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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



Buyer-Led Food Safety Effort
Leaves Open Question Of Buyer Commitment

Jim Prevor’s Perishable Pundit, October 30, 2006

Pundit has been emphatic that, as long as food safety is a voluntary issue rather than a regulatory issue, the role of buyers cannot be overestimated. We pointed out that in foodservice, it was Jack in the Box that demanded higher standards from its suppliers, not suppliers that volunteered safer product. This issue applies to retailers as well.

In the October issue of the Pundit’s sister publication, PRODUCE BUSINESS magazine, we published a column entitled Food Safety Is A Retail Issue that pointed out the responsibility of buyers in this community.

Obviously many in the industry are in agreement on this point as, in an unprecedented move, executives from eight substantial buying organizations signed a letter addressed to the Produce Marketing Association, United Fresh Produce Association and Western Grocers Association. The letter was signed by the following:

Greg Reinauer, Amerifresh, Inc.
Frank Padilla, Costco Wholesale
Reggie Griffin, Kroger Company
Tim York, Markon Cooperative
Ron Anderson, Safeway, Inc.
Gary Gionnette, Supervalu Inc.
Mike Hansen, Sysco Corporation
David Corsi, Wegman’s Food Markets

And this is what the letter said:

In response to multiple food-borne illnesses associated with fresh produce, the above-listed companies recognize an opportunity to come together as never before to voice our needs and expectations. We expect fresh produce industry associations to respond — collaboratively and expeditiously — to protect public health and work toward restoring consumer and buyer confidence in fresh produce. Specifically, we are asking the associations to develop a supply pipeline food safety program for lettuce and leafy greens as follows:

The program will be founded on standardized food safety recommendations and requirements (GAPs, GMPs and HACCP as appropriate) that reflect best practices and are specific, measurable, and verifiable.

The requirements will be developed with input from and approval by industry research scientists, as well as input from academia and regulatory agencies (whose direction may differ from that of association members).

We recognize the process of developing requirements has and will continue to illuminate areas that require further scientific research; we understand that the initial requirements will be based on current knowledge, but subject to change as science evolves; we expect the associations to have in place a process to keep the requirements up to date based on sound science.

The standardized requirements will be translated into standardized audit criteria and such audits could be performed by private and/or federal/state auditors. A certification program shall be in place to assure private auditors are calibrated and perform inspections/reviews in accordance to the established standards.

Together, the requirements and audits will amount to a voluntary, formal food safety certification program that is open to all qualifying suppliers. The associations will develop a website or other mechanism whereby buyers can verify whether grower/suppliers have received certification.

The associations will fund and lead robust industry and consumer outreach about the certification program.

The context of this communications effort will emphasize that industry’s intervention steps and highlight the intention is to minimize risk to the extent possible, because there is no “kill step” for fresh produce.

On behalf of the above-listed buyers and any others who wish to join us, a small working group will monitor the associations’ progress and report on it at least every other week; we expect the associations to update the working group at least every week via e-mail, and further suggest that associations continue to communicate proactively with all stakeholders in North America, including NRA, FMI, CPMA, and regional grower/shipper associations.

We expect that the associations will continue to communicate proactively with the trade and national media.

Due to the urgency of this matter — its current and potential impact on public health — we expect that the major components of this process can and will be accomplished by December 15, 2006. If this is not the case, our options include fast-tracking our own working group to establish a meaningful certification program with objective criteria.

Finally, while we recognize that lettuce and leafy greens are the most immediate priority due to the most recent E. coli outbreak, we expect that the associations share our urgency to have standardized food safety requirements and commensurate auditing criteria for additional crops in accordance with their actual and/or perceived risk, including: melons, tomatoes, and green onions. We expect that the process described above will be initiated for one or more additional crops by February 15, 2007.

This effort was driven by initial discussions between Tim York and Dave Corsi, and Tim York announced the program. All anyone had to do was be at the Town Hall Meeting regarding the spinach crisis that was held at PMA and one could see that Tim, a past chairman of PMA, is passionate about finding a path through this crisis for the industry.

And certainly, any effort backed by these important buyers can’t be ignored. Kroger, Safeway and Supervalu are the three largest conventional supermarket operators in the U.S. Costco is the largest warehouse club operator in the country. Wegman’s is a trend setter, and Dave Corsi is in line to become PMA Chairman. Sysco is by far the largest foodservice distributor in the country, and Markon and Amerifresh are both substantial organizations. Many of these individuals have served, do serve or will serve on important industry councils. So these individuals are respected, their organizations are respected, and they will be heard.

Yet, there is no unanimity about their proposals in the buying community. Some names are conspicuous by their absence. And, in speaking with many who declined to associate themselves with the document, it comes down to a philosophical breach.

Many buyers feel that the government must be made to set standards for the industry when it comes to food safety. This is vital, they believe, so that if there is ever an outbreak, it will be blamed on either an individual operator who broke the law by breaching the standards or on the government for setting inadequate standards.

There is a lot of sense to this position. In a sense, the FDA and state organizations play the industry as a bunch of saps. They refuse to articulate any specific guidance, let the industry make the guidelines, and then the FDA is free to blame the industry when something goes wrong. On the FDA website, they post the Commodity Specific Food Safety Guidelines for the Lettuce and Leafy Greens Supply Chain, but the most interesting line is this: FDA is posting this industry information as a service to industry, consumers, the media, and other interested parties.

In other words, FDA posts it but won’t stand by it. Following these guidelines is no guarantee the FDA won’t blame the industry for a future outbreak and no guarantee the FBI won’t charge you with a crime.

Whether the produce industry prefers mandatory regulation or voluntary standards may soon be a moot question. California is hard at work on some state legislation regulating these issues, and past history tells us that these types of state standards are often federalized a few years later.

It seems an important industry imperative to get the regulatory agencies to buy into any industry-wide standards.

That doesn’t mean the buyer-led effort is misguided. In the past, many of the rules that govern the produce industry were developed by private organizations and then, later, codified in law or regulation. One wonders if this effort isn’t best thought of as an attempt to develop a plan that could be submitted to government for review and implementation through legislation or regulation.

There is no question that every signatory to this letter means the best for the industry, but the letter strikes me as problematic in five ways:

First, it is addressed to trade associations that are not retail trade associations and thus comes off as arrogant. I don’t think it was intended that way. I wish they had asked me to draft the letter for them. But, as it was written, it is just some buyers barking orders and, thus, unfortunately, more likely to get lip service than true cooperation.

These buyers had many options: they could have simply announced that they were all going to require their suppliers to meet set standards; they could have set up a buyer-controlled organization to drive food safety initiatives, but just being big buyers doesn’t give them standing to issue “expectations” to organizations in which only a small fraction of the membership are buyers. Trade associations are about building consensus, and that process can’t really be short-circuited or you will have policies in place that haven’t won the support of the membership. That leads to splinter groups and the collapse of organizations.

Second, the buyers made the mistake of taking no actions internal to their own organizations to improve food safety. In fact, although they say they want a “pipeline food safety program” — they also make clear that they don’t actually want, themselves, to be subject to any requirements. After all, the demand is that “The associations will develop a website or other mechanism whereby buyers can verify whether grower/suppliers have received certification.

Although the nature and count of bacteria on the day product leaves a packing or processing facility is crucial, it is only part of the story. A pathogen can be in a processed product in a minute amount. If the product is handled correctly, that pathogen will multiply more slowly than if the cold chain is broken. It is widely known that retail cases, for example, do not uniformly and consistently maintain temperature. In talking about the recall of Bolthouse 100% carrot juice, we dealt with that issue here. In addition the cold chain has many links, and we dealt with 12 of them here.

It is not exactly shocking, but certainly disappointing, that there is nothing in the letter indicating that retailers would look with favor on third party audits of their own compliance with food safety standards and best practices.

Third, there were no substantive proposals to encourage processors to package and label things effectively. When fresh-cuts were first starting up as a national industry, my associates, Ken Whitacre, now Publishing Director for the Pundit and its sister publications, and Lee Smith, then with Wawa Food Stores and now Publisher of DELI BUSINESS magazine, one of the Pundit’s sister publications, presented the very first national workshops on cold chain management for what was then called pre-cut produce.

I heard many discussions in these early days, and it was retailers who opposed things such as clear “Sell By” and “Use By” dates on every bag. I remember discussions about turning bags different colors after so many days or via technology that counted up the degrees the bag had been exposed to so the bag might turn color if it had been sitting in the trunk of a consumer car on a hot day. Processors were willing to do all this, but it was retailers not wanting to be responsible for the shrink that stopped all this dead in its tracks. It seems that some sort of indication of a willingness to rethink these things would be appropriate in a letter from buyers to the trade.

Fourth, the letter explains that “Together, the requirements and audits will amount to a voluntary, formal food safety certification program that is open to all qualifying suppliers.” But the letter doesn’t explain how the associations could handle the liability aspect of the proposal. If these associations come up with a plan to certify vendors as “safe” and there is a foodborne illness outbreak, everyone will sue the associations claiming they relied on the associations’ “certification.” That is why any effort that is going to involve “…robust industry and consumer outreach about the certification program” as this proposal states is virtually impossible unless in the hands of the government.

Fifth, because the proposal is for a “voluntary” standard, the letter doesn’t address the fundamental flaw in all these types of proposals, which is that, in the long term, such standards are an application of Gresham’s Law. Put simply, this means low standards always drive out tough standards.

Today everyone is hot on food safety. If, God willing, the industry goes two years without a major outbreak and some retailer that is not a signatory to this letter can get completely legal product two dollars a case less, the very retailers that signed this letter will feel enormous pressure to buy cheaper.

This presents the industry with a Hobson’s Choice since the only way for those retailers to remain competitive with their higher priced product would be to promote to consumers its superior safety. But most in the industry think that such a claim would be counter-productive raising more consumer concerns than it reassures.

The signatories to this letter deserve real industry praise. They have stood up and are trying to make a difference.

But, increasingly, it seems that there are advantages to mandatory regulation and that only through mandatory regulation can the industry stop the commodity-driven process by which players are pressured to drive costs out of the system, including food safety costs, in order to match the price of the lowest bidder.

The power of the buyer is not greater concern for the industry or greater knowledge of the industry than shippers or processors but, rather, the power of the purse. What would be helpful from these buyers is not so much orders to the trade associations but, rather, a reassurance to the grower/shipper/packer/processor community that investments in food safety will be protected.

In other words, the FDA just reported that wild pigs may be a key source of contamination. If a firm announced that it was going to pour concrete footings ten feet under ground to prevent burrowing animals and then have solid fencing ten feet high and hire staff to, every day, inspect every inch of that fence and immediately repair any damage — are these buyers willing to pay more for product from this producer than from someone else who doesn’t do that? Are they willing to restrict their purchases to only suppliers who fence even when much cheaper product is available elsewhere?

These are really the questions that need answering. Unfortunately, although the intentions are noble, and indeed the very act of writing the letter is an act of courage and leadership, the letter is so busy instructing the associations on what to do, it neglected to tell the industry what the buyers are willing to do.

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