ORLANDO, Fla. — With global markets in turmoil, many businesses are facing an uncertain future. And Bryan Silbermann, president of the Produce Marketing Association, didn't mince words when describing the many additional challenges facing the produce industry during his annual State of the Industry Address here at PMA's 2008 Fresh Summit convention. Notably, he pointed to the toll that foodborne illness outbreaks — such as this summer's Salmonella Saintpaul outbreak — have continued to take on consumer confidence.
“We are witnessing declining trust in our government institutions, our financial institutions, our public health institutions and, yes, in our agri-food institutions,” Silbermann said. “In a time of global upheaval made even more frightening by the scourge of terrorism and the warming of our planet, more people are turning inward, searching for the basics, looking for closer connections in their lives and with their food.”
Yet concerns about food safety can be addressed by a unified industry. And, as daunting as the economic landscape may now appear, the produce industry in many ways is well positioned to respond to emerging trends, provided it recognizes that tumultuous times demand creative new solutions.
“As a result of consumers' desires to reconnect, the move to small is fast becoming a very big force, in everything from stores to cars, from marketing to political campaigning,” he said. “It's a shift as powerful as Mother Nature herself, a creative destruction we'll see over the next decade as marketplace disruptors will force us to alter the way we do business. As we've focused on the drive to become more corporate, I'd suggest that we may have passed the consumer heading in the opposite direction, on the way back down to basics.”
This trend toward smaller things, this move back to the basics, is already manifesting itself in smaller, neighborhood-focused supermarkets, Silbermann said. Similarly, the booming local foods movement is a result of several related trends: the desire to support one's local community, concerns about sustainability and a desire to have more of a connection with one's food.
“As Mark Bittman just wrote in The New York Times: ‘Simply put, many more Americans are seeing food as more than a necessary fuel whose only requirement is that it can be obtained and consumed without much difficulty or cost,’” Silbermann said.
“Friends, this should be music to our ears. People are looking for the face behind the food, the story behind the sustenance, the narrative behind the necessity. This social movement is a market disruptor, a pushing back against industrial agriculture and our society's reliance on excessively processed food. Tell me: Who is better positioned to deliver the solutions than we are? We in fresh produce should own the space in consumers' minds for what is seasonal, fresh, nutritious, family-farmed, sustainable, artisanal [and] organic.”
The drive toward regional agriculture is accelerating, Silbermann noted, partly in response to the popularity of locally grown foods, and partly due to concerns from growers that the era of cheap fuel and low transportation costs is most likely over. Areas including Michigan, New Jersey, New York, Ohio and parts of Canada are becoming popular growing regions again, and greenhouse production “has exploded” throughout North America, he said.
“Expect yet another evolution in our farming models as corporate farming and marketing merges with smaller operations in the Midwest, the east and Mexico,” Silbermann added.
“My friends, we are witnessing more than food locavores at work here. The trend to local is just one component in a fundamental societal shift with multiple causes.”
Similarly, health and wellness concerns are converging with an unrelated trend — the rising cost of meat and poultry — to lead the restaurant industry toward a new focus on produce in their recipes.
“Like retail, foodservice is learning to adapt in the face of dramatic market disruptions. Last week [the National Restaurant Association] reported that restaurants are facing their toughest time in 17 years. Wholesale food costs have jumped more than any time in almost three decades, while retail stores are making inroads into food-to-go. NRA says consumers are eating out less … and spending less when they do.
“As menu developers focus intently on costs, the value of produce in managing food costs may finally be getting its due. Retooled menus are downsizing or eliminating fast-rising, higher-priced proteins in favor of even more innovative uses of produce. They are undergoing transformations, with produce getting more share of the plate.”
Of course, these opportunities may mean little for many growers if the produce industry fails to address consumer concerns regarding food safety, or gaps in its traceability systems.
“Two years ago, right after the [E. coli outbreak] spinach crisis, I used two words as a call to action: Never Again. We have made progress, but we have a long way to go. We've had, not one major outbreak since then, but several. The most notable was this past summer's fiasco with Salmonella Saintpaul, in which first tomatoes and then peppers [instead] were implicated in causing more than a thousand illnesses.”
Silbermann pointed out that American farms grow and transport some 81 billion pounds of produce from the United States and abroad each year, and that hundreds of millions of people consume fresh fruits and vegetables each day without getting sick. Legislators, regulators and consumers have little understanding of how well the produce supply chain typically works, but this is no excuse, he said.
“The fact that the public, disconnected from its food supply, has little understanding of our challenges in managing nature is not remarkable,” he said. “Their lack of knowledge cannot be our crutch; their perception is our reality.”
The California and Arizona leafy greens marketing agreements have helped improve standards and restore consumer confidence in those segments of the industry, Silbermann said. And, the produce industry has launched other initiatives, such as the Center for Produce Safety at the University of California, Davis, that have helped facilitate the sharing of safety-related information between growers and researchers.
The industry most recently announced another milestone in its efforts toward standardized, comprehensive electronic traceability throughout the supply chain, with three dozen growers, packers and retailers publicly committing to meet the Produce Traceability Initiative's goals before 2012.
“We can't afford to continue the slow drip, drip, drip of eroding consumer confidence,” Silbermann said. “Like it or not, our world has been disrupted by the new realities of food safety. For those of you discussing if new legislation will happen, the question is not if, but when.”
He continued: “We must advocate for regulations that are science- and risk-based, to protect companies who want to do things right — and remove those who cannot or will not. That should be our commitment to public health and confidence.”