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Perishable Pundit
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Cutting Through The Agendas:
What’s A Buyer To Do?

Our pieces on the Food Safety Leadership Council, which you can read here, here and here, brought to the fore the issue of the role of buyers in establishing food safety standards, which we earlier dealt with rather extensively as a result of the Buyer-led Food Safety Initiative — launched in October of 2006 — and the produce safety efforts of the National Restaurant Association, which came to head as the California Marketing Agreement was about to start.

Now the latest pieces have brought this thoughtful letter from a long-time force in produce retailing:

When the food safety buyer group was formed last year, I thought it to be a bad thing. My reasons were as follows:

  1. I was fundamentally opposed to buyers imposing production guidelines on suppliers. My reasons were 2-fold: Once you start going down that road, it will certainly escalate. And buyers have neither the expertise nor the breadth of experience to do this with wisdom.
  2. I was also opposed that this was being done in the public spotlight. This needed to be done quietly for 2 reasons: first of all, it would continue to put the glare of public scrutiny squarely on the produce industry. And two, it would lead to using food safety as a marketing issue.

Now fast forward to November of 2007:

It appears that buyers making demands on suppliers in the area of food safety are escalating. And they are doing so without any more wisdom than they had just over a year ago.

Food safety in produce continues to be in the public eye. And now, our wonderful state and federal governments have all sorts of plans to “involve” themselves in this! And it sure looks to me like buyers are trying to use food safety as a marketing issue.

When the buyer-led food safety initiative launched last year, people’s hearts were in the right place, but their methods were not likely to lead to positive results for the industry.

What really has me fried is the response that WGA is taking to all of this. I find it interesting that WGA embraced buyers telling growers what to do in 2007, but now are outraged! Hmmmm….. why might this be?

All you have to do is to look for hidden agendas:

For years, WGA has wanted to provide “certification” to products grown in California and Arizona. From a marketing perspective, you can understand why. Simply put, they want to promote western-grown products as better than products grown in other places. It can also provide a revenue stream for them.

So here comes the spinach crisis and some well intended buyers “demanding” that something be done. So WGA drives a California marketing order, with WGA leading the charge. Doesn’t matter that by doing so, Texas Veg, Florida Veg, or Eastern Veg get thrown under the bus! PMA kicks in bucks for a food safety center, Canada requires western leafy products to participate in the California marketing order, and off we go.

Not one peep from Mr. Nassif about those big, bad buyers who tell growers what to do.

WGA should have told them publically to bag it! Then quietly, get interested parties together quietly to work on this .Then go to the government quietly and lay out the necessary activities that need to be regulated federally.

You have written in “the Pundit” that the buyer initiative was a good thing. But it has opened this “Pandora’s box” and, frankly, I see no end in sight. Just wait till when this starts being marketed in ads, or on TV.

I can see it now……..

“Hey customers of ‘our’ store ….. you can ‘get better prices and have a better life’ because our produce team has led an industry initiative to make fruits and vegetables safe by getting after those greedy, non sustainable growers to follow these ridiculous standards that won’t make produce a bit safer, but that will make you think we are doing something about it. So go buy your fruits and veggies from ‘our store’ because it is safer than what you will find at the competition!”

EGAD, I think I am going to be sick!!

Seriously, though, just go back to the Alar scare. Raley’s is promoting Nutriclean Certified Produce. Safeway and others began to advertise that their produce was being inspected by Primus, as if to say that this was better for their customers. And I promise you that this is going to come back again, only this time, it will be that “company A’s buyers” are imposing more stringent standards than “company B’s”.

Anyhow, enough of my ranting on this! I just feel it’s important for people to think through the consequences of the actions they take. Good intentions are oft times not reason enough to take particular actions.

And as for WGA, it can’t have it both ways!

Our correspondent’s letter is pointed and his experience is substantial, so these are arguments that must be paid substantial attention. Basically, the letter makes the following points:

  1. Buyers have no particular expertise or experience in food safety — certainly on the horticultural end of things. Thus this is an inappropriate function to hand to buyers.
  2. Buyers making pronouncements will attract publicity that is detrimental to the industry.
  3. WGA has an agenda separate from food safety — namely the promotion of western product. Thus WGA is an inappropriate steward of the trade’s food safety interests.
  4. Buying organizations have their own commercial interests and will approach food safety from the perspective of gaining a competitive advantage.

The letter is both frank and incisive. Yet it is not clear that there is any real alternative to what the buyers are doing. Let us look at the options:

GOVERNMENT

We could declare industry incompetence and simply allow the government to impose what standards it will — yet it is far from clear that this would turn out better for growers. Besides, there is zero evidence that the broader industry has any enthusiasm for government regulation.

On a national level, when United called for mandatory regulation, the reaction was clear: Most commodities and states not directly affected by the food safety controversies saw no reason to encourage government regulation. The later endorsement of such regulation by PMA as well did little to change this dynamic.

Even in California, the initial plan of Western Growers Association was to move from a Marketing Agreement — which always poses the danger that companies won’t join or will withdraw from participation — to a Marketing Order that would be mandatory for all. Marketing Orders customarily call for the growers to vote to establish and maintain the Marketing Order. Typically, there is some type of “supermajority” provision, whereas a majority of the growers representing a majority of the crop must endorse a plan.

WGA killed that plan because it was certain the plan would be voted down. In other words, even among spinach and leafy greens growers, even in California, there is no consensus for a mandatory food safety solution that we can take to government. Much less is there a consensus among pear growers, carrot growers and mango growers that the government should regulate.

The California Marketing Agreement is the trade’s crowning collective achievement in food safety. Yet it is best we recognize that we pulled it off through a kind of a slight of hand. Marketing Agreements and Marketing Orders were put into law to allow growers to manifest their will through collective action. We’ve found a way to use the same programs to force growers to do what they would not vote to do on their own. Don’t be surprised if, one day, someone calls us to task on this matter. One never knows how a judge — or a congressman — or a USDA Secretary — might view our strict conformance to the law, but departure from the spirit in which these laws were established.

In any case, both nationally and in California we have the same split. Industry leaders, defined as those who serve on important boards and committees, such as PMA, United and WGA, endorse some kind of regulation — whether USDA through marketing agreements and marketing orders espoused by WGA board members or FDA through mandatory regulation espoused by PMA and United board members.

But the vast majority of the industry does not. Even among specific industries affected by the E. coli 0157:H7 events of last year, we are forced to invent mechanisms that put the small number of sophisticated handlers in charge, lest the vast majority of growers reject any regulation.

In light of all this, it seems impossible to argue that the route the industry wants to follow is to have government regulation. Even if we did want to follow this route it is not clear the government is really interested in the job. After all, the FDA didn’t leap to grab the bait handed it by United and then PMA. Between industry reticence on the issue and the government’s lack of interest, it seems unreasonable to say we are counting on government to solve this problem.

Besides, even if the FDA announced a tough new standard for fresh produce, it would instantly just become a new baseline from which others would advocate even tougher standards — such is the nature of food safety issues on fresh produce where there is no “kill step” and thus we can always be more vigilant.

GROWER/SHIPPERS/PACKERS/PROCESSORS

We could hope that production agriculture will solve the problem. Yet this is problematic as well. Leave aside the question of whether there is a will to do so, the problem is that in produce — where we deal not in sharp lines but in a continuum of safety — no vendor can deliver more safety than the client is willing to pay for.

In the midst of the spinach crisis, we wrote a piece entitled The Role Of Retailers And The Future Of Food Safety, in which we pointed out the problem:

“…in the end, the strength of our food safety systems is at least as dependent on what retailers demand as they are on what the government does for the simple reason that what retailers pay for is what they are going to get.”

Then, in Pundit sister publication, PRODUCE BUSINESS, we wrote a piece entitled, Food Safety is a Retail Issue, and explained the point this way:

“…what holds suppliers back is not that they need an FDA regulation — it is that they need to see a willingness on the part of buyers to pay more to obtain a higher level of food safety and security. So far that is missing.”

We don’t have perfect knowledge, but we know most of the risks and can take action against them. But they are not self limiting. We can test water every year, every quarter, every month, every week, every day, every hour, etc. We can make buffer zones ever larger. We can put traps every 50 feet or every 25 feet or every ten feet, etc. If there is a flood, we can agree not to grow ready-to-eat produce on that land for a year or two years or five years or ten years, etc.

The point is that a grower has no basis for electing any point along the continuum. Except, from a business perspective, he will probably stick to whatever the current Good Agricultural Practices are because that is where the market clusters and thus the grower reduces his risk — on the one hand he doesn’t have to worry very much that his product will be unsalable because it won’t meet food safety standards as most buyers will accept the product. On the other hand, he doesn’t have to worry that his cost basis in food safety will be too high and he won’t be able to get the money back as all his peers will have roughly the same cost basis.

Note, though, that the decision to follow GAPs is a business decision — not a scientific decision. The grower is not declaring that the GAPS are the single most optimal set of practices if one’s only goal is to safeguard public health. Just declaring it is the safest for him to do.

The truth is that plenty of producers put in special procedures for lots of clients. Darden, McDonald’s, Tesco, Marks & Spencer, Costco — these are all famous for these things.

We don’t think that growers “disagree” with these procedures — most in fact are proud of being able to perform to “above average” standards. Most would argue that their operations, overall, have been upgraded by learning to operate at the high levels demanded by these clients.

All over the industry are firms that learned replenishment from Wal-Mart, food safety from Darden and Social Responsibility from Tesco — these vendors never would have become as good as they are without demanding clients.

It even becomes a sales point. In an interview we ran with Del Taco’s Janet Erickson, she stated it plainly:

We’re not as large a company as many of our competitors. We don’t do our own specific testing at the supplier level. The way we approach our supplier food safety is different than some of the larger companies. Our quality assurance director does go to the facility to do his own “audit”. He’ll spend a few hours there, mainly asking a lot of questions. In some ways most important, he asks who else you do business with, if the list of customers includes those that conduct stringent audits.

… Our suppliers are already doing business with many companies much larger in size that conduct extensive food safety measures. Best examples are Jack in the Box, McDonald’s, and Darden, all doing thorough jobs on food safety and quality assurance. That doesn’t mean we’re going to accept everything at face value. We always visit our suppliers and look at their operations with our own eyes, but also factor in their relationships with other customers.

Yet, this only works if buyers are willing to pay a price. If Janet Erickson had said that Del Taco prefers to work with suppliers that have been vetted by Jack in the Box, McDonald’s and Darden — unless, of course, someone happens to be cheaper — the message to vendors would be totally different.

Growers and processors clearly have enormous capabilities and the model of anyone — buyers, government, anyone — sitting in an ivory tower and then issuing a set of dictates to them is bizarre. Obviously, the best approach is a consultative one, in which vendors work with producers to enhance safety.

Yet, in the end, producers have to produce what their customers are willing to buy. If the thirst is for the cheapest product, the producers can’t easily move up on the continuum of produce safety and, frankly, most won’t be motivated to try. These are businesspeople. They will meet the requirements of the law and of their customers — to expect more is unreasonable.

Those individual producers that have high food safety standards also have a clientele willing to support these standards — otherwise they would be out of business.

So to expect growers and producers to be the source for higher food safety standards is unreasonable if their customers don’t value it.

BUYERS

So if the government won’t deliver food safety and producers won’t deliver food safety, all we have left is the buyers.

Our letter-writer’s points about competency are well taken, and certainly the efforts of the Food Safety Leadership Council have been ham-hocked — needlessly rude, done without reasonable consultation and, in general, guaranteed to insult producers and make progress more difficult.

Still, one has to recognize that this is probably due to a historical lack on involvement in produce food safety issues. If you read our interview with the British Retail Consortium, you quickly realize that a group such as the Food Safety Leadership Council, properly staffed, can become real pros at food safety.

Our writer’s second point concerns publicity, and we have concerns here as well. Yet even the publicity issue strikes us as overstated. Any pronouncements — from the government, from a grower dominated board or from a buyer’s group — could attract attention of the media.

All players… the WGA, retailers, politicians, etc… have their own agendas and own reasons for doing things. We have to judge what they do, not their motivations.

Most of the leadership on food safety has come through foodservice. Just read the interviews we’ve done. This is both because they have legal responsibility for product that they are serving — which supermarkets do not — and because they have the reputational risk that supermarkets do not.

Although we are concerned about marketing food safety to the consumer, by working through some sort of retail consortium, which the Food Safety Leadership Council may be the genesis of, there is much less likelihood of this happening in an irresponsible manner.

Basically, the United Kingdom has a retail-driven food safety system and, although we can argue what country has good, better and best systems, the situation in the UK is certainly not a cluster of retailers making wild and unfounded claims about food safety.

And, of course, we have an FTC and a court system that can serve as a check on unwarranted food safety claims.

Besides, if we want to sustain freedom, we really have no choice. No matter what standards the government or the produce industry might impose, retailers and foodservice operators will always be free to establish their own standards.

First of all, there are different legal liabilities for foodservice operators, preparing their own food, private label product at retail and reselling product to others. So it is to be expected that organizations will develop different food safety criteria.

In addition, there are different things at stake with different organizations. Disney has a market capitalization of over $60 billion — virtually none of which is related to fresh produce sales.

So, maybe Disney, either for its own use in theme parks, hotels and cruise lines or, as a standard for licensees, such as Imagination Farms, has a right to err on the side of caution. If Disney says to its suppliers, “Look, we know the science isn’t that certain, but we feel safer if we can not have any product we are going to use in ready-to-eat uses grown more than a mile of a cattle feedlot. What will it take to make that happen?” well, maybe producers will want to charge them more, maybe some producers will be happy to have the business and will charge them the same as everyone.

But it is Disney’s brand, Disney’s reputation and Disney’s $60 billion-plus market cap at risk — and it is a free country. The industry might think Disney is wasting its money, paying a premium for things that won’t truly enhance safety. Perhaps, but it is Disney’s money to waste.

Many thanks to our writer for helping us to think through this important topic.




Tesco Takes Heat For
Not Supporting Underserved

Vendor reports are that sales at the newly opened Fresh & Easy stores are brisk with the chain easily exceeding its plans to sell twice per square foot what a conventional supermarket does.

The same vendors, though, believe the initial price points are not sustainable and wonder if “grand opening specials” aren’t driving a lot of the business.

Of course, the novelty of the concept also makes predictions difficult to evaluate.

In the meantime the Los Angeles Times has blasted Tesco for not “walking the walk” when it comes to locating stores in underserved areas:

Where is South L.A.’s Fresh & Easy?

Tesco has opened its first markets, but not in South L.A. Is the grocer’s commitment to ‘food deserts’ firm?

When British grocery chain Tesco announced that it would expand into Southern California with its new line of Fresh & Easy Neighborhood Markets, shoppers and local officials took heart. They were particularly excited about the company’s stated commitment to doing business in underserved neighborhoods, including South Los Angeles — where affordable, fresh groceries have been hard to come by since the 1992 riots.

The first Fresh & Easy locations opened last week in Glassell Park, Anaheim, Arcadia, Hemet, West Covina and Upland. The much-heralded store in South Los Angeles was not among them.

Tesco offers an explanation for the delay: That store will be part of a development at Adams Boulevard and Central Avenue that also will include affordable housing, and the residential portion of the project hasn’t yet secured all of its funding.

Still, a coalition of labor activists and community groups has loudly questioned Tesco’s commitment to serving so-called food deserts, and their frustration is understandable. Researchers from Occidental College’s Urban and Environmental Policy Institute used liquor license applications to analyze 121 prospective locations for Fresh & Easy markets and found that less than 10% were in census tracts with significantly high poverty rates. Most were near existing supermarkets.

Fresh & Easy stores offer a modest mix of fresh foods, prepared foods and staples in an easy-to-navigate, clean and modern format. They provide a pleasant shopping experience for those of us lucky enough to have many shopping options. For shoppers in underserved areas, convenient access to a Fresh & Easy could be life-changing.

If, in the end, Tesco doesn’t follow through with its stated plans, it will join a long list of market chains that have flirted with and ultimately abandoned South Los Angeles. But we remain hopeful that the Fresh & Easy romance won’t come to that. Tesco officials say they still intend to open stores in South L.A. and several other food deserts. The company says it will open a store in Compton next year.

In the meantime, if Tesco wants to continue tooting its socially conscious horn, it must show — not just tell — Los Angeles that it is serious about bringing groceries to the city’s underserved neighborhoods. And labor, for its part, might consider moderating its demands for a neighborhood benefits agreement to allow Tesco to get its Los Angeles-area operations off the ground. The residents of South Los Angeles are still waiting for affordable, fresh food.

For all the research that Tesco did in coming to America, there is a certain sense in which it was tone deaf. After all, it was completely predictable that the media would be looking to see if Tesco kept its promises. If it had played its cards right, it could be getting glowing accolades; instead, with long drawn out explanations about why it hasn’t opened in South LA and doubt about any specific location coming through, people will start to feel that Tesco was playing them for a song.

Having emphasized this promise, Tesco would be wise to sign a lease very quickly so it can announce a location and show it is the real deal.




Misperceptions Of Food Miles
Affect Countries Like Kenya Hardest

We have written many times about “food miles”, including here, here, here and here, plus most recently, we addressed the issue of the Soil Association in the United Kingdom and its idea to restrict air-freighted produce from being marketed as organic.

We’ve also dealt both here and here with the notion that air freight of fresh produce is a particularly pernicious contributor to global warming and the penchant of certain UK supermarkets to place a “Mark of Cain” upon each air-freighted package in the form of an airplane symbol.

There are at least two immediately obvious problems with both food miles and the anti-airfreight movement:

First, plucking out any particular link in the supply chain is inherently meaningless. Even if it is true that air freight and/or distance were substantial contributors to carbon output, that tells us nothing. Perhaps all that transport via air is needed to get product from a particularly environmentally beneficial place of production. In this case, the extra carbon output used in transport would have to be weighed against the reduction in carbon output resulting from more environmentally efficient production.

Second, even if it was established — which it has not been — that product air-freighted in or product from far away did result in higher carbon output than locally grown product, that hardly seems determinative. Even if we assume that reducing carbon output is something we value — surely it is not the ONLY thing we value. Developing countries often depend on the export of agricultural products to sustain people. Are these people simply to be dispensed with to obtain some hypothetical slowdown on global warming?

In the United Kingdom, where many of these issues have been prominently percolating, Africa is a source for substantial amounts of fresh produce and floral products. Kenya, of course, has long historical links to the United Kingdom, and its ambassador in London has been outspoken on both the food miles and air freight issues.

In the United States, though, most of what we read of these issues comes from British media, so we thought that to learn more we would want to speak to the Kenyans directly. We asked Pundit Investigator and Special Projects Editor, Mira Slott, to see what we could learn.

Abraham Barno
Agricultural Attache
Kenya High Commission
London, United Kingdom
Michael Mandu
Trade Officer
Kenya High Commission
London, United Kingdom

Q: How is the issue of food miles impacting Kenya?

BARNO: This matter came up very strongly when certain UK supermarkets decided to enforce labeling and cap imports on the basis of food miles. We are seeing this action as an affront to Kenyan farmers because 90 percent of our agriculture exports are to the United Kingdom, and our fresh produce is delivered by air. Hearing this, we had to take action.

The concept of food miles is a simplistic idea. It doesn’t show the true qualities of CO2 influencing the environment. It ignores numerous factors, such as farming methods, transportation between supermarkets and households buying, and greenhouse gas emissions. We needed a lifecycle analysis, a fair measure to reflect better the truth of food product life.

Q: When and why did this food miles labeling start?

BARNO: Tesco, [as part of its green initiatives here] released the measure last winter. The effective start date of labeling was in February. We thought this matter was going to get out of hand. Consumers were being given false information. Food miles labeling is a marketing strategy. Supermarkets in the United Kingdom are competing on being the greenest on High Street, and using food miles as the test to show it. Facts about food miles are being manipulated and used as a marketing tool.

In actuality, Kenyan farmers are being misrepresented and the consumers at these stores are not being told the true virtues of our products. The intention of these supermarkets is to put airplane stickers on all air-freighted products, not just from Kenya, but from all over the world. We are seeing countries like Guyana speaking up, but we’ve been the leading voice.

Kenya, being a small developing country, plays an important role in international trade. We thought this was not right. Surely we have concerns about the environment and use the cleanest growing practices, which produce far less carbon emissions than many Western farming methods. Locally grown produce is not always more environmentally friendly, according to a DEFRA [Department for Environment, Food, and Rural Affairs, UK] report. It estimated that air-freighting from Sub-Saharan Africa accounts for .1 percent of the UK’s total carbon emissions, while around 65 percent of emissions relating to food are caused by transportation within Britain. These issues need to be examined in a larger context. We need to show how we can provide a competitive advantage.

Q: What efforts have you made to turn around these perceptions?

BARNO: We wrote to DEFRA, the United Kingdom equivalent of the U.S. Department of Agriculture. The secretary of DEFRA heard our concerns and spoke to the UK minister of environment and climate change. When UK supermarkets heard we were making noise with those in power, they expressed a concern and we used the opportunity to set up meetings. We had a long conversation with Tesco independently, and then with Marks & Spencer [Read about its “Plan A” climate/green initiatives here].

Q: Were the meetings productive? What was the retail reasoning behind the food miles labeling?

BARNO: They said it was their duty to respond to the concerns of their consumers who were saying they should do something about climate change. They thought they needed to address air freight, which emit higher CO2, and they wanted to be seen to be taking action.

Our argument on the other side was that this is like targeting a developing country, which exports fresh produce mostly by air. It is not right to punish us. In any case, our product travels via cargo in the bellies of passenger airplanes. You could not apportion CO2 from passengers and the cargo it’s carrying. This is a very difficult way to look at the problem. In most instances, these planes are carrying tourists from the UK!

MANDU: Even if we remove fresh produce exported to the UK by air, it won’t affect CO2 emissions because the planes are flying anyway. Airplane sizes are increasing as well as the number of flights.

BARNO: The other part of the story is that this is the only product segment we are able to produce competitively. This is very high quality product. Why can’t we be given our fair chance? We offer quite a selection of fresh produce. In vegetables, mainly French beans, snap peas, and most Asian varieties. In flowers, mainly roses, most used in bouquets.

In the first instance, the UK didn’t look at trade obligations between countries. In Africa we have a comparative advantage with agriculture products. The UK is selling mobile phones and machinery, which are produced by using carbon technologies, mainly fossil fuels since no other technologies are readily available.

There is the potential of bringing in a trade dispute under WTO, discriminating against a product, a non-tariff barrier to trade. They need to know they are affecting these kinds of things with the policies they want to enforce.

The market for fresh produce in Kenya was created to serve the demand in Europe. We have invested heavily in supporting that market. Who will pay for the investments we have made already?

The supply and demand has fueled a lot of investments particularly for flowers and some of these other products I’ve mentioned.

Q: Have you done reports to quantify the financial impact?

BARNO: We export close to 700 million U.S. dollars, so we have a lot to lose. Since the introduction of airplane stickers, our initial reports show very little impact on consumer behavior. There is not substantive evidence of change in demand or buying habits at this point, but that could change. Indications are that consumers are taking notice. The stickers have only been on products a few months.

We don’t have the facts clear on why there is not much impact. It could just be a time issue, since the labeling is so new. The labels connote different meanings to consumers. In one instance, the airplane icon shows the product has been flown in as opposed to shipped in, which indicates freshness. Most consumers are aware of high carbon footprints and feel a need to do something to reduce the problem. However, certain times of the year, and depending on the commodity, product might not be available locally.

MANDU: The majority of consumers are concerned about spending. They don’t have the luxury to analyze the meaning of an airplane sticker. And in the end, even if consumers like the idea of buying locally, their pocketbooks sway them to the better value. Our fear is a ban on Kenyan produce into the UK market as the Soil Association and other food miles lobbyists push harder. If the product isn’t on the shelves, consumers can’t buy it.

BARNO: In our meetings with the supermarket executives, they agreed to monitor the impact of the airplane stickers and to communicate the food story of Kenyan produce to consumers.

We come from a developing country with an impoverished population that desperately needs the opportunity to find employment and earn an income for basic living expenses and to afford to take their children to school. Agriculture is the fastest growing sector, with 105,000 jobs in the export sector alone. These are real people trying to provide for their extended families. The average family consists of six people plus four dependents, which comes to approximately one million people directly or indirectly affected in this sector.

Q: Some critics question whether the majority of financial benefits accrued from exporting Kenyan agricultural products actually trickle down to the impoverished workers.

BARNO: There is a lot of feeling that the companies mainly producing for export are foreign, coming from Europe for example, but this is a misconception. Investors create jobs and wages for workers. They must comply with codes of practices based on living wages and good social accountability. We believe they are delivering the benefits, providing jobs, helping in economic growth, and making a difference to the population.

Q: The Soil Association recently initiated a new caveat that air-freighted organic produce must adhere to stricter “ethical” policies in order to be accredited and sold in the UK. What is your response?

MANDU: Issues with food miles are becoming more complicated. It looks like the Soil Association is integrating food miles into fair trade. From its report, it also is looking at ethical practices, another topic all together. They are trying to muddy the waters and create more issues by examining living conditions of farmers at home, how much they earn from produce and access to health and education facilities.

The Soil Association can’t finish one fight before starting another one. They saw prominent UK officials were on the side of Kenyan farmers, in promoting trade with countries coming out of poverty. We had meetings with government officials that said this negative impact on Kenyan farmers in the name of food miles was not acceptable.

UK trade and development minister Gareth Thomas asked the Soil Association and supermarkets to be fair in their portrayal of food miles. “Food miles alone or the distance food has traveled is not the best way to judge whether the food we eat is sustainable,” he said. “Driving six-and-a-half miles to buy your shopping emits more carbon than flying a pack of Kenyan green beans to the UK,” he argued.

Q: So how are you capitalizing on this newfound support going forward?

MANDU: We’re preparing our replies to the new arguments by the Soil Association with a comprehensive paper for the Ambassador here. In the UK, there are several powerful associations, including energy organizations that look at third world trade favorably, and their support can drive us. We’ve also talked to the Commonwealth secretariat in London. They did a proposal to commission a study in CO2 emissions comparing production methods in Kenya and the UK. That gives us evidence to fight back, to counteract food mile lobbyists with facts and figures.

We want to commission more studies on CO2s, advanced by the UK government. We need to do analyses from the time seeds are being prepared, to planted, harvested, and packaged before freight, and then compare to greenhouses in Holland and other production areas such as Spain and Portugal. We haven’t done comprehensive studies. That would be the way to make an accurate assessment. But now the Soil Association is jumping to other issues with ethical farming to divert attention from the progress we’ve made.

BARNO: We think our efforts are already making a difference. In our meetings with supermarket executives, there was acknowledgement that air-freighted product could actually be environmentally cleaner than they originally thought, and a remark to this effect came from none other than the CEO of Tesco.

Several diverse and prominent organizations have pointed to problematic issues related to food miles, including The International Trade Center in Geneva. A study by Cranfield University in the UK did a comparative analysis of the impact of carbon emissions for roses produced and exported from Kenya versus the Netherlands. It found that Kenyan exports including airfreight were actually six times more carbon efficient than by the Netherlands-grown process, and the heating requirements of putting product in greenhouses. [Editors Note: The study was commissioned by World Flowers. Sainsbury’s chief executive officer Justin King has taken a stand against labeling products with air-freighted stickers, questioning the logic].

So clearly, we would like the consumers to look at food miles as a kind of marketing gimmick that does not hold water, denies people product diversity and at the same time quality, tropical vegetables that are grown with less fertilizer. The sunshine alone is enough to give it the food requirements with not necessarily putting in non-organic fertilizers.

With regards to products from Africa, we strive to produce healthy, safe and quality product with Good Agricultural Practices. We believe this is good for business and we should not be punished.

The Co-operative Group, currently farming over 70,000 acres in England and Scotland, is about buying local, which supports the food miles concept, but it is candid about supermarkets not using the airplane and has come out strongly against food miles.

ASDA has not put air-freighted stickers on its packaging. Because of the campaign going on they seem to be rethinking this strategy.

Everyone is concerned about global warming. Some use it to appeal to the whims of the moment. People are passionate about taking action, and the corporate world uses it as an opportunity to push product for their own gain, rather than directly effecting change. The food miles concept is not true. These things are being debated, people are taking action, and we are seeing some results. This is good engagement. Consumers must see the whole story.

The message we want to get across is that this product is not just good quality, but that buying it will help people with no other way to sustain survival. We agreed with the supermarkets that we will tell the good story of what Kenyan products are doing to improve the economy of developing countries.

We are working together with supermarkets now to promote this message. They have agreed in principle to communicate the good product attributes and socioeconomic aspects of buying produce from Kenya. Particularly, at Marks & Spencer, Mike Barry, head of corporate social responsibility, has expressed a desire to disseminate this message to its customers.

MANDU: We hope if we put heads together and find common ground, we can fight and win this war.

Kenya is far away, and there is not much produce trade between the U.S. and Kenya, so it is easy to dismiss this as someone else’s battle.

Yet, history works in strange ways, and in so many ways, the battle the Kenyans fight is our own.

First, it is a fight for rationality. A fight for the great western gift bequeathed us by the Greeks: Logos — a word Aristotle used to mean an argument from reason. The story Mr. Barno and Mr. Mandu tell us about the Soil Association is apt:

They are trying to muddy the waters and create more issues by examining living conditions of farmers at home, how much they earn from produce and access to health and education facilities.

The Soil Association can’t finish one fight before starting another one.

This changing of the subject is a function of the fact that the Soil Association and the elites influencing the media on these subjects are not interested in finding the truth. They are not engaged in a search for accuracy. They care not for “an argument from reason”; instead they look to “soil” our intellectual heritage by attempting to “muddy the waters” to make the logic of the situation less clear.

Second, it is a fight for freedom, the freedom of British consumers to select from the world’s goods, the freedom of Kenyans to pursue happiness by attempting to sell goods in the UK. This is about elites in the UK — and around the world — who would like to dictate what people can do. They find capitalism, with the enormous latitude it gives for individual choice, to be highly frustrating.

For the truth is that we have a very accurate mechanism for judging the relative benefit of production of product in different places… it is called the pricing mechanism. Built into that price is the cost of the entire supply chain. Perhaps we may want to consider a carbon tax to compensate for any externalities. A carbon tax, however, would fall on everyone and allow free people to adjust as they have to. This means that the real motivation of the advocates of penalizing food miles and air freight, which is to bend the world in the direction these self-interested parties or opinionated elites would prefer, will not happen. Instead people would reduce carbon emissions in ways that they elect to do so.

At the root of what Mr. Mando aptly terms a war is a cultural rift. This whole matter is driven by a combination of protectionism, Luddite anti-industrialism and a hatred of capitalism and human freedom. It is not so much that people oppose air-freighting produce half way across the world because it might contribute to global warming. It is that they seize upon global warming as an excuse to seize control and oppose what they opposed in any case — an entrepreneurial, free-trading, free-thinking world.

We write this piece just as we ready ourselves to join family and friends to celebrate the American holiday of Thanksgiving. The way in which the interests of the Kenyans and other developing countries have been so easily dismissed in the U.K. serves as a reminder of how much Americans have to be thankful for.

As smart and hard working as any of us might be, it was the wisdom and good fortune of our ancestors who traveled to America that gave us the most fantastic gift a child can be given, to grow up in a place that offers an extraordinary opportunity to realize one’s own gifts.

And how strange and wonderful that we should have friends like the Kenyans to man the barricades for all we hold dear.

As we sit down for Thanksgiving, let us make it about more than football, turkey, cranberry sauce and sweet potatoes. Let us count our blessings for living in a place so blessed.

Thanks to Messrs Barno and Mando for fighting the good fight. Let us hope they manage to keep the opportunity alive for people who desperately need it.

A Happy Thanksgiving to all.




Safco Looks To Expand
In ‘New Industry Order’

A well-known industry executive in the international trade arena has found a new home:

Dirk Winkelmann has assumed the position of General Manager of Safco of America, located in Visalia, California.

Safco is the US distribution company for Rio Blanco, the largest grape grower/packer/shipper in Chile, with production in Mexico as well. The focus of the company is the distribution of its own grape production from both Chile and Mexico. The company is also diversified in other products, including cherries, blueberries, avocados and citrus (Clementines, navels, and lemons).

While the majority of what Safco distributes is from Rio Blanco, Safco also represents independent growers who export directly to Safco of America, from Chile, Mexico and Peru.

The plan is to expand the company’s sourcing from more areas of the world, venturing into representation of growers from California and Brazil this season as well as looking to Argentina. The goal is to expand sourcing in both the “core” product lines as well as expand into new product lines.

Dirk, along with his management team, is tasked with diversifying the operations of the distribution company with the objective to provide year-round support to customers.

Dirk’s most recent positions within the industry include Senior Vice President of Global Business Development at Sun World and Vice President of Sales and Procurement at Vanguard International, a leading exporter.

Note that Safco is dipping its toe into selling California product. For years, marketers of California grapes have tried to develop import deals to provide year-round service to customers.

Also large exporters, going back at least to Frupac before Chiquita bought the company, have looked to open US sales offices to cut out the importer.

Yet, with the growth of global procurement operations, one wonders if the trend might not reverse.

After all, a global procurement operation would see a US office for a Chilean company as an added and unnecessary expense. In fact, it is not clear whether the whole notion that each company should strive to supply everything 52 weeks a year is the way things are going to go.

When we ran an interview entitled, Ron McCormick Of Wal-Mart Elaborates On Its Procurement Reorganization, we discussed with Ron the implications that Wal-Mart’s Global Procurement initiative held for the company’s purchasing patterns:

Ron was philosophical about Global Procurement. He acknowledged that for corporate reasons, as we elaborated on in our original piece, this was a vitally important initiative to Wal-Mart.

Yet he felt very optimistic about companies, such as Pandol Bros. Co., whose investments and contacts outside the U.S. add real value. Many Wal-Mart vendors that had never been importers became importers over the last decade as they attempted to provide 52-week sourcing on their items. The importance of that competency to Wal-Mart is fading as its Global Procurement operation picks up steam. Still, Ron spoke as one who has seen the “latest best thing” come and go a few times in his career, and he seemed to expect that, one way or another, Wal-Mart would wind up buying quite a bit of imported produce from U.S. firms for a long time to come.

We took this to mean two things:

First, that simply picking up marketing deals wasn’t going to create much value in the eyes of Wal-Mart’s procurement team. If, however, a company had real ownership and assets in various countries, it could be viewed as a “domestic” supplier regardless of where the company is headquartered.

Second, whatever the long-term plan, it was going to have holes in it for a long time, and thus there would be plenty of opportunity for marketers to sell quite a bit of produce even if they didn’t meet the definition of a “perfectly situated” vendor.

Seems like things are in flux and with its new hire, Rio Blanco and Safco will be looking for its place in the “New Industry Order.”

Best of luck to Dirk in his new position.




Consumers And Foodservice Operators
Should Not Rewash Fresh-cut Produce

The results are in… Do not rewash fresh-cuts.

A superstar panel of food safety experts has published a peer-reviewed piece entitled “Recommendations for Handling Fresh-cut Leafy Green Salads by Consumers and Retail Foodservice Operators”

The Summary of Results:

A panel of scientists with expertise in microbial safety of fresh produce was convened to review recent research and re-evaluate guidelines for foodservice and restaurant operators, regulatory agencies with oversight over food facilities, and consumers for handling prewashed bagged salads. The guidelines developed by the panel, together with materials reviewed by the panel to develop the guidelines, are presented. The background materials reviewed include published research and recent recommendations made by other authoritative sources. The panel concluded that leafy green salad in sealed bags labeled “washed” or “ready-to-eat” that are produced in a facility inspected by a regulatory authority and operated under cGMPs, does not need additional washing at the time of use unless specifically directed on the label. The panel also advised that additional washing of ready-to-eat green salads is not likely to enhance safety. The risk of cross contamination from food handlers and food contact surfaces used during washing may outweigh any safety benefit that further washing may confer.

The authors:

Mary S. PalumboCalifornia Dept. of Health Services,
Food and Drug Branch
James R. GornyUnited Fresh Produce Association
David E. GombasUnited Fresh Produce Association
Larry R. BeuchatCenter for Food Safety,
University of Georgia
Christine M. BruhnCenter for Consumer Research,
Dept. of Food Science & Technology,
University of California, Davis
Barbara CassensUS Food and Drug Administration
Pascal DelaquisAgriculture & Agri-Food Canada,
Pacific Agri-Food Research Centre
Jeffrey M. FarberHealth Canada, Tunney’s Pasture,
Banting Research Center
Linda J. HarrisWestern Institute of Food Safety and Security and Dept. of Food Science and Technology, University of California, Davis
Keith ItoLaboratory for Research in Food Preservation, University of California-Davis
Michael T. OsterholmCenter for Infectious Disease Research and Policy, University of Minnesota
Michelle SmithUS Food and Drug Administration, Center for Food Safety and Applied Nutrition
Katherine M.J. SwansonEcolab

You can read the paper as published in the November 2007 issue of Food Protection Trendsright here.




Pundit’s Mailbag — Responsibility To
Provide Clarity

Although we are always pleased to receive letters filled with praise for our work here at the Pundit, we also value letters that criticize our positions.

Very often we find that the written word is limiting, and we sometimes need to restate our case to be clearer. We think we need to clarify a point after receiving this blunt assessment from an important grower:

After reading your articles regarding food safety and the LGMA, I am convinced that your comments have little foundation in basic fact. The reporting is irresponsible, and you should make a better effort to engage people and learn what is really going on.

All of the meetings of the LGMA are public and available for your participation. In addition, WGA has spent considerable time in vetting the metrics with people from all areas of the industry and deserves praise for their efforts.

I hope that you correct some of your misstatements in the future or do a better job of reviewing them before putting them out.

— Bardin Bengard
President
Bengard Ranch
Salinas, CA

Bardin’s letter seems to be, most particularly, a response to our piece, Consensus From Unknown Experts Leaves Cause To Err On Side Of Caution . In this piece we raised two points:

First, we questioned whether there actually is a consensus in favor of the metrics that have been adopted by the California Leafy Greens Marketing Agreement.

Second, we repeated our call for the California Leafy Green Handler Marketing Agreement to develop a more transparent procedure for the development of the metrics.

In his note, Bardin correctly points out that the meetings of the California Leafy Green Handler Marketing Agreement are public. He also points out that WGA has spent much time vetting the metrics with many people — something that is doubtless true.

We also agree fully that the development of these metrics was an enormous task and that the people who did the work should receive praise for their efforts. In fact, we actually gave an award, The Perishable Pundit’s Unsung Heroes Award, to Hank Giclas of WGA, as well as to David Gombas and Jim Gorny, both of whom were working for United at the time, for taking on the yeoman’s task of putting all this together.

However, despite agreeing fully with Bardin on all these points, we think we were trying to make a different point.

The fact that the California Leafy Green Handler Marketing Agreement Board holds open meetings is not really the point because the board does not draft the metrics. As per the Marketing Agreement:

“Leafy Green Best Practices” or “Best Practices” means the commodity specific leafy green best practices document and the requirements contained therein, prepared by industry scientists, and reviewed by state and federal agencies, scientifically peer reviewed by a nationally renowned science panel and adopted and/or amended by the Board.

So, very specifically, the board is not supposed to develop the metrics or “Best Practices” document. It is merely supposed to “adopt” and/or “amend” them.

There is really no dispute that the metrics were “prepared by industry scientists” and they have certainly been “reviewed” — though that word is different than “endorsed” — by the government. Whether they have been “scientifically peer reviewed by a nationally renowned science panel” is uncertain.

It seems reasonable to ask basic questions, such as who serves on this “nationally renowned science panel,” and merely showing the metrics to some smart people and asking their opinion is a very loose definition of “peer review”.

We have asked pretty obvious questions:

Who is on the panel?

Who appointed the panel?

Do the appointees have conflicts of interest?

What specifically was the panel charged with doing?

Did the panel unanimously endorse the metrics?

Were panel members given an opportunity to file “Minority Reports” recommending changes or improvements to the metrics?

We raised these issues six months ago because we want the industry to succeed. It is not that anyone has to tell the Pundit this information; the problem is that if it is not public, then we can expect exactly what we saw the last two weeks as you see here, here and here from the Food Safety Leadership Council — people who don’t believe in the process the industry has gone through and, therefore are going to make their own process.

Bardin makes the difference of perspective clear when he writes “WGA has spent considerable time in vetting the metrics with people from all areas of the industry.” We believe this, we even think it is important, but we kid ourselves at our own peril if we don’t recognize that most of the world does not consider WGA or people from “the industry” to be credible when it comes to assessing food safety practices for the industry. They see it as the fox guarding the hen house.

One way to deal with this reality is to simply leave it to FDA. An underlying assumption when first United and then United and PMA called for mandatory, national, uniform regulation was that only an FDA-imposed metric, enforced on a national level, under mandatory conditions, would satisfy consumer advocates, regulators, etc.

Since WGA, presumably representing the voice of western agriculture, has been trying to avoid the FDA route, we have spilled our ink — or electrons as the case may be — to plead that the case for the metrics be both so strong and so transparent that if Disney or the Center for Science in the Public Interest or a Congressman questioned the trade’s actions, we could throw down on his desk the report from this “nationally renowned science panel” and prove at an instant that 30 of the most prominent names in food safety science thought enough of this document to unanimously endorse it as the state of the art in food safety.

We also noted that in the industry association joint letter, it went beyond even saying that this one peer-review panel had endorsed the metrics; the letter claimed that the metrics, as written, reflect an “…expert consensus among industry, academia and government…”

We simply asked the question that you can be sure the QA people at Disney, McDonald’s, Avendra, Publix, Wal-Mart or Darden are going to ask. Namely, who makes up this consensus?

See, to us in the produce industry, if we have the Grower Shipper Association of Central California, Western Growers Association, United Fresh and PMA — we feel like we have a consensus. Yet we asked the obvious — if we don’t have on board the Food Safety Leadership Council companies — Wal-Mart, Disney, Publix, Avendra, Darden, McDonald’s — what kind of consensus can we have?

These aren’t trivial companies; these are important, world-class companies. As a collective, the produce industry can stand here and curse them if we want, but it seems to us more useful to question ourselves. Are we conducting the kind of transparent and persuasive process that persuades the QA people of organizations such as these that our food safety efforts are world class?

We also threw out the names of two academic experts on food safety, Dr. Michael T. Osterholm, Ph.D., M.P.H. and Director of the Center for Infectious Disease Research and Policy, University of Minnesota, and Michael Doyle, Director of the University of Georgia Center for Food Safety. These names may not resonate much with most people who grow, pack, buy or sell fresh produce. Yet they are very important people in the field. There is really no question that they would be asked to serve on any “…nationally renowned science panel…” the industry would put together.

Yet, in the article, we pointed out some good reasons to believe that they would not be part of this alleged “consensus” on the metrics. Namely that Dr. Osterholm consults for Fresh Express and, as indicated in this article from USA Today, Fresh Express has adopted the same one-mile buffer zone that the joint association letter and the WGA letter condemn and that Dr. Doyle still won’t eat bagged salads!

We really do appreciate Bardin’s letter. It serves as a great reminder to the whole industry to not assume that the whole world is on the same page. We in the industry, especially producers and marketers of leafy greens, have watched the CMA be born, grow and spread to Arizona. Many, not so close to the issue, are much less informed.

Back in March 2007, when NRA decided to put aside any standards from the Food Safety Leadership Council and adopt the industry’s Leafy Greens metrics, we published an article entitled NRA Adopts Leafy Greens GAP Metrics. The piece included a note we received from a very important produce industry executive who was speaking about the mostly Quality Assurance group in the room:

I sat there shaking my head. First at the total ignorance about the CMA.

I think for most of the people in that room, it was the first time they have ever heard of the Marketing Agreement. Where have these people been? Why were they not hanging on every decision that was being made about the CMA? Why were they not engaged in the process? Why were they not telling their buyers that they needed to force suppliers to sign the MA? Where was National Restaurant Association in the process? Why is there such ignorance amongst their members? PMA and United sent dozens of e-mails, and every produce trade publication covered it extensively.

As far as the Pundit goes, Bardin can be assured we already work hard and will redouble our efforts to understand the situations we confront as an industry.

Many times, however, things that seem so clear to us in the produce industry don’t seem that way to those outside the industry. Part of our job is to help move the industry out of our comfort zone to confront some of these realities.

Many thanks to Bardin for helping us think through this difficult issue.




Here’s One For Mom!


Thanksgiving is a two-fer for the Pundit this year.

Credit must be given where credit is due, and if you enjoy the Pundit it would be a treat if you might raise a glass of apple cider this Thanksgiving to a woman who, in no small part, is responsible for its existence.

Momma Pundit — aka Roslyn Prevor — will be celebrating her 70th birthday this Thanksgiving. A beautiful, vibrant and energetic woman, you would think she is decades younger if you would ever have the privilege to meet her.

She grew up as a foster child and was intent on creating for her husband and children the loving family she never knew.

A teacher by trade, she gave up her profession when this little Pundit came into the world, intent on teaching all she could to her little boy.

She taught her children that, through reading, you could go anywhere and learn anything.

She taught that being a good person was more important than being a winner.

She taught that family was the center of a life well lived.

She taught that you finish what you start.

She taught how to look up words in a dictionary.

She taught that we never had to eat anything, but we had to try everything.

She taught her children the joy of discovery that an encyclopedia holds.

She taught that an educated man read a newspaper every day, preferably two.

She always believed in her children, even when the children didn’t merit that faith.

She set an example of what true love means, falling in love at age 15 with the man who would be her husband — and ultimately the Pundit Poppa; she has always striven, every single day, to love and support him and when, as he was turning 70, his life was threatened by Leukemia, she gathered her inner strength and outer resources and set out to save the man she loved, which she did, and in so doing she proved, once again, her ability to inspire her children and the world that knows her.

She headed the PTA, had the philosophy that her children’s friends were always welcome, hosted countless cast parties, graduation parties and pre-prom parties.

She also proofread plenty of issues of PRODUCE BUSINESS in our early years.

We often have occasion to write about the Poppa Pundit as he was in the business, but raising a child is a complex task and while Poppa Pundit was busy on Hunts Point, Momma Pundit was cleaning scraped knees, reading stories and telling her children they could be all they wanted to be.

Once, at a party many years ago, we were asked to say a few words about Roslyn Prevor… we called her Rambo Roz because, as is true to this day, if she takes on a project she is like a whirlwind at making it happen.

She took on childrearing with the same sense of responsibility.

If you ever find wit, cleverness, elegance or insight in these pages, she gets the credit.

The mistakes, they are all mine.

Happy Birthday Mom!




Travel, Talks and Thankfulness

We’ve been doing a lot of commodity-specific speaking lately. Back in August, we gave a presentation for the U.S. Apple Association at the 2007 Apple Crop Outlook and Marketing Conference in Chicago on Corporate Social Responsibility.

Most recently, we gave a presentation in Orlando to the Board of Directors of the National Watermelon Promotion Board on Food Safety, and soon we’ll be heading out to Branson, Missouri, to speak at the 4th Annual Potato Industry Outlook Summit on Social Responsibility.

You can get a brochure about the potato event here.

We’ll be spending Thanksgiving with Mrs. Pundit, the Jr. Pundits, the Momma and Poppa Pundits and the extended Pundit and Mrs. Pundit clans at the Pundit ancestral homestead in New York — okay, we got our “homestead” when I was 13.

We fly with the family back home, turn around and head to New Jersey for another speaking engagement next week.

In terms of broader groups, we just spoke in New Jersey at an event sponsored by the Rutgers Food Innovation Center and will return to speak for the Eastern Produce Council at an event sponsored by the Hass Avocado Board.

In between all this, we did a presentation at PMA’s Fresh Summit in Houston and one at PMA headquarters in Newark, DE.

Whether commodity-specific or appealing to a broader trade, the opportunity to travel, chat and learn from the best and brightest in the industry is a real privilege.

One more thing to be thankful for this Thanksgiving.

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