PHOENIX -- Two of the hottest issues affecting relations between grower/shippers and retailers -- food-safety audits and retail trade practices -- are on the agenda at the annual convention of the United Fresh Fruit and Vegetable Association, to convene here Feb. 26.
Both subjects have attracted a lot of attention not only because they are relatively new to the fresh-produce industry, they are two developments redefining the relationship between grower/shippers and retailers. According to Tom Stenzel, president of the Alexandria, Va.-based organization, the goal of the forums is to bring all parties to the table for an airing of viewpoints, and, hopefully, to put into place a number of guidelines that will become an industrywide standard.
Food-Safety Audits
United's Production and Quality Assurance Council is chairing the meeting on food-safety audits because a critical juncture has been reached in the development of vendor checks, and the time is ripe for all affected segments of the industry to come together to work out a common blueprint, according to Dr. Donna Garren, United's vice president of scientific and technical affairs.
"We hope for some ideas to act upon," she said of the meeting's agenda. "The ultimate goal on both sides is food safety. We have to determine the best avenue to pursue that."
Retail giants Safeway, Pleasanton, Calif., and Albertson's, Boise, Idaho, are already in different stages of implementing an audit program. While the idea is admirable, and even desirable, Garren said that that multiple plans could endanger all but the largest grower/shippers because of the cost associated with compliance. And, the more numerous the programs, the higher the financial burden on grower/shippers.
"Some suppliers are hiring folks just to take care of the audits that come through, because it's not just limited to retail. It's food service, too," she said. "We need to have something that satisfies the basic concerns of all parties and yet won't drive anyone out of business."
Retailers invited to participate in the meeting include A&P, Montvale, N.J.; Kroger Co., Cincinnati; and Wal-Mart, Bentonville, Ark.; as well as Safeway and Albertson's. While supermarkets have expressed a willingness to adopt a common language, there remains a host of potential variables. For example, Garren said that the audit firms may be using different grading systems in their evaluations, which can easily cause confusion.
"That's why each of the auditors will provide a short presentation on what type of services they offer, so we can see what's actually out there in the way of services, and to find out what everybody would be happy with," she said.
To that end, the evaluation itself could be based on one system or a hybrid of several. United has been developing its own program, as are other trade groups. One new program has just been published by the Food Marketing Institute, Washington, and Food Distributors International, Falls Church, Va. The Food Safety Initiative is a vendor qualification program comprised of questionnaires devoted to each fresh-food category: produce, dairy/eggs, meat/poultry and seafood. A separate list of queries for general vendors is meant to be completed by suppliers in some of the categories as well.
The questionnaire for produce vendors relies on current rules and guidelines prescribed by federal regulators. It examines a company's adherence to Good Agricultural Practices, the Guide to Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables and, in some cases, elements of Good Manufacturing Practices (in the case of fresh-cut processors, for instance).
"As long as there is some type of standard that [suppliers] can go by, and we are able to give guidance to the auditing community on specifics of the process," said Garren of the effort.
Trade Practices
The range of retail trade practices -- from slotting fees to warehouse opening charges -- has been a growing source of friction between supermarket operators and grower/shippers in recent years. As United's president, Stenzel has been acting as a referee of sorts, both in individual disputes, and in the larger effort to determine a fair and equitable solution.
Many industry observers fear that, if all sides cannot reach an agreement on what is proper and what is objectionable, the federal government may dictate the rules. There are currently several official investigations under way, including one ordered by a congressional committee, as well as a fact-finding probe by the research arm of the U.S. Department of Agriculture.
"It's not our wish or intent to see new government regulation in the marketplace," said Stenzel. "But this debate has certainly created a forum in which these questions can be addressed."
One benefit of public discussion has been the opportunity for both retailers and suppliers of all products to ask themselves if the fees constitute good business practice, according to Stenzel.
"Slotting fees were the secret that no one wanted to talk about and I think that public discussion, with pros and cons, is good for everybody in the end," he said, adding that there are a growing number of retailers who charge fees only for dedicated, product-related promotions, such as tastings and discounts, or none at all.
Nevertheless, the past decade has been characterized as "adversarial" when discussing the relationship between retailers and grower/shippers. Stenzel sees the pendulum swinging back to a higher level of cooperation, especially as the supermarket industry continues down the road of consolidation.
"That megachain retailer needs so much volume that they're going to become dependent on suppliers in a way that they have never been," he said. "Likewise, grower/shippers supplying these chains are spending tremendous capital on food-safety audits, logistics, technology and distribution systems and coding. Only a few shippers are going to be able to jump through that hoop, so the relationship at that level becomes more dependent on that side as well."
One result of the gathering -- which includes participation by representatives of government agencies -- may be a call for creation of a "code of conduct," whereby an agency like the Federal Trade Commission would issue a written advisory document. Stenzel sees this as a key development in removing the animosity characterizing current industry relationships.
"We're not talking about establishing new criteria," he said. "We're trying to get a better grip on what is appropriate in a very complicated area."
