Producers need to build consumer trust

By Larry Dreiling

FOURTH GOVERNOR--Gov. Dave Heineman, R-NE, offers opening remarks at the recent 20th Annual Governor's Ag Conference, held in Kearney. Heineman is the fourth consecutive Nebraska governor to host such a conference. He spent an evening and much of a day at the conference, sitting in the audience listening to speakers asking questions as well as interacting in the hallways with conference participants.

In the wake of the nation's largest beef recall came a call for producers to control their own destiny in order to build and hold the trust of consumers wary of the safety of their food supply.

"Consumers do not care how much we know until they know how much we care," said Matt Sutton-Vermeulen, a spokesman for the Kansas City, Mo.-based Center for Food Integrity, during a presentation at the recent 20th Annual Nebraska Governor's Ag Conference, held in Kearney.

The center is a non-profit organization representing each segment of the food chain, including farmers and ranchers, processors, and companies that deliver food products under local, regional and global brand names, and government.

According to the center's website, the center was established in the last year to "increase consumer trust and confidence in the contemporary U.S. food system." Its primary mission is to promote dialogue, model best practices, address issues that are important to consumers, and serve as a resource for accurate, balanced information about the U.S. food system. It does not lobby or advocate individual food companies or brands.

"Producing food is a noble profession," Matt Sutton-Vermeulen said, "but if we don't control our own destiny, someone else will."

Two food chains

He described two views of the food chain, one from a former agrarian model and a new, more industrialized model. The old model food chain had producers selling to product buyers who in turn sold the raw product to processors that moved to distributors as a regional brand.

This model, with all its players, made it nearly impossible for food activists to disrupt the food chain. On the other hand, today's industrial food chain brings buyers and processors closer together to create global brands that are easier for activists to criticize.

"When the model is flattened out like this, with very tight alignment to global brands like Wal-Mart, it's very easy for an activist organization to exert tremendous amounts of leverage on these brands," Matt Sutton-Vermeulen said. "This is what we call moving at the speed of food. The impact on people and dollars is so incredible and we haven't seen anything yet."

This tight alignment is evident in the list of the top ten food retailers, he said, that sell 75 percent of all food in the U.S. The top five, Wal-Mart, Kroger (operator of Dillon's, King Soopers, Baker's, City Market, Gerbes, Smith's, Kwik Shop and Loaf N'Jug) Costco, Safeway, and SuperValu (operator of Save-A-Lot) control more than 50 percent of food sales.

"We see this as consolidation, but activists see this as a bulls-eye. It's easier to shoot at one or two targets than it is at dozens," Sutton-Vermeulen said.

Bull's-eyes any size

Still, small producers may be targeted by activists, citing an egg business operated by the Trappist monks of the Mepkin Abbey of South Carolina.

A young man working with People for the Ethical Treatment of Animals came to the Mepkin Abbey posing as a kid in trouble, yet armed with a hidden camera, Sutton-Vermeulen said. Soon, the abbey's poultry production was the subject last year of an Internet video and the Piggly Wiggly store near Charleston, S.C., that purchased the eggs was picketed.

The store and local residents supported the monks, since the monastery's egg operation had been certified for humane treatment by the United Egg Producers, but they decided to end egg production because the controversy distracted them from their focus of serving God.

"What a disappointment and what a comment on our society. Are you ready for that kind of pressure exerted on your 'factory farm?'" Sutton-Vermeulen asked.

This sort of activism has caused the nation's largest food retailer, Wal-Mart, to shift its focus from low prices to high principles.

"They now say 'Save Money, Live Better,'" Sutton-Vermeulen said. "They now have a live better index on how what you do relates to sustainability, the environment, and everything you do associated with your life."

Wal-Mart now measures how suppliers are progressing with sustainability.

"Back in 2005, Lee Scott, Wal-Mart's CEO, said, 'We thought we could sit in Bentonville, take care of customers, take care of associates--and the world would leave us alone. It doesn't work that way anymore.'"

New goals

Now, Wal-Mart is focused on three top-line goals: to be supplied with 100 percent renewable energy, to create zero waste, and to sell products that sustain our resources and our environment.

By 2008, Scott was saying the company would favor--and in some cases even pay more for suppliers that meet their standards and share Wal-Mart's commitment to quality and sustainability.

"It's a whole new game, he told his 7,000 managers," Sutton-Vermeulen said. "He said, 'We live in a time when people are losing confidence in the ability of government to solve problems. But at Wal-Mart, we don't see the sidelines that politicians see, and we do not wait for someone else to solve problems that might hurt our business or affect our customers in a negative way.

"Our customers want products that make them feel good about their purchases. They want to walk into our stores and be confident that the products on our shelves are safe and they are durable. They also want products that are made in a way that is consistent with their own personal values.'"

Do the right thing

Sutton-Vermeulen told the more than 300 people in attendance this shift in the moral behavior of business has arisen not only by the awareness of the direct impact such a change in behaviors has on a person or business, but by societal expectations that instill five universal moral principles described by the late psychologist Lawrence Kohlberg: compassion, responsibility, respect, fairness and truth.

"This means you are going to do things because it's the right thing to do regardless of costs," Sutton-Vermeulen said. "At the lower levels, you do the right thing because you'll be punished if you don't. Instead, this is a contract with yourself to do the right thing.

"Wal-Mart got tired of being beat up and by playing by somebody else's agenda. Nobody has better market research than Wal-Mart. They wouldn't do this unless there was payback for shareholders."

That payback is triggered by higher consumer awareness on issues such as global warming, product recalls and animal welfare.

Product recalls are on the increase because of higher levels of oversight, Sutton-Vermeulen said, and that government and business are working harder to find problems and make things right.

"When we see a meat plant that's not in compliance, they get more scrutiny. We are looking for places with issues and we're finding them," he said.

Destroying trust

Of course, the trust of consumers that took years to build can be destroyed in an instant, Sutton-Vermeulen said, so accurate information is essential when responding to incidents such as the Humane Society of the United States' release of a video showing Westland/Hallmark Meat Co. employees mistreating "downer" cattle. This particular incident led to the recall of 143 million pounds of beef.

"That was just common sense. That was just embarrassing. That was appalling," Sutton-Vermeulen said. Criminal charges have since been filed against two Westland/Hallmark employees. And company president Steve Mendell testified before a House Energy and Commerce investigative subcommittee only after he was subpoenaed, following his submission of a written statement that was rejected by the panel.

"We have to begin with the end in mind--that is the freedom to operate," Sutton-Vermeulen said. "The only way we get our freedom is by gaining a social license. A social license is the privilege to operate with minimal legislative and regulatory restrictions by maintaining public interest. It allows the legislative and regulatory people to stay out of our nest because we have our nest in order."

With a social license, benefits are perceived to be higher than the costs. When it is lost, the cost is higher than the benefit, Sutton-Vermeulen said.

"We have high trust with a social license. We have no trust and regulation without it," he added. "We can be proactive with a social license and nothing but reactive without it.

"The only way you get a social license is by maintaining trust."

Trusting no one

That means having high consumer trust in food safety, good nutrition, environmental protection, humane treatment of farm animals and in proper care of farm labor. In a recent survey by the Center, it indicated that humane care of farm animals was of higher concern by consumers than care of farm laborers.

One interesting point: When asked if farm animals should be treated like house pets, Sutton-Vermeulen said 30 percent of respondents said, "yes."

He said that answer would have his grandpa rolling in his grave. "Grandpa wouldn't have a dog in the house, let alone a pig."

Overall, consumers trust themselves primarily and hardly anyone else when it comes to food issues.

"When it comes to trust in the U.S. food system, consumers believe it is more important for groups in the food system (producers, processors, retailers etc.) to 'do the right thing' from an ethical perspective, than to demonstrate their level of technical skills and abilities," Sutton-Vermeulen said. "Also, (consumers') own opinion as well as those of family and friends is more influential than any other group in the food system."

So how do ag producers earn the trust of today's consumers? Sutton-Vermeulen said the keys are to use the universal moral principles as touted by Kohlberg: to take responsibility for your actions, use best science-based practices and engage consumers at all levels of the food chain.

"You need to say, 'Nobody takes this responsibility more seriously than me,'" Sutton-Vermeulen said. "Nobody."

CONSUMER TRUST--Matt Sutton-Vermeulen, a spokesman for the Kansas City, Mo.-based Center for Food Integrity offers a presentation on consumer trust at the recent 20th annual Nebraska Governor's Ag Conference, held in Kearney. Producers need to control their own destiny in order to build and hold the trust of consumers wary of the safety of their food supply. Sutton-Vermeulen told the more than 300 people in attendance to use the universal moral principles of compassion, responsibility, respect, fairness and truth in conducting their businesses. (Journal photos by Larry Dreiling.)

CONSUMER TRENDS--John Huston, executive vice president of the National Cattlemen's Beef Association, appeared at the recent 20th Annual Nebraska Governor's Ag Conference discussing consumer trends impacting agriculture's profitability. He told attendees that modern consumers are more confortable than ever with choices and change. That change at least in the beef industry, is away from the concept of "produce and hope someone buys it" to tailored marketing in the form of multiple concepts such as age and source verification as well as natural and organic production. "You can work and scheme and sweat but it doesn't get you a market," he said.

Larry Dreiling can be reached by phone at 785-628-1117 or by e-mail at ldreiling@aol.com.

3/17/08
4 Star NE\1-B

Date: 3/12/08

	Web hpj.com

Copyright/Privacy
Copyright 1995-2011.  High Plains Publishers, Inc.  All rights reserved.  Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com