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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

a

Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



South African Road Trip

Today’s modern retailers will go to the ends of the earth to make sure consumers have a selection of every fresh produce item on a year-round basis.

And I’m going to fly about as far as you can go from Boca Raton, FL, to help make that happen. At the end of next week, I’ll be jetting off to South Africa, where I’ve been graciously invited to address the allFresh conference, which is sort of like the PMA, United, IFPA, WGA, FFVA and TCVA of South Africa rolled into one. The conference is at the world-famous Sun City resort, and the program is extremely educational.

My own talk will be focused on the battle between a retailer’s own objectives and the needs of consumers, and is entitled The Changing Face of Retail Worldwide: Retail or Shopper Driven?

In addition, I’ll be giving workshops and talks for retail groups and grower groups across the country as well as touring growing regions, visiting the local terminal markets, fresh-cut processors and doing retail tours — and, yes, you can be certain I’ll be looking at the entire perishable offering of these stores.

It is my first trip to South Africa, and I’m looking forward to seeing my old industry friends, who I’ve only seen at conferences on my home turf. I also look forward to meeting new friends.

South Africa has long been a world-class producer but has traditionally sold mostly in Europe. A country like South Africa needs robust economic growth if it is to meet the aspirations of its people for hope and prosperity. Produce can be part of that growth, and I hope I can be of some service.

But whatever knowledge I may leave behind, I know I’ll pick up so much more. It is so tempting not to do things like this. So easy to look at your multiple pressing responsibilities and say I don’t have time. But it so imperative to make the time. Doing things such as this trip is the definition of helping yourself think out of the box.

So, this is just a heads up. Any fans of the Pundit down in South Africa and environs, I hope to see you at the conference or meet up with you across the country. Don’t hesitate to send a note and let me know if you would like to try to get together.

And to those who can’t make the conference, don’t worry. The Pundit will be reporting live from South Africa, letting you see this exciting country fresh through my eyes.




The Perishable Pundit Visits South Africa

Dispatch I: Miami to London

So I sit on the plane preparing to take off and am a little unsettled. While sitting in the lounge, I read that a flight to Manchester in England had been redirected. It had to do with terrorism. I was committed already so decided not to read too much. Sometimes ignorance is bliss.

This was my first experience with the new airport security, and traveling on British Airways non-stop to London from Miami, I travel under the most rigorous of rules. I am allowed but one carry on, just large enough for my computer case.

I don’t usually carry liquids so that didn’t really affect me too much, though they did confiscate my Chapstick. I am always shocked how many people live truly isolated lives. I would say the single biggest slow-down on the lines were people walking up to the front ready to enter security carrying a large purse, a briefcase, a shopping bag, a rolling suitcase — despite the fact that they are passing many prominent signs telling them this is not allowed. And even if there were no signs, it has certainly been well publicized and you can’t go to an airline web site or toll free number without being told the rules have changed.

Yet they come, rolling their stuff. At first I am tempted to believe that they are attempting to get away with something, and I watch with admiration as I observe we are a world of thespians with abilities to rival Olivier as the people cry and shout, object and demand, alternately pleading and threatening, yet as I watch one after another, their importuning, all rejected by a woman guard just old enough to still be young, her build thick as if she were born to be the brick wall she has become.

I think the position suits her, as she is a believer. A foot soldier of the Empire manning the barricades of the war on terror. She goes home each night satisfied, knowing on her watch she held the line. I imagine her in another time and place manning a check post for ancient Rome on the Apian Way: Who goes there?

But today, the British, if not exactly ruling the waves, at least carry a proud bird in the air.

OBSERVATIONS FROM FIRST CLASS

I am escorted to my seat on the 747-400 series, and the young man who is showing me the way is beaming at the opportunity to seat me in First Class. Perhaps he is a good corporate agent and knows that this ticket cost more… well, I have to call the Padre Pundit to confirm, but I’m pretty sure the ticket cost more than the house my grandparents in Mill Basin, Brooklyn, bought when my father was 16 years old.

There is something else though, something in the culture that makes Brits glad to see things done properly. And, yes, if you are going to fly on a commercial airplane, First Class on British Airways’ long haul flights is very near the best. The very best, however, is that offered by the offspring of the Empire: Singapore Airlines and Cathay Pacific.

Yet, as we prepare to take off, I call my wife and children, I call my mother and father, I call my best friend. I’m just checking in, I say, just letting them know I’ll be out of contact awhile — will call from London. And they say the same.

I wonder if I am the only one thinking of those planes they intended to blow up. I notice that despite everyone having PDAs and Blackberries, Internet connections, radios and TV, nobody mentions to me anything about that Manchester flight.

What is there really to say?

Maybe that is why I’m going First Class. Do you know there was a brief time when people were so certain of the future, of the British Empire, of the pound sterling, that they sold leaseholds for 999 years and fixed rate bonds for the same term?

Now I pull out the picture in my wallet of my little guys, William and Matthew, age 4 and 3. I wonder if I will have had any influence on them at all if this plane goes down. Maybe they would one day understand that I wouldn’t want them to give into fear either. I would like them to grow up happy, but would like them to find that happiness in the pursuit of realizing their complete potential. For now, they only want to know if anyone from the Lion King will be at my speech in Africa.

That’s my fault. I gave another speech at a produce convention, and River Ranch had Popeye there. I took a picture with Popeye, brought it home and told the boys that Popeye was at Daddy’s speech. Ever since, in their vivid imaginations, I give speeches to rows upon row of their favorite cartoon characters. If I ever get nervous, I use that vision.

Traveling when you are single or even married is OK because things are, mostly, the same when you return, but if you have children, especially young ones, you go away for two weeks and return to a different child. You miss something every day. So I view my trip as that of a reconnaissance mission for a family vacation. I’m just an advance man scouting the landscape to one day show them what I will see on this trip. I’m told baboons run free through the streets off Cape Town. Is that so? The kids would love that.

I’m safely in my seat; it is like a little hotel room, where you can really sleep on the flat bed the seat opens into, and while you are in seating position you have lots of room.

There is no rest for the weary though; there are Perishable thoughts to be captured, Pundits to be written, columns to be finished and a business to be run. So out comes my laptop.

Indeed, the terrorists concern me, but the only moment of utter, complete fear that hit me during the preparation for this trip came when, in the wake of the British plot, they announced that laptops could not come in the cabin. Fortunately the regulation was relaxed but between flights, layovers and downtime at the airports, I have about 36 hours each way. Wondered how much I could have written in long hand? I thought about Dostoevsky.

I’ve slipped into the pajamas/sweats they have given, and it reminds me of Ronald Reagan. The media on Air Force One would sit in their seats in back and arrive wrinkled and disheveled in Beijing or Moscow or wherever the President was going. He always came down the steps in the same suit he wore on, good as new. Not a crease in his shirt — his secret was he changed into a sweat suit as soon as he got on board. Now I’ll walk out in Heathrow as good as I got on.

FOOD IS MORE THAN NUTRITION

The menu has arrived. I make it a point in traveling to always try the foods I am least familiar with, figuring that if I wanted to eat the ones I am most familiar with I could have stayed home. (Although I have an exception. My father is not a good eater when it comes to travel so, whatever country we would travel to as a family, my father always wanted to sneak off and try the local McDonald’s. I always remember the small absurdity of flying to Rio and going out with my dad in search of a McDonald’s. In any case, it is a small fealty to a great man, so I’ve kept it up ever since. I understand they have them in South Africa, so that will be another notch on my belt. I wonder if I’ll ever explain to my boys why I do that.)

But for now, I can select from a menu designed by ten master chefs from Capetown to London, from Thailand to California, and my attempts to eat British food on British Airways is frustrated as they really no longer serve such a thing. Everything sounds like the fusion cuisine you would find in some hip place in the meatpacking district of New York or South Beach.

I select a green chicken curry for my entrée as it sounds vaguely Indian and that is the closest to British cooking I will get. But the Thai chef designed a delicious appetizer with baked ricotta cheese, enoki mushrooms and a red pepper coulis.

For dessert I spy a Warm Scottish Fruit tart with Whiskey, topped with vanilla ice cream. It blows the diet to bits but Scotland is solidly in the U.K., and I have obligations.

They serve a cheese plate, which appeals to me but the menu contains a disclaimer: Unpasteurized cheese may pose a health risk to certain groups of people, including pregnant women, the elderly, the very young and those whose systems may be immunocompromised. I dig in all the same, but with slightly less gusto than before.

The cheeses are delicious, athough I wish they came with a description of where each came from. One was a bleu and, I imagine, a good British Stilton. Another was a soft goat’s milk cheese, and a third a hard yellow cheddar, all served with a wonderful selection of crackers. I use the oat-based ones, which are not labeled, but I think they are from Walker’s Shortbread.

I try to imagine where each cheese comes from, but I really have no idea so I think of the voices of Rex Harrison and Audrey Hepburn in the movie version of My Fair Lady practicing elocution: In Hartford, Hereford and Hampshire, hurricanes hardly happen. I decide these are the three towns my three cheeses come from.

The coffee and tea service comes around, and an older gentleman asks my preference. I say tea and he begins to recite the various teas and herbal teas they stock. I stop the man and explain I am on British Airways, the flag carrier of the Queen and I want a good British tea. I think I see a little grin on this man of quintessential British reserve as if he remembers a time, on some flight to some distant outpost of Empire when they did things a certain way.

The guy across the aisle from me seems very hard working and very sharp. The way he carries himself, the facility with that spread sheet he has open, the expense of that hand-tailored suit. I take him for a hot shot from The Street. From his accent, I know that he is clearly British. He orders coffee. The old man and I exchange a look.

I try to write but am very tired so I set up the bed, which is actually quite comfortable. I ask the gentleman to wake me for breakfast, mostly because years of travel have taught me the importance of getting your body on the time clock of your destination city, but also because that chef who designed the appetizer also has a special Thai Stuffed Omelet I have my eye on for breakfast.

But it is not to be. I wake up as they begin the breakfast service and am approached by my steward from last night. He does not ask what my selection is from the menu. Instead he asks enthusiastically: “Would you like a proper English breakfast this morning? Although I find the sausages and almost raw bacon the Brits always serve for breakfast unappealing, I said yes.

So I ate my bangers and eggs and grilled tomato and I thought of the doughboys on the line in World War I, which people don’t realize but was the war that started the end of Europe and, perhaps, the west, as a generation of the boys from the playing fields of Eton were mowed down in the trenches.

I thought of the typical doughboy and what a treat it was for them when they could get some bangers and mash. I imagined myself in the Dardanelles and in the great campaigns on the Cape.

I thought of the boys under Monty’s command at Alamein in the Second World War, and I felt like I was there, eating with them from a special breakfast just before they went into battle.

That is what food is all about. It is something the Slow Food movement recognizes that mass manufacturers and retailers sometimes forget: Food is not just nutrition. It ties us down a line of history and represents a place and a time.

What is a country, what are a people? If, one day, France is not Christian, and they don’t speak French, and they ban all wine, does it mean anything that the country is still called France?

In our little interchange, my steward and I asked, is it still British if we all eat Thai-stuffed omelets? I confess the breakfast was horrid, but, who knows, perhaps it is eating generations of that awful stuff that gave the British their famous stiff upper lips.

LANDED IN LONDON

We are ready to land. It is 5:30am U.K., but they have us circling. Why? Curfew on the airplanes landing to avoid annoying the neighbors. Can’t land till 6:00am. Heathrow was once the leading airport in the world. It is now #5 in Europe. Heathrow can’t get political support to build needed runways and facilities, so the economic dynamo that contributes so much to British tourism and the economy languishes because they can’t find a mechanism to deal with such issues.

I change back into my clothes and clean up my place. I thanked the steward as I exited and my steward replied, “Thank you, Mr. Prevor,” and held himself quite erect.

And we are out of our First Class cocoon and into a very gritty real world. Ugly halls, a ride on a bus and then an endless wait to pass immigration because my flight leaves from terminal four and arrived in terminal three.

I wait two hours in line and they just seem to have inadequate facilities. Most grin and bear it. I saw a couple who spouted off being taken away.

I am of mixed feelings. Obviously I don’t begrudge needed safety methods but keep thinking this is all caused by a political correctness in society. All these overweight middle-aged British ladies were scrupulously asking questions as to what is allowed and not and throwing out their hair spray and lip gloss without question. I wonder if we wouldn’t be safer if all the resources that go into this effort were actually devoted to identifying terrorists.

But there would be mistakes. Interrogators would ask questions and tell people to go home today, and sometimes they wouldn’t be terrorists and someone would sue. They may be selected because of religion, race, age or gender or some other characteristic.

The poor interrogator would be dragged up on disciplinary hearings, his name would be dragged through the mud and, soon, instead of him feeling that he should err on the side of denying boarding to insure safety, he would feel he should err on the side of letting someone on if he is certain, then they would blow up a plane.

So I take off my belt, my shoes and am limited to one carry on and can’t have my chapped lip stuff. Small sacrifices in the war against terror, I know, but probably not very helpful either.

I go to the British Airways lounge and start to write. You pass through an airport that, like all big airports, is as much a shopping center as anything else.

I am here all day, so I would have normally run into the city for the day, but with a three-hour lead time for check-in, it doesn’t make sense. I might have showered up at the airline lounge or taken a day room, but with only my small carry-on allowed, I have no clothes to change into. I think people will drive more on vacations. It is just too much hassle.

Just as well… I have a Pundit’s mailbag to work on so I will sit here and write. Next installment: London to Capetown.




The Perishable Pundit Visits South Africa

Dispatch II: London To Cape Town

HOMOGENEITY AROUND THE WORLD

The stay for a half a day in Heathrow was uneventful as was the flight to Cape Town. There was a similarity to be noted, however. In Heathrow, there was this enormous shopping arcade, yet the most telling message is how homogenous retailing has become.

For the most part, the stores were identical to those we find in shopping malls in the United States. In those cases where the store name was different, the product was the same — same brands, same items. Only Harrods was the holdout, so far having resisted efforts to open in New York or elsewhere.

Equally with the flight. I pulled out the menu to search for something unique — something British (I was on British Airways) or something South African. But there was nothing.

Even when I landed in Cape Town, filled with excitement and anticipation, I have to confess if I didn’t know where I was going, I would have said the terminal fit right in Antwerp or Amsterdam. The first site in the terminal was through a glass to a large room below and, to let me know I had arrived in Africa, I was greeted by signs with names like Hertz, Avis, Budget, and other well known rent-a-car companies.

I am not certain what to make of the homogeneity of modern life. In a sense, it tells us how similar we are and that concepts that appeal to consumers one place are likely to appeal to others.




The Perishable Pundit Visits South Africa

Dispatch III — UK Weighs In On Obesity

The most annoying thing about traveling to South Africa via Europe is that it is common for the flights to leave the US in the late afternoon or early evening so that you travel at night and arrive in Europe in the early morning. In and of itself, this isn’t so bad. The problem is that most of the flights from Europe to South Africa also leave in the late afternoon or early evening. This means you are going to have a whole day to kill.

In the old days, you could at least run into London and either do some business, visit with friends, shop or sightsee. But with the security issues, going back through security can be such a hassle you don’t even want to bother.

It also would be nice to take a shower, and shower facilities are available. But with the limits on carry-on, you can’t fit a change of clothes, especially if you need a laptop, cell phone and some business papers.

So I killed a day in the British Airways lounge where, among other things, they have plenty of British papers. I thought it would be interesting to go through them all and see what items are of interest to our business. We’ll run some from time to time:

The Guardian ran a major focus on the “Obesity Epidemic”. The report consists of three separate articles. The first explains that a group of “health campaigners” is leading a fight to get advertisements for “junk food” banned before 9:00pm. There is mention of a report, “Forecasting Obesity to 2010”, which predicts that one in three men would be obese by 2010, as would three out of four women.

The article is filled with health advocates pushing for — with government approval — a voluntary code for advertisers to be drawn up, one which could become mandatory if the volunteer program wasn’t satisfactory. But the government doesn’t like a mandatory ban. A great quote from Patricia Hewitt, Britain’s Health Secretary:

“We’ve already stepped in, but there’s only so much the government can do. People need to want to change their lifestyles and take responsibility for their health.”

The Pundit agrees with the Minister, but finds the whole article bizarre. At no point does the reporter seem to ask anyone if there is the slightest scintilla of evidence that banning ads of junk food before 9:00pm would reduce obesity in children or anyone else.

A second piece in The Guardian’s coverage is a Fashion piece that focuses on the move by retailers and manufacturers of women’s clothing to feature plus sizes in their lineups. The piece mentions that from the 1950’s to 2002, the British woman has gained almost 7 pounds, 2.5 inches around the hips and 7 inches around the waist.

A similar trend for men is expected to result in similar changes there.

The article is fair enough, but misses the more interesting story: Manufacturers and retailers who keep the same sizes but secretly increase the actual width of the clothes — thus allowing people to gain weight without having to buy larger sizes.

The final piece in The Guardian’s Obesity coverage is a report on a town by the name of Bradford, which Men’s Health magazine named Britain’s fattest city. There is a lot of psychobabble: “The socio-economic state of a large city which suffered industrial decline is an important context…” and reports on various efforts being made to reverse the situation.

What really comes across is how incredibly lame any of the responses are. They talk about having general practitioners “prescribe” walks and subsidizing the purchase of home gym equipment. Considering how much home exercise equipment that sits idle, I highly doubt that subsidized exercise equipment will do much good at all.




The Perishable Pundit Visits South Africa

Dispatch IV: Seeing The Future
From Across The Pond

Cultural Divide

In continuation of yesterday’s review of a day in London’s newspapers:

Back in The Guardian, a columnist by the name of Simon Hoggart visited America. Those foreigners report the darndest things. For example:

“It may be the little things in America that make most of it such an attractive place. Friendly service in shops, where your arrival to buy things is not regarded as a gross intrusion on the assistants’ day. The hospitality is wonderful and taken for granted. You no more ask for a beer or a soda from the fridge than you would beg permission to visit the loo.”

Who’d have thunk it?

Anyway, this columnist goes on to speak in praise of diners:

“…next morning we drove to Georgetown, a nice old part-colonial town where we found Theo’s, a diner that was serving the traditional breakfast, with pancakes, waffles, eggs over easy, eggs benedict, home fries, hash, plus jugs of coffee and juice. What was so appealing was there: men in overalls, businesswomen with laptops, mums who’d just dropped the children off at school, a pair of lawyers in suits and ties. It’s a gathering place. And right now, with the low dollar, prices are silly: a heaping meal for four cost less than £15 [the equivalent of $29 US].

Spend only a few days in South Africa and you realize the blessings we share in America go well beyond the legalistic or material ones, and one very great blessing is our easy comfort with people of different economic situations. We are democratic in America in a way that goes far beyond the way we share our votes.

There are plenty of rich guys in America who have fallen in love, married, and had children with their one-time waitress, bartender, hairdresser, etc. Here in South Africa, there is a social and cultural gap that runs concurrent with economic status, which makes that type of interchange very difficult. In America, we are blessed in ways we do not fully appreciate.




The Perishable Pundit Visits South Africa

Dispatch V: Speeches, Meetings,
Observations And Opinions

ADVANCED PRODUCE EXPORT INDUSTRY

A visit to the trade in South Africa is different than visiting Canada or even the UK. For one thing, it is very far from the US, and, for reasons of both geography and history, South Africa is not a natural trading partner to the US. So few Americans make the trip. I was here to speak at the allFRESH Conference, which is, by far, the largest industry conference and trade show in South Africa, and the only other Americans in the place were agricultural attachés at the US Embassy and Bruce McEvoy, Director of Global Affairs from Seald Sweet.

So I find myself acting as something of an ambassador, not just for the trade but for the American people.

I have already lost track of my meetings. I’m up to speech number five but, already, I know I have met people with whom I will be in touch for many years. People rearrange schedules to meet, give up their holidays and weekends, and not one person has said he has only a set amount of time. Instead there is a thirst for knowledge, a yearning for friendship with America.

I don’t think it is widely understood in America how precarious the situation is here. South Africa is a country of contradictions. It is partly as modern and advanced as any in the world. The food export industry, selling counter-seasonally into all northern hemisphere markets, is as advanced as any in the world. Indeed on produce, you could argue it is more advanced, for this sector meets the food safety, food security and certification requirements not only of the US, but also of Japan and Europe.

These certifications go well beyond food safety, to issues of social responsibility and whatnot. How many American firms are certified as EurepGAP compliant?

PRECARIOUS COUNTRY

The advanced produce economy of South Africa sits precariously across a nation in which large portions of the population are not only poor, but also tribal — many still believing in witch doctors and superstition. The Vice President of the country has been the subject of attention, for he seems to have had an affair with an HIV-positive woman. Not to worry, he explained: He took a shower immediately after sex. This is the #2 guy.

The Minister of Health is a national joke, as she touts beet root, garlic and other foods as cures for Aids.

It is to the enormous credit of Nelson Mandela, the long-imprisoned leader of the opposition to the Apartheid regime, that he built a new government in a spirit of reconciliation and that, so far, South Africa has avoided the heartache of nations such as Zimbabwe, formerly known as Rhodesia. But Mandela is old and does not have the influence he once did.

Beyond that, there is frustration brewing. Black Economic Empowerment is a big issue. Acquiring the desire and competency to run businesses is a multi-generational effort, and any quick fixes that try to short circuit the needed education, training and development of the bourgeois virtues of prudence, thrift, reliability and trustworthiness are bound to fail. Frustration in the program will continue to build.

But there is a great national undertaking going on here. They call it “Transition”, but, roughly, it is a dream of moving to a society in which historical injustices will be rectified and people will be, as a great American once dreamed, judged [not] by the color of their skin but by the content of their character.

I have my doubts about their ability to pull it off. There are too many uneducated and ignorant people, easily swayed by demagogues, and there is too high a likelihood that there will be economic setbacks that will set the stage for the rise of these demagogues. It is too easy to play on base human instincts such as greed and envy.

But this is not for some American to say. I listened to an afternoon workshop of how to reform and transition terminal markets. There were frightening mentions of dangerous things, such as quotas. I had a lot of thoughts, a lot of opinions, a lot of experience. Now that it is over, I will try to whisper what I think to some people who may be able to make a difference. But I stood silent in the workshop for this dilemma: If it is to be resolved peacefully and without ruin to the South African economy, it must be resolved by South Africans.

HERE TO HELP

Yet, South Africans should know that they do not stand alone. America is a great multi-racial, multi-ethnic, multi-religious democracy. And I paused before I began my keynote address to let the delegates know that although America may not be the traditional or natural trading partner with South Africa, in our people, who have wrestled with the devil of racism, the South Africans can find a great friend. For there is no people on this earth who more devoutly wish to see Transition succeed and the considered will of a nation prevail.

Sure there is the matter of American interests, and our interest in this part of the world is most certainly served by the rise of a vibrant and strong multi-racial democracy. But it goes beyond interests. No American can help but feel an affinity for a people who struggle, as all democracies must, to find the way to peace and prosperity.

Every little bit counts. I like to think that these speeches and meetings are not just for my benefit but that in helping to build business ties between our nations and by generously sharing what knowledge, expertise or experience America has, I can make a small contribution toward helping the people of South Africa on their own rendezvous with destiny.




The Perishable Pundit Visits South Africa

Dispatch VI: Caveat Emptor When It Comes To Tropical Plants

A continuation of our series on one day of reporting in Britain’s newspapers relevant to perishables:

The Times featured a report that garden centers regularly sell tropical plants that are certain to die in the climate of the UK:

Glorious displays of trendy plants, many of them originally from tropical countries, are too frequently being offered to customers with inadequate information about their care, say critics.

Olive trees, bougainvillea, banana plants, cannas, palms, tree ferns and a range of grasses from hot climates were all named yesterday as being among those that customers are encouraged to buy.

The piece goes back and forth as representatives of garden centers keep saying they give clients all information they need to evaluate the survival odds for a given purchase.

The Pundit doesn’t understand the concept that people in the UK need extensive disclosures to know that banana trees aren’t likely to thrive in their gardens in Sussex.




The Perishable Pundit Visits South Africa

Dispatch VII: Roadblocks To
South Africa’s Future

As I spend more time in South Africa, I confess to starting to feel that the South African government and the broader culture, heavily influenced by European ideas about social welfare, are going to prevent this country from realizing its potential.

Although South Africa is partially an advanced western country that produces world-class products and world-class lifestyles for certain residents and tourists, it also is a country filled with poverty. Shanty towns spring up everywhere as desperate people from rural areas — where there are no jobs — flee to urban areas — where there are few jobs.

Yet, policy and thought-leadership in the government are focused not on economic growth or making jobs available, but on redistributing the pie from white to black and Fabian ideals, long since discredited, for maintaining expensive regulations on employment.

I was horrified at the allFresh conference to hear a top person with the ear of the government propose a quota and require that 30% of the market agents (basically the equivalent of our terminal markets) be black.

The problem with redistribution as a route to prosperity is obvious: Whites account for about 10% of the population. If you took everything they have and redistributed equally to the rest of the population, they would all have very little. Then add in the obvious: The white population contributes to the economy substantially, and that value would disappear if the whites did redistribute everything. Quite obviously, redistribution won’t achieve anything from the economic point of view.

In fact, just talking about these kinds of proposals is harmful. It means the writing is on the wall, and bright young white people who could contribute a lot to the country will look to leave. This is called ‘brain drain’, and it has destroyed much of Africa.

All these smart people worrying about redistribution need to be turned around and focused on growth. There is a limited white population, and it is virtually fully employed. If there is economic growth, the disadvantaged will benefit. If not, it is like rearranging the chairs on the deck of the Titanic; it may occupy you for awhile, but it doesn’t change the end of the story.

UNINTENDED CONSEQUENCES

But it goes beyond issues of redistribution. In China, if you are at one of those hotels where the rooms are in little bungalows spread out across the property and it starts to rain, all the sudden 20 people appear with umbrellas to escort you to your room so you won’t get wet.

In South Africa, I was in just such a hotel — a beautiful hotel, but they had no extra staff hanging around to escort the guests to their bungalows when it rains. Why? Because although unemployment is a very big problem, the minimum wage is set high for local conditions. It is also difficult to terminate people. All this corresponds to a desire on the part of businesses not to take on workers.

In agriculture, it was traditional that many growers provided housing for workers. Laws have been passed that impute tenancy rights to people who lived on a farm for 10 years. So even if they were terminated, they have the right to stay. Surprise, surprise… many growers have stopped offering housing.

The most important thing is that South Africa gets its people into the labor force. People have to get used to going to work. They have to get used to showing up even when they don’t want to. They have to get exposed to greater opportunities. They have to understand that working is part of their lives.

This is the first step in establishing a culture of hard work that will lead to the productivity necessary to compete with India, China and other countries.

There should be no minimum wage in a country like South Africa. Employment must be “at will” so that any employer knows he can hire, and if it doesn’t work out he can fire at any time with no consequences.

This will dramatically increase employment, make the country more competitive internationally and set the stage for the cultural changes necessary to compete in this century.

PROTECTIONISM

The culture at the worker level isn’t the entire problem. The papers today are filled with the news that the South African government has proposed to put quotas on the import of clothes and bedding from China, since the local industry can’t compete.

Most of the arguments in the papers focus on the fact that even if Chinese clothing were banned, the business still won’t come to South Africa, because other nations, such a Bangladesh, Vietnam and the nations of eastern Europe, are all more competitive than South Africa.

This is probably true but the issue raises two more interesting questions:

  1. Why is it that in a country with such unemployment, South Africa is not competitive, and what can be done to make South Africa more competitive?
  2. What kind of government thinks it is helping poor people by raising the price they have to pay for clothing?

Racial redistribution, social welfare schemes, protectionism — all these things cost advanced economies plenty — but these are rich countries that can afford to pay the price. South Africa doesn’t have that luxury.




The Perishable Pundit Visits South Africa

Dispatch VIII: Marketing Proprietary Varieties

As a world-class exporter, South Africa deals with many cutting-edge varieties. For an exporter, controlling varieties that supermarkets want is a prime way to get their business. But in an age of proprietary varieties, some issues going on in South Africa as well as elsewhere are raising real questions about how these proprietary varieties will eventually be marketed.

There is no problem if the company that develops a variety simply wants to charge all comers a license fee, but very often today the developers of varieties try to get better control and better profits by also controlling the marketing of the varieties they develop.

Of course, it is not a problem if these variety developers want to grant an exclusive to one grower/packer/shipper to both grow and market the variety. But if, as is sometimes the case, the developer of a variety wants to both license many growers to grow the variety and restrict their right to market the variety except through certain approved marketers, problems can develop.

It is probably not a big issue with melons or some row crops that are grown fresh every year. But if you are developing vineyards or orchards, where the decision to plant can be years from the actual marketing, this is easily a dispute waiting to happen.

What if a grower that grows a proprietary variety has a bad experience with an “approved” marketer? He might shift his business to some other marketer for all the grower’s other production but is stuck with few options for his proprietary variety. Maybe he’ll go back to the guy he hates. Maybe he’ll go to some strange marketer who competes directly with his other fruit.

It is very problematic.

I am not even sure it helps the owner of the rights to the proprietary variety. After all, even if it is the best variety, many growers won’t want to plant it if their chosen marketer can’t market that fruit. And, of course, in a country such as South Africa, growers rely heavily on the advice of their exporters as to what varieties to plant. Those exporters are scarcely going to recommend a variety they can’t sell.

GROWER VULNERABILITY

The whole issue sounds, to me, like one of those cases where if there isn’t a law right now, there will be one day.

In most states, franchisees, for example, cannot be compelled to purchase supplies from a particular vendor. They can be given specs. They can require that product meet the specs. They can even be given “safe harbor” — that if they buy from an approved supplier, they run no risk of being found in violation of the franchise rules. But franchisors can’t make anyone buy from a particular company.

I think a similar law is likely to be the end result of this issue. A grower who has his marketing options constricted is simply made too vulnerable. This would be similar to a franchisee who also would be left too vulnerable to being overcharged if they had to buy supplies from the franchisor or his approved agents.

In the end, if a company elects to license a variety to a grower, that grower probably will be granted the freedom to sell it however he elects. The alternative is anti-competitive, not likely to be judged either helpful to the farmer or in the public interest.




The Perishable Pundit Visits South Africa

Dispatch IX: Wrong Ways To
Reduce Food Prices

The Cape Times of Wednesday, September 6, 2006, reports that in South Africa a quarterly review of food prices presented before the national assembly’s agricultural affairs committee by the National Agricultural Marketing Council (NAMC) found that:

Rural people still pay more for food than those in urban areas, although most of South Africa’s food products are produced in the farmlands.

The NAMC executive officer Ronald Ramabulana pointed out that there was now “…a general acceptance within the council that the government needs to intervene and regulate food pricing, instead of leaving the issue in the hands of the market, which in essence means only four retailers in the country.”

The chairman of the NAMC, Mohammad Karaan, who I met at the allFRESH Conference, complained that the council’s work was hindered because the Council did not have “statutory powers” to take measures to “protect consumers.”

I really have come to love this country; so many good people are involved in such a noble task of attempting to transition the country to a new day.

But it is talk like this that makes me despair for the nation. Because it is action based on this world view that will take a world-class food exporter and bring mass starvation to the country.

Is it ignorance or demagoguery? That is the question. Four thoughts come to mind:

  1. The fact that food is grown in rural areas tells us nothing, literally nothing, about what the price of food should be in rural areas. The great insight of Federal Express was the realization that the cheapest way to distribute packages between two cities 500 miles apart could be to ship the package to a hub in Memphis, Tennessee — 1,000 miles away — and then ship it another 1,000 miles to its destination. Logistics and transportation, packaging and marketing, the allocation of product to different geographic areas, all these and more factor into the setting of a price.
  2. The regulation of food prices can only lead to shortages, black markets and other issues. This is because you can’t replace the judgment of actors in the food industry with the wishes of government officials. If you try, you assure that production, distribution and/or marketing will be constrained, resources will be reallocated to where they can get better returns and the next thing you know, there will be three-hour lines outside stores waiting for bread. The government here has a friendly feeling toward the Cubans. I’ve been there and seen people reduced to a life of queuing for a potato. I was with Kevin Moffitt of the Pear Bureau and watched adults in wide-eyed wonder as he showed them a pear for the first time. My advice to South Africa: don’t go there. It is the path to ruin.
  3. I’ve toured a number of retailers and gave workshops for several of them. I was quite impressed with these companies. These are decent operators struggling with difficult environments. First, although there may be only four western-style supermarket chains, there are loads of other venues for buying food, including a substantial “informal” sector that sells a lot of inexpensive food right on the street. Second, the four supermarkets seem pretty competitive. Four is not one. Third, there would be little difficulty in opening stores to compete if these four did act in secret consort to raise prices. I was shocked at how “anti-retailer” some of the comments at allFRESH were by certain speakers. These supermarket chains are businesses doing a service selling things to people and buying things from producers. The NAMC should send them a thank you note, not attack them.
  4. The NAMC needs to look at the barriers to entry in the retail market and work on those. If the members want competition, they should go to sleep every night asking how can we make the opportunity we offer so compelling that both domestic and foreign investors will want to open competitive retail outlets in the Republic of South Africa. How do I make our offer compelling to Wal-Mart, Costco, Tesco, Carrefour and new domestic concepts?

    Here are some ways to start:
    1. The crime situation here is horrid, and it is not taken seriously by government. There was recently a news report that the equivalent of our “Brinks” armored-car division had to take a big hit to earnings because of robbery. It is an insult to decent poor people to say that armed robbery is caused by poverty. They need a larger, more professional police force, a quicker and more responsive judiciary and, most of all, a zero tolerance policy for even petty crime. This is the single biggest obstacle to economic growth in South Africa.
    2. Labor laws have to be relaxed so that people and organizations that take gambles on new ventures are not stuck with people on payroll if they have to scale back. Right now, nobody wants to open a big store and hire 1,000 people because if it turns out they only need 500, getting rid of the excess is difficult and expensive.
    3. Minimum wages at retail are absurd for a country with this kind of unemployment. By eliminating them, retailers would both create more jobs and reduce food prices.
    4. Assurance against expropriation. There is a big movement to get white business owners to transfer shares to the majority black population. Right now, foreign investors who own 100% of their local operations are basically exempt. There is a movement within the ruling African National Congress to change that. There are two aspects to this issue if they want to attract foreign investment: First, many foreign investors choose to enter a market through joint ventures with local players. They need to be assured that they won’t have to give away or sell shareholdings to players they don’t feel are contributors. Second, if a foreign entity wants to open a wholly owned subsidiary, they need super-constitutional-level protections against being forced to participate in any scheme to make them sell or give away shares.

The demographics in this market would probably work well for Wal-Mart, but after two weeks of due diligence, I couldn’t in good faith urge Wal-Mart to open stores here. If the shared-ownership movement comes to existence, the most likely course of events is that after the government finishes forcing local businesses to share ownership, the people will still be poor. Then the foreign investor exemption will be attacked, and Wal-Mart will be pressured to find a "partner" it does not wish to have.

If the NAMC really wants to reduce food prices for the people, it should focus on changing governmental policies that make Wal-Mart, Costco and Tesco hold back on entering the market.




Packinghouse Visits And Dinner Conversations

When I’m back in the US, I’ll write up a lot more about the specific experiences I’ve had in South Africa, especially my visits with many retailers, wholesale markets, exporters and packers. But as I prepare to leave, I wanted to mention two US brands I had occasion to visit yesterday.

Went to visit a citrus packinghouse here in South Africa to watch Sunkist fruit being packed for shipment to the Far East. It was an impressive presentation, as they used a selection process that pushed the quality of the fruit far past the Category 1 classification that is generally required for export fruit.

As befits a country with high unemployment, the packinghouse was much more labor-intensive than what I am used to seeing in the States or Europe, but it packed a great package. And the Sunkist brand was proudly labeled on the fruit and on the box. It was clearly identified as South African fruit, thus showing how reputable Sunkist is when many others use detachable stickers to identify country of origin in order to facilitate the black market in China. But these guys are 200% above board.

Also met with some great guys from Dole in South Africa. The Dole company down here is a subsidiary of Dole Europe and principally functions as a supply arm for the European company, though they also ship product to Asia, the Middle East and North America.

During dinner, we talked a lot about business while I had my Springbok carpaccio, but as the night grew late and the wine flowed, we also talked about South Africa and America. They tried to help me understand the secrets of Africa, and I tried to help them understand America. I left understanding much more, hoping I had taught them a little, and certain I had made new friendships that I would treasure for many years to come.




Convenience Food Puts End To Buffet Cars

The Times reported that:

“The buffet car, one of the few remaining civilized pleasures of traveling on Britain’s over-crowded railways, is to be axed on several routes between London and the West Country.”

All the usual reasons were given — it takes up room, adds weight, etc. But many passengers were unhappy:

“The buffet car is part of the ritual of train travel. I remember the days when you would sit down for afternoon tea and there would be waiters on the tables. Having somewhere to go and get food breaks the journey up — traveling long distance can be very tedious. The other problem with the trolley [Pundit note: The proposed replacement for the buffet car, which Americans would call a diner car, is a rolling trolley, which Americans would call a cart] is if you’re at one end of the train, then by the time it gets to you there can be nothing left.

Another passenger said:

“Eliminating the buffet car will detract from the whole experience of traveling by train. It is deceitful of First (the train company) to claim that the trolley will be a good substitute. It cannot carry anything like the range of products, and passengers will have to wait while it is hauled all the way down the train. Trolleys also have an annoying tendency to be off-duty when you want them.”

But it is interesting to note how societal changes in one area lead to unexpected changes in other areas. For example, we have discussed the plans of Tesco to open in the US both here and here. In the UK, many Tesco Express stores as well as similar concepts from others are right in the train stations. As one sharp consumer noted about the buffet car:

“I think it’s overpriced — especially the water — and it’s not nice food. These days, when there’s a supermarket at the station, why bother?”

And as a spokesman for the train company noted:

“Only one in eight passengers used the buffet. Most people would prefer to be served at their seats rather than leave luggage unattended.”

So, in a sense, the opening of convenient food stores with high quality product enabled people to react to the growth of crime by buying food at the station and eating it in their seat, near their luggage, rather than going to the buffet car, getting inferior food and putting one’s property at risk.

All true, and yet as the nostalgic reference to tea service with waiters points out, although the overall cost-and-benefit ratio may dictate the loss of things like buffet cars, there is a loss of things that made life more civilized. That is a loss indeed.




Box Fresh

The Times also devoted a two-page spread to the hottest trend in British retailing, as the headline states: “Box-fresh and delivered right to your doorstep”.

The article is basically a review of five different services, all of which deliver mixed boxes of organically grown fruits and vegetables to the homes of purchasers, typically on a subscription basis. Most of the services seem to provide a less expensive pre-made box that ranges from about £14 to £20 (or, from $26 to $38) and the option to create a box a la carte by paying more money. Most of the services offer delivery at no charge.

Though the basic point of these boxes is to encourage ecologically diverse farms by buying ecologically diverse selections, they do include out-of-season imports that are organic but not necessarily grown in ecologically diverse farms. You can check out one of the box-fresh companies here.

The article also mentioned that the supermarkets, including Tesco, Sainsbury’s and Marks & Spencer, are planning to launch similar schemes. The Pundit dealt with that issue specifically as a solution to problems facing the organic industry. You can review that article here.

The two prime issues of the box-fresh program seem to be the ease and predictability of the box subscription — knowing your family’s produce needs are basically taken care of each week — versus the regularity and difficulty of dealing with items you don’t want and didn’t order. How many people have any use for a couple pounds of turnips delivered to their door every week?




Traceability And “Food Miles”

Two big things in Britain that we can expect to hear more about in the United States:

The trend for people to want to know where their food is from and who produced it. This goes far beyond country-of-origin labeling. It is a French and Italian trait, always foreign to British culture, but now catching on. It is part of the Slow Food movement and much more. I expect we will get much more consumer demand for this.

We already have traceability technology back to farm level. With today’s sophisticated computers, we should be able to tag each bunch of carrots, say, with a hang tag that tells who grew it, shows a picture of the farmer, gives its location, etc. It would be a big winner for Whole Foods and Wild Oats right now, and others might do some experiments.

The other issue is “Food Miles”, basically telling consumers how far the produce was shipped. This is a proxy for the environmental impact of the food. Although there are also food security issues that are creeping in, not so much about terrorism fears but about the vulnerability of countries to be cut off from their food supplies. In this article, The Times rated each box on food miles.

I really think it would behoove companies like Earthbound Farm to consider growing and processing operations on the east coast, probably somewhere in the triangle of Baltimore, Boston and Chicago. This is America’s greatest population center, and I think it is clear that Earthbound’s constituency wants more locally grown or, put another way, fewer Food Miles.

By diversifying its operations, it would help Earthbound position itself in what is likely to be the sweet spot on this issue. Then it could say something like: “We grow locally when seasons permit but work worldwide to keep products available 52 weeks a year.”

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