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Perishable Pundit
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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur

Small Store Concepts Not Solely A Tesco Idea — Check Out Wellcome’s Express Fresh Model

As we evaluate whether Tesco’s plans to come to America with a small store concept heavily focused on fresh foods is viable, we should be aware that all over the world, retailers are claiming to see a niche in this area.

For example, the Taipei Times has an article entitled, Wellcome Bets on ‘Express Fresh’ Model:

Wellcome Taiwan Co (惠康百貨), which runs Wellcome supermarkets (頂好超市) and the high-end brand Jason’s Market Place, is testing a new store format to combat fierce competition and changing consumer patterns.

With most of its Wellcome stores categorized as standard, or medium-sized, stores, the firm is developing a smaller design, called “Express Fresh,” requiring only around 80 ping (264 square meters).

While each standard store requires around 2,000 households to support its business, the new “convenient value supermarket,” as the firm describes it, only requires 800 to 1,200 households.

“The innovation is necessary as hypermarkets and convenience stores continue with their aggressive expansion, squeezing the supermarket sector’s survival space,” chief executive officer Howard Tsai (蔡裕人) said on the sidelines of a press conference yesterday held to celebrate the Hong Kong company’s 20th anniversary in Taiwan.

“The public’s consumption patterns have also changed as the birth rate has dramatically dropped and small families become the mainstream,” he said.

Aimed at providing consumers with convenient locations to purchase fresh foodstuffs and daily necessities, Wellcome Taiwan started brewing the Express Fresh concept in September last year and the first outlet was opened in Sindian (新店) in Taipei County in April.

It is expected to open the 7th store of this kind today, bringing its total number of stores to 188 nationwide, including 179 Wellcome stores, five Jason’s Market Place stores and four Wellcome Gourmet stores.

Tsai said the new format has proved a cost-effective model that performs well, especially as acquiring larger locales gets increasingly difficult.

The Express Fresh model on average generates sales of between NT$4.5 million (US$135,200) and NT$5 million a month, compared with NT$7 million seen in standard stores, he said.

But the cost, including rent, personnel and hardware, is only half that of mid-sized outlets, he said.

By the end of the year, the firm hopes to add another 40 to 50 stores of the Express Fresh model, although it may also expand standard-sized supermarkets.

Wellcome Taiwan, founded in 1987 by Hong Kong’s Dairy Farm Co (牛奶公司), posted sales of NT$14 billion last year when it ran 168 supermarkets.

When the retail market was affected by the consumer credit abuse storm last year, Wellcome Taiwan saw the performance of its stores dwindle as shopper traffic slowed.

Ministry of Economic Affairs statistics showed the supermarket sector recorded revenues of NT$88.5 billion last year, up by 1.93 percent from the previous year.

The sector is headed by Pxmart (全聯社), the nation’s biggest “hard discounter,” better known as Chuan Lian Center (全聯福利中心), with over 300 stores.

The parallels are fascinating. You read a line like “Aimed at providing consumers with convenient locations to purchase fresh foodstuffs and daily necessities…” and they might as well be speaking of Tesco’s new Fresh & Easy concept.

Or when the CEO speaks out and says this: “The innovation is necessary as hypermarkets and convenience stores continue with their aggressive expansion, squeezing the supermarket sector’s survival space.”

“The public’s consumption patterns have also changed as the birth rate has dramatically dropped and small families become the mainstream,” he said.

Changing consumption patterns and changing demographics are a battle as large stores and tiny stores squeeze the middle. Howard Tsai might as well be speaking of Phoenix.

Wellcome is owned by Dairy Farm Group, which operates an astounding array of stores, many under brands very familiar to Americans:

The Group operates under well-known local brands, including:

Supermarkets — Wellcome in Hong Kong and Taiwan, ThreeSixty in Hong Kong, Jasons in Singapore and Taiwan, Cold Storage in Singapore and Malaysia, Giant in Malaysia, Shop N Save in Singapore, Hero in Indonesia, G-Mart in Vietnam and Foodworld in India;

Hypermarkets — Giant in Malaysia, Singapore and Indonesia;

Health and Beauty stores — Mannings in Hong Kong, Macau and Southern China, Guardian in Singapore, Malaysia, Indonesia and Thailand, Health and Glow in India, and Olive Young in South Korea;

Convenience stores — 7-Eleven in Hong Kong, Macau, Southern China and Singapore, and Starmart in Indonesia; and

Home furnishings stores — IKEA in Hong Kong and Taiwan.

The Group has a 50% interest in Maxim’s, Hong Kong’s leading restaurant chain.

You can see a nice presentation about its annual results right here.

And its annual report right here.

Visit the company website here.

Albertson’s LLC Experiments With New Temperature Monitoring Technology

Ever since Supervalu acquired most of the choice Albertson’s stores, it is easy to forget that Albertson’s LLC still employs 47,000 people and has stores in 12 states. We received a release, though, pointing out that Albertsons LLC is still out there and doing some interesting things:

BOISE, Idaho — Albertson’s LLC announced today that it will require temperature monitoring devices on all inbound produce, fresh meat and seafood shipments to its distribution centers. The preferred monitor is the PakSense TXi™ Smart Label provided by PakSense, Inc. — an innovator in sensory solutions for packaging. PakSense Labels track the temperature of a perishable product’s environment during distribution and enable quality assurance personnel to make better quality and safety decisions.

“Providing our customers safe, high quality products is our highest priority at Albertsons. We have always monitored the temperatures of our perishable products during shipping,” explains Dave Dean, Group Vice President of Procurement for Albertson’s LLC. “But we found that traditional temperature monitoring devices were bulky and expensive. A quick return-on-investment analysis on the PakSense Label convinced me that making the switch would save us a substantial amount of money — and provide better quality assurance for our customers.”

A flat, 2” x 2” disk, PakSense labels are sealed in food-grade packaging and are easy to use. They also cost a fraction of current monitoring systems, which promotes their use in more product shipments. Lights on the sensor alert quality assurance personal if temperature specifications have been breached and all data collected by the label can be downloaded and graphed, enabling Albertsons LLC to pinpoint if, when and for how long, temperature excursions occurred. PakSense Labels are intended for one time use and are priced accordingly. There are no laborious rebate programs to adhere to in order to recoup money invested in temperature monitoring devices.

“We are embracing new technology so we can be at the forefront of food quality and safety,” continued Dean. “With PakSense Labels, we can sample temperatures throughout a trailer — not just on the top. We view this as another tool to ensure our customers receive the freshest products available.”

It is an interesting concept. You can check out a video here to learn a little more about the program. Because the disk used is so thin, we were hopeful that it might be suitable for use in store, monitoring product temperatures in refrigerated cases. As we pointed out here, just because the thermometer by the blower says the temperature is good, it doesn’t mean the actual product is being held at the proper temperature.

To learn about this program, we asked Pundit Investigator and Special Projects Editor Mira Slott to speak with both Stacia Levenfeld, a spokesperson for Albertson’s LLC, and David Baldwin, Vice President Sales & Marketing for PakSense, the creator and marketer of the device:

Stacia Levenfeld
Albertson’s LLC
Boise, Idaho

Q: What triggered Albertson’s to require temperature monitoring devices on all inbound produce, fresh meat and seafood, and why PakSense?

A: It was the technology we were looking for to enhance quality and food safety. Truly what spurred our action was the ability to use it. This is much more affordable than in the past. I’m not saying technology to keep food safe was bad before. We didn’t have a food incident that spurred the transition. The earlier technology monitored ambient temperature in the truck, so we had a general idea of the temperature for the stacks of product in that shipment.

Q: How do you use this technology to get a more accurate reading?

A: Now we can put labels in different areas of the truck. For example, in a standard shipment we would use up to four labels. It may be cold on the top of the load, but how cold is it in the middle or at the bottom or sides?

Q: How many labels do you actually use per shipment and does the amount change based on commodity or category or other variables?

A: I confirmed with Dan Sutton, our director of produce procurement, that the number of labels takes into account the travel time and length of shipment, the size of the load and the type of product. It may vary to accommodate more temperature sensitive items. For example, potatoes are not as sensitive to temperature fluctuation. To keep the quality high, it doesn’t have to be freezing cold, so putting one or two labels on that shipment is sufficient. In contrast, loads like strawberries are much more volatile to temperature change so, according to Dan, multiple devices would be used to better analyze the product. At the same time, if the shipment is in southern Texas, only an hour away from our distribution center, it may not make sense to put four labels in the truck. We are using the technology intelligently. Dan is the person who initially managed the PakSense testing and rollout.

Q: Doesn’t the technology allow a more precise temperature assessment as well?

A: The fundamental shift in technology is being able to have the temperature monitoring closer to the product. The other advantage of PakSense technology that we didn’t have before is that when we download the information we can use it to forecast shelf life. We can see whether the product is diminished by temperature changes and better understand the detriment. The product temperature may be breached, going up or down, but there is still x amount of shelf life left.

Q: Since you are able to download the information from the tags, and they are designed for one-time use, what benefit does Albertson’s accrue by holding on to the tags?

A: Unless there is an indication, the little flashing light on the tag alerts us that there has been a breach in the product temperature; we do not download the data, so it wouldn’t be in our system. The significance of stapling the device to the incoming paperwork is that if there is ever a question about the product quality or the handling, we can go back and download the data if necessary to compliment the archive process. This is important to note because downloading all the data initially would take a huge amount of labor.

Q: Dave Dean, Group Vice President of Procurement for Alberston’s LLC, says temperature monitoring devices were bulky and expensive and that making the switch would save a substantial amount of money. Could you give us an estimate of the savings?

A: One key component of our decision to put the technology through our operation is that we could afford it. PakSense has brought back the price. The devices are probably a little less than half of the cost we were spending before. For us it was the cost that drove our ability to bring in this new technology. That made it possible.

Q: How long have you actually been using the technology?

A: We started testing it last spring, first with produce then meat, and then seafood, slowing expanding our use. It got to the point where we were ready to start requiring it of all our suppliers in these areas.

Q: Is it actually a requirement to use PakSense labels because in the press release it says PakSense is the “preferred” monitor.

A: We used the word “preferred” because we don’t want to preclude using another technology if it comes along. There are other people out there developing this technology but we have our arrangement with PakSense.

Q: Who pays for it?

A: Technically the suppliers put the labels on, but essentially we pay for it. They put the labels on incoming shipments and then invoice us for the cost. We are about 70 percent compliant with all incoming loads in categories of produce, fresh meat and seafood.

Q: Are you capitalizing on the labels in other ways within your retail operation?

A: It’s fair to say we continue to evaluate where and how we use the labels. Our highest priority is temperature monitoring today, but we will continue to explore other uses.

Q: Like what?

A: Outside of our warehouses, we’re testing the use of the tags in meat and produce coolers around the country. It’s not a rollout. We’re just using them to see whether it would be a valuable use of the device. Basically we’re using them in places where we may feel the equipment is not properly functioning, and so allowing us to check over time to be sure the cases are being held at the proper temperatures. Past temperature monitoring devices of this type had not been used in the past because the technology was too bulky and would have looked inappropriate in the case. The PakSense labels are small enough to be placed in the case discretely.

I want to make clear that there was no incident that drove this PakSense initiative. There was no allegation about food that we received from a vendor. Before, we couldn’t guarantee how product was handled prior to receiving it at our distribution center. This is just basically one more assurance to us that we are ensuring product integrity and quality for consumers. This technology gives us a huge advantage in monitoring quality and safety of product.

David Baldwin
Vice President Sales & Marketing
Boise, Idaho

Q: What are the key benefits this technology brings to the perishables industry?

A: When we looked at temperature monitoring in the cold chain we saw outdated technology at very high prices. From our perspective, we come from the technology industry where advanced semi conductor technology is known for its high features and functionality and low cost. We thought this industry could benefit.

Our company took the lead in transforming temperature recording technology into a flat adhesive label. Before this, recording devices were bulky and the size of a deck of cards or a VCR tape. This move to labels was significant because it opened up use-models not possible with electronic recorders, along with reducing costs. We noticed that cost was a significant prohibitive factor, especially in the produce industry to adapting temperature recording technology.

The third driving factor was not requiring any further infrastructure for the company to use the smart label format. RFID technology requires intensive infrastructure to work out logistics, trucks, relays and hubs, IT infrastructure in order to read temperatures. Many advances are coming on with RFID, but time is a factor.

Q: When did you first introduce PakSense labels to the market?

A: We launched the product April 2006 in the Smart Label flat adhesive format. Information can be downloaded in a PC for half or third of the cost of the earlier temperature recording technologies.

The industry has responded extremely favorably, the retail side as well as the grower/shipper side looking for ways to reduce cost and overhead and augment user models.

Q: How unique is this compared to other products on the market?

A: The market has been dominated by strip chart recorders, pure strip analog non-electronic devices like Ryan [which is owned by Sensitech]. Escort has a competing electronic recorder and Sensitech has one as well. These use processors and memories to track temperature and record that in a recorder that can be downloaded into a PC. The difference is these are larger instruments and use proprietary software to pull out data.

Our approach was to pre-program these devices on an adhesive label that goes onto a box or in between a box or actually inside the food. It is couched in food grade pouching material.

Q: What is the advantage of this?

A: We monitor surface temperatures, rather than taking air samples. Product temperatures and air temperatures are completely different. The benefit of flat adhesive labels is their ability to go in with the product to take surface temperatures, which correlates more closely to actual product temperature. Really, the only way to get a true accurate reading is to probe the product. The best way to simulate that without damaging product along the way is to test surface temperatures. It’s an indicator, not a replacement.

Q: Could you give us a scenario where this testing difference would matter?

A: If a grower/shipper were not to pre-cool product well enough, product could still be respirating once the truck door was closed, even though the temperature in the truck was set at 36 degrees. The traditional temperature recorder would test air blowing over the pallet but there would be no visibility at the core of the pallet, especially ones in the center with virtually no air flow. The product temperature would still be respirating, generating heat and continuing to rise in temperature. A product with high respiration rate like mushrooms or asparagus or broccoli, if not properly pre-cooled, easily goes up.

Q: How did Albertson’s get involved? And are other retailers and suppliers taking on the technology as well?

A: Albertson’s was a terrific supporter of ours, adopting the technology quickly and requiring it of produce, meat and seafood suppliers. Growers/shippers started using it in house as well, as part of their pre-cooling process or farming it out to others within their supply chain. The partnership with Albertson’s has been a great catalyst to growers/shippers adopting this technology as well. By simply putting a little flat label on boxes, the technology allows for full electronic data to be recorded to track temperature history in a data base. It provides protection insurance and indemnification in the case of recalls or claims with food safety.

Q: How secure are the labels over time?

A: Data inside the label can’t be tampered with or changed in any way. You can take the label off and staple it to documents. Three months later, if there is an issue with food safety, the company can pull out their documents with the actual label from that shipment box, and the original data can be read out. The label remains absolutely tamper proof, and the information doesn’t erase or dilute overtime.

This is one use model that is far more efficient than the old temperature recorder method. In that scenario, there is the issue of how to retrieve those boxes somewhere on the shipment, take them in a room and read them out at some other place, then take a big plastic box and collect them and ship them back to the original manufacturer for a rebate or send back to the origin to re-program. We take all that extra overhead cost out of the system.

These labels are flexible to use, and significant cost savings can be reapplied to allow increasing sampling rates on each trip and additional uses.

Q: Are there applications that can be applied at the consumer packaging level, such as alerting consumers when a product’s use-by-date has expired?

A: Packaging at the consumer level is a real quandary for the industry now. There are technologies that could be applied, but there is major pull back from retailers. We haven’t targeted the technology at the consumer level.

However, retail chains can use our labels in stores for workers to monitor temperature and freshness of products on displays and bins. The retail stores then have digital records in their PCs in case questions of quality, freshness or safety arise. They can use the technology to track different product and seasonal trends. The small size of the label encourages self-monitoring and ease of use. Our customers have invented myriad applications. One such use involves pulling off the labels and sending them through the mail.

Q: Besides Albertson’s, what other retailers are showing interest in the technology?

A: The portion of the industry that has embraced the technology is the quality assurance departments in produce and meats. Q&A directors say temperature recorders are not optimal or too expensive for the produce industry. They are interested in easier applications.

We have quite a few partnerships underway but none that we can reveal right now.

Albertson’s was the first to recognize the benefits immediately and has been very forward thinking. Albertson’s LLC side really wants to demonstrate it is doing things for quality and freshness and differentiating itself.

Change is difficult. People become entrenched in old ways of thinking and don’t realize they could apply this technology at half the price to monitor actual product temperature for quality and safety quite easily; readers are $175, snap off a preprogrammed label to start and you’re off to the races. This technology has been available to the semi conductor industry for some time at a low price.

We see this as a bridge to RFID, a way to test temperature sensoring technology without the cost and infrastructure. There is a unique ID number with each label that can be tied to the grower, or a particular crop or field, and sent through supply chain. All those digital records can be used to trace product quality and safety.

There are programmable alerts with blinking lights on the surface of the label. User specifications associated with each product or customer specify the approved range for that product. It will trigger a warning on the surface of the label if the temperature goes below or above the range and the cold chain has been breached. The visual indicator on the surface of the label can tell anyone in the supply chain without any instrumentation. Then data can be downloaded to see at what time it was breached, for how long, and at what critical control points. If the label is blinking green, it means there is no problem and the cold chain is secure. Traditional devices involve a lot of training and quite frankly a lot of errors.

This technology is low cost and easy to use right now and will converge with RFID in the future.

Albertson’s LLC has been busy selling off stores and downsizing overhead. So one senses an admirable kind of pluck in pursuing a project like this. The chain isn’t in a position to invest fortunes in RFID for a long term payback, but they still can do good work.

One wonders how this changes truckers’ obligations? It is one thing to have one temperature recording or monitoring device — now you can have four…or more. Is a trucker supposed to maintain temperature on the warmest spot on the truck?

What would be a clear win for quality and food safety would be if these devices help retailers maintain minimum temperatures in display cases. This is an experiment that should be expanded.

The devices are impressive. What we don’t know is the degree to which they are protected by proprietary technology.

The idea of not having to return recorders is very appealing, so if this works as Albertsons LLC claims, there will be lots of demand for small recorders and monitors.

Many thanks to Stacia and David and to Albertson’s LLC and PakSense for sharing their project with the trade.

Will Retailers Wait For A Trial To Act On Ocean Spray Controversy?

The controversy between Ocean Spray and the Nolan’s has broken out into common knowledge for the industry as a result of a lawsuit, so inevitably the articles written have focused on legalities.

Yet, now that this is public, it is highly unlikely that retailers, who may feel they were wronged by Ocean Spray’s pricing policies, will wait for lawsuits to be resolved in order to press their claims.

Our piece, Ocean Spray Trial Will Shed Light On Business Practices, drew on a fascinating article that appeared in PRODUCE BUSINESS, a sister publication of the Pundit. The feature, entitled Special Report: Ocean Spray Sued By Longtime Associates, highlights a complaint filed against Ocean Spray by Jim and Theresa Nolan and their organization, the Nolan Network. For now, at least, Ocean Spray isn’t talking.

The piece we ran in the Pundit focused on allegations that Ocean Spray offered special deals to both Costco and H.E. Butt. The complaint claims this violated both anti-trust law and Ocean Spray’s own policies.

Here at the Pundit, it seemed to us that if Ocean Spray, or any company, is going to publish an official price announcement, telling everyone what the price will be, it ought to stick to that price or, at least, change it for everyone.

Leaving club stores aside for a moment, just the idea that HEB may have been given preferential pricing is enough to get many people on the retail side of the business looking at what their claims might be against Ocean Spray.

Des Hague recently started with Safeway as The First President of PerishablesItal. Well, Safeway spent $1.8 billion to buy Randall’s, at the time this complaint claims that H.E. Butt was getting preferential prices. Randall’s, along with sister concepts Tom Thumb and Simon-David, competed with H.E. Butt.

Mr. Hague is bound to ask Ron Anderson, Vice President of Produce, and Steve Neibergall, Senior Vice President of Produce and Floral, to huddle with Accounting and Legal and see what would be legitimate to ask for.

If Safeway were buying Ocean Spray’s fresh product at the time, they would clearly ask to be made whole on the price, on the rebate, on the truck load transportation charge — but there is a lot more. What about the reputational loss if customers kept finding the Safeway divisions to be overpriced?

Talk about reputational loss… Ron McCormick, Wal-Mart’s Vice President of Produce, along with his new boss, Pam Kohn, who is now Wal-Mart’s Chief Perishable Executive, have to be irate when they read this article in PRODUCE BUSINESS.

Not only was Wal-Mart Ocean Spray’s single largest customer, but Wal-Mart’s single toughest battle has been with H.E. Butt.

What is the loss to a chain such as Wal-Mart if the consumer perception of Wal-Mart as the low price leader gets sullied because Wal-Mart is out of line due to being charged more than its arch competitor? Does Ocean Spray have enough money to pay what would be due if these kinds of damages were to be substantiated?

Of course, does Wal-Mart need these claims to be substantiated by a court? Since when? Surely all Pam and Ron will want to know is the facts: Was Wal-Mart charged more than H.E.B. for fruit and freight? If so, the normal practice would be to demand compensation.

And we could go down the list. Reggie Griffin, Vice President Produce & Floral at Kroger, is not the kind who would take this lying down. Who owns this claim from the old Albertson’s? Who owns the Fleming claim? What about the Winn-Dixie Texas claim? There is Brookshire, Affiliated Foods, Minyard, Whole Foods and more.

This is now a matter of public record. Many of these companies are public and their executives have fiduciary responsibilities to pursue claims like this on behalf of their shareholders. It is hard to imagine any of these companies not looking to see if they have a claim against Ocean Spray.

The typical produce response to learning competitors were getting discounts on a published price item is a demand for compensation. One of the exhibits in the case is a memo from Ken Ryan, who handled the cranberry procurement for C&S, which supplied BJ’s.

It appears that their own price tracking made them suspect they weren’t being treated correctly by Ocean Spray.

C&S didn’t wait for judges to rule — the company demanded compensation with the implicit threat that it was important to settle this before they discussed new business.

You can read Ken’s memo here. And the PRODUCE BUSINESS article right here.

Idaho Potato Commission Looks To Cuba For Future Business

As part of its effort to identify and develop new markets for Idaho potatoes and potato products, the Idaho Potato Commission participated in a mission to Cuba:

Pictured above, Idaho Potato Commission representatives, Frank Muir and Pat Kole (second and third from left respectively), are at a Cuban farm with Governor C.L. "Butch" Otter (second from right), Cuban agriculture officials and an official from Alimport, the country’s official purchasing organization

Idaho Potato Commission Opening Doors to Cuba

The Idaho Potato Commission (IPC) was recently part of a delegation of 35 Idahoans, including Governor C.L. “Butch” Otter, who traveled to Cuba to meet with government officials to discuss trade opportunities between Cuba and Idaho. The Commission focused primarily on ways to sell fresh and/or processed Idaho Potatoes into Cuba as potatoes are an important staple in the Cuban diet.

“One of the IPC’s overall strategies to is expand distribution of Idaho Potato products to all areas around the globe and this Cuban mission was an important step in helping to open forays to this country that has been, for so long, off limits to American exports,” said Frank Muir, President and CEO, Idaho Potato Commission. “The good news is that there is great interest from the Cubans in importing Idaho Potatoes, specifically seed potatoes and frozen French Fries. It’s not going to happen overnight as there are still many governmental challenges, which will hopefully become resolved with time.”

Other Idaho industries represented on this mission included: wheat, beef, dairy, pork, and medical supplies. Several universities were represented along with the Idaho Department of Agriculture.

The Pundit was in Cuba about five years ago. The laws had just been changed and U.S. firms were now permitted to sell food, medicines and a few other agricultural products, such as lumber, to Cuba, provided they paid up front. It was, and is, still illegal for a U.S. company to extend credit to Cuba.

It was an unusual opportunity. They held a trade show but there is only one organization, Alimport, that is permitted to buy so they seemed to bus in a bunch of government employees to fill up the hall.

I remember seeing Kevin Moffitt, President and CEO of the Pear Bureau Northwest, being overwhelmed as people stood in amazement around his booth as most had never seen a pear.

Fidel Castro was there as well, decked out in his three-piece suit, trying to make every contract signed seem like a major international event.

It is five years later and the people of Cuba still suffer, lacking both political and economic freedom.

It is not certain what is the best strategy to help free Cuba. Some argue continuing the boycott and keeping Cuba isolated to whatever extent we can, raises the cost of oppression. Others argue that the more we trade, the more Cubans have interaction with Americans, the more likely American ideas will sweep Cuba.

Castro is quite ill and so change is bound to occur soon.

Ironically, although all the effort has been on selling product to Cuba, when liberation comes, Cuba is more likely to figure on the production side of the business.

Grandpa Pundit, aka Harry Prevor, used to handle Isle of Pines grapefruit and various vegetables from Cuba. The Cubans still ship a little grapefruit to Europe, having made a deal with an Israeli company to manage the groves.

But a free Cuba will have great agricultural potential. And a free Cuba will see tourism boom and its own population will become more affluent, so there will be plenty of opportunity to sell to Cuba as well.

It will take time though. There are land claims to settle, and many of Cuba’s most successful citizens fled the country a long time ago and a half century of communism is bound to dull the work ethic.

Following the Pundit’s trip to Cuba, we published a column in PRODUCE BUSINESS, the Pundit’s sister publication, which you can read right here.

We also had Rhoda Rabkin, author of a much respected book on Cuba, do a cover story for PRODUCE BUSINESS entitled Cuba: Today’s Newest Customer…Or Tomorrow’s Biggest Competitor? Dr. Rabkin also produced a special “white paper” on Cuba and the opportunities and obstacles for the produce industry in evaluating business opportunities with Cuba. You can read that white paper right here.

Hernandez Of Melissa’s Featured In Cooking Light

Cooking Light magazine highlights “…five people who taught us to love fruits and vegetables.” Featured among the fab five:

Twenty years ago, tomatillos, mangos, or cherimoyas were not readily available at the average grocery store. Along with many other once-unusual produce items, they are now widely available due in part to Hernandez’s business, Melissa’s/World Variety Produce. Established in 1984 in Los Angeles, and named for Joe’s daughter, Melissa’s is the largest distributor of specialty produce in the United States. Hernandez and company is often the first call our Test Kitchens professionals make when our local sources are out of an ingredient needed for a recipe.

You can get the whole store here.

Pundit’s Mailbag — Irradiation, Pasteurization And Labeling

Our piece, Unfair CNN Report Showed One Clear Winner: Irradiation, brought a note from a frequent correspondent on the organic side of the business:

From the 5/22 Perishable Pundit, “Unfair CNN Report Showed One Clear Winner: Irradiation,” I am not sure if your statement, “There was no sense of proportion or comparative risk. The injury of a child was used to emotionally manipulate the audience,” was part of the argument for irradiation, or part of the argument against irradiation.

I have been to a couple of Bill Marler’s presentations where the clear message is “either irradiate (food X) or you’ll be hearing from me if you get implicated.” Complete with pictures of horribly injured children.

Attached here you can find a submission to FDA on the current bill to allow irradiated food to be labeled as being “pasteurized”.

I suspect you’ll hang me out to dry, but what the heck.

— Bob Sanderson
Jonathan’s Sprouts

We would never hang Bob out to dry, as he is not all wet, but he does approach things from a perspective different than the Pundit’s — which is why we so appreciate his contributions to this page.

Our statement about emotional manipulation and the CNN piece were neither pro- nor con-irradiation but an assessment of the problem with that type of journalism. Public policy issues are, of course, about the big picture, and bringing up suffering children can easily lead to a distortion of priorities.

So, for example, we might spend billions to get the death rate down to zero on spinach, and the weight of that expense might mean that budgets for medical research get reduced. The consequence might be that very visible deaths or injuries — such as that little girl on the television show — are eliminated. But countless thousands might die every year because a medication that would have been discovered or invented is not found.

Yet CNN can’t do a program and show you a person dying and say that this person right here would have been saved if we only had not spent money on the spinach industry. So the consequence of this type of television can be to distort public priorities toward solving the most visible, rather than the most important, problems.

When we say that Bob approaches the issues from a different perspective, the issue of irradiation and its labeling is a case in point. The attachment Bob sends is part of comment he sent to the FDA regarding the nomenclature used on irradiated food.

Currently the FDA has the following policy on labeling of irradiated foods:

The Radura is the international symbol for irradiation.

As part of its approval, FDA requires that irradiated foods include labeling with either the statement “treated with radiation” or “treated by irradiation,” along with the international symbol for irradiation, the Radura (see photo above.) Irradiation labeling requirements apply only to foods sold in stores. For example, irradiated spices or fresh strawberries should be labeled. Irradiation labeling does not apply to restaurant food.

There is a proposal to change this standard:

FDA is proposing that only those irradiated foods in which the irradiation causes a material change in the food, or a material change in the consequences that may result from the use of the food, bear the radura logo and the term “irradiated,” or a derivative thereof, in conjunction with explicit language describing the change in the food or its conditions of use. For purposes of this rulemaking, we are using the term "material change" to refer to a change in the organoleptic, nutritional, or functional properties of a food, caused by irradiation, that the consumer could not identify at the point of purchase in the absence of appropriate labeling.

FDA is also proposing to allow a firm to petition FDA for use of an alternate term to “irradiation” (other than “pasteurized”). In addition, FDA is proposing to permit a firm to use the term “pasteurized” in lieu of “irradiated,” provided it notifies the agency that the irradiation process being used meets the criteria specified for the use of the term “pasteurized” in the federal Food, Drug, and Cosmetic Act (the act) and the agency does not object to the notification. This proposed action is in response to the Farm Security and Rural Investment Act of 2002 (FSRIA) and, if finalized, will provide consumers with more useful information than the current regulation.

So that means there are really two separate proposals: first, that unless there is a material change in the item no labeling would be required at all.

Second, that if the item is labeled, it can be labeled “pasteurized” as opposed to irradiated. The FDA is also looking for other terms that could be used in lieu of irradiation and pasteurization.

The FDA has a point. We don’t typically require labels for things we think are irrelevant. So, inherently, a requirement to label is an indication that something is up.

However, at this early stage in the battle for irradiated food, getting rid of the label would give opponents just another thing to argue against. So we would be inclined to maintain the labeling of irradiated foods so that opponents of irradiation can’t accuse those who are selling products of being deceptive.

We do not support the use of the term pasteurization for irradiation. Words have meanings, and the common usage of pasteurization does not include irradiation. However, the word irradiation gives rise to all kinds of thoughts that have nothing to do with food irradiation (no, the food doesn’t glow), so we would be open to another term.

However, our sense is that the folks pushing this have it almost precisely wrong. What they should be doing is proudly promoting the radura and the term irradiation and making it their own. Irradiated hamburger meat sells well in many venues. More and more imported tropicals are going to be treated with irradiation as we discussed in our piece on Mangos from India right here.

Enough people are concerned with food safety that they will prefer an irradiated product if properly marketed.

One key point regarding irradiation is that we have to make sure we keep up other food safety standards if we do start to use irradiation. As the CDC points out in a Q&A:


Irradiation has the potential to be used like milk pasteurization in the future. We have confidence in the safety of pasteurized milk for several reasons. The milk is graded and tested to make sure that the milk is clean enough to pasteurize in the first place. Careful industry standards and regulations monitor the effectiveness of the pasteurization process. The pasteurization occurs just before the milk goes into the carton, so the chance of re-contamination after pasteurization is nearly zero. Similar strategies and designs can make food irradiation as effective as milk pasteurization.

Currently, pasteurization is applied to foods (like milk) that already meet a defined cleanliness standard, and is applied at a dose that gives a standard defined effect. As the irradiation of food becomes commercialized for various foods, similar standardization will be required.

In other words, with or without irradiation, we still require Good Agricultural Practices.

Our correspondent’s submission to the FDA is focused on what he sees as the likelihood that allowing irradiation will eventually lead to requiring it or making food sold without irradiation illegal. This is a subject we dealt with, along with our correspondent, in this earlier piece.

We think Bob is probably correct, but we see less horror in this than he does.

To us here at the Pundit, there is a natural progression to these things. We build houses in hurricane zones, then learn the windows blow in and people die and property is destroyed. Then we invent hurricane shutters and, initially, this is the oddity. As they prove themselves, the zoning code is changed to require hurricane shutters.

So, if we get approval to irradiate spinach, and one brand starts out doing it and we have no foodborne illness on the irradiated product but have outbreaks on non-irradiated product, that irradiated product will gain market share.

More brands will do it, some retailers will only carry irradiated product and, one day, if irradiated has no outbreaks and conventional does, it will be the standard of safety.

Perhaps a law will be passed requiring treatment by irradiation or, perhaps, you won’t be able to get liability insurance if you don’t do it.

Some will recoil from this. Irradiation is currently forbidden on organic product. Yet the question, of course, is how serious are we about eliminating all foodborne illness?

If even one death or one case of kidney failure is unacceptable, then we really need a kill step and, for most food, that is going to be irradiation.

Many thanks to Bob for bringing this issue to light.

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