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Perishable Pundit
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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur

Is Tesco Defrauding Consumers?Promising Only Nature’s Choice Certified Product But Delivering Cheaper Alternatives?

Whether the issue is food safety, sustainability, traceability or other supply chain issues, the industry model is now set. Retailers and other large buyers dictate a set of standards to their vendors. They may be established industry standards, say the California Leafy Greens Marketing Agreement metrics or they may be proprietary standards such as Marks & Spencer with its Field to Fork program. In either case the supply base is told to invest time and money to conform to these standards, the implicit promise — business from the buyer.

Now, however, with value the watchword for retailers across the globe, this deal — “you invest to meet the standards and we will pay you back by buying your product” — is disintegrating. If we needed additional validation for that concept we received a letter, from a major producer, that responded to our piece regarding retail pressure on producers in the UK:

I wanted to write you to reinforce your excellent article, Do UK Retailers Use ‘Bully Tactics’ To Squeeze Suppliers, about the UK market and Tesco in particular. You were spot on.

We can reiterate much of what the article stated. However, one glaring item has not been given the emphasis it deserves… the implication of all this on food safety commitments. The subject was alluded to in one of the interviews that spoke of the financial commitments that Tesco has asked suppliers to make on its behalf.

As you are aware, Tesco embarked on a program 5 years ago or so, that would have Tesco buying 100% of its produce from suppliers who achieved the Tesco Nature’s Choice (TNC) certification for food safety standards. This was a rigorous program that required a large investment in both capital and time because the required standards were far higher than EurepGap and later GlobalGap. It truly was a two-way commitment that Tesco made to insure that it had full participation from its suppliers worldwide.

Many growers deferred making the investment, including most of our competitors. We decided to make the investment, a substantial one, for two reasons: First, we felt that food safety would become a huge global issue (wow, is that ever an understatement in hindsight)and second, it would give us a competitive advantage as Tesco would only be able to buy from the very few producers in our categories that had such certification.

Everything was running smoothly until recently when we began receiving demands for deep discounts and, in some cases, we believe Tesco simply seized the discounts claiming quality or other problems. Obviously, we had a number of discussions with Tesco executives to get their help and to inform them that this was completely unacceptable going forward. We had invested heavily to meet the Tesco standards and couldn’t make a living at the prices they proposed to pay.

We were not particularly worried. We figured that as one of the few suppliers meeting the Tesco Nature’s Choice certification for our categories that we could exert some influence on the process. We knew that there was not enough Tesco Nature’s Choice certified product in our categories many times of the year to meet Tesco’s volume requirements without our production. Even if we were to ultimately lose the business, certainly we would have a lot of time to transition as it would take time for Tesco to persuade other producers to implement Tesco Nature’s Choice and then for them to do so, even if Tesco felt it could get better prices elsewhere.

Were we ever way too naive on that one! Tesco merely purchased from non-TNC vendors that were offering lower prices.

Wondering precisely why we had spent all that money to meet TNC requirements, we confronted several top Tesco executives. We were told that management had reiterated its commitment to food safety, but authorized “special opportunities” to provide value to their consumers.

That’s exactly what the “Pundit” predicted would happen to US growers from US buyers in several of your columns.We kick ourselves now for believing these people were ever serious. We invested time and money thinking they believed in this program, that TNC meant something. That they so blithely would walk away from the food safety programs that we had struggled for years to enforce is simply astonishing.

So, this is what we learned: In the end, a cheap deal will triumph over food safety. Our worst fears were confirmed. The whole program turns out to be just PR to keep the BBC at bay; not any commitment to safety or sustainability for their shoppers.

So, now we head into 2009 and we continue to sell some product to Tesco. The future, though, is uncertain. We may sell some product to Tesco or we may not. Probably not, because we focus on producing the best quality and we have been bluntly told that Tesco is looking to get away from premium product produced in accordance with TNC standards and is moving toward very cheap product from all comers.

Reading your columns over the years, it was obvious that Tesco didn’t have the best reputation among suppliers. I had heard that statement from others as well. However, the speed with which our deal changed, the casualness with which Tesco would drop a supplier that had committed to it, still boggles the mind.

We thank our correspondent for this powerful and plaintive letter. Although this letter is focused on Tesco and, clearly, the UK growers think both that Tesco is the toughest and that as the market leader it should be the most progressive in trying to ensure everyone meets supply chain responsibilities, the issue is hardly unique to Tesco.

It squarely addresses the single-most important problem in the industry, a problem that is getting steadily worse as the economy gets tougher.

It is also a problem that trade associations and others have been unable to face head on.

From an industry perspective, the problem is clear and simple: There are supply chain responsibilities in areas such as food safety, traceability and sustainability. The top producers in the industry strive to meet these responsibilities. Then, they are put in a position by many retailers of having to meet the price of vendors that have not met these responsibilities.

Since meeting the responsibilities is expensive, this is a recipe for the ultimate insolvency of many of the best producers in the industry.

It is also a situation that our vertically integrated trade associations have trouble really speaking up about to retailers. We have written a great deal about traceability, and we are glad that the industry came up with a solution. We know that many individual industry leaders are intent on seeing the program through.

But individuals are perishable — they retire, get transferred, pass away. One simply can’t rely on the goodwill of individuals in making investments. And the basic fact is that not one major retailer has agreed to constrain its supply chain to vendors that are in conformance with the traceability program.

The vertically integrated structure of our trade associations is extremely good at fostering what consensus can be achieved. But sometimes it creates a difficult structure for telling “truth to power” — and many producers feel they are being set up again to invest money without any assurance that buyers will actually value the investment.

The Tesco allegations are worse only because instead of a general industry effort, these are individual companies that have partnered to meet individual standards. In other words, these producers are the teammates; they did something special that the retailer requested, then they get launched adrift.

It is not good for the industry as it discourages future investment in doing things to the highest standard. It also is not right.

What we found missing from our interviews was any discussion of the role of the consumer in all this.

You go to Tesco’s web site and you get info such as this:

i) What is Tesco Natures Choice?

Tesco Nature’s Choice is a standard, which all of our fresh produce growers around the world must achieve in order to supply us with fresh fruit, vegetables or salads.

The standard was developed to ensure that our top quality fresh produce comes from growers who use good agricultural practices, operate in an environmentally responsible way and with proper regard for the health and well being of their staff.

Growers have to demonstrate that they operate in the manner which meets these requirements, laid down by Tesco in the Nature’s Choice Code of Practice.

ii) Why Tesco Nature’s Choice

Our customer’s demand fruit and vegetables that are fresh, tasty and excellent value. Not only this, but they expect Tesco to ensure that these fresh products are grown safely and with minimal environmental impact. Integrity is paramount. It matters greatly where and how product is grown.

Tesco Natures Choice was first introduced in 1991 to control chemical usage and develop environmentally sustainable production standards for our growers. We were the first supermarket to introduce a formal code of practice and have since revised the scheme to become a world wide stand alone scheme, which is independently audited.

We are not an expert in British law but to us, publicly declaring that “all of our fresh produce growers from around the world must achieve” the Tesco Nature’s Choice certification, which is “independently audited,” and then selling produce that has not been independently audited to meet that standard is perpetrating a fraud against the consumer.

Wanting to provide “special opportunities” for value to the consumer is a reason but no excuse. The premise of the Tesco Nature’s Choice program is that part of the value equation is safety, sustainability and traceability — if Tesco wants to offer cheap product that has not been audited for adherence to this standard, then it needs to make clear to consumers that when they buy this particular product, they are not getting all the assurances they usually do when shopping at Tesco.

The British producers have it tough; they have few large customers to sell to. So Del Monte, as we discussed here, can walk away from an ASDA tender and send the boat somewhere else — but a British producer can’t. To date, the focus has been on looking to ombudsmen and other structures to restrict retailers in their actions. We wonder if an alternative path isn’t to look to retailer’s relationships with their consumers.

In the US, McDonald’s and others have agreed to so-called “penny a pound” schemes where they agree to pay workers extra per pound because the advocates for the workers found out that the leverage point for tomatoes is not packers but restaurants that deal with the public. One wonders if the advocates for growers wouldn’t be better off leveraging Tesco’s desire to impress consumers with its food safety, sustainability, etc., than looking to trade-specific solutions such as ombudsmen.

Subway Joins Penny-A-Pound Program While Tomato Growers Feel The Pinch

With the announcement that Subway Restaurants has joined with many other quick-serve restaurants in committing to pay Florida tomato pickers an extra penny a pound over their normal wages, this movement seems to be gaining momentum again.

We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:

Les Winograd spokesperson
Subway Restaurants
Doctor’s Associates
Milford, Connecticut

Q: What drove Subway’s deal with the Coalition of Immokalee Workers (CIW)?

A: We strongly support farm workers’ rights, and reached agreement with CIW to further those rights. We did agree to pay the extra penny per pound. Basically, what CIW was asking us to do mirrored what was in our vendor code contract.

Q: In what ways?

A: Fairness to workers… allowing them to communicate with each other. We expect all our suppliers to follow workplace standards free from intimidation and provide provisions for fair wages and benefits, proper pay for working overtime, health and safety, protections against labor abuse, child labor and worker discrimination. Labor should not be exposed to undue risk or physical harm. Workers should not be exploited. That’s something we already had on the books. We were looking at this as an extension of what we were already doing.

Q: Yum Brands entered into a similar agreement with CIW back in 2005; McDonald’s agreed to the additional penny per pound for Florida round tomatoes supplied to its U.S. restaurants in April 2007. Burger King adamantly resisted, but eventually reversed its long-term opposition to the CIW demands, agreeing to the wage increase in May 2008 [see news conference here]. Whole Foods joined the bandwagon in September of 2008. So why did Subway wait until now? Reportedly, CIW workers were set to picket Subway stores in its Miami headquarters, and then in Connecticut. Did that imminent threat push the deal through?

A: The timing was very coincidental with the so-called protest. We had been monitoring the situation with other chains for awhile and had determined this was the route we were going to take. We came to that conclusion before they were going to announce picketing plans and what locations. We had been talking to them for quite some time.

Q: Despite the agreement, the issue still remains of how the Florida tomato workers will actually receive the extra penny per pound. The Florida Tomato Growers Exchange argues the growers should not participate in these CIW agreements because of various legal and logistical issues.

A: We have a purchasing coop that deals with that side of the business, an independent group funded by our franchisees.

The way we are set up, Doctor’s Associates handles the specifications for products and basically determines code of conduct for vendors. IPC, the purchasing coop, actually does the contracts with the vendors and the financial arrangements. The actual transactions go through IPC.

The IPC had a huge hand in the agreement. Our side of it is we agree with this.

If it affects our franchisees, we have to give it our sign of approval. If it has to do with the color and size of the tomato, it’s us. If it affects business in the actual purchasing of product, it has to do with IPC.

We’re always looking to do right by the consumer. Subway operates on the entrepreneurial spirit of the founders of the company. It was always the view of the founders to tread in areas new to us, to reinvent what we do, and to constantly improve the product, the conditions under which it is produced, and in how customers are served.

Q: Subway’s purchasing cooperative did not want to elaborate on the terms of the agreement, or how it would actually implement it to insure the additional money gets distributed to the workers. Why is that?

A: We had no problem agreeing to the deal. But it is a sensitive issue for a lot of companies. IPC may be reluctant to discuss details of the agreement because there are a lot of unresolved issues with how the money will get to the workers. It’s being worked on. I won’t say it’s impossible for it to happen, but it’s something the attorneys’ are pursuing with CIW. IPC wants a system in place to ensure the money gets passed on to the workers. It may be concerned that speaking to the media during legal negotiations probably could do more harm than good.

Mira contacted other chains that signed agreements with CIW to learn more. Following is an interview with one of these chain executives who offered to share background information, but preferred to remain anonymous due to the sensitivity of the topic.

Q: What good are these agreements between CIW and the restaurant chains if the additional penny per pound doesn’t end up in the workers’ pockets?

A: A long time ago, Yum Brands made the agreement with CIW to pay the extra penny per pound and got information from the two growers that had all the data on which pickers picked x amount of boxes that went to Yum Brands. These were very small checks — $1 to $5 dollars that probably weren’t even worth cashing for these people.

Then McDonald’s agreed to do the same, and growers said this is a form of unionization, negotiating on their labor. The Florida Tomato Exchange made sure no growers gave any information on how many growers picked what boxes. How do you get money to workers? You don’t. It’s being accrued for everybody forever. Until the growers either say, ‘We’re going to give you the information,’ or number two, the CIW would allow the money to go to community service like building hospitals or schools; the workers won’t see any benefit.

No one wants this in print, but many of the chains’ growers said from day one, ‘I’m not going to pay money to a particular worker making $10 an hour anyway.’ But growers understand workers are living in poverty, so they say they’ll give money to put into the community, like the Redlands Christian Fund. Growers want to do this. If CIW wanted to provide help to all workers, they would let the money be released to the community for different social services. Now they are pressuring the growers to give up their records; ”these guys picked this many boxes this week,” but good luck if the money gets to workers anyway. These workers pick four to eight hours a day, mostly four or five days, and in a season of seven or eight months, so you’re below the poverty line as the breadwinner of the family.

In actuality, the tomato growers are paying more hourly than we are to our restaurant workers; there is where the rub is, and the migrant workers often get housing, by the way.

Q: So why do these chains agree to CIW demands? Is it a public relations squeeze?

A: Do you give in and accrue a bunch of money and work it through, or do you fight them and get restaurants picketed and destroy business in a bad economy?

The growers argue legal issues with us getting involved in their labor. The Florida tomato growers are asking, ‘How can you tell us to pay an eight dollar-an-hour raise? I’m not going into your restaurants and telling you to do this.’ They’d like to see the word union, union, union attached to this scheme.

A lot of chains will copy our agreements. It’s costing our chain money, and it’s not a small number! Now we are at a disadvantage because we’re paying more. We’re at a competitive disadvantage versus Wendy’s or other chains that are not participating. Do you think people care about migrant workers when everyone is getting laid off? But our thought was, why fight it? Some people say it resembles extortion.

Q: Still, the CIW seems to have the media on their side from a public relations standpoint. And with migrant workers impoverished, the idea of refusing to pay an additional penny per pound could come across as heartless.

A: You hit the nail on the head. With proper marketing and a good PR firm, the Florida growers could have nipped this problem right off the bat and it would be a non-issue for everybody.

Mira then reached out to the tomato growers in Florida to get their take on the issue.

Reggie Brown, Manager
Florida Tomato Committee
Executive Vice President
Florida Tomato Exchange and
Florida Tomato Growers Exchange
Maitland, Florida

Q: What is your reaction to Subway’s agreement with CIW, as the biggest fast food user of Florida tomatoes?

A: After surviving the Salmonella Saintpaul crisis, and the grueling Senate hearings accusing Florida tomato growers of farm worker exploitation last April, this doesn’t seem that bad. It’s all relative.

It’s like extortion how CIW threatens to picket these chains if they don’t agree to sign.

Burger King refused to meet CIW’s demands for a long time, but caved in when a reporter intimidated [Burger King’s Vice President] Steve Grover’s daughter and she said he had used her blog to criticize the CIW. The scandal hit the press. That was the company’s motivation.

I still haven’t seen any documents related to these agreements. I have no knowledge of where the money is. Based on legal opinions we’ve obtained, there are several complex legal issues surrounding the receipt of those monies into our payrolls for the purpose of paying workers. We don’t know which worker picked which tomatoes for which chain.

The tomatoes don’t come with labels on them. The market and distribution systems, as FDA demonstrated so aptly this summer with the Salmonella Saintpaul outbreak, are complex, where the tomatoes go through at least two or three steps before their final destination.

Q: Don’t growers have to keep records on the amount of pounds their workers pick in order to pay them? Are you saying you have no way to identify the originating sources of a major chain’s tomatoes?

A: We have a system in place for picking, which is relatively effective in tracking how much people pick, but there is no way for tracking where that individual worker picked on an individual day and where it’s going to be sold.

If Subway or McDonald’s wants to supplement workers, we don’t know who they are. If we improperly pay workers for lack of correctly identifying the right workers, we have broken the law. We’re paying our workers with payroll checks. We know who picked what, but not where it ends up. The tomatoes could be put in a room for a week, and then sold to a re-packer, where they are resorted and then sold to a processor who slices and dices, who sends products to a distributor, who distributes to those restaurants.

How do I pay migrant workers 90 days in advance of that transaction being completed?

Even if the communication system is perfect, there is still a delay because there is no instant transfer of communication and compensation. Theoretically, the information and money comes back to the distribution center, packer, farm, and the grower is supposed to know who it is going to pay. Practically, the information comes back, if at all, long after the worker ahs been paid.

Q: What you describe sounds more like a logistical issue than a legal one?

A: The grower is thinking, ‘I pay every two weeks, on an hourly basis far in excess of the minimum wage, yet we’re being called upon to provide this compensation that is impossible to accurately distribute, but also has multiple legal problems. If I mispay someone, and knowingly mispay because I don’t know that individual worker picked for that chain, and someone files claims on behalf of all the 1,000 workers for not getting compensated correctly, it’s a crime, a serious crime.’

Under the Rico Act, the mafia crime act, if we are incorrectly paying workers knowingly, this is considered to be defrauding people, which is an actionable claim subject to jail time that could be made against these growers, filed months or years after it has occurred. We don’t know who picked for which chains, and we would be months late in being able to compensate, so the worker may or may not be working for us at that time, or the farm may not even be in operation at that time.

Why would anyone enter into that kind of arrangement knowingly? We think it’s impossible to meet the requirements of these agreements.

Q: In the case of Yum Brands, didn’t growers supply worker records to the chain so that the workers could receive the additional money?

A: A couple of growers supplied bulk payroll records and those workers received some prorate share of the Yum money, but there was no relationship of those workers having directly picked product going to Yum Brands; the only relationship between penny a pound and those workers was that it was a pool of money divided on a prorated basis to those workers working on those farms.

For purposes of explaining, say 10 workers picked tomatoes that went to Yum, and growers sent records of 100 workers, and the pool of money was paid to all 100 workers on a prorated basis. The 10 workers were mispaid, as were the other 90 workers, and knowingly, which is considered a crime.

Q: All this becomes so complicated when the chains enter into these agreements piecemeal. Isn’t the CIW simply fighting to increase the wages of Florida migrant workers across the board?

A: Let’s talk about issue of unionization. When an organization negotiates wage rates and presumes to represent workers and is recognized for that role, CIW is in effect a de-facto unionization of the workforce. There was never an effort or formal process for that workforce to express itself for or against a union. Yet these companies are entering into these CIW arrangements under state law without due process on the workers’ part. CIW claims to have 4,000 workers within its organization, but this is not really the case. They’re acting, walking and quacking like a union, but there is no union structure.

Q: Some would say the Florida tomato industry is undermining fair labor efforts. How would you counter this argument?

A: We continue to respond to the real marketplace for labor by competing with other employers for workers. Those other employers are industries such as construction, hospitality and service jobs like mowing lawns, all of which employ minimum skill labor. We are doing this by attracting them with good wages and good working conditions.

Capitalism in the marketplace will truly determine if we are able to attract workers. If you are a true believer in the economic system of free enterprise, then if we are not having a major labor shortage, it is reflected in the fact that we have the best wages. And as there is a scarcity of labor in the market, that’s why we continue to attract labor to harvest our crops.

A number of employers in the tomato industry have begun to use the guest-worker program that brings in workers to supplement current availability of domestic workers. We are not saying there is no shortage in the workplace, but we are proactively moving to address that issue with wage rates and guest-worker programs. I could make a strong case we’re one of the most progressive commodities in the country. Unfortunately, CIW has gone after our industry.

Q: By focusing on the hourly wage rates rather than annual compensation and other benefits, don’t you ignore the fact that most migrant workers are impoverished?

A: The hourly wage rate is the fundamental mechanism by which minimal skilled labor is attracted into the workforce. The nature of the seasonal agricultural labor force will not be changed by the penny-a-pound scheme. We are fundamentally seasonal employers; for months we employ workers who work for multiple employers over the course of the year.

Penny a pound is only attacking one industry and one part of the country, and that won’t change anything. In fact, it potentially unfairly handicaps that industry. At $12.46 cents an hour, go down the street and look at what other employers are paying. There is always a concern for what wages are, with minimum wage laws at state and federal levels.

Q: Why not mount your own public relations campaign to set the record straight?

A: Quite honestly, for the first four or five years, we didn’t do anything. Only in recent times have we focused efforts to respond.

Q: Your efforts have had little sway in staving off CIW’s ability to get signed agreements with the big restaurant chains.

A: CIW goes to the foodservice industry because they can absorb costs. The cost of product has a real bearing on product demand. As an example, look what happened in hurricane years when tomato prices soared and sales contracted. If we run up the cost of product for the foodservice industry, it will certainly stall demand. You just won’t see tomatoes in salads. Or the tomatoes will be imports.

When brand owners are threatened by boycotts, student pickets and campaigns by socially active groups throughout the country, the cost of agreeing to the penny a pound is certainly cheaper from a brand protection standpoint then any kind of an effort to refute inappropriate and inaccurate accusations hurled in the media, with no facts to back them up.

Q: What types of false accusations are you referring to?

A: There was one case in the last 9 or 10 years associated with a tomato company where that individual was indicted for human trafficking. After he served his time, he went to work at another company, was then identified by these activist groups and the company laid him off.

Q: Isn’t SAFE set up to protect against such abuses?

A: We have been very proactive in the tomato industry, working with tomato growers producing social accountability through SAFE. Steve Kirk, the new chairman of SAFE, has a long record of working on housing. He works with a group out of Homestead that builds and manages farm-worker housing throughout state, and has been an advocate of housing for many years.

Barbara Mainster, executive director of RCMA, remains on the board, and we picked up Ed Beckman, President, California Tomato Farmers, Fresno, California who’s now on the board as well, which gives SAFE a broader base. There is nothing to prevent SAFE being used by anyone wanting to have a third-party audit to test the veracity of employment and social aspects, and going into the direction of the whole sustainability effort.

There have been some situations where bad things have happened; bad people exist. The reality is that if the Immokalee group (CIW) creates a situation where the cost of that product is higher by 20 cents or 40 cents in today’s economy where low cost drives the market, they will drive the industry out of state and out of the country, unable to compete with imports from Mexico.

The tomato business in general is a pretty tough business. Going through what we did last summer with the Salmonella Saintpaul crisis, with profit practically down to 0… Even though we have been progressive in relation to safety of tomatoes, if you Google the industry 10 years from now, we’ll still be associated with Salmonella Saintpaul.

Q: News does propagate through the Internet rapidly and can hover in cyberspace indefinitely, whether accurate or not…

A: The strategy of CIW is to use the Internet to proliferate the myth that Florida tomato growers are enslaving workers, and it has refined it to an art. I argued our case to the media and in the Senate hearing that we were on the same side as CIW in our concern for migrant workers. The tomato industry has been targeted by this group.

The produce industry should be warned that there is nothing to prevent other groups to do the same to other commodities. CIW uses intimidation to bully brand owners, which is not helpful for the industry or the economy. Once slavery is hurled across the room, reasonable discourse goes out the window.

CIW’s strategy only works if it can make pretty outlandish allegations against an industry. The emotionally-driven issue of slavery, which has been the corner stone of its campaigning, is fundamentally wrong. The emotional connection is what drives its success. It basically says Florida tomato growers are slavers, and that has caught the social conscience of the country that opposes slavery as much as we do. CIW only succeeds if it paints our working conditions and wage rates as almost villainous. I would counter: Do we have a workforce and does it routinely return to employment as a measure of the true economic wage rate? Yes.

For this mythical image to continue to be propagated by (CIW) that we are some kind of unreasonable group of individuals is ludicrous. Look at what we’ve done with SAFE. We had worked at length to assure McDonald’s that their providers weren’t involved in activities claimed by CIW. McDonald’s brought in internationally known specialists to create SAFE. That program was created in conjunction with McDonald’s support and expertise.

The Florida tomato industry has been in the forefront of food safety guidance and auditing procedures, and it exercises complete transparency in turning over audit documents, as exemplified by the role the industry played in the Salmonella Saintpaul outbreak.

Q: Could you highlight ways the Florida tomato industry is addressing the new emphasis on social responsibility?

A: The Florida Tomato Growers Exchange, with McDonald’s assistance, made a great effort to create a third-party audit system, similarly structured to third-party audit systems around the world. We recognize this is the first step in a new journey. Everything in the SAFE program speaks to corporate social responsibility. All the effort has been acknowledged as a constant work in progress, and certainly goes beyond the minimum legal requirements in an effort to build a productive work environment for our employees that we value. SAFE was never intended or presented to be EurepGAP. We have a fundamentally robust regulatory environment that takes care of many of the issues EurepGAP addresses.

The tomato growers historically, currently and in the future will continue to support childcare, child education and other opportunities for farm worker children. We are aggressively improving housing and working conditions for farm worker families long-term.

The industry partners with organizations in these causes. We’ve worked with the Florida Fruit and Vegetable Association and cooperated with Catholic charities in building housing after hurricanes. Farmers are constantly providing land and facilities for workers, for childcare and child education on our farms. We have companies that have provided significant dollars for scholarship programs for college opportunities for migrant workers to improve their skill base so they’re not trapped and are able to gain skills and take advantage of new opportunities.

We feel SAFE has a mechanism to raise standards in the marketplace. SAFE structure provides a way to address problems if violations of the code are found, solve those problems and move on. I work with some very progressive people in the industry.

Q: In pursuit of raising worker standards, could you elaborate further on the legal obstacles to helping the restaurant chains meet their agreements to pay tomato workers additional wages?

A: We have numerous legal opinions telling us not to participate in these agreements between CIW and the restaurant chains. Despite comments to the contrary, we’ve made no announcement that there is a fine in the Growers’ Exchange for growers that do participate. We are simply a cooperative using good business practices to insure all business owners abide by their contractual obligations. Ag coops are owned and operated by their members. They are voluntary organizations. They are private businesses that operate under the terms and conditions created by their owners.

When multiple third-party groups, in fact competitors, establish terms and conditions of trade, there is a significant potential for anti-trust concerns. However, legal issues with labor laws related to employee/employer relationships are at the core of this issue. The issue of joint employment and unionization are at the core of this scheme.

In final response to this issue, where does the slippery slope end? We have no problem with Yum Brands, McDonald’s or anyone else supporting the farm workers with whatever trust funds or other benefits they wish to provide. That’s their business between them and the activists. We just choose not to be involved because of a lot of trip wires.

Q: But if the growers don’t participate, the additional money for the workers just sits in escrow, which doesn’t benefit anyone.

A: That money could be put into a foundation to serve the worker community.

We don’t oppose workers getting those resources, but have serious legal issues getting involved in that process. Some have suggested the penny-a-pound funds could be distributed by setting up storefronts where workers register claims with their pay stubs with the number of pounds they picked, but I’m not sure how this would work exactly.

Funneling money through foundations to provide help to the workers is another way.

This is one of those areas in which nothing is as it seems to be.

First, it is patently obvious that none of these fast food chains care a whit about giving a penny a pound to workers. If they did, they would apply the policy world wide and not just in Florida, and they would insist growers do it. Growers may scream and protest, but nobody will ever convince this Pundit that if McDonald’s insisted that each tomato picker be given a condo in Miami Beach and a pink Cadillac — and was willing to pay for it — that some grower would not be willing to support it in order to get the McDonald’s business. It is obvious that the chains allow CIW to declare victory, then put a penny a pound into an account because this is the easy path. They don’t take the next step of actually refusing to purchase from growers who don’t do this because they don’t actually think it is such a great idea.

Second, the growers have a thousand objections, but their real objection is that it is wrong to single out one particular production region for this treatment, and it tends to make that production region less competitive. The growers are right, because if the production is driven out of Florida, say to Mexico and the Caribbean, the workers will be paid less and will be less well off.

Third, the CIW has found a vulnerable pressure point, and we can count on other groups to use restaurants and retailers as the way to pressure production agriculture. Any one produce crop is not very important to these enterprises, and the cost of pickets and boycotts could be substantial. So the industry needs to do a far more effective job on the PR front.

Fourth, the PR will work better if the industry deals with two issues: A) Hourly compensation is just not that important in the scheme of things. The question is if someone is a migrant laborer in the produce industry, how much money can he earn? Obviously no matter what salary these workers earn during their time on the Florida tomato deal, the story has to include an industry-wide solution that includes income from their stint in Florida, Tennessee, Ohio, etc. We previously suggested the possibility of an industry organization that would hire the workers, give them health insurance, 401-K plan and arrange for their employment in different states and then would “lease” the employees to various worksites throughout the year. Then we could tell industry critics that these folks have year-round jobs with benefits at a livable wage. Perhaps we could even market the tomatoes with a Fair Trade-like program that speaks to employee compensation.

Fifth, we are all in favor of charity and, certainly, as we wrote here, the Redlands Christian Migrant Association is wonderful organization. But charity can’t be the answer; in fact the need for charity is proof of the problem. If one’s employees earn so little that they need charity, then the work is not really sustainable in our system.

Right now, things are tough and we suspect the focus on value will mean that people just want cheap tomatoes. Long term, though, it is not going to be acceptable to have jobs that people can’t make a living at on a year-round basis.

So the challenge will be two-fold: A) How to set up an industry structure so that the produce industry can be proud of the opportunities it provides its labor force, and B) How to set up trade relations so that taking these steps doesn’t price domestic agriculture out of business.

Ready Pac Voluntarily Recalls Products Containing Peanut Butter

Ready Pac Foods announced a recall related to products in packages with peanut butter:

After receiving notification from one of its suppliers, Ready Pac Foods, Inc. is announcing that they are initiating a voluntary recall of certain products containing peanut butter that may have been contaminated with Salmonella. These products have been distributed to different retailers in the states of California, Utah, Illinois, Washington, Texas, New Jersey, Colorado, Hawaii, Oregon, Pennsylvania, Connecticut, Massachusetts and Maryland. This recall is part of a nationwide recall initiated by Peanut Corporation of America (PCA).

Ready Pac has earned an outstanding food safety record for over 40 years and out of an abundance of caution has taken this immediate action in the interest of public health and safety.

We notified all of our customers who have received the products in question and directed them to remove

products from their shelves. Neither Ready Pac nor its customers have received any reports of illness connected to any of these products.

It is possible that some products may have already been purchased by consumers and therefore anyone who has purchased the following products with the expiration dates listed should dispose of the product or return the product to the store for a full refund. No other products are impacted in this recall.

  • Ready Pac Cool Cuts Celery with Peanut Butter 12/6.75 oz
    By Dates 12/27/08 to 2/2/09 and UPC: 077745-22415-2
  • Trader Joe’s Celery with Peanut Butter 12/6.75 oz
    By Dates 12/27/08 to 2/2/09 and UPC: 0048-5401
  • Trader Joe’s Celery with Peanut Butter 30/6.75 oz
    By Dates 12/27/08 to 2/2/09 and UPC: 0048-5401
  • Eating Right Apples with Peanut Butter 12/6.75 oz
    By Dates 12/27/08 to 2/2/09 and UPC: 0-79893-70175-2
  • Eating Right Celery with Peanut Butter 12/6.75 oz
    By Dates 12/27/08 to 2/2/09 and UPC: 0-79893-70172-1

Salmonella is an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Healthy persons infected with Salmonella often experience fever, diarrhea (which may be bloody), nausea, vomiting and abdominal pain. In rare circumstances, infection withSalmonella can result in the organism getting into the bloodstream and producing more sever illnesses such as arterial infections (i.e., infected aneurysms), endocarditis and arthritis.

Consumers with questions regarding Ready Pac recall may contact (800) 800-7822. Consumers with questions or concerns about their health or observe symptoms should contact their health care provider or go to a hospital.

The whole peanut butter/salmonella recall has been fascinating, mostly because it shows that the vaunted traceability of packaged foods doesn’t really exist. Having identified the source, the industry has shown a complete lack of trace-forward capability with manufacturers announcing recalls day after day.

As a result, public health authorities announced a recommendation not to consume:

Do not eat products that have been recalled and throw them away in a manner that prevents others from eating them. These products include Austin and Keebler brand peanut butter crackers and King Nut brand peanut butter produced since July 1, 2008. (FDA’s web site has recalled lot numbers).

Postpone eating other peanut butter containing products (such as cookies, crackers, cereal, candy and ice cream) until more information becomes available about which brands may be affected.

This was similar to the many recommendations made regarding fresh produce — spinach, tomatoes, jalapenos, etc. — the only difference is that because these products are not perishable, it is a recommendation to defer consumption until the source of peanut butter in the items has been determined. Of course, this reduces the cost, to consumers and industry, quite substantially.

CDC has also been doing a much better job than it did with the Salmonella Saintpaul outbreak related to fresh produce this past summer. It has been regularly publishing an epi curve, which we pleaded for during last summer’s outbreak. It also is doing a much better job with mapping the outbreak, an issue we editorialized on here, here and here.

We don’t know the cause of this salmonella outbreak. Peanut butter often is difficult to clean off machines and thus can be an effective reservoir for contamination. It is possible the Salmonella came from rats, birds, humans… we just don’t know.

We were, however, thinking about the pasteurization of almonds, which we wrote about here and here, and is now being required.

Peanuts are grown in the soil, and the soil can contain Salmonella. Perhaps peanuts should be required to be pasteurized with the same type of treatment almonds undergo before they are used in the production of peanut butter.

Sunkist And Brand Equity

At one point, we were writing a great deal about Sunkist. This was mostly because there were a series of dramatic changes after Jeff Garguilo left as CEO… from the loss of the co-op’s largest member, Paramount Farms, to the search for a new CEO first to replace Garguilo and then to replace Tim Lindgren, a sort of placeholder CEO, who had been called back from retirement to keep the ship steady after Jeff’s departure.

Ultimately Russ Hanlin, Jr. took the reigns. He was the sentimental favorite all along due to the esteem his father, Russ Hanlin, II, held during his reign as CEO of Sunkist and because of Russ Jr’s long association with the co-op.

Russ and his cheerful wife, Holly are very down-to-earth, and it is easy to see why the growers of Sunkist would be comfortable having Russ at the helm. As it happens, the loss of Paramount and a few other producers, along with a freeze, probably pre-destined this to be a time of retrenchment and his rapport with the growers and packers has served the organization well.

Now we confess that we see the Sunkist name as an incredibly valuable asset, and it frustrates us that more of that value hasn’t gotten back to the growers. We think the very structure of Sunkist, in which growers own the co-op but packinghouse owners run the place, has led to a culture in which the focus is on running boxes through packinghouses rather than realizing maximum returns for shareholders. This is why various options, such as a public offering, have not happened even though there was much value to deliver to the grower/owners of Sunkist.

It also strikes us that it was a mistake to drop the marketing of strawberries, as the fresh product seemed compatible with the Sunkist brand and the product created consumer impressions that were valuable.

We also have urged Sunkist to get involved in the production, packing and/or marketing of Sunkist brand fruit from China. This strikes us as the only way to save the vast bulk of the Sunkist export business in Asia. With the continuing improvement in quality and growth in quantity of the Chinese citrus business, we fear that Sunkist may have to ultimately exit Asia as it had to virtually abandon Europe.

Walking into the Fancy Food Show in San Francisco, Sunkist was brought to mind again as right at the entrance to the hall, there is a giant Sunkist logo. It is not a Sunkist booth actually — it is a Jelly Belly booth. The product is Sunkist Fruit Gems, a gummy candy produced under a license agreement with Sunkist by the same folks who bring us Jelly Belly Jelly Beans.

The candy comes in various fruit flavors and colors, but contains neither fruit nor juice. Without a doubt, products such as Fruit Gems and Sunkist brand orange soda are cash cows for the co-op and its owners, returning license fees for very little work. In addition, the Sunkist name and, in the case of Fruit Gems, the Sunkist logo are given increased consumer prominence.

The question, though, is what does Sunkist prominently mean? Maybe once upon a time, candy and soda were seen as harmless treats but in an age where schools are banning soda pop and candy from vending machines and the whole society is seeing obesity as a major problem, is an association with these products really beneficial for Sunkist and the long-term value of its brand?

What do the owners want Sunkist to mean? Just something orange-colored? Or is it supposed to stand for health, vitality and freshness?

These licensing deals seem like legacies of days long gone by. By associating with such non-healthy products, the brand is damaged and consumer confusion encouraged. Sunkist ought to quit its addiction to the cash flow from the licensing deals that don’t help build brand equity and insist that any future deals need to enhance the brand image for quality, taste, freshness, health and vitality. Deals for non-healthy products should not be renewed when they expire.

As it stands now, every Sunkist orange is an ad for candy and soda. Does that make any sense? How long before some school bans the product on that basis?

Lesson For Companies Hiring
Young Talent: Give Them Wings

We wrote this piece in San Francisco after we spent a little time visiting with Matthew Enny, a relatively new member of the produce industry who works for Duda Farm Fresh Foods. We gave him a pass to visit with us at the Fancy Food Show in San Francisco where Pundit sister publication, DELI BUSINESS, has long exhibited.

Matthew Enny is something of a poster boy for the PMA Foundation for Industry Talent (PMAFIT). He went through the Pack Family/PMA Career Pathways Fund, which brings promising students to the PMA convention each fall, and he eventually took a position with Duda working in Salinas. To put it another way, he is a living, breathing example of what PMAFIT is trying to do — raise awareness of the produce industry among college students so that they will consider careers in produce.

Last year, Matt attended the Leadership Symposium in Dallas, which is produced by a partnership between PMAFIT, Cornell University and PRODUCE BUSINESS — and we wrote about the Symposium here , here, here and here. And last year, we wrote here about his attempt to blog about the Symposium.

Matt came back this year to give the Symposium another try. In chatting with Matt we learned that, still working for Duda, he had relocated to San Francisco, which is how we came to suggest him broadening his horizons in the food industry by checking out the Fancy Food Show.

Yet in the fact that Matt is now living in San Francisco, we found an important lesson about the limitation of the PMAFIT effort and the type of change that is likely to be required if the industry is going to be successful at attracting and retaining quality employees.

Matt is a young, single man, and he requested permission to relocate to San Francisco because he wanted to have a more active social life than he found possible living in Salinas.

He is proud to represent Duda and thinks the world of Bob Gray, Duda Farm Fresh Food’s CEO, and he didn’t really mind Salinas and might well move back there one day. Although Matt spoke only of “a more active social life,” we suspect he wouldn’t mind finding a wife and then moving back to Salinas to settle down and raise a family.

Obviously Duda thinks highly of Matt, as the company was willing to make a deal with him. He is working from home but will spend one week a month back in Salinas.

The arrangement is also facilitated because San Francisco is only a couple of hours from Salinas and, in a pinch, they call Matt at 6:00 AM and he will be in the office before 9:00 AM.

And finally, Matt’s job, which involves a lot of number-crunching, doesn’t require him to be in the office.

Still, the important point is that an accommodation had to be made, and Duda made it. This is in line with the column we wrote recently in Pundit sister publication, PRODUCE BUSINESS, titled Attracting Talent Beyond The Abstract, in which we pointed out that PMAFIT’s promotional efforts are to be encouraged but, in the end, in order to attract good candidates into the produce industry, we need to offer attractive jobs — and that is something only the private sector can accomplish.

This is not always easy to do. Some years ago, the Hunts Point Market switched its hours of operation to become a day market, and buyers were banned from the property before some specific morning hour. This was a response to the difficulty the market was experiencing in attracting quality employees… even the sons of owners didn’t want to pursue a career that involved mostly night work.

The experiment failed and the market went back to being primarily a night market. This was for good reason. The very nature of the market, where customers buy product in the evening for delivery early morning to their stores and restaurants, demands night operations, and the produce quality is enhanced when it is exposed to the cool night air, not the heat of a New York summer. So sometimes, operational realities make it essential that people work at certain times and in certain places.

Yet, this is not true all the time, and there is a danger for the industry if executives think that the PMA Foundation for Industry Talent can solve this problem all by itself. Companies need to think carefully if they are creating jobs appealing enough to compete with other industries.

One wonders if in the story of Matthew Enny — where one works for a couple years at a major company center to earn one’s bones in the company and the industry, then one can see the world a bit and eventually come home — there might be a pattern that could help a predominantly rural industry attract young workers who often have social and personal goals that are often best served in urban areas.

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

Our piece, Audit Of California Avocado Commission Raises Questions Of Use Of Funds And Governance Policies, brought an avalanche of mail… mostly expressing incredulity that the head of a commodity promotion group would be paid $400,000 a year, forget about any malfeasance or exceptional benefits. Here is how one industry leader who has served on the board of many industry groups expressed it:

I hope the good people at the CAC aren’t hurt through this investigation. I don’t know about you, but no CEO of a commodity board or commission should make $400,000+. Their budget was about $15m.

I knew that Mark was highly paid but not the $400k plus. He was not even an 8 to 5 five days-a-week guy as he was allowed to do his motivational speaking and some church work during the work week.

Shame on the Board of Directors.

The actions were so widespread, so overt, so blatant, that many simply had trouble believing that the board didn’t know about this. Eric Schwartz, who we worked with extensively (you can read some of the pieces here, here, here , here and here) when he was President of Dole Vegetable Company during the spinach crisis, had this take on the matter:

Having spent a considerable amount of time on both the Californian and Arizona Leafy Greens Marketing Boards, I cannot understand how the lavish spending at the Avocado board could have gone unnoticed for so long by the grower community that it represented.

I guess one could always look to blame the state for not having enough oversight, but it seems the grower members should start by asking themselves how they could have allowed the board to operate with such limited transparency as to allow these types of abuses to occur.

One of my favorite sayings is that “you get what you tolerate”.

— Eric Schwartz
Chief Operations Officer
SK Foods Group
Monterey, California

In general, the critiques broke down into those two categories: The first, focused on total compensation. The second, focused on governance.

When it comes to total compensation this is always going to be a judgment call by the Board of Directors and, typically, the compensation committee of the board.

Very few people in the produce industry who are not owners are paid over $400,000 a year, but a number of those who work for large corporations have had the opportunity to make extra money through stock options, bonus plans and other kinds of deferred compensation that are not typically available to association and promotion group leaders.

It is also the case that it is very difficult for a grower in a rural area to appreciate how expensive it can be to live in places such as Washington, DC, or Irvine, California, where the avocado commission is headquartered.

The real estate Web site, Zillow, for example, estimates that home prices in Irvine are about triple the national average, despite having tumbled in the past year. Because the national average includes many expensive areas, this means home prices in a place like Irvine are probably five times what they are in a place like, say, Yakima.

And the CEO’s pay is typically a ceiling. If the feeling of the commission is that it wants to be able to attract a high-level person to a job such as Marketing Director, the CEO’s pay has to be high enough that his staff can be paid in a way that will attract and retain such people.

Still, we were frankly shocked by the number of people in the avocado industry who claim they are shocked to learn what Mark Affleck was making.

All the information is public; it just typically isn’t published widely because of a sense of decorum. Perhaps, though, our industry organizations should prominently make public the compensation of the top executive in an annual report published on their web sites. There is something troublesome about the notion that the board or executive committee should be trying to hide the CEO’s salary from the membership. If the membership needs education to understand the market for top executives in a given region, that is part of the responsibility of leadership.

Which points to the other issue — governance. The whole situation reminds us of two situations that had different comeuppances. One was that of Dick Grasso, who had been CEO of The New York Stock Exchange. No less a personage than Elliot Spitzer, then New York’s Attorney General brought charges alleging excessive compensation. And the papers were filled with board members of the stock exchange — financial wizards all — claiming that they somehow didn’t know that he was bringing home hundreds of millions of dollars.

In the end, the court threw out the charges.

The other was the case of Dennis Kozlowski of Tyco. It was alleged that he took compensation from the company that was not authorized by the board, though nothing that was alleged to have happened was particularly secretive. Still he was convicted:

Former prosecutor David Gourevitch said the Tyco result indicates that juries are willing to convict in highly complex corporate cases and to hold executives accountable for behavior that may once have seemed acceptable.

“I think what you get out of this is the imposition of a very high standard of behavior on corporate executives,” Gourevitch said. He said the case was not one in which most of the allegedly criminal behavior was deeply hidden from public view. Instead, he said, “it was a case in which everything was pretty much out in plain sight. . . . The message to executives from this ought to be that if it doesn’t feel right, it isn’t right.” Gourevitch called the verdict “hair-raising” for defense lawyers.

It was the second criminal trial for Kozlowski and Swartz, who were accused of stealing $170 million from Tyco by abusing corporate loan programs and taking unauthorized bonuses and taking $430 million more by selling stock at prices artificially inflated by their misstatements about the company’s finances.

The first case ended in a mistrial in April 2004 after several news organizations published a juror’s name during deliberations and the juror told Obus that she had received a threatening letter and phone call.

After the first trial, jurors said in interviews that the juror, Ruth Jordan, was the lone holdout for acquitting both men on a number of charges. Jordan was in the courtroom through much of the second trial and was in attendance taking notes as the verdict was read on Friday.

In a telephone interview after the verdict, Jordan said she was surprised at the result and continues to believe Kozlowski and Swartz did not act with criminal intent. “My own opinion is that I still think they are not guilty,” she said. “But I have to be sure to say that this is a new jury, and they are entitled to their own verdict. I still believe in the jury system.”

What do we think unites the Grasso and Kozlowski case with Mark Affleck’s case?

What really happened in both the Grasso and Kozlowski case was that the respective boards of directors thought these players were invaluable. They had both been phenomenally successful in building their respective organizations and, in both cases, the boards of directors were content for them to have whatever kind of compensation they wanted, to run whatever kinds of offices they wanted and, in general, to allow them to run the show as long as they kept producing results.

Maybe every “T” wasn’t crossed and every “I” wasn’t dotted, but that was the gist of it. It was only later when the board members realized that they had fiduciary responsibilities to shareholders and might be personally liable for their failure to supervise and that their own reputations could be sullied in the matter that, all the sudden, these much beloved CEOs became bad guys.

So, what seems to have happened here was that the board — or at least some key members of the board — were not choosing to look. Mark Affleck was a hero; he had built what was commonly perceived as one of the most effective commodity promotion groups in the country. Consumption and prices had risen over long periods of time, and events, such as the admission of foreign avocados into the US that were once perceived as disasters, were managed without too many problems. If he needed an extra $25,000 a year, nobody was going to risk losing him over such an issue. And if he felt that he had to offer his staff extra benefits, so be it.

The problem seems to have been two-fold. First, although certain board members seem to have accepted this perspective, not all of them did and, certainly, not all avocado growers did. So the commission started talking out of both sides of its mouth. The growers were being told there was a salary freeze, while Mark had the flexibility to give compensation in other ways. Second, whatever flexibility Mark was given, he still had the responsibility to follow the tax laws.

If he had stuck to offering benefits, even rich benefits, that were within the scope of what the tax law permitted, then his position would be defensible. But there are strict IRS rules on things such as car allowances, and one can’t just give one’s employees $10,000 because they purchase a car and not report it. Equally, the commission could spend all it wants on logo wear and give it to employees. But if you tell your employees to go to a department store and buy outfits that they get to keep, that is called compensation by another name and is taxable.

It is unclear what specifically motivated this audit and Mark’s departure. Maybe a new board member poked around, maybe a staff member whispered that something isn’t right. But Mark should have known the story of Al Capone who was famously convicted, not for being a gangster, but for tax evasion.

We think Eric Schwartz is onto something and so thank him for his blunt letter. This behavior, even if not specifically endorsed was, at least, tolerated and that is the best explanation as to why it happened.

Perishable Thoughts — A Time No More
For Ostentatious Spending?

Now that we live in the midst of a recession, one question is what the effect of such events is on human happiness. Now we should never make light of such a thing. To be hungry or unable to afford medical care, to be homeless and insecure as to where the next meal is coming from is certainly no fun and, indeed, to be without a job, to be unable to support one’s family, throws in question one’s very place in the world and purpose in life.

Interestingly enough, though, once one gets beyond these necessities of life, the promptings of happiness are much more difficult to identify. We recall a study we once read that happiness, for example, can be more influenced by the relative means of a family and its neighbors rather than absolute means. In other words, if one lives in a neighborhood where everyone buys coach seats on vacations to discounted three-star hotels in the Caribbean and that is what your family does as well — you may be happier than if you can afford first-class tickets to four-star hotels but live in a neighborhood where everyone has a private jet and flies off to their private islands.

Rick Eastes, newly named Vice President Sales and Marketing at Fruit Patch Sales, LLC, Dinuba, California, gives us a moment to contemplate such issues by sending along this Perishable Thought:

“To be content with little is hard; to be content with much, impossible.”

— Marie von Ebner-Eschenbach
Aphorisms (Download entire book through Google Books)
By Marie von Ebner-Eschenbach, translation by Annis Lee Wister
Published by J.B. Lippincott & co., 1883
159 pages

The Baroness Marie von Ebner-Eschenbach (born September 13, 1830 and died March 12, 1916) was an Austrian writer, who was famous for her novels of psychological intrigue. She is widely thought to be — along with Ferdinand von Saar — one of the two most important German-language writers of the latter portion of the 19th century.

The quote can be purchased here:

Aphorisms Aphorisms
By Marie Von Ebner-Eschenbach, translation by David Scrase
Ariadne Press (CA) (February 1994)
85 pages

If one perspective on this quote is related to economic fortune and raises the question of whether the rich are actually happier than others and whether a family can simply find contentment with love and simple pleasures during financial stress, viewed from another perspective the quote may speak to the issue of merchandising our departments.

We recently ran a piece from France in which Ctifl, the French version of PMA, is pushing a small store concept with a limited array of product. The idea is to not overwhelm consumers.

It raises many interesting questions. When we offer abundance beyond what a human can reasonably sample, do we create a spirit of awe in which one feels wonder and glory at being part of a civilization that can gather such delicacies from the far corner of the globe?

Or do we create frustration and doubt as consumers question if they made the best choice?

If we think the grass is always greener somewhere else, does not offering almost infinite choice guarantee almost infinite reason for second-guessing and doubt?

One of the effects of so many people losing so much so quickly is a cultural shift in which ostentation is out of fashion. A friend who builds luxury homes tells us he is still getting orders but they are smaller now; not necessarily because the people are poorer but because it is somehow unseemly to be showy when one’s friends have suffered loss. Also, because, when some have lost, we all learn to count our blessings, and a wing in the house to oneself seems somehow to distance one from the family members who are counted as one’s primary blessings.

Retailers such as Whole Foods, Nieman Marcus and Saks Fifth Avenue have suffered, and this is popularly assumed to be a matter of affordability. Perhaps. Perhaps, though, there is more to it. Maybe there was a time when showing one could afford such stores added prestige, while today, showing you can afford such things makes you a boor.

Perhaps simple is the new upscale.

Many thanks to Rick Eastes for sending along this Perishable Thought.


Perishable Thoughts is a regular section of the Perishable Pundit. If you have a favorite quote that you would like to share with the industry, please send it on. You can do so right here.

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