National Retail Report

In case you haven't seen the USDA's National Fruit and Vegetable Retail report, be sure to look it up here. By the way, no market news reports today because of observance of the Columbus Day holiday.
In the statistics below, I was surprised with the extent of ad support for tomatoes on the vine in the vegetable subset.



The report provides a nifty feature, a pie chart of fruits as a percentage of total fruit ads:
Here is the first breakdown from Oct. 5, Vol. 1, No. 1
Fruits as percentage of total fruit ads:
Mangoes: 4%
Cantaloupe: 6%
Blueberries: 1%
Bananas,organic: 2%
Bananas: 4%
Pears, Bartlett: 16%
Oranges, navel: 1%
Pineapple: 3%
Plums: 1%
Strawberries: 2%
Strawberries, organic: 1%
Lemons: 0%
Grapes,green/red: 14%
Clementines: 0%
Grapefruit, red: 1%
Limes: 1%
Apples,red delicious 3%
Peaches: 5%
Nectarines: 4%
Avocados, hass: 3%





Vegetables as Percentage of Total Vegetable Ads
Beans,round green: 2%
Asparagus: 7%
Broccoli, organic: 1%
Broccoli: 2%
Corn: 2%
Celery: 4%
Cabbage: 3%
Tomatoes,grape:4%
Tomatoes,grape organic: 2%
Squash, zucchini: 6%
Potatoes, russet: 3%
Peppers, bell red: 6%
Peppers, bell green: 4%
Onions, yellow: 4%
Onions, sweet: 5%
Tomatoes on the vine: 14%
Tomatoes, organic: 0%
Sweet Potatoes: 4%
Tomatoes: 3%
Mushrooms, white: 7%
Cucumbers: 4%
Lettuce,romaine: 2%
Lettuce,iceberg: 2%
Carrots,baby organic: 5%:
Carrots, baby: 7%

New flow for Fruit Logistica

Guest blogger Lance Jungmeyer here ....

The U.S. market is gearing up for the PMA Fresh Summit in Houston.

Not content to sit by the wayside, the marketers of FruitLogistica are trying to illustrate how their 2008 show will be different from previous incarnations.

The show will feature more halls, with all of them on one level instead of two or three.

The important change, at least as far as North, South and Central American exhibitors go, is in the change of traffic flow that theoretically will bring more footsteps to Hall 25, or the Americas Hall.

In the past, visitors had to go up a flight of stairs and out of their way in order to happen upon the Americas Hall. Exhibitors complained and Fruit Logistica listened.

Next year will be my fourth trip to Fruit Logistica. I've found it to be an engaging event, a feast for the senses. I don't generally accomplish as much as I do at PMA's Fresh Summit, but I nevertheless am exposed to some things that I've never seen before. It's a whole different world, and one that is ripe for exploitatation, especially for export-oriented firms now that the dollar is so low.

'Whole Foods quality at Wal-mart prices"

Guest blogger Lance Jungmeyer chiming in ...

A British newspaper characterizes Tesco's strategy for the U.S. as "Whole Foods quality at Wal-mart prices."

The article goes on to point out how Tesco's entry to the U.S. is different from previous British invasions, when retailers came here seeking to gain market share by purchasing a chain.

Instead, Tesco is trying to build its niche on its own merits. Centralized distribution and fresh, easy to prepare foods are the two key building blocks. It will be interesting to see whether consumers latch on to Tesco's Fresh & Easy banner.

If Tesco has done its homework on American consumers, here's betting that it will find success.

The article notes that, for the next five years, Tesco has pledged 7% of its capital expenditures toward growth in the U.S. That comes out to more than $500 million a year, and that ain't peanuts folks.

Harkin on Produce Safety

Vote in the latest Fresh Talk poll on Sen. Harkin's Produce Safety Act of 2007. (S. 2077) Here, Sen. Harkin makes a case for his legislation. This commentary from Sen. Tom Harkin comes from this link and is dated Oct. 4.

A year ago, there was a large-scale outbreak of food-borne illness caused by a virulent strain of E. coli in fresh bagged spinach.
More than 200 people became ill, and three died.
Since then, U.S. consumers have been bombarded with news of repeated cases of contaminated food — everything from peanut butter to seafood to pet food.
Just this week, there was a recall of a Dole bagged salad product because of E. coli contamination.
It seems these fresh-produce recalls have become the rule rather than the exception in the United States — and that is unacceptable.
It is increasingly clear that the Food and Drug Administration lacks the resources and the reach to ensure the safety of the U.S. food supply.
For example, it was reported last week that operations that grow and process leafy green produce are inspected by FDA once in every three years, on average.
We need to restore the public's confidence in American fresh produce and the agency that regulates it.
To that end, today, I will introduce the Fresh Produce Safety Act of 2007.
My aim is to create, for the first time, an effective national food safety framework for all fresh produce.
Industry groups are acutely aware of the need to restore consumer confidence.
For instance, the California leafy green produce industry has come up with a marketing agreement to certify the safety of its products.
The Florida tomato industry has pushed the state to inspect and regulate its products. But this regional, patchwork approach is simply not adequate.
We need a national program to ensure the safety of all fresh produce all across the country.
Under the Fresh Produce Safety Act, FDA would have the authority to require produce companies to follow common-sense food safety guidelines.
Those guidelines currently are only voluntary. Now, obviously, it would be a waste of resources to require the same stringent controls for, say, apples that we would require for leafy green produce.
That's why my bill requires FDA to establish national standards tailored to specific types of produce and the particular risk factors arising from the way each is grown and handled.
The legislation also requires stepped-up inspections of operations that grow and process fresh produce, such as spinach or lettuce.
Other key provisions of the bill include a surveillance system to identify and stop the sources of fresh produce contamination, and a research program to better understand and prevent contamination of produce.
My legislation would also require FDA to write rules to ensure that imported produce has been grown and processed under the same standards that we will have in the U.S.
The Fresh Produce Safety Act is timely for another reason.
Eating fruits and vegetables promotes lower body weight, stronger bones, and lower risk of developing diet-related diseases such as diabetes.
In recent years, major efforts and investments have encouraged people to eat these healthful foods.
It can only turn people away from healthy eating to have continuous instances of E. coli contamination and fresh produce recalls.
The American people need to have confidence that their fruits and vegetables are produced and handled in a safe and wholesome manner.
That is exactly the goal of the Fresh Produce Safety Act.

TK: Sen. Harkin announced Sept. 29 he will mandate a Presidential Commission on food safety in the farm bill. Interestingly, the commission was created in the 2002 farm bill but was never constituted or allowed to meet. Sen. Harkin promises scrutiny of both domestic and imported food.

“The government panel announced by the White House earlier this year will review only imported foods – a shortsighted goal given the increasing number of food safety recalls happening with food produced in the United States, but to examine the safety of both imported and domestically-produced food, comprehensive recommendations from a Food Safety Commission are needed. The farm bill I am working on in the Senate will include a Presidential Commission to examine the entire system.”

Apart from the Commission, Senator Harkin has called for moving aggressively with strong and responsible legislation in Congress. Just last week, Harkin introduced The Fresh Produce Safety Act of 2007 to give the FDA the authority to make its current voluntary guidelines on produce mandatory.

Several reports by the Government Accountability Office (GAO) and other respected organizations have already given Congress unequivocal recommendations to improve the nation’s food safety system. A Food Safety Commission, in Harkin’s view can only add to the overwhelming evidence that USDA, FDA and Congress all must act urgently to ensure the safety of our food supply.

"Supermarket bullies" face crackdown

Here at The Packer we are gearing up for The Produce Marketing Association's expo in Houston, which will be occasioned by news of dozens of new products seeking shelf space in supermarkets.

It won't be an easy thing for any produce marketer to plug in their new product at a major chain, no matter how winning the concept. What kind of allowances, discounts, rebates, marketing money or slotting fees will be part and parcel of the effort? Here is a recent paper that justifies the use of slotting fees.

A story from the UK reminds us of some of the realities of the supplier-buyer relationship, and how the consolidation of retail power continues to raise concerns among regulators. "Retrospective" payments - that's a new term for me - but it is one the key issues involved with what is being described in this story from the UK about the Competition Commission planned crackdown on "bully-boy" tactics.
From the story:
The Competition Commission is expected to raise the prospect of a ban on so-called retrospective payments to suppliers – a system by which the latter end up giving the retailers discounts for selling their items – when it unveils its preliminary findings from a probe into the sector.
In addition, the commission is expected to raise serious concerns about lump-sum payments demanded by supermarkets for the placement of new products or access to their shelves for existing products.
The watchdog is also likely to call on supermarkets to give suppliers greater certainty by offering them more fixed contracts so they know how much they will be paid and when.
According to a survey released earlier this year by Grant Thornton, the accountant, more than two-thirds of suppliers said they had no written contract, with 23% claiming supermarkets were unwilling to agree written terms. Almost half had no preagreed order-cancellation notice period in place.
City sources familiar with the Competition Commission inquiry also said it would look to strengthen the voluntary code of conduct between supermarkets and their suppliers which was launched after an investigation in 2000 into the sector.
Patricia Hewitt, trade secretary at the time, said: “The success of the code depends on supermarkets and suppliers being reasonable in their dealings with one another, and observing the spirit of the code.
“The code can set a standard for the industry as a whole, enabling it to put its commercial relations on a better footing.”
Well-placed sources said the commission may tighten the wording of the code to better define what is “reasonable” and “unreasonable” behaviour.
The watchdog already flagged its concerns about supermarket-supplier relationships in a paper reviewing the code of practice.
It said: “Our greatest concern . . . is the element of retrospectivity or uncertainty for suppliers regarding payment terms that many of these practices imply.”
In August, speculation intensified that the watchdog had found a “smoking gun” after unearthing e-mails between supermarkets and their suppliers in which the retailers were said to have threatened blacklisting unless they were given discounts.
Tesco and Asda have handed over millions of e-mails sent in the run-up to a summer £520m price war. Asda and Tesco have both denied any wrongdoing.
The commission, led by Peter Freeman, will not make firm recommendations in its preliminary findings. But it will raise key areas of concern and outline possible remedies. The supermarkets will then be given another opportunity to respond.
Most of the big supermarket chains are braced for the commission to take some action in relation to their dealings with suppliers. Privately, several senior supermarket executives say they expect the commission to tighten the code of practice.

TK: Remember the controversy over slotting fees in the U.S.? That issue has seemed to have died down now, but there was plenty of ink about it from about 1999 to 2003.

The Packer library has numerous stories about the issue of slotting fees. A limited U.S. FTC staff study on slotting fees in 2003 is found here, and here is an opinion piece from Supermarket Business in 1999 called Payola . The FTC study says somewhere between 50% and 90% of all grocery products have slotting fees associated with them. As it relates to produce, does this issue need more illumination from regulators? Has the prevalence of slotting fees and other charges increased or decreased since 2003? Given the proliferation of new products and value added items, I would think this issue has not gone away, even if it has become less publicized.