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Pundit Special Edition
A Big Win for the Industry

In a confluence of events with startling implications for the trade, the industry’s primary response to the spinach/E. coli crisis of last fall has emerged triumphant. The accepted tool of the industry, the use of a California Marketing Agreement to provide a form of mandatory regulation for spinach, lettuce and other leafy greens, has won virtually unanimous support from the production and processing base in California.

Less than a week ago, this was not the case: As we reported extensively, the National Restaurant Association was about to hold a food safety conference in Monterey, California, at which they had plans to introduce a competing set of metrics for the trade.

And Fresh Express, the largest producer of fresh-cut salads in America, accounting for close to 50% of the market, had declared that it would not be signing the California Marketing Agreement. This meant, automatically, that consumers would not be able to rely on the California Marketing Agreement as providing any kind of safeguard for large amounts of product and that the enemies of the industry would be able to seize on this gaping hole as evidence that the trade’s voluntary efforts had failed.

Between Thursday morning, March 29, 2007, when the NRA conference began and the March 31, 2007, deadline for signing up for the California Marketing Agreement, the concerted efforts of industry leadership working in forums both public and private turned it all around.

By Friday, March 30, 2007, the National Restaurant Association had determined that it will endorse the GAP Metrics accepted by the Board of the California Marketing Agreement and work with the produce industry on enhancing them in the future.

And shortly thereafter, prior to the deadline, Fresh Express signed the California Market Agreement, throwing the enormous weight of both its leading market share and its sterling reputation for food safety behind this industry effort.

These two decisions — by the leadership of NRA, especially interim President and CEO Peter Kilgore and by the top executives of Fresh Express, especially Tanios E. Viviani, President of Fresh Express — represent great acts of leadership by these two organizations. The decisions make it much more likely that the industry will succeed in both enhancing food safety and in controlling the agenda so that the many steps yet to come, as this effort expands to other states and other products, can be done both effectively and responsibly.

Special acknowledgment is also due to Tom Nassif, President of the Western Growers Association, and members of the WGA board who, with remarkable alacrity after the outbreak, came to the conclusion that a mandatory mechanism was essential and shrewdly analyzed what tools were available that might be put to quick use in pursuit of this goal.

That this highly fragmented industry has been able to gather around this initiative says an enormous amount about what true leadership can accomplish and gives just cause for an optimistic attitude about what the industry can achieve if it can maintain its focus on food safety.




NRA Adopts Leafy Greens GAP Metrics

The NRA Food Safety Conference started with all the usual suspects from government giving the same basic presentations they’ve been giving for months.

But it was not until after lunch when produce industry trade association executives — Hank Giclas, Vice President, Science and Technology, Strategic Planning for Western Growers Association, Jim Gorny, Senior Vice President, Food Safety & Technology for United Fresh Produce Association, Tom Stenzel, President and CEO of United, and Lorna Christie, Senior Vice President, Industry Products and Services for the Produce Marketing Association — presented on the CMA, metrics, consumers, etc., that things really started to get interesting.

The room was predominantly chain operator Quality Assurance/Food Safety folks. Questions abounded like: Does the CMA apply to Arizona? What is a handler? Why won’t the certification mark be on the packages year-round (if at all)? How can I know who signs the Marketing Agreement? How do I ensure I only get product from certified suppliers? Why do I get product from my supplier without any trace-back information or brand/name on the package?

In fact, it quickly became obvious that most of the QA folks had never even heard about the California Marketing Agreement. As one produce industry executive in the room told us:

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

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

What it actually points out is something we have known for a long time. Most foodservice companies don’t know they are in the produce business and aren’t engaged in the industry as they should be.

Why haven’t these folks set specific standards for these name brand chains that specify all these elements: You must have traceback information on the package, you must have CMA approved product, etc.

It is tempting to ask what do these QA people spend their time doing? But the answer is clear: They do not do that much in produce. At least not yet.

By the end of the first day of the NRA Conference, we had a group of operators, probably 100 people, most of whom had previously been ignorant regarding the Marketing Agreement, walk out the door believers, even evangelists for the Marketing Agreement.

It’s a shame that it took so long to get this information in front of food safety people so that they could decide they need product from only CMA suppliers. It would have been a service to its members and help achieve better food safety if NRA had run an information campaign to every QA food safety person on their membership roster. And they should have had this meeting in December, as did FMI.

On the last day of the conference, Donna Garren, NRA’s Vice President Health and Safety Regulatory Affairs, presented the proposed NRA Metrics. Here is how one produce industry leader described the situation:

Donna threw their metrics out there, but was rebuffed by several operators who said essentially “we have to start somewhere, the gap metrics are in place… let’s start there”.

That was the final agreement, that NRA would endorse the metrics, and meet with Jim Gorny and others to begin looking at incorporating the NRA/FSLC metrics into future standards.

I’m not a scientist, but I sat next to one of the produce industry’s top food safety experts working directly with industry and, as Donna unveiled the NRA metrics, he just kept shaking his head. Nonsensical things in there like surface water must have animal protection. No basis in reality: we irrigate Yuma and the Imperial Valley out of the Colorado River, and through a series of irrigation canals. What are we going to do, fence the whole river, and cover all the canals? That’s just one example.

And that’s what happens when it’s just scientists, in their bubble, instead of including people like Gorny, Giclas, and all the others that truly understand the reality of farming.

And another produce industry leader confirmed it as well:

Our VP, who deals with these issues, has received word that the NRA has communicated to key produce executives in the foodservice industry that NRA has decided not to reinvent the wheel and has voted to adopt the Leafy Greens GAP Metrics created by the industry and recently presented and accepted by the CDFA Leafy Green Handlers Marketing Agreement Advisory Board.

The produce industry got very lucky here. We were able to get wind of what was going on early enough to bring enough pressure so that NRA didn’t follow its original plan, which was to announce a fait accompli at its conference, in which 25 major chains would have already signed off on the GAP standards that had been drafted by the Food Safety Leadership Council.

This delay brought us into the conference where the produce industry had a chance to state its case. Its case was highly persuasive, as A) The GAPs accepted by the CMA are a serious piece of work designed to enhance food safety, B) The CMA is the only thing out there that creates a legal obligation on suppliers to open their facilities for inspection, and C) The CMA is the only thing that is actually happening right now.

Once this case was stated, the Quality Assurance teams from many restaurant chains recognized that this was the only game in town and realized that the produce industry was open to enhancing the program and to their participation in that enhancement.

So, these important players helped move NRA to decide to endorse the industry standards and to work collaboratively with the produce trade.

A big win.

Two big important lessons:

First, in many cases when the produce trade communicates with foodservice, we are communicating with buyers. We have always known that one challenge in working with foodservice is that these buyers often buy many products and don’t always pay much attention to produce.

We now need to realize that in addition to this problem, we need more effective tools to reach out to Quality Assurance personnel who are even less involved with produce.

Second, to the extent food safety remains a high-profile issue, non-produce associations such as FMI and NRA will feel a need to be relevant, involved and delivering value for their membership on high profile issues. We need to design our committees and approaches with this fact in mind.

Here at the Pundit, we have been rigorous in analyzing everything NRA was doing, and we made a point of setting off alarms when we saw danger ahead.

Now, as rigorous as we were in analysis, we wish to be generous in praise. There is always a process, and this process has led to a wise outcome that will lead to increased collaboration and understanding up and down the foodservice supply chain and to increased food safety for all.

Donna Garren and Peter Kilgore, Acting Interim President and CEO of the NRA, along with other key NRA executives, deserve much praise for coming out in the right place. We’ve never known a smart person who didn’t venture down a dangerous path every now and then. A willingness to change course when the facts demand it is a leadership quality much to be desired.

The produce industry is fortunate to have found such leadership quality in Donna, Peter and others at NRA.




Fresh Express Signs California
Leafy Greens Marketing Agreement

In case you ever need reassurance that nothing is over until it is over, some astounding news that represents a big win for the produce industry:

FRESH EXPRESS WILL SIGN THE CALIFORNIA
LEAFY GREENS HANDLER FOOD SAFETY AGREEMENT

Announcement Statement from Tanios E. Viviani, President of Fresh Express

April 1, 2007, Salinas, Calif. — Fresh Express food safety standards and practices are already significantly more comprehensive and exceed those outlined in the California Leafy Greens Handler Food Safety Agreement. Fresh Express food safety programs are already fully integrated from seed to customer, comprehensive in scope and focus on prevention.

However, Fresh Express is encouraged that its concerns about food safety are being addressed:

  • A commitment has been made to continue to strengthen the Good Agricultural Practices (GAPs) Metrics and make them more robust;
  • A commitment has also been made to extend the Agreement into other states, beginning in the state of Arizona;
  • The Agreement will not be used for promotional purposes, but will remain steadfastly focused on metrics and verification to further food safety; and
  • Significant support has been gathered from industrywide organizations including the Produce Marketing Association, United Fresh Produce Association, California Farm Bureau Federation and the National Restaurant Association, among others.

As a result, the company believes the Agreement is now more consistent with the Fresh Express commitment and approach to food safety. Therefore, Fresh Express wants to further support the process of raising the level of food safety in the industry by becoming a signatory.

In conclusion, Fresh Express is not changing its integrated, comprehensive and preventive food safety standards and practices, which are already substantially higher than the Agreement’s. However, improvements have been made to the Agreement’s GAPs Metrics that begin to address concerns voiced by Fresh Express and additional commitments have been made to continue to strengthen the Metrics, to increase their scope and to expand the Agreement into other states.

Therefore, Fresh Express will now sign the Agreement to further support raising the level of food safety in the industry.

Sometimes one serves the trade by going along, and sometimes one serves the trade by saying no. Fresh Express articulated many valid and important reasons why they elected not to sign.

But as our piece Last Chance pointed out:

We believe in fighting the good fight, so while the GAP metrics were in draft form, we fought for tougher standards. We didn’t win that battle this year, so we will fight on for next.

But these are mere details. Now that the terms have been set, the Marketing Agreement is the trade’s primary response to the E. coli 0157:H7 outbreaks of last year, and we have to join together to make it a success.

And it is in this spirit of joining together to make an industry initiative a success that Fresh Express has signed.

Of course, as Fresh Express details in its statement, much has changed since its initial decision.

We believe the key change is that the Board has agreed not to go into marketing but to focus on food safety. As long as there was a risk that vendors who barely met the minimum standards of the Agreement would use this agreement to purport equivalence to Fresh Express, they simply couldn’t sign.

Combine this key change with the movement to address other states, especially Arizona, and the commitment to continuously enhance the GAP metrics and the industry consensus that has formed around this plan — most notably with the addition of the National Restaurant Association to the list of endorsers — and you had real and substantive reasons for Fresh Express to make this move.

Still, if Fresh Express had been looking for ways to avoid signing, it had plenty. Not one major Fresh Express customer had demanded that they sign and, as the company with the best reputation for food safety in the fresh-cut field, it had substantial marketing and reputational reasons to avoid associating with anyone else.

But, as was demonstrated during the spinach/E. coli crisis in which Fresh Express product was pulled from the shelves along with all other spinach, Fresh Express also has a substantial interest in improving overall food safety standards in the industry.

Regulators and consumers both tend to lump everyone together when an outbreak happens. With this move, Fresh Express is best seen as investing its reputational advantage into the overall cause of enhanced food safety for the trade and its consumers.

Although Fresh Express already donated money toward scientific research on E. coli 0157:H7 and had pledged to make the results of that research known to the trade, this reputational gift is a gift more valuable than money.

With the signing of Fresh Express, virtually 100% of all California grown lettuce, spinach and other leafy greens are under mandatory regulation for food safety.

With no chinks in the armor existing for industry enemies to exploit, we stand as an industry unified and progressing toward a day when no consumer need be concerned about food safety when they sit down to have some fresh produce.

Today the industry owes a vote of thanks to Fresh Express and its President, Tanios E. Viviani, for having the courage to change when the situation changes. The world is filled with little people who will make a decision and defend it long after that decision makes any sense. The produce industry is very fortunate to have had this decision made by leader secure enough in his own skin that when the situation changed, he was not afraid to change his mind.

When the history of the produce industry effort to secure enhanced food safety is written, this decision will be epochal.

It makes this Pundit proud to be part of the trade.

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