Pundit Interviews

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Perishable Pundit
P.O. Box 810425
Boca Raton FL 33481

Ph: 561-994-1118
Fax: 561-994-1610


email:
info@PerishablePundit.com

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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



Putting Aside Pesticide Residue Levels And Climate Change
Will The City Of Light Be A Beacon For The West To Combat ISIS?
We Can Never Prosper If Our Civilization Crumbles

We spend so much time and money working with produce trade associations, but every once and awhile something happens to remind us that these associations often don’t deal with the most important governmental decisions. Pesticide residue levels and similar things matter right up to the day something reminds us that there are bigger issues to be addressed.  

Certainly the coordinated attacks in Paris – at least 129 dead and 352 injured – serve as such a reminder.

There is a real question as to whether President Obama is willing to accept the reality of the situation. The day before the attacks, the President recorded an interview with George Stephanopoulos, in which he claimed that we had “contained” ISIS:

Stephanopoulos asked Obama if ISIS was gaining in strength, to which Obama denied they were.

“I don’t think they’re gaining strength,” Obama responded. “What is true is that from the start, our goal has been first to contain, and we have contained them….”

This all follows on previous comments in which the President claimed that ISIS was a “JV team.” There is a real question about whether the President recognizes the seriousness of the situation.

The President’s official statement after the attack was poignant, but not true. The best piece written in the immediate aftermath of the attacks is by Mark Steyn and is called The Barbarians Are Inside, And There Are No Gates:

Among his other coy evasions, President Obama described tonight's events as "an attack not just on Paris, it's an attack not just on the people of France, but this is an attack on all of humanity and the universal values we share".

But that's not true, is it? He's right that it's an attack not just on Paris or France. What it is is an attack on the west, on the civilization that built the modern world  an attack on one portion of "humanity" by those who claim to speak for another portion of "humanity".

And these are not "universal values" but values that spring from a relatively narrow segment of humanity. They were kinda sorta "universal" when the great powers were willing to enforce them around the world and the colonial subjects of ramshackle backwaters such as Aden, Sudan and the North-West Frontier Province were at least obliged to pay lip service to them. But the European empires retreated from the world, and those "universal values" are utterly alien to large parts of the map today.

The president of France said all the right things: “nous allons mener le combat, il sera impitoyable" — which translates as: We are going to wage a war that will be pitiless. But really, what is the likelihood?

The French have already announced that they are going to go ahead with the Climate Change conference scheduled for later this month.  Of course, the correct thing to do would be to cancel the conference, not because security cannot be provided, but because if you are waging a “pitiless” war, that is what one must focus on, not as Steyn so aptly puts it, “talking about sea levels in the Maldives in the 22nd century? By which time France and Germany and Belgium and Austria and the Netherlands will have been long washed away.”

There are two basic issues:

The first is that the West is at war with a civilization; call them jihadists, medievalists, Islamic terrorists or what you will. And, secondly, wars are different than crimes. The President in his statement got what is required almost precisely wrong:

We’re going to do whatever it takes to work with the French people and with nations around the world to bring these terrorists to justice, and to go after any terrorist networks that go after our people.

Finding the individuals who did this is not the point. When the Japanese bombed Pearl Harbor, we did not say that we would hunt down the pilots, the navel crewmen and all those directly involved. In fact, we never tried to do anything of the sort. We attacked the ecosystem that trained, equipped and inspired those individuals.

The panoply of hashtags and sorrowful outcries is misdirected. Of course, we feel bad for the victims and their families, just as we felt bad for the American military members who were killed at Pearl Harbor, but our response was to address the attack on us as a collective.

Our leaders, though, are not serious. Hillary Clinton in the most recent debate said, “I also said that we should take increased numbers of refugees. The administration originally said 10,000. I said we should go to 65,000, but only if we have as careful a screening and vetting process as we can imagine, whatever resources it takes. I do not want us to in any way inadvertently allow people who wish us harm to come into our country.”

But it is self-evident that there is no possible way to run a “screening and vetting” process in Syria. It is not a serious response to the problem; it is asking for what cannot be.

Way back in 2009, we wrote a small piece for The Weekly Standard titled The Swiss Ban Minarets:

With word that the Swiss had unexpectedly voted to ban the construction of new minarets the predictable outcry against such "racism" has begun.

The Wall Street Journal, however, editorialized that the real problem is that the ban, which does not ban the building of new mosques, has no substantive effect on how Muslims are integrated into Swiss society.

The larger question, though, is whether a nation is any more than a geographic entity. If some Parisian Rip Van Winkle wakes up one distant morning and finds himself in a nation that speaks Arabic, where the people are Muslim, food is by law Halal and the government follows Sharia law, is that fellow still, in any meaningful sense, in France?

Is it simple racism for, say, the Dutch to want their nation to stay Dutch —not just in terms of geography — in terms of language, food, religion, government, architecture and all the things that make up a culture?

Switzerland is small, and whether minarets are built there is of little importance. The issue, though, is whether it is a legitimate aspiration of a people to want to maintain a nation as a home for a certain people.

This is the real question. Does the West have enough belief in its own civilization to defend it? Rob Lowe, of all people, got in trouble because he tweeted after the attacks when the President of France announced that France would close its borders:

Yet Lowe is right. What was happening was and is entirely predictable.  And the “pitiless war” was supposedly declared on 9/11. France is dropping some bombs on jihadi training camps, but for Western civilization to win, we have to believe we are in the right, and we have to put aside hopeful wishes.

The West needs to be bolstered on everything from demography to allocating resources to defense, not welfare. Clearly the Schengen agreement, allowing open borders in Europe, cannot be operative.

And in the US, the Americans must elect a President who accepts reality. William Kristol explained the point:

During the Democratic debate Saturday night, Hillary Clinton said that ISIS "cannot be contained; it must be defeated." She also said, not once but twice, that this "cannot be an American fight" (while adding, "although American leadership is essential").

But the fact is that if ISIS is to be destroyed, it will be because America decides it is an American fight. Of course, we should enlist all the allies we can; there is no need to go it alone. But bromides about American leadership will no longer do the trick. If ISIS "must" be defeated, then we must be willing to take responsibility for defeating them.

Otherwise, we remain in what Churchill memorably called in 1936 an "era of procrastination, of half-measures, of soothing and baffling expedients of delays."

Who is to be the Churchill of this generation? 




The ‘Big Squeeze’ in the UK Market
Simon Martin Of QV Foods Group And The FPC Speaks Out:
Getting Past Selling Below The Cost Of Production

There is a squeeze going on in Britain.

The retailers are being squeezed, as the government requires higher pay for employees — a national “living wage” is being phased in — and real estate taxes on commercial properties are rising — while retailers perceive themselves to have no flexibility in raising prices due to the growth of discount concepts. The newspapers are filled with articles headlined like this: Minimum wage: Tesco pleads for rethink from Osborne

Not shockingly, retailers thus turn to suppliers to bail them out. Should they? Will they? Can they? We asked Tommy Leighton, the Managing Director of the Pundit’s sister operation in the UK, to find out more:

Simon Martin
Sales and Marketing Director
QV Foods Group
and Vice President
Fresh Produce Consortium

Simon Martin will be presenting at the upcoming New York Produce Show’s Global Trade Symposium about the disruptive influences shaking up the UK marketplace. Here, we ask Simon for a sneak preview of his presentation and a perspective on where he thinks suppliers and their retail customers are heading…

Q: What is currently the most disruptive influencer of UK fresh produce trade dynamics?

A: It’s not a new situation, but the retail price war has stepped up to unprecedented levels, and it is having a major effect on everyone in the industry. It is getting to the point now where more and more lines are being supplied at, or below, the cost of production and whilst there are fresh produce companies willing to accept this, it will only get worse.

The problem in the UK now is that there are too many companies trying to sell to too few customers, and although there are more routes to market opening up, the bigger-volume customers that most people want are becoming much more difficult to serve in a sustainable manner.

The well-documented rise of the ‘discounters’, notably Aldi and Lidl, in the UK has put a lot of pressure on the traditional “Big 4”, although arguably the days of referring to those retailers as discounters are behind us as well. Tesco, Asda, Sainsbury’s and Morrisons had been used to being in control of the majority of grocery retail for decades.

Online retail is becoming more important by the year — and we now have the prospect of Amazon entering the market also. Retailers such as Poundland, Farm Foods and Iceland, who were not particularly big players in fresh, have begun to get involved on a bigger scale, and all of a sudden the Big 4 are dealing with a completely changed landscape.

They are not automatically set up to compete in the leaner, lower margin environment favoured by some of these competitors, and it is going to take them time to make the necessary adjustments.

Q: Where do the Big 4 supermarket chains begin to address the most difficult trading period they have ever experienced?

A: The biggest question they have to answer is whether or not they can afford to compete. In the current climate, it’s difficult to see how they can unless they make significant changes. The consumers have drastically changed their shopping habits in recent years, and the clear advantage that the super- and hyper-markets had over their discount competition — the fact that they were the place where you could buy everything under one roof — has been reduced as people have become accustomed again to shopping more regularly than their big weekly shop.

They have a different view of what’s convenient now, and many are as happy to go and spend £20 (about $30 US) three or four times a week as spend £100 (about $150) in one go.

Q: So, is the model of the Big 4 being rendered unsustainable by these changes?

A: I wouldn’t say it’s unsustainable, but they will need to address their culture and how they can change it. Plenty of things have been said [by supermarket chain bosses] already, but it’s still not clear what direction any of the Big 4 are planning to take. Having been able to monopolise the consumer for decades, the fact that the consumer can dabble freely in a far more open playing field now is a big challenge to them.

Q: This type of scenario you have painted for suppliers has been predicted for some time, and somehow the vast majority of companies in the produce industry have managed to stay afloat. Why do you think it’s different this time?

A: I agree. As long as 15 years ago, we were hearing similarly gloomy forecasts. But that was a different time. People were making those predictions about companies that historically had been able to make a very good living in the produce business. Some of them were not being managed all that well, and the companies that we did see disappear would often have failed due to poor management.

Now, generally speaking, the firms in the fresh produce industry in the UK are very well run, but if there is no profit in the business, however well run you are, there is inevitably a breaking point.

Supplying below the production cost is more widespread now than ever, not only in produce but across a number of product sectors, and it’s not easy to see how we can escape an enforced rationalisation process. Two fresh produce companies have gone bust in the past few weeks, and I expect to see more unfortunately — the situation has gotten that bad.

Another thing that was bandied about a lot over the years has been the need for greater collaboration. Again, I think when we talk about that now, it is from an entirely different perspective. Collaboration between retailers and suppliers has never needed to be more real — in the past, it has been very one-sided and in part, that has led us to where we are now.

There are a lot of marketing and trading companies in the UK that might well be eradicated in the very near future, but I believe we will see true grower-retailer partnerships emerge because we’ve reached the stage where we can’t afford to do it any other way.

I think the strategies will be different for the domestic grower and for imported products. Dealing with trading offices is going to get more strained as there just isn’t the margin to make it work. Every single cost is being analysed and stripped, meaning the supply chain has to be as lean as is physically and practically possible. I think we have done a very good job as an industry already, but now we have to advance again.

Q: Is it really possible that the fresh produce supply chain for the UK market can become significantly leaner?

A: Suppliers have to focus on finding ways to serve their customers in the right way for the NOW, not in the way they have been supplying them for the past 20 years or more. If you’ve got big shiny sheds all over the country, do you really need those facilities?

It’s time to be ruthless and take out costs wherever possible. Find the areas where you can add true value. If you are doing things that don’t add value, stop doing them.

At QV Foods, we are very good growers, and if we can do that as efficiently and effectively as anybody else, we will be giving our customers the best service. We may have to start talking to our competitors and colleagues in the industry more and exploring any ways that we think might bring even more value into what we do.

I’m going to be in New York looking for different options and methods that might help us. We have to look at true collaboration, and sometimes that means thinking outside the box to find ways of working together to a common end.

Q: Is the UK becoming less attractive to suppliers around the world?

A: I still think the UK is a flagship retail market in the sense that being able to supply into a UK customer is a good sign that you are capable of supplying anywhere in the world! Obviously, at this moment in time, the combination of low prices and high specifications are less attractive, but I think the key now more than ever is to pick your partners carefully, and be very clear of your aims and objectives in the market.

Analyse how many of the services that you have as a shipper add value to the product that the consumer eventually buys, and understand the market well enough to know whether you are prepared to invest in being a true partner to your customer, or whether you’d prefer to trade your product.

Q: How can the Fresh Produce Consortium help suppliers from outside the UK?

A: I’m delighted as vice president to be coming to the New York Produce Show and Conference again. We present the London Produce Show and Conference with PRODUCE BUSINESS, and it has been very successful in allowing people from outside the UK an opportunity to fully engage with our market.

That’s what the FPC is all about — we want to foster relationships that will create new opportunities for the UK fresh produce business, and both of these shows do exactly that.

The FPC will also be hosting a brand new feature at the London Show in 2016. On June 8, there will be an interactive seminar and workshop programme for companies and people who want to supply the UK market, but perhaps don’t understand all of the regulatory and standards framework, or would just like some tips on how to get started.

It’s a feature that’s been added into the show by request, and I think it will prove invaluable to anyone who takes part.

*******

We have heard this all before. Indeed, in 2008, we wrote a series of pieces on this very theme:

Another Company Says No To Wal-Mart’s ASDA:

We launched this series with a piece entitled, Just Say No: The New Dynamic Of Producer/Buyer Relations, which quoted the Fresh Produce Journal in London announcing that Del Monte had walked away from ASDA’s banana business:

Del Monte is re-evaluating its position in the UK after “walking away” from ASDA’s banana business.

UK md Peter Miller told FPJ: “We decided that it was no longer the right proposition for us to continue supplying ASDA with bananas.

“We walked away from the ASDA tender because we didn’t like the money, but we still have 80 per cent of their pineapple business, a significant and developing share of their melon business and a massive proportion of their fresh-cut fruit business.”

ASDA has extricated itself from the global supply deal its parent company Wal-Mart had on bananas with Del Monte, and is now sourcing from Fyffes, Chiquita and International Produce.

The same piece focused on Tanimura & Antle’s decision to not sell to processors. We followed up this piece with an article titled, Tanimura & Antle Changes…A Sign Of The Times.

We also published an important letter from Ted Campbell, former Corporate Director of Produce for Supervalu, under the title, Pundit’s Mailbag — ‘Little Tolerance For Dictatorial Buyers.’ In this piece, Ted explained what he saw as a reasonable procurement philosophy:

During my years at SUPERVALU and AWG, I spent many days training young buyers that their key responsibility was securing the “best” source for products rather than the apparently cheapest source. As you well know, it is critical to have consistent supply, superior quality, product safety, innovative items, and numerous other attributes — none of which happen fortuitously (they almost always cost more).

The second leap of faith in this training exercise was to develop their understanding that these premier suppliers deserved adequate return on investment and thus should receive a “fair premium” over general market pricing.

Finally to really make their heads spin, I always told them that a reasonable pricing premium returned dividends at retail because better stuff just simply sells better: more eye appealing, better eating quality/customer satisfaction, less shrink & labor, usually better margin, better repeat sales with positive customer referrals, etc. No one makes money until the product goes through the cash register, so I wanted items to fly off the shelves (and the financial advantages of rapid inventory turns are often overlooked).

Then John S. Cross, General Manager of Newell Potato Cooperative, sent in a letter that we published under the headline, Pundit’s Mailbag — Fear of Losing Market Share. The gist of his letter:

Too many producers in the potato industry have an extreme fear of losing market share, and unless their sales people don’t have product to sell, are afraid to raise prices to a profitable level.

It is interesting that John works in the potato industry because happenings in the potato industry are bringing this discussion right back to the UK, where it started in the controversy over Del Monte dropping Wal-Mart’s ASDA as a banana customer.

Earlier this month, a major potato supplier to ASDA also decided to say “No More” as is detailed in this article in The Scotsman:

Supermarket in firing line as potato bosses pull plug on £32m contract

A FAMILY-RUN potato business has fired the first shot for Scotland’s food growers by choosing to end a multi-million-pound contract supplying one of the UK’s largest supermarket chains.

The announcement by Taypack Potatoes in Perthshire yesterday that it had cut its £32 million-a-year contract with ASDA, Britain’s third-largest supermarket group, was met with surprise by insiders. The company, which started up in 1986, supplies ASDA with 80,000 tonnes of fresh-pack potatoes per year.

Taypack, one of four main potato suppliers in Scotland, is a significant player in the UK fresh potato market, controlling a 9 per cent share of the annual production of 1.5 million tonnes.

It is believed Taypack’s misgivings over the contract began some time ago but came to a head recently when ASDA, which paid the company around £180 per tonne, demanded more potatoes were supplied, forcing the growers to buy in potatoes at £230-300 a tonne…

Of course, it is one thing for an exporter to decline to serve a market. After all, the banana boat can be sent elsewhere. But what about domestic producers that have no market for their products elsewhere?

And what about consumers who are deprived of the best product because that product finds another home?

And how, precisely, will retailers get out of their funk, if they don’t get first option on the best product?

We wonder if this focus on driving costs out of the system isn’t a bit misdirected. Perhaps a focus on proprietary varieties, innovative packaging, even brands with a unique selling proposition...  don’t vendors who provide these things offer a more likely path to increased sales and profits than one that can cut costs another quarter percentage point?

David Glass, then CEO of Wal-Mart, said Wal-Mart needed its suppliers more than the suppliers needed Wal-Mart. I wonder if any retail CEOs think that way anymore.

Come to the Global Trade Symposium, and we will have a spirited conversation around these issues.

You can register for the Global Trade Symposium and the whole New York Produce Show and Conference here

Get an application for the Foundational Excellence program here.

Book a hotel room at the headquarters hotel here

And rack up the travel discounts at this link




The Disruption Of Established Markets:
How Four Strategies Can Help Transcend Today’s Dilemmas
Can Retailers Show A Little Love For Produce Marketing?
Dutch Marketer Nic Jooste Will Share His Thoughts On Swimming Upstream At The Global Trade Symposium

A few months ago over at Pundit sister publication ProduceBusinessUK.com, Kathy Hammond wrote a piece that was published with the title, Treating CSR as a collective asset can lead to tangible gains. The article detailed how the integration of a Corporate Social Responsibility initiative into the very DNA of a company can create a valuable asset that will attract employees and customers alike.

It was natural to see if we could get the article’s chief CSR protagonist, Nic Jooste of Cool Fresh International, to come to New York for our Global Trade Symposium and expand beyond CSR into the broader question of how the overall produce business is changing and how firms can capitalize on that change.

We asked ProduceBusinessUK.com Contributing Editor Tony Leighton to find out more:

Nic Jooste
Marketing Director
Cool Fresh International
Ridderkerk, The Netherlands

Nic Jooste is marketing director of Cool Fresh International, a Dutch group with clients spread across 54 countries. The company imports fruit through the port of Rotterdam — the company’s base — from all of the world’s main fresh produce nations.

Q: At the New York Produce Show and Conference, you will be giving a European take on the theme ‘Fresh Produce Import & Export: The Disruption of Established Markets.’ What will be your starting point?

A: Market disruption has been defined by Bryan Silbermann, president of the Produce Marketing Association, as “situations causing markets to cease functioning in their traditional manner.” He identified issues such as price, a slowing global economy, sustainability challenges, food safety complications and global politics as the ‘baddies’ and added, “to survive means finding opportunity amid challenges.”

I believe that this is at the heart of being able to effectively handle disruptions, and in our company we fully embrace this approach.

Q: What personal experiences do you have of market disruption?

A: Well, I am an offspring of South Africa, one of the world’s fresh produce stalwarts, yet a country which is disturbed in its own right as a result of poverty, politics and social inequalities.

I have travelled extensively in the line of duty and have seen many disruptions from close by — El Nino in Peru, uprisings in Egypt, volcanic eruptions in Iceland. I am involved in a European fresh produce company, which is situated in one of the world’s most important fresh produce hubs and operates in a great number of countries, and which feels every disruption, whether it is economic or political.

Q: What kinds of disruption, and ways in which to overcome them and prosper, will you be discussing at the New York Show?

A: I’ll highlight four issues that are crucial in combating current disruptions in the fresh produce industry. Firstly, the flexibility and determination to do things differently. Secondly, sustainability throughout the supply chain. Thirdly, niche marketing to gain market share and fourthly, product specialisation to dominate categories.

Q: Can you give us some examples of these issues?

A: Well, around the turn of the century, about 70% of all produce imported into Europe was handled by independent wholesalers on fresh produce markets. Today it is estimated that this percentage has swung around, and retailers now handle 70%. So the number of wholesalers has been annihilated.

In the year 2000 in Holland, no less than 300 importers handled the bulk of all fresh produce imports. Today only 82 remain. The fresh produce specialist has been ousted by the big retailer, and as a result we have lost the passion and product knowledge these individuals brought to the fresh produce industry.

From an economic perspective, we can also safely say that the retailers’ aggressive growth has disrupted the established/traditional wholesale market system in many countries. And consequently, the traditional marketing approaches are also completely outdated.

The European retailers’ dominance in the consumer markets has had another affect on our industry. Previously fresh produce was a source of pride for the people who did the importing and selling. There was a continuous focus on presenting fruit as being ‘top quality’, ‘wholesome’ and ‘healthy’.

Over the past few years, we have seen a drastic decrease in brands which speak to the imagination and which are put on the market by fresh produce specialists who are committed to quality. Simultaneously, there has been a radical increase in the use of generic packaging. This approach is disrupting the fresh produce trade as we know it.

The passion has largely gone out of fresh produce marketing, and consumers are not being engaged sufficiently in the story of fresh produce. We are killing our very own story, which should be all about goodness, flavor and taste, but today is predominantly based on price.  

Another aspect that can be connected to market disruptions is politics. In 2014, Russia decided to retaliate against the West by imposing a full embargo on food imports from the EU, the US and some other western countries in response to sanctions over Ukraine. This ban included fruit, vegetables, meat, fish, milk and dairy imports.

In the year preceding the ban, total European farm exports to Russia were worth some €11bn, with 29% of all fresh fruit and vegetables exports from the Union finding their way to the Russian market — then suddenly exports to Russia came to an abrupt halt.

For a couple of weeks, there was chaos all round, and the pessimists predicted large-scale bankruptcies amongst European growers and exporters/traders. Negative affects were certainly experienced in the short term, especially by those companies that had all their eggs in the Russian basket and had to lay off staff and radically decrease their operations.

This disruption had all the potential to create a massive impact on the Dutch fresh produce trade, but with survival at stake the country’s terrier-like trading attitude came into play. Within weeks, we saw entrepreneurs reacting to this disruption, developing solutions to the problem every day.

My final example of a disruption is to my mind the most threatening and frightening of all. This is the disruption which the processed food industry is imposing on ‘real’ fresh produce. With advertising budgets equaling the annual turnover of the average fresh produce company, big food business is effectively misleading the consumer and cannibalising the real fresh produce industry’s market position.

Not so long ago, the only thing that could claim to be a tomato was, in fact, a tomato — round and red, and you could touch it! The same applied to other products in the fresh produce category, but the playing field is no longer level, and the consumer is continuously confronted with slogans such as ‘ketchup containing only fresh tomatoes’.

When you read the small print on this kind of labelling, you will see that if you use commercially prepared ketchup on your food, you might as well be starting an IV of sugar, because that’s primarily what glugs out of the bottle. As another example is a packet of ‘mashed potatoes out of a box.’

I’ve seen claims to contain real potatoes, but the small print actually shows the following list of ingredients: Potato Flakes, Sodium Bisulfite, BHA and Citric Acid, Monoglycerides, Partially Hydrogenated Cottonseed Oil, Sodium Acid Pyrophosphate, Butteroil. Check the label! By abusing the goodness of real fresh produce in the communications and marketing mix, the processed food industry is cannibalising our industry to death.

Q: You have given some bleak-sounding scenarios there, particularly the last one — so how do you feel the European fresh produce industry can successfully meet the challenge?

A: Well, from the Cool Fresh Group’s perspective, the fresh produce industry can still put itself way ahead in the food game. We work with and believe in our product, which can be categorised as ‘pure goodness’.

That being said, just believing in your product is not sufficient to remain ahead of the game. One actually needs to be creative, innovative and daring to stay at the front of the pack. We started with a new approach in 2007, when the Cool Fresh Group decided to invent its own future.

We knew we had a good thing going, but we needed to do more. We created a strategy around two very specific corporate approaches, the first of them based on the famous business consultant Peter Drucker’s suggestion that, “The best way to predict the future is to create it.”

With that in mind, we set about making sure that our company could not only react but also ‘pro-act.’ For instance, when the Russian crisis exploded, we had already been active in the new economies for some time and had therefore pre-empted the challenge.

We understood what we call the ‘grey’ logistics routes, and in a short space of time we developed a solid turnover with clients who appreciated our guts to become involved in the unknown. These clients, in the so-called ‘backwoods’ of Europe, are still with us and we are constantly discovering new frontiers and opportunities.

The second approach was to take on head-first the challenge of difficult markets and difficult-to-liaise-with clients. This approach was based on a simple principle in handling disruptions: the higher the degree of difficulty, the less competition there is, and thus the greater possibility of earning a solid margin based on providing a higher value-added service.

So we say that the further away the destination and the more complicated the logistics routes; the more labelling which is required; the more complicated the documents which need to accompany the order; the greater the variety of products which we have to source and stack on mixed pallets; the more fragile the products, which we need to supply... BRING IT ON!! The lesson here is to be creative, daring, flexible, and eager to explore new frontiers.

Q: Exploring new frontiers is laudably bold, but Drucker also said, “The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.” How difficult a task is that, especially in the context of disruptions which may occur at any given time or place?

A: We have travelled extensively to meet with clients and suppliers in order to understand their markets and situations, and to generate mutual trust between ourselves and our clients and suppliers. The close working relationships we have formed make it easier to handle disruptions and to collectively identify and exploit opportunities. This approach has taught us not to fear the unknown, but rather to distrust that which has remained the same for too long.

Q: Along what you have described as Cool Fresh International’s, “journey of knowledge in the market place,” the company took the Corporate Social Responsibility route. Has this had beneficial effects in terms of combating disruption?

A: Initially we saw CSR itself as potentially a major potential disruption. The multi-national retailers were giving out clear signs that CSR was here to stay and that, in order to have a long term relationship with them, suppliers needed to be CSR-certified.

We had to get our act together in this regard and to do something before something was done to us. So we embarked on a process of transparency, good citizenship and a clean bill of health in terms of corporate integrity, and we became the first fresh produce company in Europe with a high level CSR certification.

With a strategy based on keeping things simple, we targeted issues that we could influence directly, both within our company and in passionate and high integrity social and educational projects we created in countries from where we source our fruit. We ended up still moving big volumes, but with a different approach that took our corporate profile to a whole new level.

*****

Nic’s bio explains that “Nic believes in swimming upstream. If everybody else is doing it one way, he believes that there is a good chance a company will find its niche by going in exactly the opposite direction.” This philosophy plays out in his expression of willingness to take on difficult challenges as the road to profitability.

It reminds us of a great uncle we had in the produce business. Although the family business is well known with Pundit Great-grandfather Jacob opening in the US in the old Wallabout Produce Market in Brooklyn; Pundit Grandpa Harry Prevor moving the business to the old Washington Street Market in Manhattan and Pundit Poppa, Mike Prevor, moving the business to the Hunts Point market, we also had a more distant relative in the produce business who made a good living in an unconventional way.

The merchants of the market published a unified credit report that indicated who owed a lot, who wasn’t paying, etc. Most of the houses on the market used it as a kind of “stop list,” refusing to extend credit to buyers that were behind terms.

But this relative ONLY sold people who were listed as bad credit. Why? Since selling to these buyers was risky, few would do it. So these companies had little choice but to willingly allow a vendor a high profit margin. They paid very high prices. Of course, managing this was very difficult and many went broke and never paid, but if they were charged triple normal prices, even if two thirds never paid, he cleaned up.

Back in the mainstream business, we found the same to be true. Sure we could sell full trailers, sometimes boatloads to large markets in Europe or Asia, but these buyers knew every price and practically told us what we would be allowed to earn. When we sold mixed trailers to the Caribbean, it was the service that was valued, and it was a difficult business for others to access, so we could make larger profits.

We think Nic is quite astute in pointing out the problems that growth in private label is causing the industry. It is very difficult to encourage investment in product development if the producer won’t be able to realize a return on this investment, and it is difficult to realize a return on this investment if everything is presented to the consumer as identical.

In many cases, the move into private label is specifically designed to allow the retailer and/or the consumer to capture margin that used to go into R&D and marketing — but if that margin is not there anymore, who is going to build demand and develop products for the future?

One thing we will wait for the presentation to buy into is the whole idea that processed foods that use produce as ingredients — ketchup, boxed mashed potatoes etc. — are actually reducing fresh consumption.

Although it is true that these products have large marketing budgets, we doubt that people require much persuasion nowadays to not try and make their own ketchup for example. And fresh has its own problems — notably very inconsistent taste.

We wrote about it years go when Jr Pundit Primo, aka William, was only 18 months old in a piece titled, Little Taste Bud. But, to be honest, we had breakfast at a small diner this morning, and the cantaloupe and honeydew served was almost inedible. The more marketing dollars put behind inconsistent product, the faster consumers will learn not to buy it.

In any case, this is sure to be an intriguing presentation and a spirited discussion, so come join us at the Global Trade Symposium on Tuesday, December 1st, and stay for the whole New York Produce Show and Conference.

You can register for the Global Trade Symposium and the New York Produce Show and Conference right here.

Ask for information on the exciting Foundational Excellence program here.

Hotel rooms at the headquarters hotel are available here.

And travel discounts can be gotten right here.




Setting Producers Free —
Production Agriculture And The Regulatory Burden:
Can States Help Northeast Production Thrive? Are They Inclined To Do So?

Ben Campbell has consistently demonstrated that interesting work relevant to the produce trade is being done in places many don’t realize.  Examples of his outreach to the trade include:

Perceptions And Misperceptions: Consumer Attitudes On Organic And Local — University Of Connecticut Study To Be Unveiled At New York Produce Show and Conference

Connecticut Professor Ben Campbell Comes Back To The New York Produce Show With Seminal Work On Consumer Reaction To The Marketing Of Locally Grown Produce 

When we heard he was hard at work on a research project that implies agriculture in the northeast is burdened by regulations heavier than those in other parts of the country, we asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:

Ben Campbell, Ph.D.
Assistant Professor and Extension Economist,
Department of Agricultural and Resource Economics,
University of Connecticut

Q: We’re intrigued to learn what new research you’ll be presenting this year at The New York Produce Show & Conference to once again instigate dynamic industry discussion.

A: This research will look different than what I’ve done for the past couple of years. I worked with Adam Rabinowitz, Assistant Professor in Residence, and Laura Dunn, Graduate Research Assistant. We conducted a study of the regulatory environment of agricultural producers in the northeast.

Q: So it’s not just concentrating on the produce industry?

A: It’s broader… there’s a lot of information about the produce industry, but it’s more comprehensive for agriculture in the northeast. This report was produced by the Zwick Center for Food and Resource Policy, with partial funding from Farm Credit East. The objective was to provide information to producers, policy makers, and other interested stakeholders on both the perceived and real regulatory environment of northeastern states. Notably the specific objectives were:

• Identify regulatory perceptions of northeastern agricultural producers

• Rank states within the northeast as well as select comparable states throughout the United States;

• Provide recommendations on the state level to lessen the regulatory burden for northeastern states.

Q: How did you approach those objectives?

A: We did a survey of producer perceptions of regulations on a variety of topics, and we also came up with a quantitative index to compare the northeast states individually, with states in the U.S. to determine how regulated the northeast is compared to other states in the U.S.

Overall, agricultural producers in the northeast indicated a number of regulations increasing since 2010, and the amount of time and money spent on these regulations also increasing.

Q: Which regulations are you talking about?  Do you segment the regulations impacting agricultural producers by category type?

A: We looked at regulation packs: environmental, business taxes, labor, land use, transportation and food safety. Those are the major ones. In each of the categories we looked at, the majority of respondents said regulations had increased since 2010.

Let me break out some numbers for you. In our perception survey of northeast agriculture producers, 67 percent (out of 800 respondents) indicated their regulations had increased in general since 2010.  Narrowing it down to specific regulations, 71 percent said environmental regulations had increased, 70 percent said business and taxes, and 75 percent said food safety regulations had increased.  

But the major ones that came up were food safety and business taxes, both in the amount of time and money they’re spending on these regulations. 

Q: And you focused solely on state regulations?

A: These are all state regulations because federal regulations would apply across the board to everyone. We really focused on the state regulatory environment so that we could do our comparative analysis.  

Q: Did you find out how impactful state regulations were compared to federal regulations for context?

A: Yes. We also asked which of the following had the most influence on your business, federal, state, or municipal regulations, and the state regulations came out on top in terms of having the most impact on agricultural producers’ farming practices, followed by federal second and municipal third.

Q: When defining the northeast, what states are you including?

A: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

Q: Were there big differences between states in how they viewed regulations?

A: So we know northeast producers believe regulations are increasing regardless of the state they’re in. In the survey we asked, how do you perceive your state and how do you perceive other states. What we found was, by and large, most northeast producers felt their state was regulated but other states were at the same or higher regulations, but it varied by state.  For example, New Hampshire producers believed they were hit with more regulations than other states in the northeast, and Maine and Vermont producers felt the same.

You have these mixed state perceptions of how producers view their regulations and those of other states. New York, Connecticut and Massachusetts respondents believed they had a little bit less regulation than other states.

Q: What’s the real story?

A:  I’ll be building towards that in my presentation. As a part of this, we created our own index. A number of studies in notable places, including the New York Times and CNBC, rank states by how friendly they are to businesses, and New England and the northeast particularly continue to do pretty poorly in those rankings.

We took an agricultural angle, not a business angle overall. We created our index with similar variables used in other studies, such as one done by Colorado State.  And we came up with our own index to rank states, not just in the northeast but comparable states in the U.S. based on our views of what was important to put in this index.

What we find overall is that New England is more highly regulated than roughly 10 other comparable states in the U.S.  We had 16 states in the index, and five of the six bottom ones were in the northeast, or more highly regulated in the northeast than in other states in the U.S.

Q: That’s quite a statement considering the competitive market pressures and low margin nature of the produce industry.

A: That’s exactly right. What was interesting… we had the perception part, where producers ranked how they perceived things, but it didn’t necessarily align with what we found in the index. On the producer end, they felt New Jersey was a highly regulated state, but we found New Jersey was one of the least regulated states in comparison. 

We put these states in ranking. It means state A is more regulated than state B, but it doesn’t mean A is regulated high or low. We’re not saying New Jersey is highly regulated or minimally regulated; we’re saying this in the context that New Jersey came out with less regulation compared to other states in the northeast. This is surprising. 

The assumption many people had, and what the producers felt, was that New Jersey was at the top of the list for regulation.  It was what we had expected as well, and it turned out to be the opposite.

You always hear New Jersey’s bad with respect to regulations. Yet in our index ranking taking a quantitative view, New Jersey is less regulated than Maine and New Hampshire, which turned out to be the most regulated states in our index ranking.

Q: Did you separate out your state rankings by the type of regulation, and if so, did the rankings fluctuate, maybe a state is one of the more heavily regulated states on the environment, but one of the least regulated on tax issues?

A: States moved around on the rankings based on the type of regulation, getting different rankings for tax policy, labor, environmental, etc.  In one ranking, New York was badly regulated, and in another area minimally regulated.

Q: So honing in on New York as an example, how did it fare in the different rankings on the index?

A: In overall rankings, New York came out fifth out of eight northeast states on its regulatory environment. It fell into the second tier of rankings with Connecticut, Vermont, and Rhode Island and the bottom two were Maine and New Hampshire.  Looking at the tax policy of New York, it was the least regulated in tax policy but most regulated in labor policy and environmental policy. This is our ranking when we put our factors in there. The index is our version of a quantifiable reality.

In the survey, New York ranked second highest in the perception it was over regulated, with New Jersey taking that top spot.

Q: So perception is not reality.

A: Roughly 80 percent of respondents in New York and New Jersey believed they were over-regulated. The story would be there are differences in perception versus our quantitative ranking. I hesitate to say reality. It’s our quantitative representation of reality. 

New York is in the middle of the pack, where producers thought it more highly regulated than what we found in other states. Similarly, New Jersey producers perceived their state more highly regulated than what we found in other states, yet New Jersey comes out in our index ranking as the least regulated.  

We have Maine and New Hampshire, where producers believed they didn’t have much regulation, and we found in our index those states more regulated overall.

Q: Do you average out the different regulatory categories to come up with those overall rankings. For instance, you point out that New York is least regulated in tax policy, but most regulated in labor and environmental policies. How do you weight those different issues? And the subsets of those issues, which may vary based on the state you’re in and your company’s particular needs?

A: That’s an excellent question, which I will address more during my talk. I can tell you that in our index, getting hammered in labor and the environment really brings down New York’s overall score despite it being least regulated in the business tax category.  

Whereas with New Jersey, it’s always in the upper third of these different categories; it’s not always the best but never the worst, so New Jersey averages a higher ranking for being less regulated.  New York has two really low scores bringing our quantitative ranking down to show it is highly regulated.  

Q: Who did you survey, and how many are in the produce industry? Are you able to pull out those respondents’ answers and provide industry-specific insights? Did you find any big differences in respondent answers based on what industry they were in? 

A: Thirty percent of our sample was fruit and vegetable producers.  I don’t have that detail to share with you now, but I’m working on breaking down the information in the survey, which will be part of my talk at the New York Produce Show. 

What we did in our modeling was to determine perceived differences in regulations by type in respect to the regulatory climate.  And I don’t think producers of fruits and vegetables were different than other groups in that vein. So generally, respondents in the produce industry had the same views as everyone else, with the exception of transportation and food safety.

For transportation, fruit and vegetable producers thought they were over-regulated compared to field crop producers. And the same thing was the case for food safety. Those are two areas where the produce industry thinks they are over-regulated compared to other agriculture sectors. 

But with land use, labor, business taxes, and environmental regulations, we see no meaningful differences in perceptions between sectors. 

Q: Did you break down the impacts of the regulation types in terms of resources and costs?

A: I don’t have that information broken down now for you, but I can tell you the fruit and vegetable producer segment is in line with everyone else in believing the resources and costs will continue to increase because of more regulations.

Q: Did you go into the study with a hypothesis, and did you come away with any big surprises?

A: There was no surprise regulations were increasing. The big thing we didn’t expect was the perception versus reality phenomenon. We thought our index rankings would be more in alignment with our producer survey results.

There was some alignment there, but we thought New York and New Jersey would be more regulated overall compared to other states. We didn’t find that.  New York was maybe more in line with what we expected, but New Jersey was a surprise. We expected Maine would be more highly regulated than what we found.

Using the results from the report, it is clear that each state has areas they can improve their regulatory burden on agricultural producers. Some states need to focus on lessening the burden of taxes while others may need to focus on labor or environmental policies.

In the big picture, we thought northeast states would do poorly compared to other states, and that’s what we found. We had other states in the model for comparisons.

Q: Which states did you include outside of the northeast?

A: We chose Pennsylvania, Ohio, Michigan, Wyoming, Nebraska, Illinois, Wisconsin, and Idaho. Five of the bottom six states in our rankings are from the northeast.  That indicates the northeast doesn’t do as well regulation-wise in agriculture as other comparable states in the U.S. That was our inclination, but we didn’t go into the study to prove that. We set up all these factors, and the results came out as they did.

Q: Doesn’t that create an uneven playing field?

A: It was eye-opening.  If we have states in the northeast that are more heavily regulated than other states, it may make them less competitive, whether it’s in labor, transportation or another area.

There’s a whole host of additional costs you might have to pay; it could be an extra regulatory fee or extra time and resources you have to invest. Agricultural regulations affect everyone, especially if you’re a producer. That’s why it is significant for us to see how the regulatory environment in the northeast compares to other states.

The differences in producer perceptions versus our quantitative index, and the breakdown in regulatory categories, are important to understand.

Producers have the right to their perceptions, but the fact the northeast continually falls to the bottom for its agricultural regulatory burdens compared to other states is the big takeaway. Whether you agree with our index, the certain sets of weights and variables we used, or not, this study indicates a competitive imbalance and a need to examine agricultural policy in the northeast.

*******

Whenever we see research where the results don’t match the expectations of people actively engaged in the field, we like to assess why that might be so.

In our experience, the definitions of the regulations, the legal requirements, don’t always speak to the regulatory burden.

One of our speakers this year in the Global Trade Symposium is Gualberto Rodriguez of Caribbean Produce Exchange in Puerto Rico. You can see the piece about his presentation here.

Back when the Pundit was in his salad days and green in judgment, we worked in our family’s Puerto Rican warehouse; it was decades ago and doubtless things have changed, but it was the culture that the inspectors felt they should receive a parting gift to thank them for their services. 

One reason we stopped selling frozen eviscerated poultry along with produce was because the inspectors only expected us to give what we had. If we only sold potatoes, they were happy with a $5 bag of potatoes. If we had poultry, they expected a $65 case of frozen chicken!

Working retail, in various places, we saw dramatic differences in enforcement on weights and measures depending on where we were and the culture of the department.

So it might be that a state like New Jersey has tougher enforcement of the rules so they are experienced as more onerous.

The key is that this type of work is very valuable for the industry because it is the kind of study one can take into the state legislature and say “Look. You are killing us. All the produce is going to come from somewhere else if you don’t fix this.”

We are looking forward to getting the hard numbers at the show. Come and join the conversation.

You can register for The New York Produce Show and Conference here.

Get the info on the new Foundational Excellence program here.

Book a room in the headquarters hotel here.

And find great travel discounts here.




Pundit’s Mailbag –
A Look Back At Fresh & Easy:
Tesco’s Insistence On UK Suppliers Building Facilities In The USA Increased Overhead And Reduced Flexibility...
The End Was Easy To Predict Even At The Beginning

We wrote about Tesco’s Journey To America as Fresh & Easy for many years, but we have been speaking to Eric Schwartz even longer. You can see some of the pieces he has contributed to here:

Pundit’s Mailbag — The Irresponsibility Of Whole Foods’ 'Responsibly Grown' Campaign

Why The Secrecy On Inspection Agency Lab Results?

Dole’s Schwartz Sheds More Light On Recent Recall

Pundit’s Mailbag — Dole’s Schwartz Comments On Silent Buyers

Pundit’s Pulse Of The Industry: Dole Vegetables’ Eric Schwartz

Pundit’s Mailbag — How About Subsidy Money For GTIN Conversion?

Pundit’s Mailbag — More Questions About Leafy Greens Board

Pundit’s Mailbag — Organic Industry’s ‘Situational’ Standard

Single Step Award Winner — Eric Schwartz Of Dole Vegetables

Pundit’s Mailbag — PMA’s Opportunity To Learn From Friends And Foes

Pundit’s Mailbag — The Deadline Approaches

Pundit’s Mailbag — Lesson From Avocadogate: You Get What You Tolerate

Dole Hit With Another Recall

Dole’s Schwartz Sheds More Light On Recent Recall

Arizona Marketing Agreement One Step Closer To National Leafy Green Standard

Now, as we published Fresh & Easy: R.I.P, Eric sent over some final thoughts on the matter:

There isn’t much about Tesco that hasn’t already been said. One piece that contributed greatly to their demise that little has been written about was their decisions around bringing suppliers here to start from ground zero by building production facilities, warehouses, etc., in an industry that already had excess supply chain capacity that was very efficient.

Any one of the major US processors at the time could have taken on their roll-out. In the UK, it is common to have a supplier tied directly to a retailer because there are not a lot of competitive options for many fresh items. But Wild Rocket and 2 Sisters just added very expensive processing and supply chain steps to an industry that already had excess capacity. 

When I had my first meeting with Tesco, I proposed a test run using our (my employer at the time) brands and supply chain as an option to test where the right production and distribution points should be, as opposed to investing significant capital right out of the gate.

I recall listening to a dress-down speech about how “You Americans don’t understand how the retail business and the supply chain should really work”. I also remember walking out of that meeting and taking bets with my team on how long Tesco was going to last with the supply chain costs they were about to absorb. 

—Eric Schwartz
Chief Executive Officer
United Vegetable Growers Cooperative
Salinas, California

Indeed. We wrote often about the decision to entice its UK suppliers to open facilities nearby as being flawed in many ways. Part of it was market intelligence. On opening day, 25% of the fresh-cut SKUs were devoted to Watercress-based salads — the total SKU count devoted to watercress-based salads by national US fresh-cut salad manufacturers producers at the time? Zero.

But, as Eric reports, the people assigned to the project simply weren’t interested in adapting to American ways; they wanted to change the way we did business in America and the way American consumers eat.

It was a tough order, and they failed to do either.

The fresh-cut facility was silly. Ready Pac is within walking distance of the Fresh & Easy campus, and Dole, Fresh Express, Taylor Farms and many smaller players would have been anxious to hook their wagon to Tesco’s star — assuming it didn’t demand an upfront investment of tens of millions in a new facility — and thus save it the cost of investing in such facilities up front.

Although Tesco didn’t actually make the investment, it had its suppliers make the investment. Still, it crippled the Fresh & Easy operation in two ways:

First, as a result of such large fixed investments by itself and its suppliers, there was tremendous pressure to open stores fast, and that meant tremendous pressure to accept sub-standard locations.It is not really widely recognized that Tesco didn’t just fail in America. Its US subsidiary actually filed for bankruptcy, mostly to get out of leases on stores so bad that Ron Burkle’s group wouldn’t touch them. Although legally correct, that is not what one expects when dealing with an operation such as Tesco.

If Fresh & Easy had been buying from existing vendors and distributing through existing facilities, even if it “overpaid” by 50 cents a box, it would have had the time to wait for the right locations to become available.

Second, it eliminated flexibility.It is quite possible that the Fresh & Easy concept that failed so completely in auto-focused southern California, Arizona and Nevada might have done well in Manhattan, inside the loop in Chicago and other urban centers. Had Tesco opened a half dozen stores and found it wasn’t working, they could have afforded to try the concept in a different geography, but their commitment to their own distribution center and their committed suppliers meant that opening elsewhere wasn’t an option.

In the end, we concluded that the use of outside vendors was a kind of subterfuge that allowed Fresh & Easy to get the facilities it believed it needed without having to put the cost on its own books. In the end, Tesco bailed out the two British suppliers, paying a shockingly high price for two basically worthless companies.

The price was so high, we saw it as only possible based on some agreement, a handshake or a contract, in which Tesco agreed to make the vendors whole. We wrote about the sale in a piece titled, Latest Tesco Report Details Bailout Of Owners Of Wild Rocket And 2 Sisters; Tesco Says Fresh & Easy Will Be Profitable But Not Now

One of the great business lessons of Tesco’s effort in America is the desirability of maintaining flexibility. What are you going to do if plan A doesn’t work? Tesco’s investments put itself in a box from which no plan B was ever likely to emerge.

Many thanks to Eric Schwartz for reminding us of this important lesson.




Pundit’s Mailbag –
GMOS And Bio-Diversity
Is It A Tool Toward Progress?
Or A Dream Of Monopoly Profits?

Our piece — The Wall Street Journal Highlights The GMO Dilemma: Will the 'Innate' Potato Change Minds When The Case Is So Clear? Don’t Bet The Farm On It! — brought feedback from a thoughtful industry member who has communicated with us before. Among the pieces he has participated in include these:

Pundit’s Mailbag — Organics And Manure

Insights On The Alfalfa Sprout Advisory

Pundit’s Mailbag — Sprout Lessons Echo Food Safety Dilemma

More ‘Summing Up’ Of Sprout Situation

Pundit’s Mailbag — Food Prices And Free Markets

Pundit’s Mailbag — Irradiation Risks

Testing Sprout Seeds

Pundit Mailbag — Honor ‘Green’ Attempts

Pundit’s Mailbag — Can Irradiation Follow The Path Of Pasteurization?

Pundit’s Mailbag — Pesticides And Cancer

Pundit’s Mailbag — Irradiation, Pasteurization And Labeling

Pundit’s Mailbag — The Acceptance of Risk

Pundit’s Mailbag — A Look At Organic Versus Conventional Yields

Recommendation For An ‘Appropriate’ Seed-screening Program Shows FDA Unwilling To Take Responsibility For Its Recommendations

Now, he speaks out on GMOSs:

The November 12 Pundit article on GMO's bemoans the categorical rejection of GMO's as being irrational and counter-productive. For example, take the "Innate" potato!

Citing a specific benefit as a way of discrediting a generalized opposition is no different from citing a specific problem as a way of discrediting a generalized benefit.  I have never heard the pro-GMO argument expressed in any way other than "GMO's are safe".  

The discussion of the Irish "potato famine" rarely mentions the following:

"While the effects of these (crop) failures were largely ameliorated in many countries thanks to their cultivation of a wide variety of potatoes, Ireland was left vulnerable to these blights due to its dependence on just one type, the Irish Lumper."  (http://www.history.com/news/after-168-years-potato-famine-mystery-solved)

One doesn't hear GMO proponents suggesting that the best way to prevent massive crop failures might be to cultivate many varieties, rather than a single monoculture. To what extent is the money behind GMOs also invested in the dream of monopolizing a single seed type?

Someday perhaps we can start to discuss these issues.

— Bob Sanderson
Co-founder
Jonathan's Sprouts
Rochester, Massachusetts

Well, fortunately, we are not bound by how others argue for or against things, so we will express our own view this way: Genetic modification is a tool, and that tool can be used wisely or foolishly; its use can have good consequences or bad consequences. 

It is perfectly coherent to argue that we should use genetic modification to transfer genes between two potatoes to accelerate the breeding process and NOT believe we should genetically modify human children to prevent them from being born redheads.

It is also quite obviously true that even in areas where genetic modification could solve a problem, it is not automatically true that genetic modification is the BEST way to solve a problem. Thus, there is no contradiction between allowing for genetic modification and also being in favor of biodiversity.

Having given dozens of speeches on the subject, we can also say that most of those opposed to GMOs have no idea about what goes into conventional plant breeding. We find the decision to exclude GMOs from organic food bizarre, when they say nothing about varieties produced through mutagenesis. The Genetic Modification Project ran a piece titled, Delicious Mutant Foods: Mutagenesis and the Genetic Modification Controversy, that explained the issue this way:

To the foodie, what could be better than “natural” ripe Ruby Red grapefruit? Free from the alleged dangers of pesticides or genetic modification, organic Ruby Reds should represent one of the last havens of natural food, completely unaltered by man.

Think again. Ruby Red grapefruits, along with 3,000 other crop varieties consumed by millions every day, were actually created through mutation breeding, also known as mutagenesis. Plants were exposed to atomic radiation, thousands of genes scrambled in laboratory experiments that took years.

In the last 60 years, mutation breeding has produced a sizeable fraction of the world’s crops. Varieties of wheat, including almost all of the most popular varieties used to make top-grade Italian pasta, vegetables, fruit, rice, herbs and cotton have been altered or enhanced with gamma rays, and often separately or additionally soaked in toxic chemicals, in the hopes of producing new desirable, traits. Now these varieties are marketed as conventional and organic foods, and are unlabeled.

Because the most prominent early use of commercial GMO technology happened to be Monsanto, with Roundup Ready crops, many people who don’t like Monsanto or who feel that the nature of this usage encourages monocultures or has other negative effects, are opposed to GMOs.

But genetic modification can also be used to produce Golden Rice and save people from blindness. Mission 2017, an MIT student initiative that focuses on global water security, argues against “the current genetic modified crop and agricultural business culture” but supports “agricultural biotechnology in the form of crops genetically modified for drought resistance and water efficiency.” You can see its argument here.

Radioactive materials can be used to make bombs, but they can also be used for medical uses to save lives. And even bombs can be used for good or ill. Life requires us to confront hard decisions, but simply abandoning valuable tools — radiation or genetic modification — won’t help us advance.

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