Here at the Pundit, we often publish letters from readers around the world. Typically these letters deal with issues important to the industry.
We actually receive many more letters commenting on our coverage. We consider ourselves blessed in that most of these letters are very kind. We don’t run many of them, partly because they are often quite short — “Go Jim!” — and partly because we are mindful of the Momma Pundit’s admonition that one can break one’s arm patting oneself on the back.
We almost always publish all letters providing a substantive critique of anything we’ve written.
Sometimes, though, we are torn as to how best to respond to questions regarding our way of operating. We confess a temptation to rely on the adage, “Never explain. Your friends don’t need it and your enemies won’t believe you anyway.” But, in the end we suppose ourselves swayed by the pen of Thomas Jefferson, who began our Declaration of Independence by explaining that when such an important event was occurring, “a decent respect for the opinions of mankind” required the giving of a public explanation.
In this spirit, we wanted to explain ourselves when it comes to the issue we have been most frequently asked about in recent days: Why do you write so much about Tesco and Fresh & Easy?
We have written a great deal on this subject. Over 70 articles just in the Pundit and more in sister publications. Considering that Fresh & Easy is a teeny regional chain, it seems like overkill.
Yet when people give us their time, they are relying not just on our reporting obviously important things, but they are trusting in our judgment to select things that they should know about, whether it affects them today or not.
You can be sure that nobody working on the initiatives at Safeway or Wal-Mart to set up small format stores has written to ask why we devote so much space to Fresh & Easy. They know the importance.
There are, of course, many interesting things being done by retailers all over the country. Yet few are rolling out by the hundreds of units; few represent completely new concepts and few are demanding as much change by the supply chain.
If Fresh & Easy succeeds, we would expect many dramatic changes in American retailing:
- There are around 34,000 supermarkets in the US. If 10,000-square-foot formats such as Fresh & Easy were to garner 20% of the market and the formats realize the same sales per square foot as a US supermarket, we can anticipate that there will be around 34,000 small-format stores and 6,800 supermarkets will close. There are almost 150,000 convenience stores in America. If these new small-format grocery stores take away 10% of their business, this would mean about 15,000 convenience stores closing. This is a revolution in real estate and the food business.
- Although concepts such as Trader Joe’s and Aldi are almost completely private label, the nature of these specialized concepts is that you can’t have stores every mile or two — Tesco thinks the Fresh & Easy concept can sustain that density. Right now Fresh & Easy is pulling back a bit on private label, but it is clear that this is its long term direction. If other small-format stores mimic this private-label strategy, it cuts off vast segments of American retailing from branded marketers. This is a revolution in food marketing, branding, etc.
- Although competition in the food retailing industry is intense, it is difficult for new entrants to open conventional supermarkets for the simple reason that in most places it is simply impossible to get prime locations that can accommodate a 50,000-square-foot box. Had Tesco decided, for example, that it wanted to enter the New York metro area with large supermarkets and grow without an acquisition, it could easily take decades, maybe a century, before it became a major factor in the New York metro market. Larger stores such as club stores and supercenters can require special permits or zoning, which can be difficult to obtain.
Because a 10,000 square foot store can be built “as of right” and in commonly available real estate, a viable concept would reshuffle the competitive deck. Wal-Mart has been having a dickens of a time getting much presence in major cities where unions are powerful, such as New York. It seems as if every proposal to open a store is World War III. Yet if a small-format concept works, Wal-Mart can easily enter New York with hundreds of small stores. Safeway can enter Boston, Kroger can enter Philadelphia. This would be a massive change in the nature of competition.
- Small-format stores, if located in urban areas, may wind up displacing independent grocery stores and fruit stands, butcher shops, etc. If a larger percentage of the business goes to big chains that self-distribute, this small-store format could pose a direct threat to terminal markets and independent wholesalers.
- If part of the issue is the novel format, the other issue is Tesco itself. As the third largest retailer in the world and an operator of multiple formats, if it should be successful with Fresh & Easy, it is highly unlikely it would be content with that singular concept. With small-format stores providing critical mass to a network of distribution centers, they would likely open even smaller convenience stores similar to Tesco Express in the UK, standard supermarkets such as the Tesco superstores in the UK and supercenters such as the Tesco Extra concept in the UK — all adapted to US consumers of course.
With a successful US operation as a base, acquisitions would be less risky, so we would expect our prediction that Tesco will buy Meijer as a base to roll out supercenters will come to pass. Tesco would love to buy Whole Foods, though the stock is too pricey right now. But let Whole Foods slip up and the stock nose-dive, and Tesco will zoom in. Many large US chains, such as Kroger and Safeway, have been working on enhancing operations and increasing profitability, but their store count has barely budged. Tesco could reshuffle the deck of US retailing in a dramatic way.
- Retailers in the UK tend to control their suppliers in a way American retailers do not. Tesco or its competitors, J. Sainsbury or ASDA, may allow suppliers to work with a smaller upscale chain such as Waitrose or Marks & Spencer, but if you work with Tesco, you generally can’t work with Sainsbury. Because vendors are typically exclusive and everything is private label, the British retailers drive food safety, sustainability and much more — many would say to higher standards in Britain than we have in the US. If you go in a Fresh & Easy, you will note many interesting things. Despite every chain in the country selling 4.4-ounce packages of blueberries, at Fresh & Easy they are six ounces. Most grape clamshells are variable in weight, but at Fresh & Easy every grape clamshell is exactly one pound.
Now we think Fresh & Easy is wrong on some of these decisions. Grapes don’t grow in neat one-pound bunches, and we don’t think the consumer values the consistency enough to pay for all the waste. We suspect many consumers will pay the same price for a 4.4-ounce package of blueberries that they will for six ounces, and we know of no evidence that six ounces is a size preferred by consumers. Whatever motivated these and similar decisions — whether consumer research or a drive for distribution efficiencies — what is notable is that Tesco takes control, and the company is not willing to be dictated to by the supply chain.
This attitude will be a sea change, especially when Tesco obtains sufficient market share to tell vendors that they have to choose: sell Wal-Mart or Tesco, not both.
So, we write about Tesco because to those with open minds, the discussion is not about a small chain on the west coast; it is about the future of retailing, the future of branding, the future of food safety, the future of wholesaling, the future of sustainability, the future of competitors, suppliers and more.
Some have spoken out and said we should wait to see how it all turns out for Tesco before we comment. Readers of the Pundit, though, have to make investments and business decisions now to avoid the dangers and capitalize on the opportunities that Tesco’s rollout in America represents.
We want to help our readers succeed and part of the way we do that is by sticking our neck out and trying to figure things out before they are definitive. We call that “Business Intelligence,” and it is part of the value one gets by reading the Pundit.
Our intent to deliver that value is why we so often write about Tesco and Fresh & Easy.
During a Presidential Press Conference, President Bush spoke out on a range of issues. He faulted Congress for not allowing for more domestic oil drilling, particularly in Alaska, saying this was contributing to higher oil prices.
Although he didn’t threaten a veto, he didn’t like the Farm Bill much either:
Americans are concerned about rising food prices. Unfortunately, Congress is considering a massive, bloated Farm Bill that would do little to solve the problem. The bill Congress is now considering would fail to eliminate subsidy payments to multi-millionaire farmers. America’s farm economy is thriving, the value of farmland is skyrocketing, and this is the right time to reform our nation’s farm policies by reducing unnecessary subsidies.
It’s not the time to ask American families who are already paying more in the check-out line to pay more in subsidies for wealthy farmers. Congress can reform our farm programs, and should, by passing a fiscally responsible bill that treats our farmers fairly, and does not impose new burdens on American taxpayers.
The big issue the White House is pushing is cutting off subsidies to wealthy people:
The administration wants to end crop subsidies to the wealthiest Americans. It proposed a cut-off point of $200,000 a year in adjusted gross income, later raised to $500,000 AGI if Congress enacted farm-program reforms. The White House says Congress has not followed through.
Senior farm-bill negotiators were working on a proposal to deny farm subsidies to people with high off-farm income but put no limit on farm income, even if it is millions of dollars.
Although Congressional negotiators have come to an agreement, there are still open issues, including some that affect the produce industry:
Payment limits are one of the remaining disagreements among congressional farm-bill negotiators, along with aid to fruit and vegetable growers and direct payments to farmers made regardless of crop prices, said Mary Kay Thatcher, top lobbyist for the American Farm Bureau Federation, the largest U.S. farmer group. Bush’s comments, and the previous veto threats, are the White House’s way of influencing talks, she said.
“Whether they veto the bill or not, they have to keep threatening it at this point,” said Thatcher, who said she sees a 30 percent chance of a veto.
A bunch of advocacy groups, such as Sustainable Table, came out with statements praising President Bush for supporting the locally grown movement. But an honest reading of the President’s comments shows he was talking about buying local, not in the U.S., but in Africa and other troubled regions of the world.
The President pointed out his concern over situations of food scarcity around the world, pointing out that he just released $200 million in food from the Emerson Trust, which is a food reserve that allows the secretary of agriculture to release food to meet emergency humanitarian needs. The President then suggested an alternative plan for international famine problems:
One thing I think that would be very creative policy is if we would buy food from local farmers as a way to help deal with scarcity, but also as a way to put in place an infrastructure so that nations can be self-sustaining and self-supporting. It’s a proposal I put forth that Congress hasn’t responded to yet, and I sincerely hope they do.
This point is really crucial. If you take an impoverished country and dump free food in the country, you often deprive local growers of any market at all. You certainly depress local prices. Instead of dumping free food around the world, we could actually create incentives for local production by providing the means to buy food. This would do a lot more to help the world than we are right now.
This fact, though both important and true, has virtually nothing to do with consumers buying locally grown produce here in America.
Here at the Pundit, our work on sustainability has been extensive. We have published many pieces, including an important letter from Tim York of Markon Cooperative under the title of, A Call For An Industrywide Sustainability and Social Responsibility Initiative.
We also ran a series of pieces addressing a proposed sustainability standard for the industry; these included:
Sustainability Being Steamrolled — Does A Sustainable Vision Encompass only Organics
Pundit’s Mailbag — Organic Icon DiMatteo Weighs In On Sustainability Standard
Pundit’s Mailbag — SCS Takes Exception To Analysis of Sustainability Standard
Following this dialogue, Tim York wrote a letter jointly with Jeff Dlott of SureHarvest; we published this under the title, Sustainability Goes Beyond Best Practices. The letter included this paragraph:
The California Sustainable Winegrowing Program is ahead of most when it comes to sustainable practices, and an example for the produce industry to monitor. Made up of more than 1,200 wine grower and vintner enterprises, the program is looking at quantitative performance measures including water use, energy use, water quality, air quality and greenhouse gases. The goal is to enhance competitiveness and sustainability of individual companies and the California wine sector as a whole.
As the produce industry analyzes how best to incorporate sustainable principles in its operations, learning more about this program in the wine industry seemed imperative. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:
President and CEO
Q: How did you become an advocate and innovator of sustainability practices?
A: I started out as an academic, received a PhD from UC Berkeley in the Department of Environmental, Science, Policy and Management in 1993. I did all my work out in the Central Valley with peaches, plums and nectarines, studying the efficacy of improving pest management as well as environmental performance, not theoretically, but by working with growers in the fields.
I then spent two years researching similar products in the Salinas Valley. On leaf miner, I analyzed how to optimize controlling this pest, while minimizing environmental impacts and worker exposure. We’re asking questions about performance. What are those practices that are most economical resulting in the least environmental impact? The important point is we’re not talking organic; we’re taking a much broader definition of sustainability.
Q: Let’s go into this in more depth later, but for now, could you explain why concentrating on organic limits and sidetracks sustainability goals?
A: On organic, at this point there’s a legal definition from USDA. The principle focus is on what products you can’t use and the requirements are generally around the farm planning, and some soil management practices. What it doesn’t really address is the actual performance of agricultural systems, including energy use, water use, and actual water quality questions; these aren’t measurable components we would know about as outcomes of organic production.
Q: Where did this broader pursuit lead you?
A: From that work, I was recruited by Pew Charitable Trusts, based in Philadelphia, Pennsylvania, to help build an organization that could provide support to private and public partnerships for sustainability projects around the country. I had the opportunity to work with grower associations, as well as universities to provide technical assistance on how to design, implement and evaluate results of a sustainability program. To realize these large scale programs, we brought in environmental scientists, survey experts, and economists.
Q: Did any of your projects involve the produce industry?
A: My work with Pew Charitable Trusts led to the formation of the Center for Agricultural Partnerships, based out of North Carolina. I worked with pear growers in the Northwest, and peach growers in the Midwest, with dairy producers in the Northeast, and raisin growers in California, and actually did do a project in Salinas in vegetables on integrated pest management. Our goal was to design, put into practice and evaluate these large scale projects. The key was to get growers involved in adopting and executing these sound practices.
I went on to form my own company in 1999. I founded Sure Harvest to basically continue this type of work and add information technology.
Q: What do you mean by information technology?
A: During the work I had done through the 1990s, most of the growers were collecting information on pieces of paper, and it was difficult to aggregate that data and evaluate progress. Sure Harvest set out to further refine the system, and figure out how to develop specific, measurable, verifiable practices to track, and give tools to growers to track progress. We build the software and information tools to do this. We’re like architects who design the building you want to live in.
Q: When did you begin your work with the wine industry?
A: In this case, in 2001 the Wine Institute and California Association of Wine Grape Growers (CAWG) hired us. They contracted me as a consultant to take them through the strategic planning process for the Sustainable Winegrowing Program (SWP). It was launched in 2002 to give growers and vintners educational tools to increase adoption of sustainable practices and to measure and demonstrate ongoing improvement. California Sustainable Winegrowing Alliance (CSWA) was formed in 2003 to help implement SWP. The SWP is based on the concept of a “Cycle of Continuous Improvement”
We built a comprehensive Code of Sustainable Wine Growing Practices Workbook, and facilitated more than 100 workshops with growers and wine makers; both the growing and production side. We weren’t looking at how efficient the distribution center or trucking fleet was, just really focusing on the supply side.
Q: How did you go about determining what practices needed to be included? Are there basic production/operational procedures and tactics commonly employed by winemakers? How many of these measures would be relevant or applicable to the produce industry?
A: I believe there is significant overlap between the wine industry and produce industry in terms of measures. Based on my knowledge, I’d estimate 70 percent of these measures are common across all sectors of agriculture. You want to look at water usage, pest management, and energy efficiency. You want to assess solid waste management and reduction, as well as community issues. All these things are common whether you’re producing wine, broccoli or Georgia peaches. These measures are foundational to a sustainability program. Obviously there are some unique issues to produce, and wine quality would be unique to the wine industry.
There is an opportunity to apply sustainability programs in the wine industry to produce because a lot of these performance measures are similar across any crop. But the key is for individual groups to make their own decisions on what works for their particular circumstances.
Q: Are these measures formulated through scientific analyses? Do you have a method for validating the criteria set forth in the workbook?
A: We got the book peer-reviewed, an important step on the scientific side. We put together the collection of sustainable practices and sent it out broadly to academic scientists, members of the environmental community, executives involved in corporate social responsibility and the social equity community. We sought input from those that advocate on behalf of sound corporate practices and bridging community relationships.
Q: Are you engaged in childcare issues and worker rights?
A: People get nervous when labor issues are brought to the table. We had the document reviewed by a labor lawyer and farm employees. We address sound human resources practices ranging from best practices for recruiting and retaining employees, to working on issues including housing, childcare, benefits, and other matters important to employees.
Q: What comments did you receive? What were the key areas of concern and how did you tackle them?
A: We had a range of feedback. There was no problem about the breadth of what we were addressing in so many different areas. There were concerns about the depth of specific issues around water quality. And some issues on conservation of biological diversity; are we doing enough to protect endangered species, enough to build habitat? We incorporated a chapter on ecosystem management into the program to respond to these anxieties.
We serve to negotiate those discussions. By and large, we were able to address the majority of those concerns. There were some cases where, based on the level of detail requested, we deferred. We are doing a statewide book, so if the level is so specific to a region it should be addressed on a regional basis. Can we build relevance on the state level and on a small geographical scale?
Q: Have you experienced resistance from companies receiving mandates to implement more sustainable practices?
A: Mandates elicit confrontation and resentment and can appear daunting and infinite. At the same time, the concept of sustainability remains ambiguous without a plan to quantitatively measure and validate the program. Does the company have a plan, an implementation timeframe, are they collecting data and are they using that data to make changes? That is a different prescriptive practice than, ‘You need to do this.’ To grow the best grapes in an environmentally and socially responsible way — that is what farmers and winemakers do.
We can put in processes to maximize those efforts. Then we can hone more specifically to individual cases and devise a program of best practices that makes sense. No one has all the answers. It is extremely challenging to assess the most effective strategies. We’ve continued to focus on the best available science.
Q: I assume science is only one component of creating a workable sustainability program.
A: That’s a point I need to emphasize. Making sure practitioners are able to implement the program is paramount. The way we ground truth that is by reviewing all sets of best practices with growers and winemakers.
The science alone doesn’t tell you what to do; it points you in the right direction. What makes sense and is feasible and easy to do? And does it do what you want it to do?
Will it improve your economic, social, and environmental performance?
One of the important lessons learned in straining the information through practitioners, growers and winemakers is to know your target audience. The workbook needs to be written for them. If you’re communicating with consumers or regulators, the information and style needs to be adapted to their perspective. If you say you’re doing this for consumers, growers don’t understand why it is that way. Going to other target audiences like consumers and regulators can be done later.
Q: How do you assess progress, what works and what needs improvement? Do companies share results to help the industry at large move forward?
A: We do workshops with growers and winemakers to collect information. In turn, if they voluntarily submit data, they get to see the benchmarks. The grower associations have utilized that data and published the 2004 and 2006 benchmarks as tools in public relations and in setting internal goals to improve the practices.
There was a great concern that people wouldn’t want to do this workbook and deal with a lot more paperwork; the response to that was exemplified by the more than 1,000 vintners and growers who have self-assessed their operations. If it wasn’t adding value, we wouldn’t get the investment of these two- to three-hour workshops. [Editor’s Note: The California Wine Community 2004 Sustainability Report, authored by Dlott, provides an overview of the strategy, implementation and results of the program up to that point].
Q: Who attends the workshops?
A: The full spectrum of industry, from small/medium to the largest growers and wine companies. The Gallo’s of the world bring teams together — human resources, the facilities manager, the product people, etc., and tailor the program with internal workshops. Some 5,000 people have attended targeted education workshops to date.
At the end of 2006, we launched the online version of the workbook, an environment where companies can do all kinds of benchmarking on line, compare multiple fields, do scenario planning; if I do these practices how do I compare to others in my area or to others in my size class? Now we have some of largest wine companies using this as an internal resource — as a platform to measure and manage their own practices.
Q: Is there a way a company can demonstrate its progress or compliance to customers or other interested parties? Have you created some kind of third-party audit and certification program, like what has been done in the produce industry to address food safety problems?
A: In the past, the program has been largely an educational process. It wasn’t initially a marketing campaign, and hasn’t been run that way until just recently. For six or so years, data has been self-reported.
The California Sustainable Winegrowing Alliance, the non-profit organization that now administers the program, is in the process of developing a voluntary certification program. A joint committee of growers and wine makers is working to decide what makes the most sense in terms of a certification system. In 2002, people weren’t asking these questions. This sustainability workbook was designed to improve the whole overall positioning of the industry.
The key decisions around the type of certification program will be made in the next three to four months. The concept could be to verify where people are in meeting their objectives, not saying whether that’s good or bad. That would be up to the buying community to say, is this good enough or not?
Q: The concept of sustainability has been left open to much interpretation, misconception and confusion. Within the broad definition of sustainability, how many of these objectives are delineated in the workbook?
A: The workbook covers over 200 practices spanning 14 chapters. That’s the scope of sustainability. It’s not nebulous at all. Energy resources, water, air, human resources, economic production of crop itself, how are you most efficient, the very nuts and bolts. What I find most satisfying is that you can go to any part of the state and ask people in the industry what is sustainability, and they’ll have an answer.
This helps us to be clear on our goals, and has driven efficiencies because all are working off the same page. With large operations, it is critical to put forth clear objectives, plans and measured results. Internal communication can be a powerful motivator.
Q: Do you weigh the value of these 200 practices to help companies prioritize what to embark upon first, second, third, etc.?
A: Comments of usefulness are discussed. A typical question: Do growers get paid more for their products if they implement these procedures. And have these practices substantially reduced costs? The first question hasn’t been a marketing issue and is not presented that way. The answer to the second question most executives keep close to their chest. I know that’s not a satisfactory answer.
Saving costs in direct energy and water use are key drivers; some companies see dramatic reductions. Asking that question upfront is part of the work we do now. What kinds of solutions would you see that could improve both economic and environmental performance for mutually beneficial results?
Q: What happens where there is a conflict between corporate interests and what is best for consumers?
A: When sustainability goals are in alignment with public and private benefits those are easy wins. Examples would be reduction of energy use and water conservation; these save growers and processors money and contribute to the greater public good. Basically, improved efficiency is good for business. Responsible employee practices lead to recruiting and retaining the best.
However, we do need to openly and honestly recognize when public benefits aren’t in alignment with private sector economic realities. For example, it will require investments in some cases to improve water quality or increase biodiversity, and in these instances we need to be realistic that the majority of benefits are for public good. We need mechanisms in place and incentives for that to happen. These can be government incentives in the form of rewarding growers for environmental improvements, or as Wal-Mart has suggested, producers become preferred providers and it may even pay more.
Is the system functionally built to lead to business improvement and positive social and environmental outcomes? Mostly, it’s about reducing liability and improving public perception, and if that’s the case, there isn’t much conflict there.
When there are conflicts we need to get them down in measurable ways and come up with the most favorable solutions.
Q: In the produce industry, heated congressional hearings reveal the conflicts of interest in bolstering food safety requirements.
A: The wine industry doesn’t have to wrestle with food safety issues like the produce industry. There has been discussion regarding the environmental pressure that food safety measures have put on the growers. Whether you agree or not, some argue that buyers demanding new food safety requirements are forcing farmers to poison ponds, remove animals, clear non-crop vegetation, and destroy areas that should be environmentally protected. A company instituting higher food safety standards has reduced the habitat, while the other guy with lower food safety practices has maintained the habitat.
You have to approach these issues holistically; you can’t do food safety in a vacuum and you can’t do sustainability in a vacuum. That’s why you have to have all stakeholders in the room.
California laws prevent companies in the wine industry from using winery waste for composting, which is a great thing because it doesn’t go to landfill. You have integrated waste management requirements on the one hand and water board requirements on the other. I’m aware of at least one instance where a company was not composting on site but still got its contract denied because its actions created new conflicts with the Water Board.
What are the things we’re compromising? Does potential risk of reducing water quality outweigh greenhouse gases and use of diesel fuel?
If you stay away from these issues, you won’t be successful in building a meaningful sustainability program. We need to acknowledge philosophical conflicts between public benefits and private enterprise. It is unrealistic to expect companies to invest in certain practices. That’s why regulations are instituted, but clearly that approach doesn’t always work. When Wal-Mart asks for things economically viable, what they’re really asking for is public investment.
Q: How can the produce industry translate what has worked so well in the wine industry?
A: If we could bring the PMA, United, WGA, FMI, GMA and NRA all into a big tent that would be by far the most efficient.
Q: Are you doing any work with individual produce companies or commodity organizations to build or expedite sustainability projects?
A: We’re starting the needs assessment and strategic planning work to design and develop sustainability programs with the Almond Board of California, the California Avocado Commission, and the California Pear Advisory Board. Because we go through needs assessments, their programs will look different than the wine industry; it’s a not a cookie cutter approach.
We need to get stakeholders in the same room and talking about a comprehensive set of practices and performance metrics. In the end, though, our clients have to reach their own decisions on what works for them. What I don’t want to do is say the Almond Board needs to follow what the wine industry did.
Q: What is your vision on a timeframe for hashing out the metrics and making a measurable sustainability program a reality in the produce industry?
A: There is real opportunity. Even though there is a lot of discussion on the metrics, the hard part isn’t building these, it’s instituting them. If there was a clear commitment, we could get this done in 12 months. How do you get hundreds of growers and processors to do this? It’s leadership.
We’d always seek a leader in the wine industry to push initiatives forward, a champion in a company to champion the industry. Ask the Joe Pezzini’s and Tim York’s of the world. Bring in Tom Stenzel and Bryan Silbermann to drive the point home. Without that full spectrum, it will be difficult. How could the wine industry do this? Very strong leadership throughout the organizations saw that everyone was better off by working together as a whole.
Ideally, if the stated goal is improving the industry, there will be agreement on the core principles; to come up with the best environmental, economic and social outcomes. We need the growers, processors and other members of the supply chain involved. If we’ve done that right, we should be able to come up with a robust set of best practices that emerge as the industry standard.
In the wine industry, we don’t have Wal-Mart telling us what sustainability practices should be. Safeway isn’t saying how to make a good bottle of wine. Regardless, the better we do in raising standards and filling the voids, the better protection we have of something being imposed on us. I also know growers need to make there own decisions. Each group needs to settle on priorities, what they embark on first. This can vary based on commodity. Sustainability practices need to become part of the business process with clearly defined performance goals. There’s an old adage that you can’t manage what you don’t measure.
A lot of people start out talking about sustainability and wind up acting like bullies — telling everyone what to do and how to do it.
Yet the very essence of sustainability is how to sustain a business and an industry. That doesn’t come from an outsider dictating “Best Practices” and demanding conformance. It comes from extensive stakeholder engagement that identifies real life obstacles and real life opportunities; the engagement defines priorities, discloses potential roadblocks and defines the road to be traveled.
Then everyone is able to move toward sustainability by engaging in a process of continuous improvement.
We’ve found that many growers take umbrage when we talk about sustainability, pointing out that they have often been multi-generational stewards of the land. Indeed, agriculture, going back to biblical admonitions has always been focused on sustainability:
Six years thou shalt sow thy field, and six years thou shalt prune thy vineyard, and gather in the fruit thereof;
But in the seventh year shall be a sabbath of rest unto the land, a sabbath for the LORD: thou shalt neither sow thy field, nor prune thy vineyard.
That which groweth of its own accord of thy harvest thou shalt not reap, neither gather the grapes of thy vine undressed: for it is a year of rest unto the land.
— Leviticus 25:3-5
Even the social aspects of sustainability were addressed biblically:
And when ye reap the harvest of your land, thou shalt not wholly reap the corners of thy field, neither shalt thou gather the gleanings of thy harvest.
And thou shalt not glean thy vineyard, neither shalt thou gather every grape of thy vineyard; thou shalt leave them for the poor and stranger: I am the LORD your God.
— Leviticus 19:9,10
When thou cuttest down thine harvest in thy field, and hast forgot a sheaf in the field, thou shalt not go again to fetch it: it shall be for the stranger, for the fatherless, and for the widow: that the LORD thy God may bless thee in all the work of thine hands.
When thou beatest thine olive tree, thou shalt not go over the boughs again: it shall be for the stranger, for the fatherless, and for the widow.
When thou gatherest the grapes of thy vineyard, thou shalt not glean it afterward: it shall be for the stranger, for the fatherless, and for the widow.
And thou shalt remember that thou wast a bondman in the land of Egypt: therefore I command thee to do this thing.
— Deuteronomy 24:19-22
Now in our modern day, we seek new expression for ancient principles. It has never been easy to balance the economic, environmental and social responsibilities we all bear. Yet sustainability offers a window to a vibrant way of living.
Sustainability doesn’t tell anyone what to do — how can it? Tradeoffs between food safety and environmental issues, such as those Jeff alludes to, aren’t resolved just because one has decided to embark on a journey toward sustainability.
But sustainability provides a framework for evaluating these issues and for insuring that the outcome is not inadvertent or accidental.
So sustainability offers a path to a more complete business assessment and a more fully engaged life.
Many thanks to Jeff Dlott and SureHarvest for sharing their wine industry initiative with the produce trade.
Now that United has settled down for an extended stay in Las Vegas, the association is emphasizing the enormous local foodservice buying base. In fact, its interest in including more prepared foods and similar products in the show next year is to a large extent built on the fact that the buyer for most foodservice operators, including large Vegas hotels, is likely to buy a variety of food and beverage products.
Yet foodservice, though an important buying segment, is also a somewhat problematic one for the supplier base in produce.
One might think that foodservice operators, as they are buying an ingredient which will typically amount to only a small portion of the total price the consumer will pay, might be willing to pay top dollar for quality. Yet that is not how it typically works out.
Certainly some white tablecloth restaurants will pay premiums to get precisely what they want — delicious, ripe for tonight, organic, locally grown, etc.
It seems as if almost all high volume chains, however, are very price-oriented.
It is understandable why this would be so. With an inflexible menu price, every penny a foodservice operator pays for an ingredient is a penny out of the operator’s profit.
In contrast, retail prices are much more flexible so price increases are more easily passed on to consumers. In fact, as many chains work to maintain set margins, higher prices often rebound as higher profits for retailers.
We’ve discussed recently both here and here, the issues regarding growers getting a profitable price for their production.
It is not an easy thing. Produce is perishable; farmers have to sell their crop. Issues regarding yield cloud what is actually profitable and what is not. Few growers can just say no to unprofitable business.
Although every day the newspaper brings reports of rising food prices, our perception is that returns to producers in fresh produce are not keeping up with the rising cost of inputs.
The foodservice operator may be naturally focused on price. Yet the branded foodservice operator, such as McDonald’s, is in direct contact with the consumer and is also particularly sensitive to its public image.
Issues related to sustainability, which we have discussed in many places including here, here, here and here, include at their essence the sustainability of the supply chain, and that is not sustainable if the grower goes broke.
If United is going to attempt to focus more on foodservice, a useful approach would be to tie together the operator’s desire to be — and to be seen as being — sustainable, with the need to raise returns for producers. That would make “Sin City” a sustainable setting for a long run of United Fresh conventions.
We’ve analyzed the Honduran cantaloupe story regarding Agropecuaria Montelibano and the “import alert” the FDA imposed against its cantaloupes from the very beginning.
Initially we focused on the role of the FDA in the situation, kicking off our coverage with a piece entitled FDA Fumbles Again On Cantaloupe ‘Alert’. More than 20 stories later, we found ourselves moving from the ridiculous to the absurd as we tracked government officials riding around a Pacific island in a story we entitled Cantaloupe ‘Alert’ Reaches Guam; What’s An Island To Do?
Much of our coverage has been critical of the FDA, and its actions become less explicable every day. It is now five weeks since the “Import Alert” was issued and almost eight weeks since anyone is known to have gotten sick. It is almost a month since FDA and CDC inspectors visited the farm and left with their samples. Yet the Import Alert still stands.
It is certainly a shame and probably a sin that in a world where people are rioting for food, the FDA has scared the world so much that perfectly good cantaloupes are rotting because everyone is afraid to buy them and eat them.
The Honduran harvest season is now over. If the FDA doesn’t act soon, this company and country will be denied a chance to clear its name this season. Instead, the situation will drag into next season — if they can even get financing to plant crops for the US.
The best understanding of what is going on is that the FDA made a mistake, is embarrassed and, since it is institutionally incapable of admitting error, it needed to go down to Honduras, find a “problem” and get Agropecuria Montelibano to agree to fix this problem so FDA could announce that “corrective action” had been taken. Then it would lift the Import Alert.
Alas, FDA found nothing seriously wrong in Honduras. Thus it cannot announce corrective action has been taken. As a result, the Import Alert still stands.
Think about how bizarre this is. If FDA had gone down and found serious food safety violations, the company could take corrective action and the Import Alert would be lifted. Because the company has no serious food safety violations, there is nothing to correct and thus the Alert stands. It boggles the mind!
While the behavior of the FDA has been a focus of our coverage, we have been at pains to point out that whatever the flaws of the FDA approach, the industry still needs to focus on better understanding of food safety issues as well as efforts to reduce the food safety risk of our products.
In the context of our coverage on this issue, we ran a piece entitled Despite Flawed FDA, Cantaloupes Are Challenged, which led to this letter:
Recent food safety outbreaks and FDA warnings involving Honduran cantaloupes have raised many questions. Your latest piece on this topic, “Despite Flawed FDA, Cantaloupes are Challenged,” raised additional questions the California cantaloupe industry could not resist weighing in on.
The letter below is meant to dispel any perception that food safety is not a priority for the cantaloupe industry. To the contrary, the California Cantaloupe Industry has been at the forefront of commodity-specific food safety guidance on melons from field to fork for more than a decade. There is, in fact, a significant body of research available on the topic of cantaloupe food safety. We offer your readers today an overview of this research along with a summary of key findings. In addition, we provide comment on what could and should be done to prevent future outbreaks and unnecessarily broad and punitive market withdrawals.
The most important point we want to raise is that, although California cantaloupes have never been associated with an outbreak of foodborne illness, our industry does not take this issue lightly for two important reasons. First, our customers and the consumers who eat and enjoy fresh cantaloupes deserve to be assured they are buying a safe and nutritious product. Second, as we’ve seen in the past, concern about outbreaks associated with cantaloupe produced anywhere can have a significant economic impact on all producers. This is why the California cantaloupe industry took action nearly a decade ago.
Beginning in 1999, the California cantaloupe industry engaged University of California scientist Dr. Trevor Suslow to proactively initiate an ambitious food safety research program. This program examined all aspects of California cantaloupe production for potential contamination risks, established best practices and recommended new technologies and production methods.
Dr. Suslow’s research results showed that the hot and arid climatic conditions in the Central Valley and southern desert regions, where most of the state’s fresh melons are grown, make for a very unfavorable environment for the survival of high levels of foodborne pathogens. Further the irrigation practices of our industry, which strive to keep moisture away from the fruit, also assist in minimizing the risk of contamination and growth of pathogens on cantaloupes in the field. In fact, during Dr. Suslow’s extensive research project, thousands of cantaloupes were randomly selected and tested for the presence of salmonella. The pathogen was never found on any of these California cantaloupes.
Still, the industry pressed on in its efforts to address food safety. Food safety became the number one issue of concern for the California Cantaloupe Advisory Board, the state marketing order representing California cantaloupes. Requirements were added to the marketing order for government certified mandatory traceback on all cantaloupes shipped. This was the first program of its type in the United States fresh fruit industry. New best practices designed to prevent potential contamination in the field and packing houses were put in place.
In 2004, the cantaloupe industry was the first commodity to complete the FDA recommended Commodity Specific Guidance Document for Melons document,which encompasses all melons produced in the United States. Our work continues today with two new research projects involving food safety slated for the coming year. Please note that all of the California cantaloupe industry-sponsored research is available through the University of California, Davis, and is posted on the California Melon Research Board website at www.cmrb.org This information includes tutorials for growers, packers and consumers.
Clearly, this cannot be the stopping point and we find ourselves in agreement with the Pundit in its assessment that more research is needed. Once again, we turned to our respected food safety scientist Dr. Suslow for his thoughts, which he will share with you in a separate letter. From the California cantaloupe industry’s perspective, we hope that research such as what is suggested by Dr. Suslow can and will move forward working with organizations like the Center for Produce Safety, USDA and the FDA, in addition to our own industry’s funding mechanisms for research needs.
On a final note, we must emphasize the importance of consumer education. The primary cause whenever cantaloupes have been involved in a foodborne illness outbreak has been the transfer of pathogens from the outside rind to the internal flesh — usually occurring when melons are sliced. Dr. Suslow emphasizes that this is mostly problematic when the pathogens on the rind are present at a high enough level and/or the fruit is cut and then left to sit at room temperature for an extended period.
This being said, there are actions which can be taken by the consumer and foodservice operators to prevent outbreaks. As with any preparation involving fresh produce, knives, cutting boards and all utensils should be clean. Melons should be washed in cool running water and scrubbed with a clean brush. Cut fruit should be refrigerated and should be consumed as closely after cutting as possible.
These are simple steps and as part of its food safety education program, the California Cantaloupe Board has developed a web page with consumer-friendly messaging on cantaloupe food safety and handling. This web page, available at http://www.cmrb.org/tips/ can be linked to any website and should be added to the food safety section of all retail and grocery store websites to help spread this important message.
In addition, following the recent Honduran cantaloupe situation, Dr. Suslow developed a white paper with detailed information on methods for washing cantaloupe for those who are especially concerned about preventing illness http://postharvest.ucdavis.edu/datastorefiles/234-928.pdf. Suslow is quick to note that these methods are not really necessary, but for those who want to take extra precautions, this is the proper way to do it.
We hope the above information communicates adequately that concern about food safety is paramount for a large segment of the U.S. cantaloupe industry and that real and measurable action is being taken to ensure a safe product. And while the California cantaloupe industry takes responsibility for preventing outbreaks from occurring in our own fields and packinghouses, we are willing to share, discuss and work with other production areas to conduct the necessary research which will ensure outbreaks associated with cantaloupes are eliminated for us all.
— Stephen Patricio
Chairman, California Cantaloupe Advisory Board
— Stephen Smith
Chairman, California Melon Research Board
It was truly a pleasure to receive this letter, both because an industry so proactive on food safety is something to be celebrated and because Stephen Patricio is the gentleman responsible for the Pundit joining WGA.
We eagerly awaited the letter from Dr. Trevor Suslow, who we have mentioned many times in the Pundit and interviewed about food safety here.
We also included Dr. Suslow’s suggestions for consumers interested in cleaning their cantaloupes right here. Dr. Suslow’s letter arrived shortly after the above-mentioned letter:
It has been quite a year already.
A few individuals forwarded your recent entry, “Despite Flawed FDA, Cantaloupes are Challenged,” to ask me about the apparent lack of science behind efforts to reduce the chance of detectable contamination by Salmonella on cantaloupes and why honeydews grown in close regional proximity don’t appear to have the same issues.
At the same time, the California Melon Research Board and California Cantaloupe Advisory Board asked if I would send a short note to highlight the large body of melon food safety research supported by the California industry and federal level funding. I am happy to do this as I greatly appreciate and acknowledge the past research and outreach support provided by the California Melon Research Board and the California Cantaloupe Advisory Board, starting at a time when commodity group support for science-based GAP and GHP assessments was much less common.
From this springboard, we were successful in securing USDA CSREES funding for several multi-state efforts focused predominantly on cantaloupe. Researchers from UC Davis, University of Georgia, University of Florida, Texas A&M, Iowa State University, ARS scientists at the Western, Eastern, and Southern Research Centers, and collaborators in Mexico were supported by the multi-year grants.
Numerous cantaloupe-specific (with a bit of honeydew comparisons as well) journal publications came out of these findings and were presented in several industry workshops and three regional cantaloupe food safety seminars in California, Mexico, and Georgia, supported by USDA CSREES. A large collection of research papers contributed by other domestic and international research groups exists that encompass many aspects of cantaloupe preharvest, but especially postharvest, risk factors and mitigation practices or options.
A good deal of this research involves disinfection at shipping point and prior to foodservice or fresh-cut processing. The presentations from these seminars and a large bibliography of melon food safety research citations was available at http://www.ucfoodsafety.ucdavis.edu, but was removed about two years ago. I have committed to update these and make them available, within the next week, to the California Cantaloupe Advisory Board for posting on their website and available for linkage to other resource centers, such as the Center for Produce Safety.
To keep this note relatively brief, we know that Salmonella can survive on cantaloupe for an extended period and has the potential to multiply on the netted cantaloupe rind, under permissive distribution and storage conditions. External contamination may gain access to sub-rind tissues during immersion or flotation, if these practices are used and not well-managed. Internalization may also happen by growth of common surface molds that develop with handling and ripening. We also know that timely cooling and several treatments, such as effective chlorine brush-washing, heat, ozone, peracetic acid, essential oils, lactic acid, and others alone or sequentially will greatly reduce these risks.
Within this multi-year project, the greater challenges to surface disinfection of the netted cantaloupe as compared to smooth waxy honeydew were demonstrated. Much of the outcomes of this research was first communicated to the industry and made available to public health regulators in a lay-technical brochure and extension guidance paper:
• In 2003 — DANR # 8103. Key Points of Control and Management of Microbial Food Safety: Information for Producers, Handlers, and Processors of Melons;
• In 2004 — Minimizing the risk of foodborne illness associated with cantaloupe production and handling in California: Overview of Industry Practices and Risk Assessment. 24pp. In addition, two informational videos to encapsulate the research information into guidance overviews were produced;
• In 2005 — Food Safety DVDs With the Consumer in Mind: Growing, Handling, and Shipping California Cantaloupes; and GAP Guidelines for the California Cantaloupe Industry. By request from http://ucfoodsafety.ucdavis.edu or viewed at the UC Postharvest website http://postharvest.ucdavis.edu/
Pubs/video-library.shtml under Cantaloupe.
That these research findings and outcomes are not more broadly recognized within the industry and among food safety experts providing input to the Pundit is a clear Call to Action for the food safety extension network. We need to do a better job of ensuring this information is disseminated and accessible beyond the immediate primary users and some of their customers.
Looking forward, even prior to the most recent outbreak and massive recall, it seemed prudent to evaluate the specificity and sensitivity of the newer rapid detection and recovery systems for Salmonella on cantaloupe in light of the CFIA and FDA surveillance-activated voluntary recalls of imported melons in 2006 and 2007. The two California Boards agreed to jointly support an effort toward these practical objectives in our lab this season as well as a baseline-setting survey of regional irrigation water for future guidance ‘metrics’.
From a more basic risk assessment need, the melon boards requested we conduct funded, exploratory research into the plausibility of preharvest internalization of bacteria into vines and fruit from irrigation or soil sources.
Beyond the research funded by the California and Arizona industry, through the Cantaloupe Advisory Board, the events surrounding the recent outbreak implicating cantaloupes seem to dictate that greater federal dollars or other sources of block funding in research and on-the-ground assessments need to be allocated to epidemiology and pathogen source tracking. A data-based linkage between quantitative levels of detectable pathogens and community-based illness is sorely needed to bring some sense and order to the consequences of our greatly increased ability to recovery pathogens, such as Salmonella, from the outer rind of cantaloupes at shipping point and beyond.
This is not at all a trivial undertaking, and I am not the one to do it. The right combination of expertise needs to be brought in with some practical input and adequate access provided by the industry. There are, naturally, other research knowledge gaps that need to be filled as well, but to be honest I think the simple things have been “beat to death” and the constant pursuit of esoteric vectors of pathogens may be diluting research resources to more probable sources.
However, a more direct numbers-association between pathogen presence and sporadic illness must be elucidated to strategically and intelligently move beyond the current food safety foundation. Given the appearance of disregard for the investment of resources devoted to systematic food safety programs, research investments should be carefully evaluated for the potential to compel adoption of practices that improve consumer protection and the sustainability of agricultural techniques.
In short, I hope and expect that those involved in research funding prioritization in the coming months and the food safety research community at large will spend less energy emphasizing the search for the “silver bullet” kill-step and more on resolving sources of contamination and the environmental biology of key pathogens in different regions.
— Trevor V. Suslow, Ph.D.
Extension Research Specialist
Postharvest Quality and Safety
University of California, Davis
Department of Plant Sciences
Dr. Suslow has completed his updating of the bibliography of the food safety literature on cantaloupes and, along with the California Cantaloupe Advisory Board and the California Melon Research Board, has been kind enough to allow us to make a copy available here.
We appreciate both letters, and the Pundit is not foolish enough to parse scientific food safety issues with Dr. Suslow.
What we do know is this. We keep having food safety issues with cantaloupes. Dr. Suslow’s letter mentions the “…CFIA and FDA surveillance-activated voluntary recalls of imported melons in 2006 and 2007…” and now we have a situation in 2008.
It is simply imperative that we get to the bottom of the cause of these food safety issues or a whole commodity will be at risk.
How many recalls does a fresh-cut facility have to experience before its executives decide that it can survive without cantaloupe in its fruit salad?
Dr. Suslow’s efforts to help consumers looking for ways to wash cantaloupe so as to safeguard their health is certainly laudable. Unfortunately, despite almost every step in the distribution chain having food safety responsibilities, the current state of the law is that FDA will consider any salmonella found on a cantaloupe an adulterant.
There is no question that the cantaloupe industry is dedicated to advancing research — more so than many commodities.
Still, Dr. Suslow’s letter points out the clear limits to our knowledge. And it makes nine specific suggestions related to current and future research:
- …evaluate the specificity and sensitivity of the newer rapid detection and recovery systems for Salmonella on cantaloupe…
- …a baseline-setting survey of regional irrigation water for future guidance ‘metrics’….
- …plausibility of preharvest internalization of bacteria into vines and fruit from irrigation or soil sources…..
- …greater federal dollars or other sources of block funding in research and on-the-ground assessments need to be allocated to epidemiology and pathogen source tracking….
- …A data-based linkage between quantitative levels of detectable pathogens and community-based illness is sorely needed to bring some sense and order to the consequences of our greatly increased ability to recovery pathogens, such as Salmonella from the outer rind of cantaloupes at shipping point and beyond. …
- …the constant pursuit of esoteric vectors of pathogens may be diluting research resources to more probable sources….
- … a more direct numbers-association between pathogen presence and sporadic illness must be elucidated to strategically and intelligently move beyond the current food safety foundation….
- …research investments should be carefully evaluated for the potential to compel adoption of practices that improve consumer protection and the sustainability of agricultural techniques…
- …spend less energy emphasizing the search for the “silver bullet” kill-step and more on resolving sources of contamination and the environmental biology of key pathogens in different regions….
Many food safety experts believe that #3 — exploring the “….plausibility of preharvest internalization of bacteria into vines and fruit from irrigation or soil sources…” — is absolutely crucial. However, all of Dr. Suslow’s points are well taken.
The cantaloupe industry has been sponsoring food safety research since long before most commodities. They have made real progress in advancing our understanding in this area. There is, however, more work to be done.
Publicity affecting cantaloupes impacts the whole industry, so it behooves the trade, in general, to support cantaloupe growers in their effort to better understand the issues. Perhaps some of the research funds that the Center for Produce Safety will invest could go to this effort.
We also wonder if some kind of national marketing order, similar to the National Watermelon Promotion Board, whose executives we interviewed here, couldn’t be set up so that imported cantaloupe producers would also be contributing to fund food safety research.
In any case, we thank Stephen Patricio, Chairman of the California Cantaloupe Advisory Board and Stephen Smith, Chairman of the California Melon Research Board, for reaffirming the trade’s deep commitment to food safety, and we thank Dr. Trevor Sulow of UC Davis for providing a roadmap on how, as an industry, we might get to a safer future.