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WGA’s Primal Scream…
And Dirty Glasses

The letter that Western Growers Association wrote to Publix in response to its letter to produce suppliers insisting on adherence to new food safety standards of the Food Safety Leadership Council is best understood as a primal scream — an outpouring of the bitterness and resentment that growers feel toward big buyers.

After we ran our pieces, Food Safety ‘Arms War’ Claimed As WGA Responds To Publix’ Demand For ‘Enhanced’ Produce Standards and Coalition Of Associations Seeks Dialog With Food Safety Leadership Council, here is just one letter we received in this vein:

Regarding WGA’s letter, yes it was strong, but for once I felt like I wasn’t getting pushed around by these huge, powerful corporations. You need to remember most of us ship crops from family farms, and we’ve been getting hit again and again. We’ve worked so hard to form the Leafy Greens Marketing Agreement and for these buyers to come out so after-the-fact, from their Monday morning quarterback positions…..is frustrating to say the least.

This is typical of buyers. They sit back in their glass houses and throw stones at the rest of us. Why didn’t they ask for a meeting?

Should these frustrations be vetted publicly, in writing? Probably not. But someone has to put their foot down, once and for all, and tell these buyers we’re not going to take it anymore. Not when they push back time and time again about sharing any of these costs. Trust me… these costs are real and mounting.

Sure… they’ll give it lip service, but you’ll get a Hold Harmless Indemnification Agreement to sign from them in a heartbeat when something goes wrong.

They cut training and education programs at store level… anyway, I’m venting, but for once I was proud to see a produce trade association do something the vertically integrated ones can’t do and that is stand up for the growers.

For the most part, buyers deserve this resentment, as much because they ignore basic standards of civility as anything else. As our letter writer says, “Why didn’t they ask for a meeting?”

Even little things like “Dear Produce Supplier” letters are really insulting. What is it — they can’t afford a mail merge program on their computer? People have names, and if they have a pre-existing relationship with a company, their names should be used.

Of course, many of these things come down from above in big corporations, but the produce team should make sure that vendors are treated respectfully — not mailed ultimatums.

Beyond just being a decent business associate, there is also the real sense that buying organizations have plucked out of the food safety realm one aspect — field and packing conditions — and ignored the fact that they play a role in ensuring food safety as well.

Our letter-writer expresses this sense by writing of buyers that, “They cut training and education programs at store level…”

And WGA’s announcement expressed the same frustration: “Moreover, the consortium has not provided the fresh produce industry with its own set of good handling practices that demonstrate that consortium members are properly handling fresh produce after receipt of produce from fresh produce suppliers.”

Here at the Pundit, we’ve been raising the same question for months in pieces dealing with botulism and juice, such as this one and this one.

We know of not one single supermarket chain that is having its refrigerated cases third-party audited for maintaining proper temperature everywhere in the case, including during defrost cycles.

When the goal is protecting public health, a lot more than food is involved. For example, clean dishes are important.

One of the members of the Food Safety Leadership Council is Avendra, which is basically a procurement arm for the hotel industry:

Avendra is a procurement services company with the functional and industry expertise to make a difference in your operations….

Founded in 2001 by ClubCorp USA, Fairmont Hotels & Resorts, Hyatt Hotels Corporation, Intercontinental Hotels Group and Marriott International, Inc. Avendra is headquartered in Rockville, Maryland.

Yet while focused on produce procurement as a way to improve the health and safety of the hotel guests, Avendra might do better to turn its attention to helping its hotel clients maintain proper sanitary standards.

Fox News at Channel 5 in Atlanta did an undercover investigation that will disgust you. The reporters took glasses in the hotel room, poured soda in them and put lipstick stains on the glasses so they would be obviously dirty. They then put hidden cameras in the room and bathroom and watched how the hotels dealt with dirty glassware.

These were not flea bag motels. These are the five hotels they rented rooms in, all in the Atlanta area:

  • Downtown Holiday Inn
  • Embassy Suites Alpharetta
  • Sheraton Galleria Suites
  • Renaissance Concourse
  • The Ritz-Carlton

Notice that the list includes an upscale Ritz-Carlton. In not one of the hotels did room service staff remove the glasses from the room and replace them with newly dishwasher-cleaned or sanitized glasses.

In each case, the glasses were simply rinsed off in the dirty sink — an inadequate treatment to kill pathogens on a glass if someone was sick.

In some of the cases, it was much worse — sometimes they pick the dirty towels off the floor and use them to dry the glasses; in other cases, a housekeeper shoots all the glasses with a blue liquid that looks like Windex, even though the bottle clearly indicates the liquid should not be consumed; in other cases, the housekeeper uses the same gloved hand she just used to clean the toilet to rinse out the glasses –without changing gloves!

That it is disgusting is beyond doubt. That it is a form of consumer fraud — as every consumer will assume the glasses they have in their room have been sanitized — is beyond doubt. In most cases, it is a violation of local health codes.

The report includes an interview with Roy Costa, an expert in disease control who contributed to the Pundit here as part of our effort to improve the draft GAPs for the California Marketing Agreement. He points out that this is not just a gross practice — it is the way disease is spread. This could be herpes, staph infection, hepatitis, flesh-eating bacteria, etc.

After watching a report such as this, who can blame growers for thinking that buyers should mend their own house before pointing their fingers at produce farmers?

You can see the video here.

Consensus From Unknown Experts Leaves Cause To Err
On Side Of Caution

In the more moderate joint produce association letter sent to Walt Disney World Co., there was a point made that spoke to how food safety metrics ought to be designed when we have imperfect knowledge:

“…some of the recommendations in your document are inherently based on opinion and judgment where science is insufficient, such as distance of production from animal grazing. Science today cannot tell us an exact distance, and we would therefore argue that expert consensus among industry, academia and government is the best way to address such unknown scientific questions until research can provide better evidence for risk-based decision-making. Otherwise, we are faced with an escalating, unscientific approach — if a 100-foot buffer is good; a 1,000-foot buffer must be better. Or why not 1,000 yards; or perhaps a mile, or two, or three. This is indeed a slippery slope without real science to guide these judgments.”

In the absence of certainty, it is reasonable enough to say that we should rely on expert consensus. This is a reasonable proposition — in the abstract. The problem is that this specific letter was being written to some of the top Quality Assurance people in the world. What kind of “consensus” can be said to exist if the QA departments at Wal-Mart, Disney, Darden, McDonald’s, Avendra and Publix do not share in the consensus?

We get back to the issue of who, precisely, is part of this consensus. For months we have urged first WGA and then the California Leafy Greens Advisory Board to make public the names of the people on the committee to draft the metrics. As we said in our piece, WGA’s Secret Science Panel:

Let us ask five simple questions:

  1. Who is on this committee and how were they selected?
  2. Do they have any conflicts of interest?
  3. Have they each endorsed the draft GAP document?
  4. Have they been asked to draw up dissenting reports on areas where they would like to see different standards?
  5. What was the charge given the scientists?

These are not insignificant points. If you want people to refrain from proposing their own standards on the grounds that a consensus exists, you better let them in on who, precisely, agrees on this consensus.

Let us put aside the QA departments of all the members of the Food Safety Leadership Council and just throw out a couple of other well known names.

Is Dr. Michael T. Osterholm, Ph.D., M.P.H. and Director of the Center for Infectious Disease Research and Policy, University of Minnesota, part of the consensus? As we mentioned here, when announcing that Fresh Express was donating $2 million to fund food safety research, Dr. Osterholm is chairman of the panel that gives out this money. Yet he is a consultant to Fresh Express. In fact, he was described in the USA Today article, ‘Fresh Express leads the pack’ in produce safety, in this way:

Osterholm has been a paid consultant to Fresh Express since 1999. He says it is the only food company he consults with because it’s made a major commitment to food safety and quality.

“I’m not here to help them sell more produce,” Osterholm says. “We want the Maytag Repairman Syndrome here. We don’t want another outbreak.”

Yet in that same article, Fresh Express articulated some standards that are different from those of the California Leafy Greens Marketing Agreement — including the one-mile buffer zone standard that WGA specifically attacked in its letter and the joint association letter questions.

Presumably Dr. Osterholm endorses the Fresh Express one-mile buffer zone — so how can he be considered part of the “consensus” that opposes this?

The same USA Today article quotes Michael Doyle, director of the University of Georgia Center for Food Safety. Here is what he has to say:

“From what I’ve seen, Fresh Express leads the pack,” in terms of food safety, says Michael Doyle, director of the University of Georgia Center for Food Safety and a longtime advocate of tougher regulations for the packaged-salad and fresh-cut produce industry.

Doyle won’t eat packaged salads. He says the process, including the mixing of leafy greens inside a processing plant, increases risk of contamination.

Well if he won’t even eat the product, in what conceivable way can we call him part of the consensus that the California Marketing Agreement’s metrics are optimal for food safety?

There is a real question whether there is a scientific consensus around the metrics adopted by the California Leafy Greens Advisory Board or whether there has merely been an agreement to establish those standards.

It is also unclear what the supposed “consensus” is actually supposed to be based upon — that the existing metrics are optimal for food safety or are the metrics the optimal compromise between food safety and expense?

This strikes us as very significant.

In one sense, our point here is simply that we can’t have it both ways. We can’t have a secret procedure where unknown people of unidentified expertise decide on standards in unknown ways and then claim a scientific consensus that immunizes the standards from objection. So we must develop a more transparent process for developing these metrics.

In another sense, though, we probably have to recognize that some organizations are simply going to be more conservative than others. The risk that Disney runs if a child dies at Disney World from eating contaminated food served at Mickey’s Kitchen is different, not merely in degree, but in kind from the risk a supermarket runs by selling product with the same result.

Quick, name two supermarkets that sold E. coli 0157:H7-laced spinach in the fall of 2006? You probably can’t do it. But nobody will ever forget should a child die on her “Make a Wish” trip to Disney World.

So, if there is doubt… if the science is not clear and Disney wants to be conservative and have a five-mile buffer zone between produce grown for it and a feedlot, who can say they are wrong? It makes more sense to say that they are very conservative, cautious in the protection of their customers and their brand.

Obviously, they have to pay enough or buy enough to entice people into growing to this rigorous standard. But that is different than arguing, as the industry seems to be doing, that Disney would be doing something morally wrong by electing to err on the side of caution.

Buyer Commitment To Higher Standards
Means Willingness To Pay More

When WGA issued its letter to Publix, we questioned the applicability of some its concerns:

WGA seems to be missing the important point that Publix is a company free to make its own procurement policies. Even its letter to Publix, in point ten (10), seems to imply that WGA is missing this key point:

10) How do you propose to impose these standards internationally without violating WTO and other international trade agreements?

This literally makes no sense. As a corporation, Publix is not bound by any WTO rules. Publix is free to announce that it chooses not to buy produce, for example, from China — case closed. It is the government that is bound by WTO rules. The government cannot enforce rules against foreign countries that are not enforced against US producers and are not justified by the science. But private companies can and do discriminate every day.

Other issues that are raised in WGA’s letter really don’t make economic sense as questions to be asked. For example points 8 and 9:

8) How do you propose to reimburse growers/handlers for the increased costs of these food safety measures? Will you agree to a “food safety line item” on invoices that would be auditable?

9) Do you now reimburse growers/handlers for the increased costs already incurred by complying with the existing standards for lettuce and leafy greens?

Al Siger of Consumers Produce, speaking at WGA’s Annual Meeting in Maui, made this point:

On market valued produce commodities (as opposed to value-added such as fresh-cut) adding a line item charge for any item, whether it be palletizing, pre-cooling, or food safety, has a net effect of zero in terms of returns to the seller. Buyers paying a $5 fob plus a $2 charge factor their selling prices the same as they would paying a $7 fob with no additional charges. Markets go up and down based on all costs to the seller, so adding a line-item charge will only reduce the fob prices accordingly.

We would expand the point to say that the key interest of growers when it comes to food safety is making sure buyers constrain their supply chain.

The real problem for growers is not the expense of meeting the new Food Safety Leadership Council standards. The problem is making sure the buyers really are committed to the product.

Typically, if a buyer wants something that is not standard practice — say the product put in RPCs — few people are willing to do it on the come. They want a contract. But the instant Wal-Mart told its suppliers this is what it wanted, the suppliers were willing to do it.

The disagreement over the metrics and complaints about its arrogant way of handling things obscures the real issue with the Publix letter. There may be a few things in the Food Safety Leadership Council metrics that are impossible in some places. But if they are impossible, they won’t be done, and the metrics will be changed.

But if Publix had gone to its Romaine vendor and openly negotiated a fair price for a contract for 10 trailers a week of Romaine grown to its specs, the whole thing probably would have never gone to Western Growers. The grower would have been busy figuring out a reasonable price.

Alternatively, Publix could have said it wants to develop a national market for product grown to a special food safety specification and, as this alternative market will have a different cost structure and, more important, a different supply and demand dynamic, Publix recognizes this product — just as organic product — will have a separate price point.

In this case, to entice growers to grow to this standard, Publix would commit to buy X amount of produce of this new standard over some time period.

The truth is that the only people who would sign a contract such as the one Publix drafted — a contract that imposed tremendous expense on producers without any reciprocal responsibilities on buyers — would be people who weren’t taking it literally. These may be some long-time Publix vendors who were whispered sotto vocce that the vendors were going to get the business and they could rely on those informal representations.

Al Siger is right; markets determine prices, not in the way it is laid out on the bill. So since a separate $2 charge for “food safety” alters neither supply not demand, it will not alter grower returns.

To ask how buyers will “reimburse” producers for food safety costs is no more helpful than asking how buyers will “reimburse” growers for real estate taxes, insurance, labor or any other cost of production. All these things are paid for out of the price they pay. If the price is not equal to the cost of production and the cost of production cannot be reduced, then production will fall until the market clearing price allows people to stay in business.

Tough food safety standards actually will increase returns to top producers. Many growers won’t be able to meet them, so supply will drop. If WGA wants to help boost grower returns, the focus should be on making sure that buyers who urge high food safety standards don’t ‘cheap out’ and buy sub-standard product when the higher standard product gets pricey.

Back Channel Discussions
On The Food Safety Leadership Council

As our initial pieces and follow-up articles pointed out, the method of Food Safety Leadership Council members trying to enforce their standards upon growers has caused quite a controversy. Back channel communication with a lot of different parties has led to a few points:

  • Legal is behind a lot of this. How can companies minimize liability? These initiatives are often not in the control of produce or even Quality Assurance.
  • Some of the quality assurance people at Food Safety Leadership Council companies are upset with the way this has been handled. They feel that, internally, people bent to the concerns that the legal departments expressed.
  • Many supermarket CEOs are bitterly angry at the Food Safety Leadership Council companies. They resent what they perceive as an attempt to ‘one up’ their own food safety credentials. They have been praising the assertiveness of the produce industry in fighting the FSLC.
  • The idea of one standard is simply not going to survive. We will have to look at how to live in a multi-standard world. There may be ways to do base audits with add-ons to reduce costs. We have to view regulatory initiatives as base standards and expect companies to supplement — not only in terms of food safety but supplemental environmental, labor and social responsibility standards.
  • McDonald’s, with its massive purchases and highly aligned supply chain, is likely to lead the way in establishing separate food safety standards for its purchases.
  • The Food Safety Leadership Council companies are all leaders in their fields, and most have agreed to quiet discussions that will likely result in at least some changes to the FSLC standards. However, those companies that have requested vendors to commit to the FSLC standards are not withdrawing those requests. But few companies are signing.

Pundit’s Mailbag — Welcome To The
World Of Retail-Imposed Standards

Following our two Pundits on the controversy between WGA and the Food Safety Leadership Council, which you can read here and here, we heard from several of our friends in the U.K.

Their take was that of empathy for the growers, as they have already been through this, as one long time British retailer expressed:

Great issue!

It’s all Kicking Off in the States then!

Welcome to Due Diligence and retailers raising the standards… about time!

In the United Kingdom, of course, it has been retailers that have led the drive to impose food safety standards on the production end of the business.

When the Buyer-led Food Safety Initiative was launched, many thought the same movement was taking hold in the U.S., but the buyers decided to work through existing industry associations and never took the step of imposing standards on the trade.

When we interviewed Jo McDonald, Technical Services Manager at the British Retail Consortium, we asked this question:

Would British Retail Consortium Standards Have Prevented The Spinach Crisis?

Her answer was bold:

“I believe that if all companies had adopted BRC standards, the spinach E. coli outbreak very well could have been avoided.”

— Jo McDonald
Technical Services Manager
British Retail Consortium

We don’t know if it was correct. Comparisons between countries on food safety are notoriously difficult because each country uses a different surveillance system, and nobody has a system like the US PulseNet.

We don’t know if this initiative is the beginning of a buyer-driven food safety system, but we are certain that the Food Safety Leadership Council metrics and this whole initiative are signs that nature abhors a vacuum.

If we as an industry don’t create a national regulatory program to establish a food safety base for all commodities from all sources, others will move into that vacant space and create their own food safety schemes.

In the end, the produce industry may wind up thanking the Food Safety Leadership Council for clarifying the choice before us.

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