy-local issue is more complex. The law is actually contradictory with some provisions requiring schools to seek out the low-bidder and other provisions urging them to buy local. The Obama administration has leaned toward the second provision in its discussions with state officials and school districts. We ran a related piece here: ‘Buy American’ and ‘Buy Local’ Requirements Confusing School Foodservice Buyers…Chilean Fresh Fruit Association Speaks Out

There are also special nutritional funds that are available only if you buy in politically approved places, such as a Farmer’s Market. Here is a link to a government description of a special program that adds on WIC funds — but only for purchases from Farmer’s Markets with the explicit goal of encouraging the purchase of local produce: WIC Farmers’ Market Nutrition Program

Beyond these public policy issues, we run a series of focus groups and mall intercepts and other studies that interact with consumers from the UK to North America and on to Australia/New Zealand. You would be shocked at what people expect. A seemingly intelligent woman walked out of a farm stand in Massachusetts. The stand stood on a small farm but probably 90% of the sales of the farm stand were purchased off the local wholesale market. Yet when we asked shoppers why they liked shopping there, more than one pulled out their pineapple and pointed to the advantages of a good Massachusetts grown pineapple!

Ms. Postrel goes on and links to an excellent video, summing up by pointing out “that consumer preferences need not be ‘rational’.”

We first encountered Ms. Postrel when she was editor of Reason magazine, a libertarian publication. On her point that consumers are not obligated to be rational, the former editor of Reason magazine is being most rational.

But the answer you get depends on the question you ask. If the question is… how can we affluent Americans have some foodie fun… perhaps the answer is to go pay $3.90 a pound for peaches and enjoy.

If the question is how are we going to feed 10 billion people, then we need to seriously look at the actual productivity of different modes of production and distribution. We need to focus on what most people in the world have to focus on all the time: affordable nutrition.




Stewardship Index Still Has High Hurdles To Overcome

Our Sustainability Special Edition featured a piece titled The Battle Over The Stewardship Index: Will Wal-Mart Wind Up Taking Over.

The piece featured something of a debate between John Vendeland, an ag consultant who has engaged with the Stewardship Index, and Jeff Dlott, a consultant guiding the process by which the Stewardship Index is coming to fruition.

Now we received a letter in response to the piece:

Thank you for the extensive coverage on sustainability this week. Perhaps it’s a topic that some have perceived as not critical in this economic climate, but it remains an issue on which many of us, both inside and outside the industry, remain focused.

One only needs to reflect back on the food safety process to see why the Stewardship Index for Specialty Crops (SISC) remains relevant and necessary. Today, the most common complaint amongst growers/suppliers is not the cost of food safety, but the multiplicity of audits, dueling standards, and added costs. Over this past year United Fresh has held multiple meetings on “GAP harmonization”, and has made some progress in that area. This effort may have proven unnecessary had two things been in place: sound science to support a common standard, and an effort by the grower-based organizations to bring all stakeholders — buyers, sellers, growers, regulators, NGO’s — together to develop common food safety practices in advance of the proliferation that now overwhelms the industry.

SISC was founded on three simple principles:

1) A focus on performance metrics and not prescriptive practices. Where possible, we correlate performance metrics with practice options so that growers and supply chain partners can continuously innovate in ways that achieve profitability, environmental stewardship, and social responsibility outcomes.

2) An aim to reduce compliance costs for supply chain participants by developing a broadly accepted set of metrics on how sustainability is to be measured. Simply stated — develop the yardstick.

3) An open and transparent process that includes the engagement of all interested participants.

While we know the execution of these simple principles is very challenging and critics assert we fall short in some areas, they continue to be our driving principles. Today, SISC has over 100 growers in 13 states pilot testing 8 performance metrics on 18 different crops to determine if they are practical, meaningful to their customers, and useful for identifying opportunities for internal cost-efficiencies. SISC remains the industry’s best hope for a multi-stakeholder, pre-competitive, marketplace solution for measuring and improving specialty crop sustainability.

Jeff Dlott, SureHarvest

Hank Giclas, Western Growers Association

Hal Hamilton, Sustainable Food Lab

Jonathan Kaplan, Natural Resources Defense Council

Kathy Means, Produce Marketing Association

Tim York, Markon Cooperative

We appreciate the effort that went into this letter but must confess it leaves us in a quandary…and the nature of the quandary speaks to some of the points about mission drift that were raised in the article.

When it comes to substance, the letter avoids addressing any of the real critiques leveled against the process. The letter points out:

1) That growers hate the trouble and expense of multiple audits — which was never contested.

2) That United is trying to harmonize food safety audit standards — which was never contested.

3) That if there had been sound science and grower-based efforts to bring everyone to a common standard, the multiplicity of audits would have never have come about and so United’s harmonization efforts would not have been necessary. This is possible, although uncertain. After all, even in food safety, there is no absolutely correct standard for how frequently one should place traps or how broad buffer zones ought to be.. These are judgment calls, not scientific findings. Besides, even if you have agreement on one standard, you still have a question as to which auditors you want to trust. We only have one accounting standard, yet many a firm wants its own accountants to look over the books before they buy a company.

More importantly, the relevance of all this to sustainability is decidedly uncertain. Sustainability is very much a way for retailers to express their own values. So it is not obvious at all that science has much to do with it or that growers could have somehow persuaded retailers to put the values they want to express by the door. If one retailer wants to emphasize that farm workers are paid well and another wants to emphasize that everything is organic, it is not self-evident how lots of science and lots of stakeholder meetings will make a difference.

4) The letter then pronounces that the Index was founded on a focus on performance metrics, not prescriptive practices. This was also never contested. The question is whether there has been “mission drift.” The whole business of correlation sounds like a little mission drift right there. Developing measuring systems for how to determine how much carbon a farm puts into the atmosphere is one thing. Blessing particular ways of reducing that carbon output comes perilously close to prescriptive standards.

5) We then are told that the goal is to “develop a broadly accepted set of metrics on how sustainability is to be measured.” Yet this is itself very close to a standard. It is one thing to say we will develop a set of metrics that will provide a standard for measuring outcomes — say carbon output or water usage or residue of pesticide X left in the soil — so that one farm can be compared to another farm’s.

This by itself is exceptionally hard to do in a meaningful way. In the article, we compared two farms, one in a rural area right on a river, with the river about to dump its water into the ocean, and another farm where the water could be easily diverted to thirsty cities. A seemingly fair measurement system could easily have the ocean front farm overinvest in water-saving technology to keep its water usage down to meet a seemingly objective measurement or to prove it is “conserving” a lot of water.

Yet this answer — “develop a broadly accepted set of metrics on how sustainability is to be measured” — seems like not just a drift but a leap from the way the Index was originally sold to the industry.

The web site of the Stewardship Index explains why it was not called the sustainability index in the first place this way:

Why is the project using “stewardship” instead of “sustainable” to describe the proposed tool?

We recognize that many stakeholders are sensitive about how the term “sustainable” is used in commerce. Use of the term “stewardship” is compatible with our decision not to try to identify a “sustainable” level of performance.

So the Stewardship Index has gone from a decision “not to try to identify a ‘sustainable’ level of performance” to a decision to “develop a broadly accepted set of metrics on how sustainability is measured.” That is a big change. That moves the Stewardship Index smack dab into the substantive debate over differing values that can be expressed through sustainability efforts.

Such a substantive change merits PMA and United looking carefully at whether they should participate in this effort at all. After all, the decision to make the Natural Resources Defense Council and similar groups members of the steering committee is not really objectionable if this is a scientific matter — if NRDC is sending in scientists to judge whether the technique proposed to measure carbon output is state-of-the art, for example. These are technical issues.

But if the goal is for the leadership of NRDC to see whether the value judgments being made by the produce industry meet its own values agenda — it is simply completely unacceptable to give these groups veto power over the outcome. Who voted them in? On what basis was it decided that these particular NGOs should hold these seats? As we asked in the article, why not The Club for Growth instead? Surely not because these are the groups who will threaten the industry with unfair attacks if we don’t. Is that the level we are now at?

Sure the industry would be wise to seek input from all kinds of groups, including the NRDC, but getting input and giving a veto in the governance is not the same thing. If this effort is to continue — that should really be changed. The only voting should be people who buy and sell produce. Everyone else should be in an advisory capacity.

In any case it is quite clear now that there has been a substantial change in mission since the founding and this change has not been well articulated to the trade.

6) The letter goes on to explain that the Index is founded on the principle of an “open and transparent process that includes the engagement of all interested participants”. We have no doubt at all that this is how the Index was founded. We also have no doubt that in their hearts of hearts, the founders really believe in transparency. Yet, as we mentioned in the article there is actually very little outreach. It is in fact interesting that the Steering Committee took it upon itself to respond. The whole Coordinating Councils were meeting in Denver this past week, the Steering Committee could have waited to see whether any members had a different reaction to the critique contained in our article. In fact, they could have asked the broader industry for feedback. But instead, the control group seized control, seemingly wanting to shut down internal discussion rather than being open to it.

7) Finally the letter asserts that whatever its failures, “SISC remains the industry’s best hope for a multi-stakeholder, pre-competitive, marketplace solution for measuring and improving specialty crop sustainability.”

This strikes us as probably true. Of course, the “best hope” doesn’t mean it will work, and it is not 100% clear that just because it has multi-stakeholders that the outcome is desirable.

The heavy involvement of the Western Growers Association and the complete lack of involvement of the Florida Fruit and Vegetable Association are tipping us off to the dangers of this proposal for the broader industry. Regional production techniques are difficult to measure in a meaningful way against totally different production techniques used in totally different environments.

The FFVA knows about sustainability. They called in the Pundit to give a workshop on the subject at their annual meeting. If they are not participating, we would guess it is because they see trouble down the road. People comparing incomparable situations, the media judging things in a way not reflective of the totality of the circumstances.

But while they are not a stakeholder, the NRDC is. This is the root of the problem. The definition of stakeholder was determined in such a way that the NRDC and its ilk get a veto but the Florida produce producers do not. This is a value judgment, not a necessary part of the process.

We have to tip our hat to the signatories on this letter. They are working hard and trying to do good things for the industry. But goals and intentions sometimes can’t transcend the difficulty of the situation. The danger is that so much time, money and personal and institutional prestige get invested in these matters that just saying we tried and it didn’t work no longer seems to be an option.

So much time, money and personal and institutional prestige get invested that solely producing metrics seems not inspiring enough.

We wish the founders of this effort well because we know they want to help.

The triple bottom line, on this initiative, however, is this:

1) That many industry stakeholders will not participate in a process in which the likes of the NRDC and the Environmental Defense Fund are given a veto over industry actions. This is either a “giving in” to a kind of extortion or it is the decision to elevate a particular ideology over others — neither is acceptable.

2) The stakeholder definitions are arbitrary. You could just as well say “Florida Agriculture” or “Chilean Agriculture” are each a stakeholder group. It would be bad for the industry if regional discord is sowed because a global chain such as Wal-Mart adopts nationally and/or internationally metrics that were really California-based and thus create inappropriate comparisons.

3) There has clearly been a mission shift. What started out as so metric-based they didn’t want to use the word sustainability has now become an initiative to literally define sustainability for us all or, in the words of the letter, to “develop a broadly accepted set of metrics on how sustainability is measured.” But nobody elected them to do that, and the ideologies of the veto-wielding environmental groups absolutely guarantee that the end result will not comport with any industry or societal consensus on the meaning of sustainability.

We wish everyone well and hope it all works out, but those are three very high hurdles to leap over.




New Marketing Opportunities

The power of produce.

 




Pundit Mailbag — Where Does ‘Affordability’ Fit Into UC Davis’ Local Decision

Our coverage of local and sustainability — and particularly our series on the UC Davis/Sodexo procurement program — has engendered great interest:

More On PMA Foodservice…Everyone Is In Favor Of Better Flavor But Is ‘Local’ A Solution Or An Ideology?

Tom Reardon of Michigan State University Speaks Out: Wither Local?

Dissecting The Meaning Of Local, Sustainable And Flavorful

Pundit Mailbag — Taste Trumps Over ‘Local’

Our latest letter comes from a UC Davis alum:

I wonder if UC Davis decision-makers believe their customers are the students or those who pay the students’ educational fees?

As a UC Davis grad and a current parent supporting a Chico State student, I have come to understand the price/value relationship that I practice daily is quite different from those in the world of academia.

I better get back to work — I need to analyze my price/value matrix and pinch a few more pennies in order to subsidize those whose matrix calculates value in a much different manner.

GO GREEN!

— Stan Foster
Sales Manager
MOARK LLC
Fontana, California

We think Mr. Foster cuts to the chase. To give ‘local’ preferred treatment in procurement has to mean buying local when one otherwise would not have purchased the product. So either the local product did not meet some specification or required more staffing to procure, or the local product was more expensive.

Now if local initiatives simply call for a buying entity to reassess its specifications and so decide that, say, less attractive product is acceptable or different sizes and varieties are acceptable because the priority is going to be on flavor, that could lead to supplier changes without raising costs. It is also true that reassessing menus can lead to more local purchasing. If these types of changes reflect culinary desires to eat at the peak of ripeness, it is unobjectionable and can lead to natural changes in sourcing.

Of course, these changes can also be ideological and, in fact, many kids might welcome grapes in the winter and pineapples, mangos, avocados, papaya and bananas all year long.

Still, the UC Davis goal of “reducing the environmental impact of food purchases and dining operations while maintaining accessibility and affordability for all students” — struck us as obscuring more than it revealed. As we mentioned in an earlier piece, we thought the emphasis on the environment was unexplained — why not a focus on job creation or building world peace through trade? What we didn’t mention was that we also thought that the University wasn’t being fully frank with those who pay the bills.

Maintaining “accessibility and affordability” sounds great, but it is different than promising to not pay more than they would have if they didn’t have this particular ideology.

In fact, in a time of tight budgets, who says there is any money available for these kinds of tangents? Don’t the schools need to hire professors? Buy books for the library? Provide financial aid? Aren’t the parents pressed to pay rising tuitions, buy textbooks?

Even if one believes that “reducing the environmental impact of food purchases” is a desirable goal, who determined that it was more important than keeping dining fees down?

Nobody is saying that those who just love local and want to be locavores shouldn’t do so — with their own money.

The question is on what basis a public university decides to procure this way? Normally there would be laws requiring them to set specifications and then buy from the lowest bidder who meets them.

Perhaps because Sodexo has a contract, UC Davis isn’t procuring directly and so gets away with it. But isn’t Sodexo charging more than it would have if it could purchase based on the most economical product that meets university specs?

And doesn’t that mean that parents are paying higher dining fees than they would have? Did anyone ask them if they want to do that?

Many thanks to Stan Foster and Moark LLC for participating in this industry conversation.




Pundit Mailbag — Taste Trumps Over ‘Local’

Our extensive discussion of the “local” phenomenon has recently included three pieces revolving around the procurement policies at Sodexo/UC Davis and a related workshop held at the PMA Foodservice Conference:

More On PMA Foodservice…Everyone Is In Favor Of Better Flavor But Is ‘Local’ A Solution Or An Ideology?

Tom Reardon of Michigan State University Speaks Out: Wither Local?

Dissecting The Meaning Of Local, Sustainable And Flavorful

These pieces have brought a number of comments, including this one:

Great piece on “local”, both in the letter from Professor Reardon and your analysis.

It’s interesting to note that COOL has not moved the needle in terms of consumer choices, and I think that supports Mr. Reardon’s musings. At the end of the day, consumers want great-tasting fruits and vegetables that delight their senses, and, I would agree, don’t really care where they come from.

In my view, this is another reason to continue the focus on three things:

1. Taste

2. Taste

3. Taste

!!!

— Chris Puentes
President
Interfresh, Inc.
Orange, California

Chris’ comparison with the COOL movement is apt in many ways — and some quite scary.

Most obviously, the COOL movement was pushed by producers who hoped that consumers would see words such as “Mexico” and be scared to death.

Yet it didn’t happen. There has been no noticeable change in consumption patterns due to COOL.

This means the law is ineffectual, but it is not harmless. Retailers are spending millions to conform to the rules. In the very same state, different inspectors are interpreting the rules differently.

Bananas, for example, often are shipped to retailers with different countries on the very same shipment. Some retailers put up signs listing each country that bananas on the table may come from. Some inspectors are requiring this.

Other inspectors are saying, no, they don’t want any signage. They will rely on the clause in the law that says that if 90% of the product is stickered, then the sticker can be used in lieu of a sign. However, a typical hand of bananas has two stickers on it. Which means most of the individual bananas are not stickered. So the reliance on stickering depends on a finding by the inspector that the product is a hand of bananas, all of which are stickered, rather than an individual banana, most of which are not stickered.

Then, of course, we have the fact that individual bananas often are separated from the hands. They fall off accidentally or are ripped apart by consumers so they can buy a smaller hand. Some inspectors are allowing for this and not requiring stickers or signs on these bananas; others are requiring they be consolidated and signed or stickered.

And this is all just on one product — bananas!

The end result is wasting countless hours of management talent and countless dollars in order to achieve nothing.

In its essence, that was really our critique of the Sodexo/UC Davis procurement policy. They had set up this elaborate scheme of concentric circles of preference for procurement but, in fact, had not required the product meet any specific criteria. They simply assumed that the closer a product is produced to the school the more flavorful and sustainable it would be. But, in fact, there is no evidence that this is true. In some cases, as with counter-seasonal fruit, it is obviously not true.

Of course, the fact that a convoluted five-tier procurement system makes no sense is not evidence that conventional agriculture is necessarily doing a great job.

Sure, some companies — Sun World come to mind — have really focused on breeding and we’ve listened to British retailers, for example, speak with enormous enthusiasm as to the flavor of new black grape varieties that Sun World’s affiliated growers were planting in South Africa.

Yet most producers have little choice but to sell what they have. We bought some peaches for the Pundit household last week and they wound up in the garbage. The Jr. Pundits won’t be urging the purchase of peaches for quite a while.

If Sodexo/UC Davis had really come up with a plan to make sure all its produce was flavorful, we would have been pointing to it as a model for others to consider. Instead we were left curious as to how an ideology got adopted as a procurement standard.

Many thanks to Chris Puentes of Interfresh for weighing in on this important matter.

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