Pundit’s Mailbag — Denny’s Weighs In
On Food Safety Effort
Jim Prevor’s Perishable Pundit, November 1, 2006
Our discussion of the Buyer-led Food Safety Effort brought forth this constructive contribution from Gene Harris, Senior Purchasing Manager at Denny’s:
Let us start by assuring Gene and anyone of the same thought that all feedback and contributions are always welcomed with open arms. The only “combat” here is intellectual, and it is worth remembering that we are all fighting on the same side for the improvement of the industry. Thinking is hard work, and the Pundit is a forum in which those discussions can play out.
Anyone who knows Gene Harris is not the slightest bit surprised that he would endorse this initiative. Take a quick glance at the original signatories:
Greg Reinauer, Amerifresh, Inc.
Frank Padilla, Costco Wholesale
Reggie Griffin, Kroger Company
Tim York, Markon Cooperative
Ron Anderson, Safeway, Inc.
Gary Gionnette, Supervalu Inc.
Mike Hansen, Sysco Corporation
David Corsi, Wegman’s Food Markets
Gene Harris, as with his fellow endorsers, wants to do the right thing, wants to help the industry. He and his fellow buyers are willing to lead. That is why the Pundit wrote in his piece: “The signatories to this letter deserve real industry praise. They have stood up and are trying to make a difference.”
And clearly, as the Pundit has often pointed out before, in a voluntary system, regarding an issue such as field crops, in which there is no 100% guarantee of safety, the level of safety that producers will ultimately deliver is exactly and precisely the amount that the customer wants to pay for. So buyers play an enormous role.
Yet with the announcement that the Western Growers Association has called for mandatory food safety standards, the dynamics of this issue are switching swiftly.
Buyers can impose standards on their suppliers, but it seems as if the big grower members of WGA are more inclined to go with a mandatory program. Perhaps because this is more easily “saleable” to consumers, perhaps because the growers have no confidence that buyers will ever agree to a uniform standard on food safety and, perhaps, because growers know that buyers today can have the best of intentions but situations change and buyer’s change — and if legal product is available for much less money, that will put a lot of pressure on an organization to change its standards.
If growers made investments for food safety based on a voluntary requirement and that requirement gets waived for others, the grower who invested will be out the money. A mandatory program avoids the pressure on well meaning buyers that can come from less stringent competitors and is far more likely to give a grower a chance to earn a return on his food safety investment.
Gene’s point about sharing the cost is well taken. Ultimately, however, all costs are paid by the consumer. Temporarily someone may take a reduced profit, employees may work for less, stockholders may give up dividends — but in the end, there are markets for labor and capital that dictate returns.
If the industry doesn’t provide adequate returns to labor and capital, both will migrate elsewhere. So, yes, it is easy to propose running up bills on food safety, but it is good to keep in mind that it is the consumer who, ultimately, must pay those bills.