Brian Kenny: In 1904, journalist Upton Sinclair published a groundbreaking novel exposing the harsh working conditions of Chicago's meat packing industry. He intended his book, The Jungle, to be a rallying cry for social justice for workers, but what really got readers worked up was his unflinching depiction of the unsanitary conditions in which meat was processed. After all, that meat was going to end up on their table. Sinclair famously quipped, "I aimed for the public's heart and accidentally hit it in the stomach."
The public outcry sparked by The Jungle led directly to the establishment of the Meat Inspection Act, which authorized the secretary of agriculture to inspect and condemn any meat product found unfit for human consumption.
It was the first wave of food and drug regulations that swept over the United States in the 20th century, spawning a vast array of agencies and legions of inspectors, all with the same goal: keep consumers safe from harm. Yet, according to the Food and Drug Administration, about 48 million people, that's one in six, are sickened by foodborne illness each year, and 3,000 die, raising the question, just how effective is food industry regulation?
Today we'll hear from Professor Ray Goldberg about his case study entitled, Wegmans and Listeria: Developing a Proactive Food Safety System for Produce. I'm your host, Brian Kenny, and you're listening to Cold Call.
Ray Goldberg joined the faculty of Harvard Business School in 1955, and he's been investigating the functioning of the global agribusiness system ever since. The agribusiness program he developed in 1955 continues to bring business leaders and policy makers from around the world together each year. Throughout his tenure, Ray has written over 100 articles and 24 books on the business of agriculture, including his very latest, Food Citizenship: Food System Advocates in an Era of Distrust. Ray, thanks for joining me today.
Ray Goldberg: Thank you for having me.
Brian Kenny: Did you coin the term agribusiness?
Ray Goldberg: I did, together with John Davis. He was the Assistant Secretary of Agriculture under Eisenhower, and he became the first head of the (HBS) Agribusiness Program.
Brian Kenny: That term lives on today, and what you started so long ago continues to thrive, probably because of a lot of the reasons that we're going to discuss in this case today about [grocery chain] Wegmans. I confess, I'm a fan of Wegmans. They've done a great job changing the way people think about grocery shopping, so it'll be interesting for people to hear the context of this case and how Wegmans is thinking about it, and what the issues are more broadly around food safety.
Can you tell us, in this case, who's the protagonist and what's on his mind?
Ray Goldberg: Well, the protagonist here is Danny Wegman and his Head of Produce David Corsi. They were concerned as to whether the requirements of the FDA, the EPA, and the USDA, in terms of how to manage a disease, E. coli, should be zero tolerance or not. Everybody else in the world gives them a little leeway that enables them to continue to ship, even if two or three items are shown to have listeria. The case concerned a company that supplied produce both in the United States and to Australia, and the Australian company saw these three items and decided they were going to use it. At the same time, they called Wegmans to see if they had any problems with that. They also called the supplier of that product to see if he could find the source of that listeria in his company. That led to this case.
Brian Kenny: This is not your first case on Wegmans. You've actually been writing about Wegmans for a while.
"We are the only country in the world that is zero tolerance. The rest of the world is more lenient."
Ray Goldberg: I have, for a very long while, because they are the most admired supermarket in our country. [I’ll ask my students], "Has anybody ever worked for Wegmans?" when we're having the Wegman case, and two or three hands will show up. And I ask, "What do you think of Wegmans?" "I'm in love with Wegmans," and then they proceed to tell me what a wonderful company it is. They do so much for their community, for the employees, for the education of their community, for the health of their community, that it's hard for anyone to imagine one firm doing that. When Danny Wegman comes to class, he's the only visitor who stands at the front door of the classroom and shakes everybody's hand as they walk into the room.
Brian Kenny: Why don't we get right to the core of the matter here in the case, this listeria issue. How prevalent is foodborne illness, writ large?
Ray Goldberg: Well, it's very prevalent. You started this conversation with 46 million people, and one out of six people, being affected by some kind of adverse condition of that food. You say 3,000 people die every year, and 260 of those die from listeria.
Brian Kenny: The case cites examples of foodborne illness outbreaks in the US. We're coming on the heels of the recent romaine lettuce issue in the US, which has now occurred, I think, twice in the last few months. So clearly these are things that are almost ripped from the headlines, and there have been some very high visibility ones over the year. Do you want to describe a couple of those?
Ray Goldberg: I can describe the romaine lettuce [event], because I talked to the produce manager this morning, and he tells me the cost to the industry was $100 million dollars.
Brian Kenny: Wow.
Ray Goldberg: The problem is that romaine lettuce itself, when cold temperatures occur, begins to blister, which make it more susceptible to listeria. When they tried to find the location of that listeria, it came from a dairy herd about 2,000 feet away from where that lettuce was grown. We have a rule that 1,200 feet is far enough, but they actually found listeria a mile away from where that lettuce was concerned, so he feels very strongly that they have to change the rules.
Brian Kenny: Listeria, we know makes people very sick, it can be deadly, but is there a safe level? This is one of the questions in the case that comes up. Is zero tolerance the right policy or is there a safe level that people can consume?
Ray Goldberg: We are the only country in the world that has zero tolerance. The rest of the world is more lenient. But since this case was written, our government has been more lenient in the sense that if something is discovered, they will let you go back to your plant, and if you can prove that you have no more listeria there, then they will let you continue. The gentleman in this particular case couldn't find the source of listeria but it was still there. He couldn't find it. He basically had to create a whole new company, and his company is now the model for best practices for the country, so he decided that, once and for all, he was going all out, and he did.
Brian Kenny: Which gets to another issue that the case raises, which is has the industry done well enough trying to regulate itself? What are some of the things the industry has tried to do?
Ray Goldberg: Under Danny Wegman's leadership—he was the person in charge of food safety of the Food Marketing Institute that really looked at the whole industry—he got several members of the industry to sit down and create new rules with the FDA, the EPA, the USDA, and CDC, all of them saying we have to have better rules. Produce, as you know in the case, is the most valuable part of a supermarket but also the most susceptible to problems.
Brian Kenny: So in an age where people are looking for more and more organic things, there are a lot of people who are suspect of any of these kinds of processing approaches.
Ray Goldberg: And we want them to eat more fruits and vegetables because they'll be healthier if they do, so consequently, I think that the more stringent the rules are, the better for everybody including the industry. I think the industry finally agrees to that.
Brian Kenny: You mentioned that the US has more stringent rules than other parts of the world. How have other countries dealt with this?
"Produce is the most valuable part of a supermarket but also the most susceptible to problems."
Ray Goldberg: I think every country is very sensitive to it, and the FDA, the EPA, the USDA all work closely with their counterparts around the world, and many of the people in those organizations have helped other countries create their own food safety organizations.
Brian Kenny: What do you find in China? They had issues with dairy not too long ago. When you get into countries where the government really has iron-fisted control over industry, do you think that they're taking the same level of concern for consumers?
Ray Goldberg: No, they don't, unfortunately, but what's happened is that the consumer in China got so upset with the melamine problem of adulterating the milk that they didn't buy local milk, they bought foreign milk. So consequently, the market has forced these other governments to become more stringent. In fact, what happened is that the government of China, working with the government of the United States, created a Dairy Farm Institute under the leadership of Nestlé and Land O'Lakes in this country, and other dairy companies around the world. I did a case study on that to show how all of these people got together to correct the problem.
But we not only have a problem of disease, we have adulteration. You remember the horse meat scandal? As before, a new company was created that uses DNA and identified the horse meat. That company is now working in the United States and around the world.
Brian Kenny: This gets a little bit to the topic of your book, Food System Advocates in an Era of Distrust. What are the big ideas coming out of your book?
Ray Goldberg: The big ideas are two-fold, that the kind of men and women in the industry have changed from commodity handlers and bargaining as to how cheap they can buy something, or how expensive they can make something, to finally realizing that they have to be trusted. And because they have to be trusted, they have to start working together to create that trust. In addition to that, they realize that the private, public, and not-for-profit sectors really need to work together. That's why I tried to write a book to give people an inkling of the kind of men and women in this industry who really are the change-makers, who are changing it to a consumer-oriented, health-oriented, environmentally-oriented, economic development-oriented industry.
Brian Kenny: Let's go back to the Wegmans case. You've discussed this in class. You mentioned Danny has come to class before.
Ray Goldberg: Yes, Danny and the head of the produce department came to class together.
Brian Kenny: I'm curious as to how the class discussion unfolds because I would imagine there's a lot of different perspectives in that room.
Ray Goldberg: There are a lot of different perspectives but one thing about this younger generation, at least at the Harvard Business School and some of the other schools I've had the privilege of teaching at, these people recognize the importance of the food system, more so than any generation I ever taught.
They look at the food system as the most important system to try to overcome poverty and malnutrition around the world. They also realize it's a class issue, that people who are better educated have more resources, know more about food and relating it to health. They also recognize that medical schools finally look at nutrition being more important [to maintaining health] than popping pills. So this case goes way beyond just food safety. It really looks at, how do you work with the community and the rest of the world so that the food system becomes a change-maker and improves that world? That's why I was anxious to write the book, and we're very fortunate at Harvard to get men and women to come here and talk to our students, and let us write cases about them.
Brian Kenny: Ray, thank you for joining me today.
Ray Goldberg: Well, it's a real privilege to talk about a subject that I've loved my whole life.
Brian Kenny: Thanks again.
Ray Goldberg: My pleasure.
Brian Kenny: If you enjoy Cold Call you should check out HBS SkyDeck, a podcast series that features interviews with HBS alumni from across the world of business sharing lessons learned and their own life experiences. I’m Brian Kenny and you’ve been listening to Cold Call, an official Harvard Business School podcast.