Fresh Item Management

The media’s attention to Lean Finely Textured Beef has raised the issue of fresh food safety and its role in consumer transparency.

By Jan A. Dragotta

In the movie The Perfect Storm, three converging storms combine to turn safe sailing seas into a raging torrent with significantly increased risk to anyone on the water. In the ocean of fresh food retailing, many retailers sail through food safety issues. Although they are often cognizant to avoid storm elements, they may not recognize when these might converge into a perfect storm. A recent example of this is the consumer reaction to Lean Finely Textured Beef (LFTB), which became known as Pink Slime. This Perfect Storm tarnished retail consumer trust and created a focal point for concerns about the management of our meat category.

Three elements converged to create this consumer movement:

  • Increased shopper concerns on food safety, transparency and family wellness;
  • Increased regulatory complexity and needs to improve efficiency in fresh food operations; and
  • Increased social media in the hands of connected consumers who demand fresh product information, transparency and accountability in food safety.

The LFTB, a.k.a. Pink Slime, storm didn’t start in retail. It started with highly concerned parents that discovered their schools were not transparent about the ground meat fed to their children. They started an ad-hoc Internet referendum and were soon joined by approximately 250,000 retail consumers asking if this is in their grocery store.

Ironically, and almost simultaneously, an USDA/FSIS regulatory meat nutritional labeling sunrise arrived on March 1, 2012 requiring primary cuts (and grind) nutritional labeling. The industry knew this was coming for quite some time and expended energy to brunt any unreasonable costs or negative impacts to our shoppers and operations. However, apparently not enough energy was spent in truly understanding what is going on. We missed that our regulators want votes from our shoppers who want transparency in fresh foods labeling. We didn’t connect these elements. Instead, we handled regulatory labeling rules and the increasing consumer concerns as seemingly separate storms. Nor did we envision them as potentially converging.

There is no doubt that our food retailing industry is talented, trained and capable. But how did we not see the storm converging?

There is an emerging discipline in our industry called Fresh Item Management (FIM) that is creating a paradigm shift in our fresh category operations. All our fresh categories are affected and all are at risk of perfect storms without effective FIM.

Many think that FIM is a software solution or IT project to manage shrink, better forecast fresh production and manage inventories and improve the fresh supply chain. However, FIM is so much more. It includes work force disciplines, business processes and integration of technology to work together to provide critical information to manage the business. It can enable your fresh operations to weather any storms in fresh food safety and provide agility to give the consumer transparency. It will help mitigate potential food safety and regulatory non-compliance issues.

What if within hours of any fresh category storm or new regulatory requirement, a retailer could change product labels to add the right information, such as the nutritional characteristics of LFTB, amend safe handling instructions, republish grind recipes and food safety information and proactively educate the store and consumer?

This is not an unreasonable request for any enlightened fresh category leader to ask of his organization. This is an opportunity for senior executive leadership to be positive and proactive and deliver an approach that resonates far better with their valued fresh customers.

Jan Dragotta is the Director of the Fresh Item Management Consulting Practice at Business Strategy Group (BSG). With a lifetime of service in retail grocery operations and with 10-years of experience in FIM; Jan is an informed and knowledgeable proponent for change in fresh category operations. He can be contacted at (904) 509-0486 or e-mail Jan at J.Dragotta@bsgretail.com.

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