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Pundit’s Pulse Of The Industry:
Michael Spinazzola
Diversified Restaurant Systems

Jim Prevor’s Perishable Pundit, December 6, 2006

To better understand the elements of effective food safety programs, we are running a series of Pundit Pulses focused on foodservice operators as the industry consensus is that foodservice is ahead of retail in the quality of food safety programs. We started out with Pundit’s Pulse Of The Industry: Del Taco’s Janet Erickson and Notre Dame’s Dan Crimmins,which dealt with the perspectives of two smaller buyers who are very active in the produce industry by virtue of their service on the Board of Directors of PMA.

Today’s interviewee, Michael Spinazzola of Diversified Restaurant Systems, represents a larger organization as his company supplies the Subway chain. He also has a PMA connection, serving on the foodservice board of PMA.

Mira Slott, Pundit Investigator and Special Projects Editor, spoke to Michael about food safety:

Michael Spinazzola, President
Diversified Restaurant Systems (DRS)
San Diego, California

Q: Before we discuss food safety, could you clarify the relationship between Diversified Restaurant Systems and Subway

A: To simplify, DRS/IPC is the buying coop in charge of all purchases for the Subway chain. We’re hired by Independent Purchasing Cooperative or IPC, which is owned by the Subway franchise. Subway is actually just a trademark owned by Doctor’s Associates, Inc. (DAI).

Q: How large is the chain now?

A: Currently there are more than 26,500 Subway restaurants, all franchised, in 85 countries. As of 12/31/05, sales topped $9 billion, with $7 billion of that in the United States.

Q: With such a wide network of franchised restaurants, what challenges did you face during the spinach crisis?

A: Subway franchise owners use the coop buying group for their specified product needs. At the time of the outbreak, Subway corporate took immediate actions to pull spinach from all Subway restaurants. Recently, spinach has been reintroduced. However, some of the owners chose not to put spinach back in yet, even though the corporation gave the OK. It is so early in the process, I don’t have the numbers on how many franchises now have spinach and how many don’t.

Q: What specific strategies does the coop have in place to control food safety at the supplier level?

A: Subway has tried to be an industry leader in food safety and is continually looking to raise the bar. Food safety should be the highest priority for every chain, but often times it is not. Since the spinach E.coli outbreak, different industry groups and food safety task forces have been working with the FDA and California Department of Health Services. We are behind any initiatives that try to lift the industry beyond the minimum standards.

We also are reviewing our policies internally, and working with the industry leaders to raise the standards across the board. We must insist with them that we as an industry are doing everything in our power to make produce as safe as possible.

Q: What do you mean when you say, ‘going beyond the minimum standards’?

A: The big companies, the Burger Kings and McDonald’s, are more thorough and demanding of their suppliers. Darden’s Larry Barton [Director of Global Fresh Produce] is a smart guy. He goes out into the fields himself to investigate. But there are a handful of chains that don’t necessarily do their own direct produce buying programs. A lot have distributors like a ProAct or Sysco that do buying programs for them. They’ll either do a third party audit, or rely on their distributors for food safety reassurances. Who is coordinating these chains’ buying? Is it them or their distributors who actually handle the audits? How frequent are the audits and are they unannounced?

Q: What does Subway do in this regard?

A: We do millions of dollars through our big distributors. We also buy directly from produce companies including Fresh Express and Taylor Farms. Each level of the supply chain is checked and audited. We have strict GAP requirements that must be followed whether at the field level or at the tomato re-packer. We require all our suppliers to do self inspections as well as hire our third party auditing company to evaluate their internal programs. We have different audits for distributors, processors, re-packers, wholesalers, growers, and harvesting crews. We believe it is important for us to control and monitor all stages of production.

Q: Aren’t there all kinds of auditing standards out there?

A: Yes. You’ve pinpointed the problem. You’re only as good as the actual auditor. Sometimes chains say they have internal quality control people that go into the marketplace and audit all their facilities, but they may not be as highly skilled in specialized areas as an expert at a top level auditing firm. The key is to hire the PhD to check the water. We need to be asking the right questions. Are we hiring the right food safety company? Did we work jointly to develop the right audit, to have all the questions answered and all necessary tests conducted and verified? One of the critical things is to examine new testing opportunities built on technological advances. For example, end product testing is one area being discussed, but it is not yet clear whether this approach will lead to effective safety results, rather than a false sense of security.

We have a dedicated department at Subway in charge of food quality and food safety. We’ve always pushed for the freshest produce, but food safety verification is critical. The quality control team has done a thorough evaluation and found what we feel is the best auditing company to audit our vendors all the way through the supply chain. What they are assuring is that all our audit needs are being met.

We give our auditing firm the list of our vendors and they audit their operations from the plants down to the fields. And then we evaluate it again. There isn’t a kill step in produce. In meat you have cooking. With produce all you can do is handle each step the best you can, and try to eliminate the risks of contamination and the possibilities for foodborne illness to spread.

The Pundit extends much appreciation to Michael for helping the industry by giving some insight into his thoughts on food safety. We take away three big concepts:

Role of Distributors

All too often food safety is discussed as if everything goes non-stop from farm to a store or a restaurant. Many times there are loads of stops in between. All these stops have implications for handling and thus food safety, but retail chains and foodservice operators typically lose the ability to dictate or monitor grower-level food safety efforts. Dan Crimmins at Notre Dame pointed out that for his organization it was really the distributor that made the crucial decision of who to buy from. DRS is much larger and buys a narrower range of products, so it is in a position to assert more control. But as we think about the Buyer-led Food Safety Initiative we are reminded that no regional wholesalers or distributors are signatories. It is a large hole in the distribution system.

Actual Auditor

Michael reminds us that, although the auditing firm is important and the standards they are told to audit are important as well, no audit is better than the individual person doing the auditing. As Michael says: “You’re only as good as the actual auditor. Sometimes chains say they have internal quality control people that go into the marketplace and audit all their facilities, but they may not be as highly skilled in specialized areas as an expert at a top level auditing firm. The key is to hire the PhD to check the water.

We’re not sure about the PhD. He might be bored doing water samples and you might get a better audit from an ambitious tech but the point is well taken: If we are relying on audits to confirm food safety, we better be really concerned with how auditing firms select, train, compensate and motivate the actual people in the field.

Technological Advances

Things such as rapid product testing are now technologically possible. As Michael points out, staying on top of the wave so that we always have the most effective approach but are not bamboozled by something ineffective is a challenge unto itself.

Thanks again to Janet Erickson of Del Taco, Dan Crimmins of University of Notre Dame and Michael Spinazzola of Diversified Restaurant Systems for their willingness to share with the trade. It is through these types of exchanges that we become stronger as an industry.

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