Dole's decision

Dole has announced to its buyers that it is instituting a new food safety assessment starting April 29. We have some coverage in The Packer this week about the reasons for the letter and reaction from various parties.


The letter, signed by Mike Cavallero of Dole Fresh Fruit North America and Eric Schwartz of Dole Fresh Vegetables, describes Dole's leadership efforts in the formation of the California Leafy Greens Marketing Agreement and the company's substantial efforts to enhance food safety.

"We are increasing field buffer zones (which will reduce yields), enhancing traceability, and implementing raw material testing, among other efforts. These enhancements are not one-time events, but are a part of doing business – ours and yours – for the future."


Then, Dole asks buyers for their support to help defray costs:

As you are aware, under the Marketing Agreement, the California Department of Food and Agriculture has put in place a $0.02 per carton assessment, solely to cover costs of the new government inspection program. This $0.02 per carton assessment is only a fraction of the incremental food safety costs we are incurring. Dole Fresh Vegetables incremental costs cover our enhanced practices, which are not limited to California or just leafy greens. Based on the magnitude of these incremental costs, we are asking for your understanding and support in passing along a portion of these costs. Effective Sunday, April 29, 2007, we will be implementing a cost increase of $0.22 per carton, across all cartons, for Dole Fresh Vegetables products.

TK: This issue has so many facets it is difficult to know where to start. We are in an unprecedented period in the history of leafy greens marketing. Human effort, capital and technology are being intensively brought to bear on the issue of pathogens on lettuce and leafy greens. How do marketers pay for these costs? Dole suggests a food safety assessment on their entire vegetable line as one approach. Ultimately, competitive forces will influence how food safety costs are passed on. Over time I would expect those costs to be built in, not added on, to the price of produce. If some aspect of what Dole is doing - perhaps raw material testing, for example - is shown to substantially increase consumer confidence and enhance leafy green safety, then the assessment may be sustainable.