ASSURANCE INSURANCE

Operating a laboratory staffed by degree-holding scientists isn't something supermarket retailers routinely do. For H.E. Butt, opening a new $3.5 million, 13,500-square-foot, quality-assurance lab adjacent to its headquarters in San Antonio seemed like the logical next step to take for a company with a longstanding commitment to food safety.Three times bigger than the company's old lab, which H.E.

Operating a laboratory staffed by degree-holding scientists isn't something supermarket retailers routinely do. For H.E. Butt, opening a new $3.5 million, 13,500-square-foot, quality-assurance lab adjacent to its headquarters in San Antonio seemed like the logical next step to take for a company with a longstanding commitment to food safety.

Three times bigger than the company's old lab, which H.E. Butt had operated for 13 years, the new facility is the testing hub for ground beef and produce sold at the company's 300 stores in Texas and Mexico. Technicians and scientists test the beef for contaminants like E. coli 0157:H7 and fruits and vegetables for hygiene. They also analyze returns -- any reportedly defective item brought back to the stores by consumers -- and work with product manufacturers to correct the problem.

Besides giving associates a great deal more space for experiments, analysis, research and development, and special projects -- not to mention room to grow as new testing programs come on line -- the lab offers new technology, including a DNA section that allows researchers to more quickly identify specific strains of a pathogen, data that can help traceback efforts.

The lab is a busy place. Open seven days a week, 12 hours a day, the lab has 32 professionals on staff who, over the course of a week, take 50 to 75 samples of ground beef and 300 samples of individual commodity produce items.

Though it's been open for only half a year, the lab has attracted a great deal of attention. Regulatory officials, groups of university and high school students, community groups and others with an interest in food science have toured the facility, which is in the heart of an industrial neighborhood where a number of H-E-B's food manufacturing plants are based. Even the July opening of the facility made a splash when members of the local media videotaped the event and featured stories about it.

"We're one-of-a-kind in terms of having this," said Bill Fry, H-E-B's vice president of quality control, who is not aware of any other retailers with a similar quality-assurance operation.

H-E-B officials started making plans for the new lab long before last year's flurry of meat recalls and illnesses linked to the meats. Two of the recalls, in fact, were big enough to set records. Ready-to-eat turkey and chicken linked to Listeria monocytogenes prompted Pilgrim's Pride to call back more than 27 million pounds of product -- the third-largest meat recall in history. After discovering E. coli 0157:H7 in some meat, ConAgra Beef Co. recalled 19 million pounds of ground beef, the nation's fifth-largest callback involving a protein.

Big recalls make headlines and raise meat-safety questions in people's minds. And while retailers are not always responsible for the conditions that cause meat to become contaminated, they are the ones who deal directly with consumers, who may not separate the bad meat from the store where they bought it, one industry watcher noted.

"You hear reports all the time about E. coli coming out of meat-packing plants," said Greg Kahn, founder and chief executive officer of Kahn Research Group, Charlotte, N.C. "It's outside of the retailer's control. Yet if you buy it from the store, you blame the store. [Retailers] are still blamed in the minds of consumers."

H-E-B's state-of-the art food lab sends a reassuring message to consumers, and it no doubt reduces the retailer's risk of bringing tainted food into the stores, he said. "It's a good preventive measure," Kahn said. "Doing something like that benefits the brand overall. It makes people think stores care about them."

H-E-B historically has taken a proactive position on food-safety matters, and the strategy has paid off. It was a summer day in 1999 when officials realized through tests there was a problem with ground beef. Without working with the U.S. Department of Agriculture, which company officials said would have slowed them down, they went directly to consumers and asked them to return packages of the meat in question.

"We had almost 1,000 consumers return product," said Richard Parker, H-E-B's manager of quality assurance. "We contacted all those people back. The following week, around Labor Day, our meat sales were up by $2 million in comparison to the same week the prior year. That was actually 4% to 5% higher than what we anticipated," he said.

Technicians rarely detect E. coli bacteria in the ground beef they sample. In eight years of ground beef testing, the company rejected just four loads of meat, Fry said.

Produce is another key area of the lab's work. To run the pesticide residue-monitoring program, H-E-B partnered in 1989 with a leading independent research and development firm capable of delivering quick turnaround and consistently reliable results. San Antonio-based Southwest Research Institute monitors H-E-B's produce for more than 140 pesticides and provides associates with daily test results. Using them, the retailer works out problems with growers whose products exceed pesticide limits. Over the years, officials have seen a steady reduction in the amount of produce that gets turned down.

"When we first started the pesticide program in 1989, we rejected 2 1/2% of total loads tested," Fry said. "Now, less than 1% of total loads we test is rejected."

Achieving that reduction wasn't easy, though. Southwest's stellar reputation helped the retailer respond to the frequent challenges brought by angry growers who had a hard time swallowing results that showed higher-than-acceptable levels of pesticides.

"We've never had to overturn any of their findings," Parker said. "People would challenge the results but now they've calmed down. Now it's only once in a while."

Now many growers interested in increasing their margins also are using expensive pesticides more "judiciously," Fry said.

Aside from pesticide residues, H-E-B's quality-assurance staff also manages and monitors produce hygiene. When the company first started, officials took a larger number of samples from a larger group of growers, looking for traces of generic E. coli that could be a sign of a more serious problem. Eventually, staff identified the growers who consistently provided the company with acceptable produce and were able to narrow the testing down to a smaller number of companies. Certain produce items with a higher-risk history are also subject to more frequent tests.

The results give the company comparative data against which to compare products from various growers from different parts of the country.

"We have dropped some produce suppliers as a result of this," Fry said. "Our customers are assured of getting safe produce."

While Fry described the lab as a good investment, many retailers would balk at the expense involved in running such a facility. H-E-B budgets $1 million to $1.2 million for the lab's annual expenses. Indeed, industry observers, while lauding H-E-B for going the extra mile, said they don't expect to see every supermarket chain follow H-E-B's lead. "It's a very modest investment considering the public health benefit," said Burt Flickinger, a food-industry consultant with the Strategic Resource Group, Stratford, Conn., and New York. "Some companies look and don't want to take on the expense. Unfortunately, they rely on [government agencies], which is not enough."

To bolster meat safety and reduce recalls, "you'll see retailers moving to meat processors that are developing pathogen-free products," he predicted.

Operating the lab actually makes good business sense, officials from H-E-B said. Perhaps the greatest advantage the test lab offers is speed.

"Having the scientific capability gives us a competitive advantage," Fry said. "We can react much more quickly to food-safety issues. It gives the company more control."