Year to Recall

Year to Recall

The passage of the Food Safety Modernization Act brought a positive conclusion to a year marred by a giant oil spill and another foodborne illness outbreak

Far beneath the surface of the Gulf of Mexico, underwater cameras captured some of the most indelible news footage of 2010. After an explosion in April, millions of gallons of crude oil spewed from the wreckage of BP's Deepwater Horizon oil rig, and no one, it seemed, knew how to stop it.

Less than five years after Hurricane Katrina devastated the Gulf Coast, this fresh tragedy seemed destined to destroy the region's seafood and tourism industries. Cleanup efforts began in earnest, but the oil just kept flowing. It would be September before the well was fully sealed.

Fortunately, the cleanup efforts appear to have worked much better than expected, and federal officials have already reopened virtually all of the Gulf to commercial fishing operations after extensively testing.

SN's annual Year in Review issue presents an opportunity to take a look back at major events of the past year, and assess their lasting impact on food retailing. In the case of the Gulf oil spill, one would hope for minimal lasting impact. Similarly, this summer's recall of half a billion eggs from Wright County Egg and Hillandale Farms in Iowa was an event that most everyone in the industry would hope to learn from and then leave in the past.

But, Fresh Market this week also takes a look at two stories that are still taking shape. First, Wal-Mart [3] Stores recently announced plans to double its sourcing of locally produced foods, and when the Bentonville behemoth makes a move, it tends to reverberate throughout the supply chain.

And, the Food Safety Modernization Act was, at long last, passed by both houses of Congress. Although some food industry factions are upset with amendments that offer exemptions to small farmers, the bill will give the U.S. Food and Drug Administration much-needed new powers, including the authority to order mandatory recalls.

Retailers Navigate Gulf Spill's Aftermath

CRUDE OIL GUSHING daily into the Gulf of Mexico just off Louisiana's coast had retailers and fishermen temporarily stymied about the fate of local seafood, but they soon went into action to try to minimize effects on the market.

One of 2010's most tragic events, BP's massive oil spill not only took lives and damaged the environment, it sent shock waves through the entire food industry. Local retailers gained high praise for acting fast and taking proactive measures to obtain safe product.

In the days following the explosion of the Deepwater Horizon oil rig on April 20, worry prevailed. But even as the National Oceanic and Atmospheric Administration took the cautionary measure of quickly closing particular areas of the Gulf, some retailers and their suppliers got together to source product in unaffected zones, and made sure even those catches were tested and re-tested.

One family-owned independent, Rouses Markets, Thibodeaux, La., got busy right away stocking up with safe product before the damage spread. Because Rouses has an IQF system and plenty of storage space, they quickly had a corner on the Gulf shrimp market.

“By doing what we did, and also getting right out there with the fishermen and the agencies testing the products, we earned the customer's confidence. Our message was, ‘If you shop at Rouses, your food is safe,’ and we got that message out by radio ads, our ad circulars, anyway we could,” recalled James Breuhl, Rouses' director of seafood.

The biggest challenge was getting oysters, Breuhl and others agreed. For six months, oysters weren't available. State officials decided to divert freshwater from estuaries in an attempt to keep the oil away from the shore. The tactic succeeded, but the freshwater killed nearly half the oyster beds, said Harlon Pierce, chairman of the Louisiana Seafood Promotion & Marketing Board.

“In fact, the oil itself had zero impact on Louisiana fisheries. It was the mitigating measures taken to keep the oil at bay that had the big impact,” he said.

The freshwater diversion was one of those. So was NOAA's temporary closing of parts of the Gulf. Many fishermen and shrimpers had been recruited to work for BP to help clean up the spreading oil.

In November, oysters came back.

“In Louisiana, if you have a turkey, you have to have oyster dressing. We sold 40,000 pounds of oysters during Thanksgiving week,” Breuhl said. “We had no problem getting the quantities we needed. Our sales for all Gulf seafood were up 18% over the same week a year ago.”

Overall, Gulf seafood prices have risen 20% to 25% and that has kept sales down by 10%. “But some of the competition haven't had the products they need at all,” Breuhl said.

Perception as well as prices have kept sales down. Ewell Smith, executive director of the Louisiana Seafood Promotion and Marketing Board, with others, is working with government agencies, Secretary of Navy Ray Mabus, the local tourist bureau and chefs across the country to help spread the word that Gulf seafood is safe.

Smith said the seafood is the safest in the world. He's emphasized that he's been eating Gulf seafood four and five times a week.

Prices are above normal because fishermen are in many cases traveling 100 and 200 more miles out for their catch.

The price of crabs, oysters and shrimp will remain above normal for quite a while, Pierce told SN, but he said the crawfish and finfish crops are good.

Except for the immediate area, most supermarkets near the Gulf felt little impact from the spill.

In Texas, Scott Nettles, business director for market and seafood of Lubbock-based United Supermarkets [4], said the oil spill had little or no effect on United's seafood this year.

“We were able to source ample supply to meet demand in all our stores,” said Nettles. “Sales this year have been about the same as the previous year for shrimp, oysters and crab.”

And in Florida, Publix Super Markets [5] saw little impact, officials said, although prices of Gulf items are still above pre-spill levels.

“We had very little impact aside from some short-term availability issues on fresh shrimp and oysters,” said Maria Brous, spokeswoman for Lakeland, Fla.-based Publix.

— Roseanne Harper

Wal-Mart Doubles Local Sourcing

THIS YEAR, local foods got bigger. In October, Wal-Mart Stores [3] plunged deeper into the local market, announcing intentions to increase its sale of locally sourced produce in the U.S. from 4.5% to 9% by 2015.

As part of this initiative, Wal-Mart stated it will train a million farmers and farm workers; generate a 10% to 15% increase in income for the small and medium-sized farmers from whom it sources; and sell “$1 billion of food sourced from 1 million small and medium farmers,” according to a company announcement.

Wal-Mart is far from the first produce retailer to embrace local sourcing and sustainable agriculture, but because of its influence, many rural locations, and definition of local as grown and sold in the same state, Wal-Mart may have it easier than others in implementing its broader local goals.

Wal-Mart also announced global plans to use only sustainable palm oil in its private-label products and only source beef “that does not contribute to the deforestation of the Amazon rainforest.”

Starting 2011, Wal-Mart Executive Vice President Leslie Dach announced that Wal-Mart will ask growers questions about water, fertilizer and chemical use, as part of its in-progress sustainability index.

Because of the scope of Wal-Mart's produce business, its local agricultural goals are likely to influence industry strategies. Wal-Mart's move will accelerate the long-term local sustainability trends already taking place in food retail, said Jay Jacobowitz, president of the Brattleboro, Vt.-based Retail Insights, a natural products consultant.

“Over time, we're talking a generation here, 20 to 30 years, there could be a fundamental restructuring of the supply chain for certainly a portion, a significant portion, of the agriculture that winds up on store shelves and in people's shopping carts.”

Wal-Mart's sustainable agriculture goals do not enjoy universal support. Some food activism groups have continued to view the retail giant's moves with skepticism. Ronnie Cummins, international director of the Organic Consumers Association, called Wal-Mart's plan “local-washing.”

“Eleven cents on the dollar now is being spent by consumers who are really trying to not only improve their health, but improve the health of the planet. That's why Wal-Mart and these big players are making these PR moves,” Cummins said, advocating for produce labels to include state, city or county grown, in addition to information on the use of agricultural chemicals and genetic engineering.

Cummins told SN that chemical fertilizers, pesticides and processing have much more of a significant impact on industrial farming's carbon footprint than food miles do.

Wal-Mart's new sustainable agriculture goals, which include target reductions in food waste, are in line with the retailer's overall stated environmental goals, which include running entirely on renewable energy, producing no waste, and selling “products that sustain people and the environment.” The retailer's agriculture goals stand to not only potentially increase Wal-Mart's revenue through decreased freight costs, but to further mold its growing green-friendly image.

“Nobody can afford not to be green,” said Jacobowitz. He told SN that retailers need to support environmental initiatives “at least deep enough for the PR effect to work, and it needs to be deeper than that over time, because consumers will see that it's just a veneer.”

— Jenna Telesca

Egg Recall Coincides With New Regulations

THE LATE SUMMER egg recall shook consumer trust when over half a billion eggs from Wright County Egg and Hillandale Farms were considered a potential risk for Salmonella Enteritidis. According to the U.S. Centers for Disease Control and Prevention, the outbreak ran from May 1 to Nov. 30, and caused at least 1,939 reported illnesses.

As the list of potentially contaminated eggs grew, consumers became acquainted with egg carton Julian dates and plant numbers from the recall listings on the Food and Drug Administration's website.

“The most striking problem brought to light by the recall is how contamination of food from one high-volume producer or facility can have such far-reaching effects,” said Alison A. Evans, assistant professor of epidemiology and biostatistics at Drexel University's School of Public Health, who noted the outbreak crossed through multiple states and affected eggs at retailers and restaurants.

Both suppliers voluntarily recalled the potentially hazardous eggs, and the FDA inspected their facilities. In the reports posted online, the FDA inspectors noted, among other violations, insecure laying areas, rodents and problems with manure disposal, including “excessive amounts of manure in manure pits” at Wright County Farms and a liquid manure leak at Hillandale Farms.

The inspections left many consumers wondering how these practices were not stopped earlier.

The recall reached its height weeks after the FDA released new guidelines for egg safety and Salmonella prevention effective on July 9. Among the new safety requirements are rules for egg refrigeration, pest control, Salmonella testing and disinfection of Salmonella-infected poultry houses. These rules apply to shell eggs “not processed with a treatment, such as pasteurization,” said the FDA press release.

“I think the new safety requirements, if rigorously enforced, will do a lot to reduce salmonella risk in eggs, but there hasn't been enough time yet to see what the full impact will be,” said Evans.

The recall may have helped bolster support for the Food Safety Modernization Act, which had been held up for months in the Senate. If the bill is ultimately signed into law, it will give the FDA more power in food regulation enforcement in prevention, detection and response. The act would allow for fine collection for recalls and repeated inspections; give power to suspend registrations of potentially hazardous facilities; and require food traceability standards, along with many other requirements.

The FDA has since started allowing Hillandale Farms and Wright County Egg to resume shipping eggs for sale from selected egg houses, as of October and late November, respectively. The FDA ensured continued surveillance at these locations.

As time passes, the recall seems to have become less of a worry for consumers, at least as far as buying habits are concerned. Egg sales predictably dipped during the outbreak, but citing data from the SymphonyIRI Group, the Associated Press reported on Dec. 8 that egg sales have since returned to normal.

“As our food supply becomes more and more dependent on large-volume producers with a wide geographic reach, our methods for identifying and controlling outbreaks of disease in humans have to keep pace,” said Evans.

— Jenna Telesca

Food Safety Modernization Act Passes

AFTER MORE THAN a year and a half of setbacks and delays, the House and Senate this month passed a historic piece of food safety legislation. Pending President Obama's signature, the Food Safety Modernization Act will give the U.S. Food and Drug Administration funding for new inspectors, and will give the agency several new powers, such as the authority to order a mandatory recall of contaminated food.

In a November op-ed published by the New York Times, food activists Michael Pollan and Eric Schlosser described the bill as “the best opportunity in a generation to improve the safety of the American food supply.” And, shortly after the Senate passed the bill, Food Marketing Institute President and Chief Executive Officer Leslie G. Sarasin [6] praised the legislation: “We have taken another important step toward modernizing America's food safety network and focusing on preventing problems before they occur, rather than just reacting to them.”

Not everyone was pleased, however. The Senate's version of the bill included several amendments that exempted small farmers from traceability and record-keeping requirements, and gave them the option of working with local and state agencies, instead of the FDA. These amendments helped allay concerns among some farmers that the new standards would be too expensive for small growers to comply with, and that new fees, audits and paperwork would effectively drive them out of business.

Organizations such as the Produce Marketing Association and the United Fresh Produce Association have countered that the type of preventative controls that the new law will put in place are most effective when everyone in the industry is subject to the same science-based safety standards. But, whether lawmakers felt that this issue was not a concern, or whether they were simply in a rush to reconcile the two versions of the bill before the end of the current Congress, the House essentially approved the Senate's version, including its amendments, and tacked it onto a major appropriations bill.

“The Tester amendment inserted into the Senate bill, and now passed by the House, weakens public health protection by exempting some producers and processors based only on the size of their business, their geographic location or to whom they sell their products,” Robert Guenther, senior vice president of United Fresh, said in a prepared statement.

“The statutory enactment of non-science-based exemptions would limit FDA's ability to assure consumers that all foods they purchase, whether at grocery stores, restaurants, farm markets or elsewhere, have met the same food safety standards. We fear that this profound error will come back to haunt the Congress, public health agencies, consumers and even those who thought they would benefit from food safety exemptions.”

One would hope that Guenther's words don't prove prophetic. While it is understandable that small businesses would be concerned about a major new bill that initially held all farms — large and small — to the same standards, rumors that were spread about the legislation were often wildly misinformed. Claims that the bill would ban organic foods and outlaw backyard gardens circulated on the Internet. Many food activism groups argued that groups like PMA and United Fresh had only expressed support for the legislation because their members would prefer to see local growers driven out of business by a bullying FDA.

This was all very unfortunate. Small growers need look no further than the U.S. restaurant industry to find examples of small businesses that thrive in a regulated environment that involves frequent safety inspections. Moreover, the FDA currently inspects many major food production facilities only once every five years. The idea that the agency would use its new powers to deploy armies of inspectors to harass small farms, rather than have those inspectors address much more obvious areas of concern, never made much sense.

But, this bill is better than nothing. Much better. It will allow the FDA to take a more proactive approach to safety, it will increase accountability and oversight of major food producers, and it will give the agency some teeth when it is forced to deal with bad actors.

— Matthew Enis