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Perishable Pundit
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Produce Business

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American Food & Ag Exporter

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Got Produce? What About FRESH Produce?

In our ongoing analysis of the proposal that the industry launch a generic promotion program we have made a few salient points:

1)In our piece Got Produce? Generic Marketing Program Dialog Begins, But Is It Right To Use PBH Donor Funds To Lobby For A Mandatory Assessment? — we pointed out the danger of using PBH funds that derive from donors for purposes those donors never intended. We also suggested that having to go through the process of raising money is itself a useful vetting process for an idea. If everyone claims to like an idea but nobody is prepared to fund its promotion, the support is lukewarm at best.

2) Got Produce? Both Sides Need To Be Heard included a letter complaining about the failure of the advocates of the program to publicize any critiques of the program. We pointed out the problematic nature of having the same exact people being the organizers of this industry “Dialog” and the prime advocates for the proposal! It is sort of like allowing then candidate Barack Obama to set all the ground rules for the Obama vs. McCain debates — it almost precludes a fair assessment of the issues.

3)With Got Produce? Is $30 Million Sufficient? — We began a move into substantive analysis of the proposal and we pointed out that what we need to avoid at all costs is undertaking this effort with insufficient resources to accomplish its objectives. There is simply not a persuasive case that a total $30 million dollar budget — and how much of that will inevitably wind up as office space, staff, travel, agency fees, research, etc. before we spend a dime on media — is sufficient to achieve objectives. A lot of homework remains undone: What would consumption be without the program? What is the projected effect of the program? How does this ROI compare with other uses of the money, say bolstering commodity specific or branded efforts? The proposal contains virtually no research done by bona fides third party experts. We questioned how the industry could possibly vote when it hadn’t been given any information on which to vote.

4) Got Produce? The Rent-Dissipation Hypothesis And The Issue of Cui Bono pointed out that this type of program would play out in produce very differently than in Beef, Dairy or Pork, which all draw on the fact that a cow is a cow and a pig is a pig. In produce we have so many different produce items and each would benefit or lose from the proposed scheme in a different way. In general we expect that the producers of row crops would be paying to subsidize benefits for tree crops that take a lot of capital and a long time to be established. We asked why no research had been done to assess how this would play out for different commodities and how could we expect people to vote on such a proposal without such information?

Now most of our concern over PBH’s role in this situation has revolved around two procedural areas:

First, that PBH has never raised money with the pitch being that if donated the funds would be spent on lobbying for mandatory assessments for the produce industry. Obviously it is possible for a person of integrity to both want to urge increased consumption of produce with the goal being better health for the population and to oppose mandatory assessments. In the long run we suspect this will do great harm to PBH because those who support its work but happen to oppose mandatory assessments will be hesitant to support PBH in the future.

Second, we are concerned because PBH has taken on a dual role that is in conflict. Elizabeth Pivonka, president of PBH, Mark Munger, Vice President of Marketing at Andrew & Williamson Fresh Produce and immediate past chair and Paul Klutes, Brand Sales for C.H. Robinson and current Chairman are all out there as the primary advocates for the program. Yet the exact same people have set up the “groundrules” — Who gets to speak? For how long? When and where? How is the budget to be spent? In effect, these three have been set up as both the candidates and the League of Women Voters. It is not right and it makes the process lack credibility.

Today, however, we would like to look at a substantive issue, that also calls into question the involvement of PBH with this matter. Why not Fresh?

The Produce for Better Health Foundation, because it chairs a public-private nutrition education program and works in partnership with the Centers for Disease Control is obligated to promote, frozen, canned, dried and juiced product.

So, on its web site, when asked about nutritional differences between fresh and frozen, PBH says this:

Whether it is fresh, frozen, canned, dried, or 100% juice, all forms of fruits and vegetables matter, and are part of a nutritious and healthy diet. In fact, most frozen and canned foods are processed immediately after harvest, preserving their nutritional value and flavor. Frozen fruits and vegetables are also convenient and require little preparation, as the washing and slicing is already done for you. Also, the nutrient content of fresh and frozen (as well as canned) fruits and vegetables is comparable.

To us it reads like a commercial for non-fresh product, with PBH going out of its way to emphasize the convenience and ease of preparations of non-fresh, which wasn’t even asked in the question.

Still, we understand. This is a nutrition education program being done in partnership with the government, so the rules have to be followed.

However, a generic commodity promotion program is not a “nutrition education program” it is an ad campaign for an industry. Although done under the law, it is not a public private partnership and the government doesn’t allocate money for it.

If asked a question, a generic promotion board pushing fresh produce would have no obligation to wax poetic about the convenience of canned and frozen.

One suspects that a consumer program pushing consumers to demand, say, fresh mushrooms on their pizza rather than canned imported mushrooms from China would be far more likely to be successful than an effort to get consumers to eat more mushrooms rather than Twinkies.

Selling the crispiness of fresh broccoli rather than frozen seems a more doable project than hoping to sell more broccoli by getting consumers to give up Cheesecake.

Obviously there are advantages to working with others, we can possibly have more money, it would align better with the PBH effort, etc. Yet there is also a clear reason for saying the truth — that the fresh industry competes with canned and frozen and needs to use its advertising to differentiate itself.

Now we would like to analyze thoroughly the justifications for why the fresh industry should give up the opportunity to use its generic promotion budget to emphasize its own fine qualities and hope to gain share from both frozen and canned — but the proposal is silent. It provides no research results that indicate that the returns are higher if frozen and canned are included in the program. As with much else in the proposal we are left to hypothesize as we are given no data. There is, in fact, no real basis for making a decision right now on the scope of the program.

The only reason the plan was developed this way is because this is what PBH has done. But with its non-profit status and engagement in a public/private partnership, PBH is a very different entity than the proposed generic marketing program. The industry already has PBH. It is not at all obvious that we need another organization bound by the same strictures. Maybe we need to free up fresh to pursue its own interests.

More ‘Summing Up’ Of Sprout Situation

Our continuing analysis of the alfalfa sprout recall brought this letter from a small grower:


You did a great job investigating the alfalfa seed issue.

1) You covered the FDA’s basic stance, which seems to be “we’ll sorta say something that if you get a psychic you might be able to figure out” sorta thing. Interestingly in a position paper back a few decades ago, the FDA asserted its authority over mung bean seed used for sprouting; however, given the complexity of world trade it’s understandable that they haven’t pursued this. But I have to say that it is a step forward for the FDA to make seed the center of an official sprout notice.

2) As a former sprouter I learned to avoid Caudill seed a long time ago. They are cheap, but this is what you get. Great work getting to the bottom of the seed-certifying, GAP’s, etc. I believe Caudill has been associated with most of these outbreaks. Their assertion that most of the seed they sell is organic is just not true — not that organic would assure clean seed, but they have never been big suppliers of organic. One thing organic does have, if done right, is better traceability. [Editor’s Note: See interview with Caudill Seed spokesperson Lyle Orwig here.]

3) I would have liked to see some follow up with Jonathan’s Bob Sanderson and International Specialty Supply’s Bob Rust. Together they have worked out a seed-testing regime that gives high statistical confidence and should be used in sprout-seed testing all of the time. The chlorine rinse has been called into question in various studies as being ineffective. It’s telling that no other country that I’m aware of has chosen to go the chlorine route, but in Australia at least one of the provincial governments is recommending the ISS seed-testing regime.[Editor’s Note: A letter from Dan Lasic keyed off a discussion of these issues, and you can find that piece here. We also had a “dueling letters” exchange with both Bob Rust and Bob Sanderson. You can see that here.]

4) A decade or so ago, I had a conversation with the California Ag Dept about pesticide use on sprouting seed. They asserted, as you have discovered, that as far as the regulations are concerned, there is no difference between seed for sprouting and seed for planting.

5) In recent private conversation with a seed supplier sourcing from Australia, it was revealed that the supplier was finally going to ask the grower to keep the cattle out of the field. So Chet Boruff would be right that in growing varietal or foundation seed, cattle would not be grazed in the field, but sprout seed is not grown for later replanting of particular varieties. So I believe that it is likely if not probable that sprout seed, alfalfa and clover is grown under grazing conditions.

6) It strikes me that you and your staff have gotten very conversant in the areas of FDA recalls, epidemiology, etc. How about a summing up for us? It would be really interesting to get your impressions of the state of the nation when it comes to produce and food safety.

We appreciate the thoughtful analysis from our correspondent. We too remain frustrated that the FDA will not be clear and specific.

Summing it all up maybe is a little too ambitious a project for a Friday, but we will work on it.

In the meantime, there is an awful lot of summing things up in our “Hot Topics” buttons that you can find on the left hand side of this page. Then, of course, there is always The Hitchhiker’s Guide to the Galaxy, where after seven-and-a-half-million years of processing, the supercomputer named Deep Thought reveals that the “Answer to the Ultimate Question of Life, the Universe, and Everything” is 42. That should hold you for now.

Pundit’s Mailbag — Hope For Tesco Vendor Community ‘Is Gone’

This letter, written before the Ballantine collapse, manages to speak about modern subjects such as Tesco and tree fruit while reminding us of a letter written long ago:

Thank you for your many articles on Tesco and, especially, your piece Tesco’s US Losses ‘Unnerving’ .

At the present, here in Fresno there are 2 stores out of 6 proposed that have been built. Just built mind you, they sit empty. One of the stores is situated as such that you have to really look for it or know exactly where it is just to find it! It lies buried behind the Rite Aid Store.

I had the pleasure of working for Scattaglia Growers & Shippers last summer. At that time, SGS was a major supplier of fresh summer items exclusively to Tesco.

It appears that the hope that Tesco’s Fresh & Easy concept might support a vigorous, growing and profitable vendor community is gone.

Tesco’s timing and format do not stand much of a chance as you have pointed out!

Thanks for being the bearer of truth over the years!

Many years ago, 21 to be exact, I wrote to you about retail chains having no problems asking their suppliers to help defray the costs for, shall we say, modernizing their operations. At that time, in the article you said you could not reuse or print my words as I did not provide you with my name. Now you have it.

We here at PR Farms have thrown in the towel of growing fresh California tree fruit. The economies of providing it to our customers no longer make it a viable venture!

— Steve Spears
P-R Farms, Inc./Bella Frutta
Clovis, California

We take no pleasure in pointing out the difficulties of any business. Indeed we are sustained in doing what we do because over the years we have learned that thoughtful critique is really a great gift.

We are fortunate to have a number of close friends who are executives on the buying end of the business. Although we like to think it is the Pundit’s pleasing personality and rapier wit that has built these friendships, when we really get close we always wind up being told some variant of the same story: Buyers suffer because all their schemes are deemed brilliant, and they reached out to us because we were the only one they could talk to about their plans who didn’t laugh at their jokes!

The moral of this story is not that everyone should befriend the Pundit; it is that they should really work hard to create an environment in which vendors feel free to speak their minds and in which those same contributions are respected and acted upon.

The shame of the Tesco situation is that it didn’t have to turn out this way; but they were never secure enough to listen. We hoped they would have listened to us a little bit, but, mostly, they needed to listen to their vendor community.

We harped many times on their unwillingness to join PMA, United Fresh and the Fresh Produce and Floral Council. Sometimes we were even asked, “Do you really think joining the trade associations is so important?” We did, and the reason is not because of any miraculous insight that joining would produce; it is because Tesco intentionally didn’t join because they felt they had nothing to learn. They figured they would let their produce supplier join.

We were certain that almost any experienced Americans they had working for them would recommend joining, so a decision to join would mean trusting the Americans who worked there and being open to the idea that Tesco could learn from interactions with others. So it was, in a sense, not the joining, but the willingness to join, that would have been the big win for Tesco.

We thank Steve for his kind words and remember his letter of so long ago. We often publish pieces anonymously, but the Pundit, personally, has to know who sent the letter. This is to ensure that the letter is properly positioned. For example, indicating if it comes from a competitor.

Still it is nice to be a survivor, and the fact that 21 years after writing a letter one feels free to speak openly and doesn’t worry about the consequences indicates that our correspondent has acquired wealth of a special sort over the past couple of decades.

We thank Steve Spears and P-R Farms/Bella Frutta for the letter, and wish all our readers that kind of prosperity.

Pundit’s Mailbag — Wal-Mart’s Lack Of Passion For Perishables

We have written much about Wal-Mart, yet a tiny piece, titled Another Sea Change At Wal-Mart, highlighting the departure of Pam Kohn from the Senior VP Perishable slot — the old Bruce Peterson position — at Wal-Mart brought a surprising amount of mail. Many keyed in on this statement:

…she never took much interest in industry affairs and, unlike Bruce, didn’t participate in associations, certainly never sought to become Chairman of PMA or anything like that.

Her departure after just over two years in the job is not really surprising. She had no particular connection to perishables, having been a Senior VP for Non-perishables at Stop & Shop; her holding the job always had the air of Wal-Mart’s penchant for getting its people to cross-pollinate. So here they added some perishable expertise to her resume. If she ever acquired any love or passion for the category, it was well hidden.

She was never long for the job anyway. At the time Bruce left, she was Senior VP for the southeast division, which meant she was on the road constantly. She had wanted to get off the road and Wal-Mart filled the ”spot” with her.

Of course, that in and of itself is the story. For Bruce, being VP of Produce and then Senior VP of Perishables, was a career… a life’s work… to build and elevate Wal-Mart’s produce and broader perishables area. It was a position requiring special expertise in the field and was the fulcrum for passion about fresh foods at Wal-Mart.

Now it is a slot to be filled a few years at a time by executives who need to get their resume punched that they have perishable experience.

Here is how one professor took it:

This is probably one of the reasons that, as a consumer, Wal-Mart produce does not seem that appealing most of the time.

We will buy many things there but very little in the way of fruits and vegetables. Add meats to that too.

You are right when you indicate that the person in charge should really care about the product.

— Dr. C. Brent Rogers
Associate Professor of Agriculture
Morehead State University
Morehead, Kentucky

Alas, Wal-Mart’s problem is irregular execution in the field. We have a friend who just started working as a clerk in a Wal-Mart and the stories he tells are just shocking.

Unfortunately, it is very difficult to control what happens at thousands of stores, so Wal-Mart tends to try to control what it can control. So if the produce or meats are bad, the inclination is to raise procurement standards. Unfortunately small improvements in product at the door of the DC cannot make up for poor execution at store level.

Passion about product is always important. At Wal-Mart, the key is having passion for what can actually be scaled. That requires not falling in love with every trendy idea.

Many thanks to Professor Rogers for weighing in on such an important industry matter.

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