FOREIGN AFFAIRS 2003

Robert Vosburgh

For many years, selection in the supermarket produce department was largely determined by domestic growing schedules and the ability of grower-shippers to speed ripe or near-ripe product to market. Like the seasons themselves, this was how the field of summer greens along the wet rack gave way to winter's bins of well-stacked citrus. The department was naturally limited by availability.

Today's super-size produce department of 500 or more stockkeeping units is certainly not the result of improvements in domestic agricultural capabilities alone; rather, it reflects retailers' increasing reliance on imported product. According to the latest FreshTrack report, conducted by Cornell University for the Produce Marketing Association, imports of fresh and frozen fruit in 2000 totaled 7.3 million metric tons, while fresh and frozen vegetables from overseas topped 3.8 million metric tons. Average growth rates between 1990 and 2000 were 7.8% for fruit and 8.1% for vegetables.

As imports become more prevalent in produce, so does their impact on the industry when something interrupts their flow. Mother Nature is one variable capable of such influence; international bureaucracy is another.

On Oct. 28, the Food and Drug Administration surprised the industry when it issued an import alert, just before Halloween, effectively barring the importation of Mexican cantaloupe into the United States. The action came after the Centers for Disease Control and Prevention, Atlanta, was preparing to publish findings on a series of Salmonella Poona outbreaks all traced back to the Mexican-grown melon. According to federal officials, there were four outbreaks over the past three years in the Southwest, resulting in at least two deaths and nearly two dozen hospitalizations.

The immediate impact wasn't severe, since the bulk of the harvest was still some months away. Since then, however, only two growers -- who ship fruit to Giumarra Cos., Nogales, Ariz. -- have met the FDA food safety standards and the remaining growers south of the border are scrambling to meet the new rules so they can shake off the stigma of inferior, tainted product -- and act in time to save their lucrative export deals coming due this spring. In 2001, Mexico shipped nearly 104,000 metric tons of cantaloupe to the United States.

"We're basically looking for assurances that the crop that is being grown is safe and complies with the principles of Good Agricultural Practices. As applications come in, we'll review them and turn them around as quickly as possible," said Sebastian Cianci, an FDA spokesman.

"We don't want to penalize firms which do have a safe product, [but] the problem seemed to be widespread enough that we made [the ban] countrywide," he told SN.

Except for some consumer media coverage during the initial announcement, most of the activity has been playing out behind the scenes. Nevertheless, there was an impact at the retail level, according to a number of observers.

"The U.S. consumer doesn't differentiate where their produce comes from. So, when they read there's a problem with cantaloupe, the U.S. producers will tell you the week after the FDA issued the import alert, all cantaloupe sales went down," said Tom Stenzel, president of the United Fresh Fruit and Vegetable Association, Washington. "It didn't matter where the product was from."

Jeff Stephens, communications director for Scientific Certification Systems, Emeryville, Calif., has been seeing domestic operators trying to distance themselves from the controversy.

"I've noticed 'Grown in the USA' stickers on cantaloupes, likely coming from U.S.-based growers," he said. "It's an interesting reaction to all of this, something you don't usually see."

Mexican agricultural authorities were surprised at the scope of the action, and lodged a protest, demanding that FDA lift the ban and allow exports to resume.

"The discriminatory nature of the FDA action is apparent to Mexico as many growers in the United States and other countries do not meet the standards being imposed on Mexico," said Enrique Lobo, minister of agricultural affairs, in a statement issued by the Mexican Embassy in Washington after the FDA's announcement. "Similar problems have occurred with imports from countries other than Mexico but none but Mexico has been subject to a countrywide ban."

After the ban was announced, the Fresh Produce Association of the Americas, the Nogales, Ariz.-based trade organization representing Mexico's growers, sent U.S. retailers information packets detailing the situation, as a first step to counter negative press reports surrounding the ban.

"One of the first things we've been working on is a mailing to all retailers with some fact sheets and explanations as to what is and what is not happening in regards to cantaloupes so that they have an accurate picture," said Lee Frankel, FPAA president.

Many Mexican growers have long-established food-safety programs in place, industry observers told SN, because their primary customer is an American company. SCS's Stephens said the quality of the farm operations has improved dramatically in relation to increased demand for accountability from the United States.

"It's an overgeneralization to say that Mexican cantaloupe growers are doing a poor job. From our perspective there are many down there doing an outstanding job, that are doing perhaps even better than some growers in the United States," he said. "Still, there's [a poor] perception out there among consumers in regards to imported product, and a lot of [our job] is education that's used to bring a true understanding that these are state-of-the-art growers."

SCS helped the two Mexican growers currently approved by FDA with their food-safety programs, which he pointed out were already in place at the time of the ban. The firm is currently working with a half-dozen more farms to navigate the international bureaucracy.

"Much of the difficulty has been truly understanding what is needed, the best format to use and the best presentation to make," he said of the process. "All of the growers we represent have programs already in place, so it's a matter of putting it in the right format and gathering the right information. None of these growers has had to start from scratch."

Indeed, the FDA said it's a lack of detail on the food-safety programs that is holding the process up. Cianci said the FDA is supportive of Mexico's own efforts to develop a national food-safety program based on Good Agricultural Practices and Good Manufacturing Practices.

"Mexico put out some guidelines for farms that we're OK with," he said. "That's the best bet for growers seeking to come off the ban; but so far the applications sent in haven't had enough information or detail for us to grant further permission."

The food-safety branch of Mexico's own Department of Agriculture is developing a certification program for all of its produce, he added.

Retailers themselves have grown more sophisticated over the past few years, mandating food-safety audits for suppliers before doing any kind of business. United's Stenzel said the great strides in self-regulation made by retailers and suppliers may one day eliminate the need for government agency intervention.

"I have a lot of faith in what major retailers are doing in their selection of vendors. Maybe 20 years ago, they didn't know who they were buying from. But that's not the case anymore," said Stenzel. "If you're talking about a Safeway or Kroger or Wal-Mart, they know whose cantaloupes they're buying and they have made their own determinations as to trust and quality."

Stenzel noted that the ban took many by surprise because both the United States and Mexico had been engaged in an ongoing series of discussions on food-safety and import/export-related issues. The shock was not the outbreak, but the sudden, total ban.

"There's enough market disruption from nature without having these artificial disruptions," he said. "Both sides needed to do something to avoid the way it played out. They needed to negotiate this thing in a more orderly process so that the grower-shippers could know what they had to comply with, go through with the procedures and work toward approval."

For his part, Frankel said the FPAA is working with growers not only to gain U.S. accreditation, but to save the region's reputation. He knows volume-hungry retailers can easily shop other deals to secure off-season product, and he fears Mexico may lose its niche as a winter supplier of cantaloupe to U.S. consumers.

"There's a sense that it will be difficult for Mexico to regain its place in the market after the legal, technical and scientific issues are finally resolved. Marketing companies can set up stronger deals in the Caribbean basin countries," he lamented. "It means we'll have to focus that much more on quality and freshness and ripeness, where Mexico has an advantage."

He said that, while lot of growers might be certified, they may not be able to ship product before the end of the Mexican deal in May.