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Perishable Pundit
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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur

Tesco’s Secret Expansion Plan?

The Times of London ran a piece entitled, Tesco Begins its American Dream By Seeking Gold In California, which reports that although the operation is not yet a month old, Tesco is planning a major expansion, including building a twin of its Riverside facility in Stockton:

Only three weeks after opening its first American stores, near Los Angeles, Tesco is looking at dozens of sites in Northern California as it seeks to extend its Fresh & Easy convenience chain. It is part of the supermarket’s expansion drive in the United States to give it 1,000 stores generating nearly $10 billion (£4.9 billion) of annual sales.

The group is also in talks about taking on a second distribution centre — in Stockton, 60 miles east of San Francisco — that could service up to 500 Fresh & Easy stores around the San Francisco Bay Area, Fresno and Sacramento.

Tim Mason, Fresh & Easy’s chief executive, said that Tesco planned to open another distribution depot further north to serve Seattle and Portland. Such a move would give Tesco the potential for its biggest overseas chain of Tesco Express-style convenience stores, stretching the length of the Western Seaboard. It operates in 12 countries outside the UK, including South Korea and Thailand.

Mr Mason said: “If you look at the scale of opportunity here, it could be transformational for Tesco. If Fresh & Easy is successful, it will be the most exciting thing in retail, bar none.”

Tesco has 15 Fresh & Easy stores around Los Angeles, Las Vegas and San Diego. It will open stores in Phoenix, Arizona, this week, backed by the company’s first marketing campaign in the US. All the existing stores are supplied by a huge distribution centre at Riverside, near Los Angeles, which has the capacity to serve a network of 500 sites.

Publicly, Tesco has committed itself to opening only 200 stores in Southern California and Arizona by February 2009, but the Stockton depot is likely to be a replica of Riverside.

At the 600,000 sq ft Riverside site, the supermarket makes its own salads and ready meals, rather than sourcing them from an American food group. Two privately owned British suppliers, 2 Sisters and Wild Rocket Foods, have set up at Riverside to help Tesco to source meat, poultry and fresh fruit and vegetables. The integration has helped to generate savings that are allowing the group to compete with Wal-Mart on price.

Fresh & Easy claims to be up to 25 per cent cheaper than its main supermarket competition. Average sales are expected to settle at up to $200,000 per store per week.

Tesco’s optimism over the American market comes despite an increasingly bitter dispute with union leaders. Like Wal-Mart, Tesco is non-unionized and industry insiders believe that the unions are worried that other retailers could follow their lead.

The United Food and Commercial Workers Union is thought to be behind Health First, a lobby group locked in a legal battle with the developers of the Riverside site. A court ruled last week that the depot did not comply with environmental law, despite having one of the largest solar panel installations in America. Health First argues that the site, on a former military air base, should have been subject to a full environmental review and public consultation. The ruling could force closure of the depot, but Tesco believes that it will be made simply to carry out more monitoring work. Mr Mason said that all necessary state approvals for the site were in place.

Tesco’s plans are still largely secret. TNS, the retail consultant, believes that the group could achieve annual sales of $10 billion in the United States by 2015. Tesco has considered launching in Denver and is expected to move to the East Coast.

We think Tesco is too smart to be this dumb. It seems highly unlikely it is going to bet everything on this small-store concept that remains completely unproven.

Tesco claims it wants stores every two miles, to be less expensive than supermarkets by 25%, to locate private label stores in poor neighborhoods that typically value branding, to pay employees more than others. And small stores are difficult from a capital investment standpoint — multiply the cost of anything you want to buy by a thousand relatively low-volume stores.

So the real question is what else is Tesco going to do with this procurement and distribution network it is setting up? Tesco has to be thinking in terms of other concepts. We already suggested acquisitions of Meijer and A&P, but if Tesco does decide to launch everything from scratch, one has to believe that designs for a Tesco supercenter are already underway.

Will Tesco Regret
Operating Its Own Commissary?

The Financial Times ran a piece entitled, Tesco Adopts a New Business Recipe, which points out that Tesco in the US is operating its own central commissary, as opposed to operations in the UK and elsewhere, where it relies on outside firms to produce its prepared meals:

Tesco has become a food manufacturer for the first time as part of its efforts to win over US shoppers.

The UK food chain, which has more than a 30 per cent share of supermarket shopping in its home market, has built an 80,000 sq ft food preparation facility — dubbed the Fresh & Easy kitchen — at its central distribution centre in Riverside county, east of Los Angeles.

Tesco wants its prepared meals, such as chicken curry, sushi rolls and Caesar salads, to be an important part of the appeal of its Fresh & Easy neighborhood stores. But it decided to set up its own kitchen rather than use third-party suppliers because of concerns over prevailing US standards in the sector.

“The reason for doing it ourselves was that there was no one here that could do it to the same standards,” said Tim Mason, head of Tesco’s US operations.

Forty per cent of the ingredients for the kitchen — including meat, poultry and fruit and vegetables — are provided by Wild Rocket Foods and 2 Sisters Food Group. The two UK suppliers have each invested $100m in setting up food processing plants adjacent to Tesco’s Riverside distribution “campus”.

“It’s all about getting the supply chain as short as possible,” said John Burry, Fresh & Easy’s chief commercial officer of centralized planning at the warehouse complex, which ships about 95 per cent of the items sold at the stores.

Tesco says its buyers will source food from the kitchen at commercial margins, to benchmark the performance of its operations.

None of Tesco’s US competitors operate similar kitchen facilities, and Tesco has never before tried to make the food it sells. In its home market — and around its 12 other business in Asia and Europe — Tesco always uses third-party suppliers. Bakkavor, Kerry Foods and Greencore are its biggest suppliers in the UK.

But the discount operating model of its US business increases the attraction of the higher-profit margins yielded by making its own food, rather than using a third-party provider.

“We could have asked one of our suppliers to come over and they would have jumped at it, but we felt we could do it ourselves,” said Mr Burry, who has worked at Tesco for nearly two decades, on a tour of the facility last week. “We have lots of experience in this, and the margin is much better. Why pay someone else to do this?”

The kitchen, with its giant cookers, stirring vats and the pasta-making machine imported from Italy, produces 120 different product lines from ready meals to fresh sushi and sandwiches.

Mr. Burry said he expected to expand that to about 150 lines and the existing kitchen site can be doubled in size to serve up to 500 stores. Tesco is considering building a second kitchen, or smaller “kitchenette” at its planned North California distribution centre in Stockton.

Orders from the stores are placed with the kitchen at 2am — this means Tesco can incorporate all the previous day’s sales — for next-day delivery.

Wild Rocket and 2 Sisters — which also supply pre-packed fresh products for the Fresh & Easy stores — chop and prepare the required amounts of vegetables and meat for the kitchen to be made into meals later that day. For fresh salads, Wild Rocket will take leaves picked by their suppliers in northern California and then wash, prepare and ship them to the kitchen at the distribution centre.

The proximity of the suppliers and the kitchen to the warehouse means that the lettuce can go from the soil to the shelves in three days.

Mr Burry says that the prepared food is going down well with shoppers — so much so that Tesco had availability problems in the first couple of weeks of opening its first stores.

We have been told that the shortages in the stores are actually due to a computer software problem — not wild demand beyond expectations.

We suspect Tesco will regret this decision. We’ve written about the pros and cons of company owned commissaries for years in Pundit sister publication, DELI BUSINESS.

Although, right now, Tesco says its buyers will source from the commissary at commercial margins — meaning the commissary will be a profit-center — what typically happens is that because it has a guaranteed client, it gets less sharp, its expenses get bloated, it becomes less service-oriented, etc.

Ironically just a couple of days ago, the Financial Times had a piece entitled Legal Setback for Tesco’s U.S. Plans, which determined that its main U.S. facility did not comply with California’s environmental laws:

Tesco has suffered a legal setback in its ambitious expansion plans in the US, after a California court ruled that its main warehouse did not comply with environmental planning law.

Tesco executives acknowledged that the ruling could, in theory, lead to the closure of the depot, the logistical backbone of its US operation. But they said this was highly unlikely and that similar disputes had been settled without such radical measures.

“We will review the ruling to understand what further compliance might be necessary but there is nothing in the ruling handed down that we believe will affect the operation or further roll-out of the business,” Tesco said in a statement.

Simon Uwins, marketing director of Tesco’s US Fresh & Easy subsidiary, said: “It is just the latest round in an ongoing court case”. But he said Tesco had contingency planning in place to deal with any potential distribution difficulties.

The ruling came as Tesco announced it was drawing up plans for a second warehouse complex at Stockton in northern California.

Tesco has opened 15 stores in the US and plans to bring the total to 50 by the end of the year and 200 by the end of next year. Its first 10,000 sq ft US Fresh & Easy store was opened this month. The company has said it will spend £250m a year over five years on its US expansion.

The case was brought in Riverside County Court by Health First, a previously unheard-of group established with the support of the United Food and Commercial Workers union.

The UFCW, which represents workers at the big three traditional supermarkets, has sought unsuccessfully to negotiate with Tesco over union representation. The union has used tactics like those employed to block the expansion of Wal-Mart in California.

Health First argues that the distribution centre should have been subject to a full environmental review, including a public consultation. It says it is particularly concerned about increased traffic from truck volumes.

Tesco says the distribution centre, on the site of a former military base, is covered by the environmental approvals secured for the base redevelopment.

One of Tesco’s UK suppliers, 2 Sisters Food Group, faces a similar lawsuit.

The only reason Wild Rocket Foods isn’t also subject to the lawsuit is that it moved “off campus” when it learned how expensive water would be on site.

The irony is this: The lawsuit was brought by a front group for the unions. You can bet that the very first group those unions will work on organizing is the commissary crew.

Retail store workers are hard to unionize; they are scattered, mostly short-term and unskilled. But the commissary workers all will work in one place and gain some specialized skills. The union will see this as a choke point. Unionize those workers and they can bring Tesco to heal — it will be the union’s weapon to get Tesco to open negotiations on the store employees.

One would have thought Tesco would have learned from Wal-Mart on this one. Case-ready beef may always have made sense for Wal-Mart’s approach, but it made a lot more sense after the butchers at a Wal-Mart supercenter in Texas voted to join the United Food and Commercial Workers — the same union funding the lawsuit against Tesco.

If Tesco is smart, it will lease out that facility to a private operator.

EU’s Banana Policy Breaks WTO Rules

Back in July, we ran a piece entitled Banana Import Policies In Europe Defy Logic And Ultimately Hurt Consumers in which we pointed out:

The whole purpose of the WTO is to say that countries can’t choose favorites. There are exceptions for countries that don’t have normal relations or what we used to call “most-favored-nation” trading status, but, overall, the point of the WTO is that Europe cannot say, in the absence of a free trade agreement, that it favors African producers over South American producers.

Richard Yudin of Fyffes Tropical Produce wrote us here to protest our harsh tone toward those not able to compete in the world banana market as he put it:

The other side of the coin is that the assured markets for their produce allowed many thousands of smallholders in the Caribbean islands to enjoy a steady income and remain in their land.

No other low-tech fruit crop is harvested all year round and this ensures a weekly income to the growers. The preferential treatment for these economically weak nations kept their rural communities economically viable and socially stable.

Well, we have to pay Richard some respect as he was writing from his head and heart; but the interests of Fyffes seem to be different. The WTO has ruled, though not yet published, that the European Union banana importing regime violates WTO rules.

The immediate response in Ireland: Fyffes Shares up 9pc as WTO Rules Against Banana Regime:

SHARES in banana importer Fyffes soared almost 10pc yesterday after news that the World Trade Organisation (WTO) has upheld a complaint from Ecuador challenging European Union rules that impose custom fees of €176 a tonne on bananas from countries outside the Africa-Caribbean-Pacific area.

The news would mean a reduction of more than €30m a year in levy payments by Fyffes, Goodbody analyst Liam Igoe said.

Fyffes shares were up 9c at 93c in Dublin, a rise of 9.4pc on the day.

A preliminary report from the WTO, delivered confidentially to the parties earlier this week, found that the EU importing scheme was inconsistent with global trade rules, the source said.

This latest ruling is the second time in six years that the WTO has found against the EU’s banana imports regime after a ruling against a previous system in 2001.

Ecuador lodged a complaint in November 2006 challenging new rules implemented on January 1, 2006.

The rules imposed custom duties of €176 per tonne on bananas from countries outside the so-called Africa-Caribbean-Pacific (ACP) group.

The United States, home to three of the five biggest multinational banana producers in the world, has also lodged a complaint against the EU system.

Bananas from Latin America account for four fifths of EU imports, with the remainder coming from African, Caribbean and Pacific nations.

ACP bananas enter the EU duty free under a quota of 750,000 tonnes a year, with the system devised to favour the ACP countries, many of which are former European colonies.

Under previous practices, bananas from Latin American and other non-ACP countries were subject to a tariff of €75 a tonne under a certain quota level and €680 a tonne above that level.

This system was redrawn after the WTO in 2001 upheld a complaint against the EU by Ecuador, Guatemala, Honduras, Mexico and the US.

The WTO agreed to rule on the latest US complaint against the EU in July.

The EU described the US action at the time as “regrettable”.

Three of the world’s largest banana producers with plantations in Latin America are US-based multinationals: Chiquita, Del Monte and Dole.

Ecuador, the leading exporter of bananas to the EU, argued that the system was preventing it from maintaining its market share.

It seems unlikely, but we hope that the EU will decide to separate its foreign aid and its trade. Basically, heavy banana consumers should not have to pay what is, in effect, a tax to support banana production in certain countries.

We are sympathetic to Richard’s point, but we think we simply have to find economically viable industries, not subsidize industries that are not competitive.

Easier said than done, of course, but if the amount of time and energy that has been spent on the banana wars had been devoted to helping the banana exporting countries of Africa, the Caribbean and the Pacific, we would be a lot closer to an answer.

Will Threat Of Rotten Produce
Be Enough To Solve Immigration Issue?

The Washington Post ran an editorial entitled, Rot in the Fields, that pretty much reads as if it were written by a coalition of produce grower groups:


As farmworkers become scarcer, Congress dithers.

CHECK OUT the asparagus you have for dinner, the cucumber in your salad and the pear on your plate for dessert. Chances are none would be there if not for the undocumented farmworkers who plant and pick most of the fruit and vegetables grown in this country. Nonetheless, faced with a serious and growing shortage of legal agricultural labor, Congress has followed the same playbook it has used for the broader issue of illegal immigration: political cowardice and empty slogans followed by inaction.

At least half, and possibly as many as 70 percent, of the 1.6 million farmworkers in America are undocumented immigrants, and their employers are painfully aware that there are not enough U.S.-born citizens and legal immigrants to do all the labor-intensive work they require. Agribusiness, farmworkers unions and enlightened lawmakers from both parties have pleaded for solutions, only to be foiled by congressional Republicans and swing-state Democrats who dare not support legislation that would provide undocumented farmworkers with a path to legalization — the dread “amnesty” of 30-second attack ads.

By doing nothing to ensure a steady, reliable and sufficient labor force for farms, it’s a good bet that Congress will make things worse, and soon. Faced with understandable public pressure to tighten border security, federal authorities have added personnel, technology and fencing to make it increasingly difficult for people to enter America illegally. Reports in the past year of vegetables and fruit rotting in fields and orchards for lack of hands to harvest them have failed to give Congress sufficient impetus to act. Look for the labor shortages, and instances of rotting produce, to grow more acute next year.

As Congress dithers, fair and balanced legislation to deal with the problem languishes. The so-called AgJobs bill would allow some 800,000 undocumented workers — qualified farmhands who have been working here for several seasons — to register, pay fines and legalize their immigration status by working in agriculture three to five more years before they could qualify for green cards. At the same time, it would provide a more sensible way to ensure an adequate supply of farm labor by streamlining the current H-2A visa program for agricultural guest workers, which is so cumbersome and unreliable that farmers use it for only an estimated 2 percent of all farmworkers.

Having failed to pass comprehensive immigrations reform this year, Congress has tried to deal with the problem piecemeal. The AgJobs piece is among the most critical. The realistic alternative to it is not arrest and deportation, as anti-immigration activists may imagine. It is the prospect of undocumented workers leaving the farms for higher-paying, year-round jobs in the cities; of a country increasingly unable to meet its own demand for food; and of hundreds of thousands of workers in a vital industry doing backbreaking work without basic employment protections. That amounts to a moral blight on America and an indictment of a political system incapable of fixing fundamental problems.

Getting a piece such as this in such a prominent venue and with the endorsement of the Washington Post is a big win for the industry.

Unfortunately the Washington Post editorial page is unlikely to turn those “congressional Republicans and swing-state Democrats” that blocked comprehensive immigration reform earlier this year.

The key point is probably this one:

The so-called AgJobs bill would allow some 800,000 undocumented workers — qualified farmhands who have been working here for several seasons — to register, pay fines and legalize their immigration status by working in agriculture three to five more years before they could qualify for green cards.

To those who focus on the law, this will seem unfair to the countless millions that lined up patiently waiting their turn at US embassies.

To those who fear what immigrants may do to our political institutions, this provides a path for 800,000 voters that they don’t want.

To those who respect the immigrants, the question is why should anyone be compelled by law to work in agriculture — and only agriculture — to get a particular benefit? They will be concerned about the power this will give to ag employees.

To those who want to limit future illegal immigration, this seems to hold out the possibility that if you come here illegally, maybe one day a path to a legal status will be created for you. This seems a likely incentive to future illegal immigration.

Everyone knows that we are not going to deport over ten million people, but the Constitution does solve the problem over time. Anyone born in the U.S. is a citizen, even if the child’s parents are illegal, so if we can restrict new illegal immigration, in the end, everyone will be legal.

The threat of rotten produce may be real in certain places at certain times but is probably not a sufficient threat to get people or their representatives to view immigration through the lens of the produce trade.

Pundit’s Mailbag — Traceability Initiative
Requires Broader Base Of Participants

Our piece, Traceability Initiative Lacks Full Industry Representation, pointed out that the steering committee of the CPMA/PMA/United Fresh joint effort on traceability was lacking players from important segments of the industry.

We reminded readers of a letter we received from Alan Siger of Consumers Produce pointing out that, by law, commission merchants were obligated to maintain traceability in order to fulfill the requirement that each grower receives the proper account sales. As such, traceability was important long before food safety and food security started driving these issues.

This letter from Alan’s fellow Pennsylvanian confirmed that wholesale/distributors have something to contribute to this discussion:

I would certainly agree with Alan Siger that independent wholesale/distributors have capabilities that enable them to be part of the solution. From my recent experience in serving on the Produce Electronic Identification Board as the wholesaler/distributor representative, I have seen the value of broad supply-chain participation in developing and implementing industry standards.

As an organization, we have gained many ideas by tapping a wide range of available sources. We have learned many of our ‘best practices’ through contacts across — and beyond — the produce industry. A wide-ranging search for a warehouse management system five years ago led us to implement a ‘best in class’ solution never before used in our industry.

In regards to the current food safety and traceability discussion — this system provides us the capability to require voice verification with each pick. This links a product’s source and destination within our facility for more timely, precise, and reliable trace back information. This system has also allowed us to achieve much higher selection accuracy and productivity. Other produce distributors have since implemented the system. The best ideas in a company (or an industry) come from a variety of directions, and are therefore created when drawing from a broad base.

In short, participation by the entire supply chain will lead to the most effective end-to-end standards on this important matter of food safety.

— Nelson Longenecker
Vice President — Business Innovation
Four Seasons Produce, Inc.
Ephrata, Pa

One reason Cathy Green, Chief Operating Officer for Food Lion, was a good choice to chair the committee is because she is not personally part of the produce industry and thus more likely to be accepted as a kind of neutral arbiter when things get tense. Also as an operations person in a major supermarket chains, Cathy has exposure to what other parts of the food chain are doing on traceability.

Without a doubt, though, the initial list of committee members reveals some gaps. Fortunately, there is adequate time to fill them. We can and we should.

Many thanks to Nelson for reminding us that ‘best practices’ don’t have to mean within the limited experience of companies exactly like our own. Stretching to acquire knowledge, to learn what others are doing, to adapt practices and procedures to new environments… these are all pathways to success.

Pundit’s Mailbag — Small Farmers Have More At Stake With Food Safety

Our piece, Chefs Collaborative Opposes Leafy Greens Marketing Agreement, brought a firestorm of protest from smaller growers, including this letter:

You should have put a bit more thought into your assertion that small outbreaks of food borne illness are not noted or acted on by authorities. You are confusing the level of publicity an outbreak rises to with the number of outbreaks that have been reported and acted on.

Being in the Pundit business, though, it’s appropriate that that’s how you would look at it. Small outbreaks are acted on by local/state health authorities all the time. A large outbreak is actually just a collection of small outbreaks. These small outbreaks are noted by the local emergency room physicians and are then reported to the CDC. When enough small outbreaks occur with the same casual factors identified, then you have a big outbreak. But the initial reporting is always done by the local personnel.

When viewed in the above light, the flaw in your logic becomes apparent. I personally know of two outbreaks reported with 6 and 4 illnesses, in different parts of the country, that resulted in recalls of all suspected product on the authority of the County and City health officer. Neither made the news so they won’t show up on Google to this day. Nor do they show up on the FDA websites!

If the local authorities were not doing their jobs, then no outbreaks, large or small, would ever be reported. But they are, and that’s why you hear about the public swimming pool water, or the church social, or the local diner that caused half a dozen people to report to the local hospital. It’s true that the number of people reported in any outbreak is significantly smaller than the number made ill. But it doesn’t follow that a small outbreak only occurs among folks that don’t report.

It would be absurd to think that just because an item of produce is local that it can’t cause an illness outbreak. But it’s also absurd to believe that just because it’s local, it doesn’t get reported. Think about it, if a farmer’s market or some other localvore venue was identified as a possible source in a food borne illness outbreak, the news would probably be national even in the smallest outbreak. The press loves to attack so-called liberal values and loves to puncture belief balloons of the dreamy-eyed consumer.

I think it’s significant that you could not find a local farm source outbreak to actually report on. You must have tried or you wouldn’t be doing your due diligence.

All of us in the small farm community are concerned about food safety. If we make our customers ill, then we are out of business. No small farm could survive even one recall and come back. We know our customers personally, in some cases by name, and we live in the community we serve. There is no accountability better that.

We are not opposed to food safety plans for small producers, but do you really believe that a food safety plan administered from Washington DC is going to be anything but a bureaucratic nightmare?

On a final note, the gist of your piece seems to rest on the idea that opposing the LGMA is short-sighted. You go on to say that the world needs HACCP plans. I don’t find a HACCP plan in the LGMA GAP/Metrics. Most every privately audited food safety plan is much more robust than the GAP/Metrics.

If money and HACCP plans equaled food safety in a proportionate basis, then how in the world do we get the large company recalls that we continue to see? Companies large and small are spending millions on food safety, and I believe America has a very safe food system, but the illnesses from those very same companies keep coming.

— Kenneth Kimes
New Natives
Freedom, California

We appreciate Ken’s letter. His company seems to do interesting things. New Natives describes itself this way:

New Natives farm is nestled in a valley on the central coast of California. Over the last 20 years we have grown thousands of pounds of sprouts, using good organic seed, natural sunlight, clean water, and nothing more. Growing sprouts of high quality, using the natural elements is very important to us. We sell locally at farmers markets and natural food stores. New Natives sprouts are known for flavor, quality, and integrity

The company also seems to sell organic seeds for sprouting, which sounds like fun, and the Pundit might be tempted to buy some to sprout with the Jr. Pundits, but we hesitate because on its website, New Natives describes the seeds this way:

These organic seeds are sleeping peacefully and have not been disturbed with chemicals, irradiation, genetic modification, or other invasive processes.

This worries us a bit, as while Ken’s seeds are “sleeping peacefully,” the ones watched over by frequent Pundit contributor Bob Sanderson of Jonathan’s Sprouts are being “triple tested” for safety. You can see it all here. Then Jonathan’s does more testing on the crop. We wonder if it makes food safety sense to grow this crop all on our own?

Still Ken is intriguing — doing things such as “…experimenting with a mustard seed variety developed at the University of Idaho that works as an organic fertilizer after its oils are extracted for biodiesel.” We would like to break bread with him some time.

Yet, we confess to always being astonished at how quick people are to assume that people who disagree with them just haven’t thought things through. Considering that we have written hundreds of thousands of words on food safety for over two decades, to accuse us of needing to “put a bit more thought” into the issue seems downright odd.

As it happens, if you read Ken’s letter you notice that there are no quotes in it — that is because we never actually said the things he accuses us of saying. For example, at no point in our article do we say that “…small outbreaks of food borne illness are not noted or acted on by authorities.”

Lest anyone drew the same inference, let us state our point clearly: The authorities should act and often do act on every case of foodborne illness brought to their attention. However, we made two specific points:

1) The math of the matter is such that many small outbreaks will simply be very hard to trace back to a particular producer.

A plant the size of the Natural Selection Foods plant implicated in last year’s spinach crisis would probably produce around ten million servings a day. Obviously we have no way of knowing how much of the plant’s production had pathogens on it and recognize that the plant can produce multiple items.

Equally, a small producer might have many products to sell and we can’t know how much of his production has pathogens on it.

We do know that we were able to identify 300 people who got sick or died as a result of the contaminated spinach. So this gives us our ratio: 300 identified illnesses or deaths for each 10 million servings produced — when there is a pathogen contamination existing.

Obviously this is subject to change, based on the extent and intensity of the pathogen, but, assuming the local producer is no worse on food safety than the plant last year, this gives us something to work with.

And what it tells us is that if a local farmer is cutting his crop and going to a farmer’s market and his crop is equally contaminated to what that day’s production was last year, we would expect his crop to result in less than one tracked-back illness — unless our local grower sold at least 33,333.34 servings that day at the farmer’s market. The 33,333.34 number comes simply by dividing 10,000,000 servings by 300 known affected people.

Now these are just statistics and the actual events will differ, so some poor farmer could get six people sick and it could be tracked back. But that is not going to be typical.

Our guess is that this significantly understates the amount of product that a local grower would have to sell to expect that a foodborne illness will be tracked back.

First, many of those tracked back were identified because the people who got sick or died had bags of product in the refrigerator. Without those bags, the number would have surely been less both because consumers might forget what they had eaten and because a definitive tie could be made from product testing.

Second, the enormous publicity and the involvement of big business such as Dole and Natural Selection Foods encourages people to go to the doctor both because they hear there can be a real problem and because some smell a chance for a settlement. If there had been a news blackout on the spinach crisis and the FDA never issued its advisory, we think the 300 number would have been much lower.

Now, even if we have one sick person who reports himself to a doctor or hospital and even if the person’s symptoms are correctly diagnosed, the limits of survey methodology make it far less likely that an individual illness will ever be tracked back to a specific producer.

The way our surveys work is that we survey healthy people and ascertain what is normal — then, if people come in sick, we can give the same survey. If the base survey indicates that 10% of the population eats a spinach salad every day and 99% of the sick people coming into the hospital ate a spinach salad, that is what tips us off as to where to investigate. But if only one person gets sick, the questionnaire isn’t very useful because we can’t ascertain statistical anomalies.

So the point is obvious: we will always expect to track back more foodborne illness to large shippers and chain restaurants than we will to small growers and independents — even if they are all equally proportionally responsible for foodborne illness.

2) The safety of fresh-cuts cannot be assessed by comparison to bulk product.

Yes, theoretically, blends will increase risk. Take 50,000 pounds of radicchio with a pathogen on it, blend it with 950,000 pounds of Romaine, and you have a million pounds of contaminated product. Although, of course, how much actually will get to the public depends on the effectiveness of our washing procedures — it might be zero.

However, the risk of blending in a fresh-cut plant is just one possible risk. If to avoid that risk, a restaurant, for example, wishes to consider buying all bulk and chopping it up and mixing it in a salad in house — otherwise known as processing and blending — it has to evaluate the food safety risk of all those manual steps. Are the knives and cutting surfaces sanitary, do workers properly wash their hands and under their nails after using the rest rooms, do people take off if they are sick, etc.? The evaluation, in other words, has to include both the product and the processing — wherever the processing may be done.


We are sure that small farmers would like to sell safe food. That is not the issue. The issue is whether food safety standards should be compromised because they are difficult to meet.

The gist of the complaint here is that if a large farmer owns a 100,000-acre ranch surrounded by cattle feeding lots, the requirement to maintain a buffer zone is an inconvenience and expense but not business-threatening. However, a farmer who owns 4.3 acres surrounded by cattle feed lots may be driven out of business by such a requirement.

To which we respond: We are sorry, genuinely sorry, but we now know that that piece of land is simply not an appropriate place to grow fresh food.

As our correspondent points out, the Leafy Greens Marketing Agreement metrics are not a HACCP plan. But small growers are not proposing that they be allowed to impose more rigorous standards upon themselves. The metrics allow for that anyway.

We certainly think small growers deserve a chance to critique and have input on the GAP metrics. But that input should be on a scientific basis — not related to marketing.

Right now the smaller growers and the chefs we were writing about are not critiquing the metrics. They are just asking for an exemption from them.

If the Chefs Collaborative wanted to hire some PhDs in agronomy and asked if its committee could submit suggestions for modifications of the metrics, well, this columnist would be the first one on their side.

But to say that food safety standards should be abandoned because they are difficult to adhere to and therefore some people will go out of business and some buyers will have to buy less conveniently — that is hardly an argument at all.

We appreciate Ken’s letter and the opportunity it gives us to clarify our point.

Pundit’s Mailbag — Consumer Has Shared Responsibility In Food Safety

Our piece, Consumers And Foodservice Operators Should Not Rewash Fresh-cut Produce, detailed that a panel of experts had studied the available research and came to this conclusion. At least one grower thinks the panel made a mistake by failing to emphasize consumer responsibility for safe produce:

Unfortunately, the report focuses too much on the aspects of cross contamination and not enough on the visual inspection and safe handling of fresh produce.

You should look at the brochure prepared by [the Western Institute for Food Safety and Security,] WIFSS at UC Davis. It gives great advice on handling and preparation of fruits and vegetables in the kitchen and if followed would minimize the chances of cross contamination.

Then they throw it all away as you have in your “endorsement” of packaged product even though there is no kill step for that product.

There is no substitute for the consumer doing their part by looking at the product and using proper methods of preparation.

If the product is decayed or looks/smells like it has been spoiled, you should not eat it, period. If the use date is out of date, throw it away regardless of how it looks.

Make sure that the cold chain is intact because if it is not, the chances of foodborne illness is greatly increased with time and cross contamination will not be your biggest risk.

— Bardin Bengard
Bengard Ranch
Salinas, CA

Bardin doubtless expresses the sentiments of many growers… that consumers need to be asked to do their part in ensuring food safety. The panel, though, was required to assess reality based on the literature available and came to the conclusion that in light of the safety of the product, the way consumers and restaurant workers typically wash produce poses more dangers — because of the risks of contamination — than eating it right out of the bag.

One possibility is more education. If consumers and restaurant workers were more diligent about hand washing, about not contaminating cleaning surfaces by touching their noses or coughing/sneezing into their hands before cutting or preparing food, perhaps the assessment would change. Yet it seems unlikely that the change will be very dramatic despite the whole Fight Bac campaign and the new Be Food Safe campaign. For one thing, facilities are inadequate, as the study reports:

The personal hygiene risk factors associated with produce that are most in need of attention at retail and foodservice operations include adequate, available and accessible hand washing facilities. These personal hygiene risk factors were found by the survey to be not in compliance with the 1997 FDA Model Food Code 33.3%, 26.2%, and 20.6% of the time, respectively.

Hands are a very common vehicle for the transfer of human pathogens to food products, and food handlers’ hands may become contaminated when they engage in activities such as handling raw meat products, using the restroom, coughing or handling soiled tableware.

Food safety procedures for cleaning and sanitizing food contact surfaces and utensils for handling produce were found to be not in compliance with the 1997 FDA Model Food Code in 44.4% of the observations in this study. Proper cleaning and sanitization of food contact surfaces is essential to preventing cross contamination. Results for selected types of facilities and selected assessment criteria are shown in Table 1:

Table 1. Percent of facilities out of compliance with
assessment criteria based on 1997 Food Code

Type of facility Contaminated equipment/
protection from contamination
utensils cleaned and sanitized
Poor personal hygiene2 proper hand-washing
Fast food restaurant 21.9 50.9 31.2 53.8
Full serve restaurant 37.3 56.6 41.7 72.7
Retail stores/
20.5 44.4 22.3 33.3

Bardin’s recommendation for a source of information on how to handle produce is a good one. You can download a copy right here.

The study also contains similar suggestions.

Yet, as sympathetic as we are to the notion that the industry is wise to urge all sectors to do their part, we have a sense that the industry is standing athwart history on this one.

If consumer participation in food safety could be expected or mandated, then E. coli 0157:H7 in hamburger would not be a beef industry issue. It would always be the consumers or the restaurant’s fault for improperly cooking meat if anyone got sick.

Yet in the years following the 1993 Jack-in-the-Box outbreak, there was a clear shift away from this perspective. In mid-1994 a man named Michael Taylor was appointed as Chief of the USDA’s Food Safety and Inspection Service. Shortly thereafter, on September 29, 1994, Taylor said that the USDA would from that date forward regard E. coli O157:H7 in raw ground beef as an “adulterant,” because the epidemiological evidence showed that in the hands of consumers it was ”ordinarily injurious to health” — thus it was an adulterant that should never, ever be present in the product.

In mid-October, 1994, Taylor announced plans to launch a nationwide sampling of ground beef to assess how much E. coli O157:H7 was in the marketplace. Five thousand samples would be taken during the year from supermarkets and meat processing plants “to set an example and stimulate companies to put in preventive measures.”

A positive result would prompt product recalls of the entire affected lot, effectively removing it from any possibility of sale — even though no one had gotten sick and consumers and restaurants could make the hamburger 100% safe just by thoroughly cooking it.

So even where there is a kill step, the rule has become that it is unacceptable to sell product that is dangerous.

Certainly this doesn’t mean we shouldn’t urge consumers and restaurants to do all kinds of things to keep food safe. Certainly we can continue to preach from the hymnal of shared responsibility.

Yet, at least on our fresh-cut product, we really have to ignore all that when it comes to our production specs.

And if down the road bulk produce starts causing people to get sick, don’t expect a “blame the consumer” strategy to carry much weight with regulators or the consuming public.

Many thanks to Bardin for helping us to address this important issue for the trade.

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