Part VI

POSSIBLE FUNCTIONS OF A FEDERAL

RETAlL FOOD GRADING SYSTEM Part VI

Possible Functions of a Federal Retail Food Grading System

The discussion thus far has brought issues surrounding food grading into focus. This section addresses what the role of Federal food grades could beat the retail level. First, problems in obtaining consumer input on the sub- ject are discussed, exemplifying the difficulties encountered in determining exactly what kind of retail grading system consumers want. Next, because the issues differ from one food group to another, a separate section is pre- sented for each major food category: processed foods, fresh fruits and vegetables, and fresh red meat. Each section covers the present status of both Government and private industry programs, the potential function of Federal retail grades in light of these programs, and the potential impact of changing the present Federal grading system to a more consumer-oriented one.

OBTAINING CONSUMER INPUT FOR THE DESIGN OF A Retai GRADING SYSTEM

User input for designing a system is highIy may be asking the consumer to do the im- desirable. For a retail grading system this in- possible, Consumers are being asked to give volves consumer input. In order to obtain information they do not have. They have only consumer input the most common method what was given to them by the interviewer. If employed is consumer surveys. the proposition is presented so that it is ab- solutely sterile of value judgments, they may Two types of situations need to be defined in assessing useful output from surveys of find it very difficult to analyze and say what their feelings or views are. On the other hand, consumer views, preferences, and opinions. if the proposition is laden with values, the in- The first situation is where the consumer is terviewer is very likely to get back those same aware of the topic being surveyed and has values or opinions. “preformed” views and opinions. In this situation, consumers are not asked to think or Consumer input in the design of Federal analyze. The interview process simply inven- retail grades is an example of the second situa- tories attitudes already developed and formed. tion. Experts have considerable difficulty con- Surveying preformed attitudes, opinions, or ceptualizing the operational mechanics and preferences is relatively easy, straightforward, user implications of retail grades. It may be and inexpensive. naive to expect consumers to efficiently and directly advise on how to design such a Useful output from consumer surveys system that would operate effectively. becomes more difficult, however, when the topic of the inquiry is one with which con- Individual consumers desire accountability sumers are generally unfamiliar and therefore from the food distribution system. Account- they have no preformed orderliness or posi- ability means that someone, including public tion. In this situation the interview process representatives as well as private firms, is

47 paying attention to important matters such as bol that this issue is being addressed. Thus, nutrition and safety. Even though individual although individual consumers may not consumers may not use information such as possess strong opinions concerning the nutritional labeling routinely as a purchase specifics of retail grades, a more general desire aid, consumer groups may give careful sur- for accountability of the system exists among veillance to nutritional quality in general and consumers. For further elaboration on this specific terms. The individual sees it as a sym- topic see appendix D.

ASSESSMENT BY MAJOR CATEGORIES

Processed Foods Sector second grade is U.S. Grade B or U.S. Choice, while another product such as canned squash Present Status of Government Programs has as the second grade, Grade C or U.S. Standard. In the third grade the nomenclature USDA Grading System: The present grading can be either U.S. Grade/U.S. Standard, as the system for processed foods is authorized third grade of green olives, or substandard, as under the Agricultural Marketing Act of 1946. the third grade of canned squash. Dairy prod- A processed food is defined as any fruit, ucts, a separate classification, have a no- vegetable, or other food product which has menclature radically different from the fruit been preserved by any recognized commercial and vegetables nomenclature. process, including, but not limited to, canning, freezing, dehydrating, drying, the addition of Wholesomeness and Safety Programs: The Food chemical substances, or fermentation.1 and Drug Administration (FDA), in coordina- tion with the U.S. Departments of Agriculture The current grading system is volun- and Commerce, exercises regulatory control tary/mandatory and designed to facilitate over all processed food products through the wholesale transactions without the necessity authority provided in the several Acts ad- of onsite inspection, but in some cases the ministered by these agencies and departments grade appears on the retail package. Grades of the Federal Government. Figures 9, 10, and have been established for canned fruits and 11 show Federal Government agencies in- vegetables, frozen fruits and vegetables, and volved in food programs. dairy products. The grades establish criteria for differentiating these products according to The Food, Drug, and Cosmetic Act and the sensory differences. The main criteria for Fair Packaging and Labeling Act are the basic these are color, uniformity of size or shape, Federal food laws of the country and apply to flavor, texture, maturity, and number of all foods, food ingredients, and packaging that defects. are offered for sale in interstate commerce. Grade designations for processed foods lack These two Acts and the regulations issued uniformity. Designated grades of selected under them are intended to assure that foods products of canned fruits and vegetables, are safe, wholesome, and nutritious; labeled truthfully; and packaged so that deception frozen fruits and vegetables, and dairy prod- relative to quality and quantity of package ucts vary substantially (table 4). For most contents is precluded. The Food, Drug, and grades of fruits and vegetables there are two Cosmetic Act is both a safety and labeling act, sets of nomenclature. For example, either U.S. whereas the Fair Packaging and Labeling Act Grade A or U.S. Fancy can be used to desig- addresses labeling and packaging only. nate the top grade of all processed fruits and vegetables. For the second, third, and fourth The Public Health Service Act provides grades the nomenclature is not uniform. In authority for controlling the safety and some products such as orange marmalade, the wholesomeness of food and drink served aboard interstate common carriers and for Iu.s, Government. Code of Federal Regulations, T CFR, controlling the sanitary operations of 52.1, p. 39. establishments that prepare food intended for

48 Table 4. Selected USDA Grades for Processed Food Products

Grade Nomenclatures Product Group Product Top Grade 2nd Grade 3rd Grade 4th Grade

Canned Fruit U.S. Grade A U.S. Grade B Substandard Fruits Cocktail or U. S. or U. S. Fancy Choice

Orange U.S. Grade A U.S. Grade B U.S. Grade C U.S. Grade

Marmalade or U. S. or U. S< or U. S. D or Sub- Fancy Choice Standard standard

Green U.S. Grade A U.S. Grade B U.S. Grade C Substandard Olives or U. S. or U. S. or U. S. Fancy Choice Standard

Canned Tomatoes U.S. Grade A U.S. Grade B Substandard Vegetables or U. S. or U. S. Fancy Standard

Peanut U.S. Grade A U.S. Grade B Substandard Butter or U. S. or U. S. Fancy Extra Standard

Squash U.S. Grade A U.S. Grade C Substandard or U. S. or U. S. Fancy Standard

Frozen Apricots U.S. Grade A U.S. Grade B U.S. Grade C Substandard Fruits or U. S. or U.S. or U. S. Fancy Choice Standard Cranberries U.S. Grade A U. S. Grade B U. S. Grade C or U. S. or U. S. or U. S. Fancy Choice Standard Concentrated U.S. Grade A U.S. Grade B Substandard Orange or U. S. or U. S. Juice Fancy Choice

Frozen Lima Beans U.S. Grade A U.S. Grade B Substandard Vegetables or U. S. or U. S. Fancy Extra Standard

Peas U.S. Grade A U.S. Grade B U.S. Grade C or U. S. or U. S. or U. S. Fancy Extra Standard Standard French U.S. Grade A U.S. Grade B Substandard Fried or U. S. or U. S. Potatoes Fancy Extra Standard

Dairy Butter U.S. Grade U.S. Grade A U.S. Grade B Products AA Cheddar U. S. Grade U.S. Grade A Cheese AA Instant U. S. Extra U.S. Standard Nonfat Grade Dry Milk

SOURCE U S Government, Code of Federal Regu/at/ens, 7 CFR 52206, Washington, D C, 1976 49 service aboard interstate common carriers. In tained that the product meets Federal law re- addition, the Public Health Service Act pro- quirements. vides for assistance to the States in the control Certain products, by virtue of their inherent of communicable diseases transmitted nature or because of the preservation process through food and water, and with this applied, have greater risk of rapid microbial authority FDA maintains Federal-State development that cause human illness. These cooperative programs directed toward main- products and processing establishments are taining safety and wholesomeness of milk, considered high risk and inspected with shellfish, and food served in restaurants. greater intensity, comprehensiveness, and fre- quency than establishments processing prod- Under the statutes FDA performs inspec- ucts in a lower risk category. Examples of tions of food-processing establishments, high-risk products and establishments include warehouses, and distribution systems, and as milk, fish, meat, low-acid canned foods, filled appropriate, collects samples of products for pastries and ready-to-eat entrees that require laboratory analysis to determine that the no further cooking. standards, guidelines, tolerances, and labeling specifications for the products are being met. The inspection tool for the high-risk areas is Imported foods are inspected at dockside and the Hazard Analysis Critical Control Point are not released by the Customs Office for en- (HACCP) inspection designed to identify try to the United States until FDA has ascer- hazards associated with the product or proc-

50 Figure 10. U.S. Department of Health, Education and Welfare--Public Health Service, Food &thug Administration--Bureau of Foods

DIRECTOR Deputy Director Special Assistant Administrative for Programs and Associate Directors Operations Staff Organization

Management ● Compliance Program Planning & Evaluation Staff Sciences Technology Assistant to Technical Director for Nutrition Operations Staff International Standards

Technology Divisions

Regulatory Nutrition Guidance I I t

Food & Color Consumer Additives I Studies t

Compliance Food Programs Service

Industry Programs I

Administrative Operations Staff Director for Management ■ Associate Mathematics August 1,1976

SOURCE: Department of Health Education, and Welfare-Food and Drug Administration.

ess. In addition to the comprehensive HACCP Standards of Identity: The Food, Drug, and inspections, other inspections are conducted Cosmetic Act also provides that standards of to record general housekeeping procedures, quality, identity, and quantity may be sanitary operations, control over filth and established when in the judgment of the other defects, and adherences to standards, Secretary of Health, Education, and Welfare labeling requirements, food additive such standards will promote honesty and fair tolerances, and good manufacturing practices. dealing in the consumer interest. So far as is

51 Figure 11. Food and Drug Administration Programs Directed to Control of Food and Cosmetics as Authorized by Various Federal Acts

Authorizing Agency Program Projects Within Agency Objectives of Projects Program Act

Food Sanitation Control Inspect establishments for compliance with regulations, guidelines, standards, etc., and Import Tea Act take corrective regulatory action. and FD&CA

Establish safe guidelines and tolerances for industrial chemicals and heavy metals in FD&CA Chemical Contaminants foods. Regulatory action against products not meeting tolerance or guideline.

Mycotoxins and Other Establish safe guidelines and tolerances for mold toxins (aflatoxins) and plant poisons FD&CA Natural Poisons (solanine in potatoes) in human food and animal feed.

Food and Color Process food and color additive petitions and GRAS affirmation petitions for denial or FD&CA Additives approval of requested safe conditions of use and cyclically review all previously approved substances added to food.

Promote the adoption and use by industry of quality assurance practices in manufacture FD&CA Quality Control and encourage participation in the FDA Cooperative Quality Assurance Program. FOOD Promote use of sound nutritional principles by public, determine compliance with nutri- SAFETY Nutrition tional labeling, establish regulations for food fortification and regulations for foods for FD&CA special dietary purposes, regulate micronutrient uses, regulate nutrient quality of new foods (plant proteins).

Provide for the safe production, distribution and retail sale of Grade A pasteurized milk FD&CA Milk Safety and milk products through assistance to the States and through the continuous updating and and publication of the Pasteurized Milk Ordinance and Code; administer the interstate PHSA Milk Shippers Agreement. Provide for the safe growing, harvesting, processing and sale of bivalves through assist- FD&CA Shellfish Safety ance to the States and through administration of the national, cooperative industry, state, and federal National Shellfish Safety Program. PHSA Improve hygienic practices and food protection measures used in the more-than 500,000 FD&CA Food Service food service establishments through assistance to the States and through publication of and the Food Service Sanitation Model Ordinance and Code. PHSA Prevent the spread of communicable diseases by controlling the safety of food and bev- FD&CA & Interstate Travel erages served aboard interstate carriers and wastes discharged from such carriers. PHSA

Food Economics (Food Prevent misleading label statements, fraudulent filling and weight declaration practices, Import Tea Act, FOOD misleading packaging, and degradation of product in the marketplace through ingredient ECONOMICS Labeling and food FD&CA, and standards) labeling regulations, regulations for standards of identity, quality and fill of container, FPLA and regulations for slack fill. Remove from the marketplace cosmetics-and cosmetic ingredients that have been dem- Cosmetics FD&CA COSMETICS onstrated to be harmful to consumers.

ANIMAL DRUGS Review New Animal Drug Applications and applications for additives to animal feeds to Safety of Animal derived FD&CA AND FEEDS human foods assure that unsafe residues of the drugs or additives are not present in the edible tissues of animals.

SOURCE: Department of Health, Education, and Welfare-Food and Drug Administration. practical, such standards are established wholesome, acceptable foods, and to promote under the common or usual name of such fair practices in world food trade. Publication foods. Presently, approximately 400 foods of the standards also is intended to harmonize have been standardized by regulation under food definitions and requirements in different this authority.2 Some food for which stand- countries and, in doing so, facilitate interna- ards have been promulgated include bread tional trade. Codex standards eventually will products, canned fruits and vegetables, dairy be developed for all principal processed, semi- products, nut products, fish products, and processed, and raw foods that go in distribu- jams and jellies. tion channels for human consumption. Food standards mean that for a food prod- uct to be sold legally under its common or Nutritional Programs: In 1973, FDA an- usual name, it must be made in accordance nounced the Food Nutrition Labeling Regula- with certain specifications. The promotion of tions, which provided for the voluntary honesty and fair dealing on behalf of the con- declaration of the calorie, protein, carbo- sumer is accomplished through preventing hydrate, and fat content and the percentage of product degradation in the marketplace. Egg U.S. Recommended Daily Allowance (RDA) bread, for example, cannot be labeled as egg for protein and seven vitamins and minerals bread unless it contains a minimum quantity in each processed products. The Food and of eggs stipulated in the standards. Drug Administration has established a stand- ard format for the nutritional labels, which in- Food standards are not only developed in clude the following items: 1) serving size, 2) the United States but are also being developed servings per container, 3) calorie content, 4) internationally. Codex Alimentarius, trans- protein content, 5) carbohydrate content, 6) lated freely as code of food standards and fat content, and 7) the percentage of U.S. regulations, is a collection of internationally Recommended Daily Allowances (RDA) for adopted food standards drafted and presented protein, vitamins, and minerals in each serv- in a uniform manner. Such standards attempt ing (figure 12). Nutrition experts, scientists, to protect consumer health by insuring doctors, home economists, and industry and

Figure 12. Nutritional Labeling

Nutrients listed are for NUTRITION INFORMATION one serving. (per serving) Nutrients in metric I I weight as grams (1 ounce= 28 grams), Number of servings Carbohydrate 25 Grams Fat per container. Sodium (970mg/100gm) 275 Milligrams

Percentage of U S Recommended Daily Allowances (U.S. RDA) I Percentages of U.S. Labels may show amounts , Recommended Daily of cholesterol & sodium Allowances. in 100 grams of food Riboflavin 25 r I and in a serving. I

SO

2Dr. Robert Artgelotti, Overzliew of FDA FOOd COIItrOl Programs, paper presented at the 36th Annual Meeting of the Institute of Food Technologists, June 7, 1976.

53 consumer representatives all had input into USDA standard of grading specifications for the development of regulations for nutritional fruit cocktails labeling. The basic elements of a quality assurance Nutritional labeling is designed to provide system include:4 specific and meaningful information on the ● Ingredient inspection and control, which identity, quality, and nutritional value of a requires testing against written stand- wide variety of foods to consumers. In addi- ards. tion to the nutrient, vitamin, and mineral labeling required on the FDA-designed format ● Manufacturing control, which requires for labels, fats and cholesterol content is that hazards be identified and critical shown. The regulation also sets standards for control points be established and that vitamins and minerals sold as dietary supple- these be monitored with the resulting ac- ments and rules for the definition and labeling tions duly recorded. of imitation food products. ● Distribution control, which requires not The number of foods that are required to only that the integrity of the- finished have nutritional labels is limited to only those product be protected from the environ- products fortified by addition of a nutrient or ment in which it is shipped but also that those for which a nutritional claim is made in the finished product as sold be the labeling or advertising of that food. For unadulterated and properly labeled. most foods nutritional labeling is voluntary, To achieve this system requires a detailed but if processors want to nutritionally label program. These programs may differ among their products, then they must conform to companies. The following is a typical program these standards. The voluntary program has used by the Pillsbury Company’s businesses been adopted by most large processors, and a to assure product safety and regulatory com- significant volume of processed food is cur- 5 pliance. rently nutritionally labeled. 1. Product Safety Analysis.—A product safety Nutritional claims include any references to analysis must be performed on every new, ex- protein, fat, carbohydrates, calories, vitamins, isting, or modified food product offered for minerals, or use in dieting. Any such reference consumption or use. Each business’ research makes labeling mandatory. Products and development department has the respon- marketed as “enriched” or “fortified” also re- sibility of completing the food safety analysis, quire full labeling. which includes an assessment of the Such items include microbiological, physical, and chemical safety enriched bread and flour, fortified milk, for- of the product. The formulation, processing, tified fruit juices, fortified breakfast cereals, distribution, and recommended end use are and diet foods. evaluated for any possible contribution to an unsafe product situation. 2. Product Specifications.—There must be a prod- Present Status of Private Sector Programs uct specification for each product sold or other- Quality Control Practices in Manufacturing: wise distributed. The specification must take All processing plants have a quality assurance into full account all safety, quality, and system to assure that the food products regulatory requirements and specify the use of all ingredients, process and acceptance tests, manufactured and shipped are not adulterated and packaging materials and labels, as well as a or misbranded within the meaning of the description of the process and of the finished Food, Drug, and Cosmetic Act and the Agricultural Marketing Act of 1946. Accord- ing to Dr. Elaine Wedral, Director of Research and Development, Libby, McNeill, and Libby: sWorkshop, vol. I, p. 239. ACarl A. Smith and James D, Smith, Quality Assurance System Meets FDA Regulations, paper presented at Sym- We have grade specifics for our own company posium on Impact of FDA Regulations on Quality for, say, fruit cocktail that is ten pages long, Assurance, November 1975. These regulations are much tighter than the SIbid.

54 product. The product specification also serves assuring Good Manufacturing Practices must as the vehicle by which Pillsbury’s pure food be documented and religiously observed at policies and the FDA regulations and stand- each production, storage, and distribution ards are communicated to the manufacturing facility, including the R & D Center. These pro- operations. cedures are “how-to” instructions for comply- ing with sanitation procedures and do not go 3. Physical Systems Hazard Control.—Each busi- into the technical aspect of why these practices ness is required to make and maintain an in- must be followed. The technical aspects are ventory of all food-processing systems and en- handled by in-plant training of the affected vironments and the possible hazards to food personnel. safety that could be caused by them. Whereas the product safety analysis and the product 7. Product Recall System .—A product traceability specifications are R & D-originated, the physi- system must be in effect and capable of tracing cal systems hazard control system is a facility- all products or materials sold or distributed generated set of documents which the facility which may require recovery. Each of our must maintain. In order to identify all physical businesses has documented procedures--some systems hazards, a clear understanding of each manual, some computerized—for the prompt step in the processing and packaging of food is tracing of products, and each of the plants must necessary. Since flow diagrams aid in defining establish procedures for accomplishing a prod- the total process, and since physical systems uct trace. Periodic tests of the traceability hazards can be identified on them, we require systems are conducted and the results are each business to: documented. —Develop and maintain flow diagrams on all 8. Customer Service.—Means must exist to record food processing and physical systems and en- and immediately respond to consumer and vironments. customer complaints as well as to correct any — Identify all physical systems hazards to prod- safety or regulatory deficiencies discovered in uct safety. products as a result of such complaints. A — Establish and document systems of control for product recall might be one result of an action all hazards. undertaken because of such a complaint. —Maintain records of control actions for all physical systems hazards that are critical to 9. Inspections and Safety Incidents.—Each busi- product safety. ness must have a means to record and respond to all safety or regulatory incidents that occur. 4. Purchasing Requirements.-Our purchasing A regulatory incident is defined as a visit by a requirements dictate that all food ingredients Federal, State, or local inspector or any regula- and packaging materials may be purchased tory agencies including the FDA, USDA, EPA, only from an approved supplier. An approved OSHA, FEA, military veterinary corps, State supplier is one who has submitted an accepta- and local health inspectors, civil rights inspec- ble continuing guarantee, submitted adequate tors, etc. Our facilities are defined as many of proof of his ability to furnish products which our plants, mills, warehouse, restaurants, R & meet our quality and safety requirements, and D centers, etc. passed a plant inspection whenever required 10. Auditing.—All processing plants, warehouses, by Corporate Quality Assurance. A supplier and other storage facilities are routinely may be removed from the list for unsatisfactory audited by Business Quality Assurance person- performance. nel to determine their degree of compliance 5. Contractor Requirements.—Any company with the business and corporate standards product manufactured, packed, or supplied by regarding specifications, product safety, and a third party—i.e., contract manufacturers or regulatory requirements. packers—must be produced in accordance with an approved written contract and appropriate Date Coding by Manufacturers: Food approved specifications and food safety manufacturers have dated products for years; analysis. All facilities to be used in manufactur- however, dates and certain other manufac- ing or packing of such products must be in- turer’s information usually appear in some spected by qualified personnel for Good form of code. In establishing coding, the food Manufacturing Practices compliance and ap- industry was concerned primarily with pro- proved by Corporate Quality Assurance. viding a tool for inventory and quality con- 6. GMP Compliance .—Sanitation procedures for trol. Codes made it possible to trace product

55 movement, to identify and handle consumer complaints, to rotate stock, and to identify product loss in the event of a recall. As a result Figure 13. of today’s increased consumer concern, the food industry is providing clearly identified Types of Dates information on freshness of product when purchased and, in some cases, anticipated Several types of open dates may be used on food items: home storage life. Figure 13 lists examples of date coding being used by manufacturers. Pull Date–This is the last day the retail store may Private Labeling and National Brands: Infor- sell the item as fresh. The date is designed to allow mation is conveyed on the quality of products you a reasonable amount of time to store and use the sold under manufacturer’s brands and prod- product at home even if it is purchased on the pull ucts sold under retailer’s or other distributor’s date. How long the product should be offered for sale and how much home storage time is allowed are de- brands—i.e., private label. Many manufac- termined by the processor, based on his knowledge of turers strive to establish strong consumer the product and its shelf life. When you see “Sell by preferences for their brands and in some Jan. 15” on a package it doesn’t imply you shouldn’t branches of the food industry incur substan- use the product after that date. The date represents tial advertising and sales promotion costs for the last day of fresh sale so you will have time to store this purpose. and use it at home.

Brand names and private labels are an in- Quality Assurance or Freshness Date–This shows strument of differentiation, and as such they how long the processor thinks his product will be at become a vehicle of change. In merchandising peak quality. Some time after the “freshness date” a brand, a company wants to differentiate to (and there will always be a cushion of time allowed), make it stand out differently in consumer’s the food will no longer be of optimum quality. This perceptions from other brands. This has been doesn’t mean that it will be unacceptable or that you very useful in our society because of rising in- shouldn’t use it; it does mean that the processor comes and changing needs of consumers on would like you to use the product while it is at its peak. the one hand and technological changes that The label on the item might say something like “Better enable changing a product’s characteristics on if used by January 1974. ” the other. Society benefits from product change through new products such as conven- Pack Date–This is the date of final packaging or processing. Although it is sometimes used, it may not ience foods. be very helpful to shoppers who don’t have the tech- What brand names and private label prod- nical expertise to judge the shelf life of thousands of ucts have done over the years is to establish a different items. perceived quality of a product. Thus there is a function, in an informational sense, of a brand Expiration Date–This is the last day the item should be consumed. It is virtually never used because qual- name. As Dr. Angelotti indicated: ity changes occur slowly and it is simply not possible You know when you buy Green Giant green to say that an item will be acceptable one day and beans, your perception of that quality is consist- unacceptable the next. ent and you can expect your perception to be Of these dates, the “pull date” and the “quality met the way you want it to be met each time you assurance or freshness date” are in most widespread buy Green Giant green beans. The variation is use. minimized. When you see an unexplained date on a food pack- age you might check with the store manager or write When you start talking about grades, that is to the processor. But it is important to remember that where the rub comes in. I buy Green Giant green the date is not a “throw away” date. beans because as I perceive quality, I want that After you get the food home, a good general rule is in that product. I might not buy Green Giant’s to rotate food on your shelves in order of freshness. corn because it is not mushy enough for me. It is For peak quality, use the items before or within a how I perceive it. reasonable time after the date shown on the package. If you start talking about grades, what are you going to do with that? The thing that brand SOURCE U S Department of Agriculture Economic Research Service

56 names offer to the population in my view is just the most defects, or the most off color or be the that, the selection for them to exercise their per- least uniform. How can you say this is Grade A ceptions of quality. As they know when they and this is Grade B?7 buy this brand, it is consistent over time, and they will always get essentially the same product Other problems expressed were those in- if they stick to that brand name.6 volving the time factor. Most participants in the workshop agreed it is impossible to That is one reason why most companies do analyze the products coming into a canning not use the established grades for their proc- plant for nutrient qualities. Dr. Wedral stated: essed products. They have their own stand- ards, and it is their perception of quality In nutritional labeling, companies have been derived from consumer surveys that is used to permitted to establish nutrient data banks in order to support their claims. (In other words, set their own standards. Thus the brand name the nutritional information on this year’s is doing something useful for the manufac- package represents information collected over turer and conveying information to the con- many years.) sumer. If a grading system were adopted that incorpo- Potential Function and Impact of Retail Grading rated nutritional characteristics (and data banks were utilized), the grade on the product would Grade Criteria: The present public programs, be reflective of previous years’ grades. Thus, for such as the wholesomeness and safety example, canned tomatoes packed and labeled programs and standards of identity programs Grade B due to information in the data bank conducted by FDA, assure the public that the might in reality be Grade A. processed food they buy is safe for human Thus, if a grading system were adopted that in- consumption. The nutritional labeling corporated nutritional characteristics, the grade program provides consumers with nutritional on the product would be reflective of the last information. In addition the private sector, year’s grade. For example, canned tomatoes through quality control programs and date from a plant are Grade B this year when this coding, provides additional assurance that the year’s might really be Grade A.8 food consumers buy is safe and wholesome. Voluntary or Mandatory: Grades carry infor- Given this, the question to be addressed is mation to the consumer, as do brand names what additional useful role might grades per- and private labels. However, there is a school form? Whatever role grades might play, most of thought that believes brand names are a of the food grading workshop participants felt vehicle for change and cause new processed that grades should continue to differentiate products to evolve. Grades, on the other hand, sensory characteristics only and not combine have just the opposite effect. According to with nutritional characteristics as additional Professor Daniel I. Padberg, Department of grade criteria. Agricultural Economics, University of Illinois: Many problems were raised on the Brand names through differentiation in the feasibility of combining nutritional charac- marketplace have become a vehicle of change. teristics with sensory characteristics. Dr. Grades on the other hand have the opposite Wedral stated that: effect-one of stabilizing, one of identifying a level of characteristic, requiring it and thereby Sensory characteristics of a product are not 9 stabilizing. related to nutrition. For example in canning peas, there are different grades reflecting Further, Dr. Timothy Hammonds, Vice different colors or various defects, but they may President for Research, Food Marketing In- all have the same nutrition. With orange juice, stitute, indicated mandatory grades may limit some of the earlier products or crops of oranges consumer choice in the longer run: may be higher in vitamin C; however, they have less appeal from a color or flavor standpoint. Mandatory grading would be a way of choosing That is why earlier varieties are not preferred. among those products that are in the market The product may be the most nutritious, but has TWorkshop, vol. I, pp. 69-70. BIbid., pp. 70-72. bWorkshop, VO1, 1, p. 96. gWorkshop, vol. I, p. 79.

57 place when in fact it is going to reduce the would merely be an A, B, C or 1, 2, 3 system; variety of products in the marketplace. And I but that system would not be meaningful in think ‘that is an unexpected consumer result of terms of conveying grade criteria or standards 10 it. to consumers. One would not know whether So, if society looks at the choice of whether A, B, C reflected nutritional information or or not to institute retail grades, an important other characteristics such as size and flavor or implication of that choice is the product it defects. To this end, descriptive labeling or wants to stabilize in terms of characteristics grades have been suggested in processed food and the product it leaves open for evolution. products. This system would mean that peas When grading is instituted, an inevitable con- might be graded and given a descriptive term sequence would be to suppress differentiation such as “young, tender peas” or “mature or variability and evolution of product peas.” Descriptive terminology, however, is characteristics. best suited to processed products rather than fresh, since the characteristics of those com- According to Professor Padberg: modities in processed form are less available I am assuming there are subsets of the food in- to the consumer at the point of purchase than dustry where differentiation may become a in the case of fresh. Terms that might be used social detriment. That is to say the canned peas for a particular fresh product grade may are not that different today than they were 30 already be apparent. years ago. And we are now supporting several different labels with minimum differences. Another difficulty is that all nomenclature implies rank, with the possible exception of a If we had grades, then what would happen? designation such as circle, triangle, square. What I would suspect will happen is that Del The latter terminology represents an effort not Monte or Green Giant who are now spending to imply rank in the grade. Objection to im- money on marketing peas, which is a stand- ardized product, would use their research and plied rank is that second or third grade may in development capabilities in other areas that fact be superior for some end uses, or at some were more amendable to development.11 particular relative price, to the top grade. However, the circle, triangle, and square ter- Thus the potential for grades as a consumer minology would not imply grade criteria or information vehicle is not a universal prod- standards. uct; it is a very selective one. It makes more sense in some products and relatively less in Regardless of the terminology, the likeli- others. Sorting them out may be difficult. It hood of most retailers offering all qualities or means selecting those products where the grades of a particular commodity is slight. Mr. differentiation cost is currently greater than Kimbrell expressed the feeling of most benefits of differentiation to consumers. workshop participants when he stated that: Uniform Nomenclature: Based upon workshop evidence, concern regarding Any grading system, of course, is only as good as the selection it offers the consumer-that is, a uniform nomenclature was in two categories. retail grading system. And without some kind of One was simplicity in terminology. A second a system that will be used that will offer a selec- was whether terminology could be devised tion, then the effects of that grading system are which does not imply rank. Each of these con- going to be lost, cerns will be discussed in the following paragraphs. The people that are going to use it have to be get- ting something from it such as the retailers Optimum terminology would be both sim- themselves. And in order to set up some kind of ple and meaningful to consumers. However, an advertising program, some kind of a system there appears to be a tradeoff between to incorporate a grading nomenclature therein, meaningfulness and simplicity in ter- you are going to have to remove some of the minology. For example, the simplest system stigma of the lower grades. In this case, B is derogatory or C is derogatory, 3 IO1bid., p. 232. is derogatory, 2 is derogatory. So you need some llIbid., pp. 172-173. kind of a system.

58 I am talking about the practical aspects of getting The consensus of workshop participants a system accepted by all parties and not just the was that whatever role retail grades play in consumers. And you are going to have to offer processed foods, possible grade criteria should something to those people that are going to not include differentiating products based on make use of it. And I think that they are going to a combination of sensory and nutritional have to get some kind of advantage. characteristics. It is impossible to establish a In order to do this and for them to get away from meaningful grade when incorporating nutri- strictly an A system, nobody is going to adver- tional characteristics with sensory charac- tise that they sell B anything. They are not going teristics. Problems include an inverse relation- 12 to set up a system that will advertise a B or 2. ship between sensory characteristics and In summary, the question of what ter- nutritional characteristics for some food prod- minology to choose is an unsettled issue. Even ucts. Such a relationship would mean that a though optimum terminology is unsettled, grade would reflect an average value between strong support for uniform terminology was sensory characteristics and nutrition and evidenced. therefore not adequately reflect either. Also a problem is the time lag between establishing Summary the nutritional content and labeling the prod- uct. Consensus of workshop participants was The potential role of retail grades for proc- that nutritional labeling is the most appropri- essed food products can only be defined in ate vehicle for conveying information to the light of the current Government and private consumer. sector programs and their respective func- tions. Currently, Government programs Establishing retail grades for processed regulate food products for wholesomeness products would likely have a stabilizing effect and safety, provide standards of identity, fair on product characteristics. There would be labeling and packaging, nutritional informa- less evolution of new products. Thus, if tion, and a grading system designed primarily society looks at the choice of whether or not to for wholesale transactions. Most manufac- institute retail grades, an important implica- turers have elaborate quality control tion of that choice is what products should be programs that assure compliance with stabilized in terms of characteristics and what Government regulations and have insituted a products should continue to evolve. This voluntary date coding to ensure product means sorting out those products where cur- freshness for consumers. rently the differentiation cost is greater than benefits to society of differentiation. Terminology of current grades for retail processed products is confusing. For grades to be used more extensively at retail, uniform Congressional Options terminology across grades that is simple to understand is a basic need. Some of the options available to Congress for grading processed or manufactured food National brand names and private labels products include: have substituted for grades at retail. They have established a perceived quality of a prod- ● Congress could standardize nomenclature uct for the consumer through time. Brand for the first, second, third, and fourth names and private labels have allowed society grades for processed products so they to exercise its perception of that quality by would be consistent from one product to selection of one brand name over another. another. That is one reason most companies do not use ● Congress could direct the Food and Drug established grade standards for their proc- Administration to disseminate information essed products. They have their own grade to consumers concerning the current standards which are more detailed than cur- programs that are in operation which rent Federal grade standards. assure the safety, wholesomeness, labeling, and identity of most manufactured or proc- lzworkshop, VO1. V, pp. 45-46. essed food products.

59 ● Congress could support or provide incen- products is not obvious when that product is tives for educational programs by Govern- in a container. For example, attributes of ment agencies or the private sector which peaches in a can are more difficult to deter- inform consumers about nutrition of proc- mine prior to purchase than a fresh peach. essed food products and interpretation and Some argue that fresh produce is either ob- use of the current nutritional labeling viously good or poor and that the grading program and/or grades for processed food system therefore need not deliver informa- products. tion, prior to purchase, concerning product sensory quality. On the other hand, some ● Congress could make designation of the cur- argue that the role of the grading system in the rent processed grades mandatory for case of fresh produce is delivery of informa- selected food products. Such a program tion concerning flavor and nutritive content. should not be instituted, however, prior to Both of these latter pieces of information standardizing nomenclature for the first, would, presumably, aid consumers prior to second, third, and fourth grades. purchase.

Fresh Fruits and Vegetables Sector The Current Standards of Identity Program administered by the Food and Drug Ad- Present Status of Government Programs ministration substantially lessens the need for information concerning wholesomeness, As reviewed earlier in this document, grad- safety, and sensory characteristics of proc- ing programs of fresh fruits and vegetables are essed products to be conveyed through retail under the auspices of the Agricultural Market- grades. Commodities may be modified rather ing Service (AMS), U.S. Department of dramatically when processed. A strong need Agriculture. Current grades have evolved for consumer information concerning over a number of years. Specific fruit and wholesomeness, safety, and sensory charac- vegetable product grades were developed pri- teristics of these commodities in their proc- marily at the request of the various food in- essed state has been recognized through FDA dustries involved. programs. Contrast this with fresh produce, Grades for fresh fruits and vegetables are which basically is not altered from its natural based primarily on sensory criteria typically state. In the latter circumstance, information involving color, uniformity, exterior concerning certain quality attributes is availa- blemishes (in some cases), size, texture, and ble through observation at point of purchase. ‘ maturity. As previously reviewed, the criteria Some argue this lessens the need for any currently used for fresh fruits and vegetables Federal Government involvement in fresh are designed to facilitate wholesale rather than fruits and vegetables. retail exchange. These grades essentially serve Few fresh fruit and vegetable commodities the purpose of facilitating wholesale exchange without necessitating onsite inspection. are branded, or carry a brand name designa- tion. This is especially true of produce sold in Few commodities in the fruit and vegetable bulk at retail. There is a trend, however, category carry their grade, if graded, all the toward fewer bulk retail sales and more way through to the retail shelf. Thus, little in- packaged sales—i.e., bags, boxes, or other con- formation is provided by the current grading tainers (figure 14). With packaging, brand system as to sensory characteristics, nutri- names become more prevalent. So if the trend tional aspects, or wholesomeness and safety of toward more packaged retail containers con- the produce on the shelf. tinues, brand names may become more preva- lent for fresh products. Currently, though, the The function of grades in processed prod- information role of brand names is not as ucts is conceptually different from the func- strong in fresh produce compared to proc- tion of grades in fresh products. The informa- essed foods. tion role for grades in processed products may revolve around ingredient or identity stand- With respect to pesticides and other chemi- ards because sensory quality of processed cals on fruits and vegetables, the Environmen-

60 Figure 14. Examples of Fresh Fruit and Vegetable Packaging

. . I

USDA Photos

tal Protection Agency establishes a safe significant differences between, for example, tolerance level for pesticides, which FDA en- lettuce and carrots in terms of nutritive con- forces.13 Because potentially harmful pesticide tent; but a grading system can serve to residues are already controlled through these differentiate only within a commodity catego- Federal agencies, it is not a potential function ry rather than across commodities. Nutri- for a grading system for fruits and vegetables. tional information on fresh produce may be useful on an intercommodity basis and be meaningful to consumers, but not useful on Potential Function and Impact of Retail Grading an intracommodity basis. Nutritional infor- mation simply will not serve as a base for Grade Criteria--Nutritional Base: Consumer sorting within a commodity because nutrition groups, as previously discussed, would like to is essentially invariant within a commodity. see grading criteria changed to reflect nutri- tion of the commodity rather than merely Along these same lines, Mr. Eddie Kimbrell, physical appearance. Consumer representa- Assistant to Administrator of USDA’s tives want Federal grades to include nutri- Agricultural Marketing Service, stated: tional quality in addition to the already Normally a grading system is something that defined sensory characteristics such as ap- separates commodities within a group. For ex- pearance or size. ample, within apples, there would be a set of ap- This does not seem to be possible in fresh ples that are different than another set of apples. fruits and vegetables, based upon workshop And grading in this sense would separate those two categories within the same commodity.14 evidence. Within a particular fresh com- modity such as lettuce, nutrition does not However, there does seem to be a desire on serve as a useful basis for discriminating or the part of the industry to have a program sorting one head of lettuce from another comparable to the nutritional labeling of proc- because the commodities tend to be basically essed products. Professor Thomas Clevenger, the same in nutritive content. There may be Department of Agricultural Economics of

13WOrkShOp, VO1. I, p. 165. 14WorkShOP, VO1. I, p. 57.

61 New Mexico State University, indicated that: technique if graded based upon nutrition con- There is a desire by the (fruit and vegetable) in- tent. dustry to have nutritional labeling in that the Other Bases: For fresh fruits and vegetables nutritional labeling at this point in time would two potential information needs arise for con- probably be on a commodity-only basis. That is, sumers. One is information prior to purchase there would not be different nutritional labels concerning yield per pound or the amount of for say, a Grade A if we had one versus a Grade B edible product. A second potential informa- or a Grade C. And that the implementation of that might have to be in terms of some posting of tion need is with respect to variety. nutritional labeling regarding that commodity at the point of purchase as opposed to, say, placing One possible basis for reflecting grade at a nutritional label on every banana.15 retail is a per-serving basis on commodities such as lettuce, oranges, grapefruit, bananas, As further clarification of nutrition serving peaches, avocados, cantaloupes, and water- as a base for grading, Dr. Angelotti pointed melons. These commodities have in common out : values which vary from one another on a cost- As a rule, on a weight-for-weight basis there is per-ounce serving basis. However appealing no significant difference in nutritional quality of such a basis may be for a grading system, raw agricultural commodities.16 problems that are practically insurmountable Even if it were possible, a potential problem of would be experienced in implementation. One difficulty would be in the technology and test- a grading system at retail based upon nutri- tion is indicated by Dr. Wedral: ing necessary to determine the amount of edi- ble product per unit of each and every in- Would the consumer think a peach that is Grade dividual commodity. A second factor is that A would supply the same amount of nutrients as subjective judgment can be constantly exer- a green bean that is Grade A? I think it (nutri- cised during the purchase decision concerning tion basis for grades) would create a tremendous product value (on a per-serving basis). For ex- amount of confusional T ample, consumers can and do make subjective Dr. Wedral continued by indicating judgments concerning the value of particular difficulties concerning laboratory techniques produce from a bulk display at retail. Hence, a used to analyze particular nutrient values. She retail grade based upon yield (edible servings said: per unit such as pound, head, or bunch) may Variability in laboratory techniques used in be of marginal benefit to consumers in aiding determining nutrient content can alone account purchase decisions. for differences in label claims. In one collabora- tive study involving several laboratories, the A second possible criterion for grades on average vitamin A content of samples of tomato fresh fruits and vegetables would be labeling juice taken from the same lot was determined to with respect to variety. The idea of variety be 20,9 percent RDA with a standard deviation labeling would be to convey information of 6.3 percent RDA. This means that depending regarding such aspects as use or flavor of the upon the lab that ran the analyses, someone product. For example, in strawberries or ap- could claim as little as 15 percent or as high as 25 ples the variety would convey to an informed percent RDA for vitamin A. And really both consumer some characteristics concerning claims would be based on tests on the same 18 flavor and, in the case of apples, appropriate tomato juice. end use for that commodity. However, the The significance is that fresh produce would variety labeling idea for conveying informa- be subject to the same variability in laboratory tion at retail is limited. There are a number of commodities for which knowing variety may not assist in a purchase decision. In addition, Sworkshop, VO1. V, p. 30. an adequate job is probably being done in- lbworkshop, Vol. 1, p. 58. store at point of purchase regarding the IT1bid., p. 73. 16E.R. E]kins, “lnterlaboratory Variability in Nutrient variety of product. As an example of this, ap- Analyses: Two Cooperative Studies,” /ounzal of the ples are commonly labeled according to their AOAC, Vol. 57, No. 5, 1974, p. 1193. variety at the point of purchase. Thus, the

62 variety labeling concept has limited useful- In essence, the expectation would be that ness. voluntary or voluntary/mandatory grading systems for fruits and vegetables carried to the Voluntary or Mandatory Systems: The ques- retail level would not be adopted to the same tion of voluntary or mandatory grades on any extent that nutritional labeling has been commodity basically revolves around ex- adopted on a voluntary/mandatory basis for pected use at retail. Net benefit to consumers processed foods, from voluntary programs would, of course, vary greatly depending upon the extent of use There are three basic systems under the that was assumed for a voluntary system. voluntary/mandatory issue. One is a com- pletely private voluntary system. A second is a There seems to be a significant difference combination voluntary/mandatory system, between the expected adoption of voluntary with a third being a completely mandatory or voluntary/mandatory grades compared to a system. With a completely private system, the voluntary/mandatory program such as nutri- standards and the adoption of those standards tional labeling. Voluntary grades may not be is done on a private basis and voluntarily. expected to be used the same way as nutri- Under the voluntary/mandatory system, a tional labeling, indicated Professor Padberg: Government standard is established, and then One thing would be markedly different in grad- anyone who grades produce would be re- ing consumer products from the nutritional quired to adopt the system. However, grading, labeling experience is that, if voluntary, it for any particular firm, would be on a volun- (voluntary grades) would not be taken up at all. tary basis. The mandatory system would A very minor take, That is very different than establish Government standards, and all pro- nutritional labeling. Nutritional labeling gave duce would be required to be graded. From a large processors a great stake in consumer reac- consumer information viewpoint, the only tion, a vehicle that was perceived in our research and their research as being useful. serious systems would be the last two—that is, either a voluntary/mandatory or a mandatory It is also extremely flexible. It doesn’t system. The completely voluntary and private categorically restrict what they can do. They just system would be of little use in providing con- have to tell about it. And so in their process of sumer information with respect to purchase differentiation, that enables them (processors) to decisions. give Government legitimatized information about their differentiating activities. So it has There are some general cost considerations been a very functional part of their marketing relevant to a mandatory grading system. The activities, where grades are quite counter to that. structure of the marketing channel in fresh I think grades, although discussed as a vehicle or fruits and vegetables (see figure 15) is signifi- choice, would be restrictive on items in the cantly different from the marketing channel market. for processed food products. In the latter Can you imagine being a produce buyer for a marketing channel, there are points of con- large chain trying to stock stores with two or centration, particularly at the processor level. three grades of cantalope? There would be a There are no similar points of concentration in preferred grade in everything and the producer the fresh fruit and vegetable marketing chan- or grower is going to learn how to meet that nel. The impact of this structural difference in preferred grade. the marketing channel from production to So voluntary grades have different meaning consumption is that no convenient place exists than voluntary nutritional labeling and I think in the fresh fruit and vegetable channel to in- voluntary grading systems for consumer prod- tercept a large proportion of the commodity ucts is no system at all. so that it can be economically graded. As Mr. Maybe that is all right, but I think in terms of im- Kimbrell indicated: plementation, 1 would get a very different take Unless there is an assembly point in the market- on the part of the large firms as compared to 19 ing channel, then grading by a third party may nutritional labels. really be a problem.20

lgWorkshop, Vol. 1, pp. 230-231. WA/orkshop, Vol. 111, p. 3

63 Figure 15.

< STATE STATE USDA USDA AGENCIES AGENCIES ●

SERVES I

However, there are alternatives to the third third party does the monitoring of the system party method of grading, as Professor to be sure that misrepresentation is not per- Clevenger indicated: mitted, but the industry does the grading on a voluntary basis. This contrasts to the man- The options might be to consider the possibility of not grading by a third party, but a third party datory system wherein a third party does all acting only as a referee.21 the grading using Federal standards and all produce is graded. Further elaboration of this option was given by Mr. Kimbell: Because of this structural distinction be- tween fresh produce marketing channels and There is one of the options that we have had processed marketing channels, there is a wherein there may be more of a quality control kind of system on the part of industry with the serious question as to the applicability of any industry doing the sorting and grading itself grading system to all fresh produce. Professor under the same kind of standard and supervi- Padberg elucidates: sion applied by other parties, State government agency or Federal Government agency, or some- Now the problem with the grading system is one who has no financial interest in the prod- that it favors a centralized commercial opera- uct.22 tion. To get Federal grading on produce moving through small local markets would be very ex- This system is commonly referred to as a pensive. voluntary/mandatory system wherein there We have a high price set on human labor, and are standards established by a third party. A we have adjusted our whole system to that. It favors durable and commercially grown pro- z~ibid., p. 4. duce. While there is local stuff that has quality 221 bid., p. 4. anybody would recognize, a grading system just

64 doesn’t fit it. That is a sad fact. But grading is not There is a tremendous difference, though, in the going to change that, I don’t think.23 cost, it seems to me. In nutritional labeling there is a big start-up cost, and after the system Thus, the structure of the industry is directly becomes operational on a permanent basis it is related to its geographic dispersion and the not very much. lack of concentrated points through which the product flows. A strictly mandatory system of When you are talking about grading fresh fruits grades would be extremely expensive due to and vegetables, it is a continuous cost. There is this dispersion. no start-up and then dribbling out (of costs) afterwards. It is just constant, continuing. In terms of use of grades on a voluntary And so there is a tremendous difference in the basis, incentives for grading by industry were costs we are talking about. It would be more ex- not clear. Professor Clevenger addressed this pensive to grade fresh fruits and vegetables than issue in general: it is to institute nutritional labeling on canned products. 27 What incentives would be there if grading were voluntary? Grades would really have to convey Uniform Nomenclature: As previously dis- some specific types of information that are not cussed in this report, consumer advocates now communicated to differentiate products if it want uniform nomenclature for various (grading system) were to be implemented on a grades which might cover all commodities voluntary basis. graded under Federal standards. With respect And I don’t think that we are positive that in fact to fresh fruits and vegetables, existing regula- we could devise a grading system that would do tions could be changed to make grade ter- that in the case of fresh fruits and vegetables.24 minology uniform and easier for consumers At a different point in the workshop proceed- and industry to understand. This could assist ings, Professor Clevenger continues on the consumers’ use of the current grading system. same topic but with specific reference to fresh The structure for the terminology makes fruits and vegetables: U.S. Fancy, U.S. No. 1, U.S. No. 2, and U.S. No. It seems to me there is an excellent option for 3 the four designated terms applying getting to be voluntary and for industry to use it uniformly to fresh fruits and vegetables that as a competitive device just as we have in nutri- are graded. With the new simplified ter- tion labeling. The same argument we applied to minology, the criteria on which an individual nutrition labeling we could once again apply product is graded may remain unchanged. here.25 The program announced by the U.S. Depart- The cost of a system is sometimes felt by con- ment of Agriculture potentially will take sumer representatives to be an excuse for cer- several years before the new uniform no- tain courses of action. As Ms. Cross indicated: menclature is adopted. I can’t quite go to the actual cost because I know From the food grading workshop, no argu- if industry doesn’t want to do it, they will talk ment or disagreement prevailed concerning about the cost, and if they do want to do it as a whether or not there was a need for uniform voluntary nutritional labeling program, they are nomenclature. There was overwhelming not complaining about the cost.26 agreement that uniform nomenclature would However, the analogy between the cost in- be desirable from consumers’ viewpoint and curred in nutritional labeling versus the cost would not be contrary to the interest of indus- in grading fresh fruit and vegetables does not try, However, there was disagreement on what the uniform nomenclature should be, seem to hold. As Dr. Thomas Sporleder, agricultural economist from Texas A&M Concerns about the aspects of uniform no- menclature have at least two dimensions. One University, indicated: is the need for simplicity in any uniform no- menclature scheme. A second concern is im- zsWorkshop, Vol. V, p. 39. plication of rank that comes from most zgWorkshop, Vol. III, p.35 ZSIbid., p. 63. zbIbid., p. 66. zWorkshop, Vol. III, pp. 66-67.

65 uniform nomenclature system, which has in- such as heads of lettuce. Nutritional informa- teresting potential consequences on industry tion could be provided among categories of merchandising practices. products—that is, lettuce versus carrots—by placing average nutritional information for There is no reason that uniform no- each type of produce at the point of purchase menclature should not be implemented for in retail stores. fresh fruits and vegetables. Consensus was that uniform nomenclature could be relatively Other potential bases for grades do exist for easily instituted and would be relatively low fresh fruit and vegetables. One possible basis cost compared to other possible changes in the discussed by workshop participants was a current Agricultural Marketing Service grade grading system that reflects a per-serving standards. As previously mentioned, the U.S. basis, A second possible basis discussed was Department of Agriculture has announced a standard labeling with respect to variety. uniform nomenclature program for fresh Although some may not consider such bases fruits and vegetables. However, implementa- as a grading system per se, such systems po- tion of this uniform terminology may take tentially would provide additional consumer several years. information and thus serve the same function as retail grades or be a substitute for retail Fresh fruits and vegetables and processed grades. However, product sectors are similar with respect to the both the variety labeling concept and the yield-per-serving concept uniform nomenclature issue. In both sectors, were judged by most workshop participants workshop participants expressed concern to have limited usefulness for fresh fruits and both about tradeoff between simplicity and vegetables. meaningfulness in terminology and that all nomenclature implies rank. More detailed dis- In terms of the three systems for imple- cussion of these issues appeared previously in menting grading system—namely, voluntary, the Processed Products section of this chapter. voluntary/mandatory, and mandatory--only In regard to fresh fruits and vegetables, the the voluntary/mandatory system seems to be question of what terminology to choose is an appropriate for fresh fruits and vegetables. unsettled issue, However, participants voiced Evidence exists that a voluntary system would strong support for uniform terminology for be no system at all, On the other hand, a man- fresh fruit and vegetable grades regardless of datory system would not likely produce a the terminology chosen. positive net benefit to consumers, since costs would be substantial in a mandatory system, Summary while the information provided would be of marginal benefit to most consumer purchase In terms of consumer information con- decisions. siderations, uniform terminology across grades that is simple to understand is the most Congressional Options basic need. Although some question exists concerning optimum terminology for any The following are some of the options uniform nomenclature, no reasons seem to ex- available to Congress for grading fresh fruit ist for not instituting uniform nomenclature and vegetable products: across fruit and vegetable commodities regardless of the standard terminology ● Congress could direct USDA to im- chosen. mediately adopt the new simplified grade terminology for fresh fruits and vegeta- A second area of consumer information bles as announced by USDA in July 1976. concern is nutrition. Nutritional information This would mean that program adoption apparently cannot be combined with grade would not remain at the initiative of criteria or serve as the basis for grading, since growers or processors of these com- nutritional content is similar within any par- modities. ticular product. This means that nutritional information cannot serve as a base for sorting ● Congress could support or provide in- among various products within a category, centives for educational programs by

66 Government agencies or the private sec- change of meat products. The current grades tor which inform consumers about nutri- are carcass grades and not retail cut grades. tion of fresh fruit and vegetable products and the differences in nutritive content A second major Government program is a from one commodity to another. combination of Federal and State inspection of meat carcasses. This inspection essentially . Congress could direct USDA to ad- assures safety in the food product. The inspec- minister a standard labeling and variety tion system is mandatory for meat. Thus, all identification program for fresh fruits red meat in commercial channels sold through and vegetables which are sold in retail retail outlets is inspected under this program. packages. The extent of use in the US. Department of . Congress could direct USDA to facilitate Agriculture grading system is widespread but adoption of a voluntary/mandatory not total. About 50 percent of the commercial nutritional labeling program for fresh cattle slaughtered were federally graded in fruits and vegetables. 1975 (see figure 16). Of this total that was federally graded, 5.1 percent was Prime, 77.3 . Congress could make the current percent was Choice, 12.9 percent was Good, wholesale grade designation mandatory 0.7 percent was Standard, 0.4 percent was at retail for fruits and vegetables that are Commercial, 3.1 percent was Utility, and 0.5 currently graded. percent was Cutter-and the Canner grade 29 ● Congress could make grading mandatory was insignificant. for all fresh fruits and vegetables using Two concerns emerge for consumers in the current wholesale grading criteria terms of the present Government programs and designate such grades at retail. relating to grading of meat. One is that the grading system is not used for all beef and, Fresh Red Meat Sector secondly, the grading system is still oriented Fresh red meat refers primarily to beef. This toward wholesale exchange and therefore not is because beef accounts for the largest pro- carried to retail shelf in a manner that op- portion of consumer expenditures on meat. In timally assists consumer purchase decisions. 1976 it accounted for 54 percent of the $46.1 billion consumers spent on all meat. Poultry is Present Status of Private Sector Programs excluded from this decision because: 1) in An active trade association in meat is the relation to beef it accounts for a small propor- National Live Stock and Meat Board with tion of consumer expenditures on meat (12.5 headquarters in Chicago, Ill. In September percent in 1976); and 2) the present carcass 1973, the National Live Stock and Meat Board grading system for poultry is suitable for con- announced voluntary meat identification sumer purchase decisions since most poultry 28 standards. An industrywide Cooperative Meat is sold by carcass at retail. Identification Standards Committee developed fresh meat identification standards in an effort Present Status of Government Programs to eliminate confusion at the meat counter There are two Government programs (see figure 17). This committee reduced 700 which influence meat grades at retail. The best frequently used names to 314, of which about known system which currently exists for red 150 were expected to be used by the average meat is a carcass-grading system sponsored by retailer, The project was coordinated by the the U.S. Department of Agriculture and National Live Stock and Meat Board in reviewed earlier in this document. This cooperation with the Food Marketing Institute system is not a retail grading system, but National Association of Retail Grocers of the again is oriented to facilitating wholesale ex- United States, and the National Association of Food Chains, as well as other interested

ZWJSDA, National Food Situation, Economic Research Service (ERS), December 1976. Zgworkshop, Vol. I, p. 251.

67 Figure 16.

Breakdown ~ of Meat Grades of Federally Graded Commercial Cattle, 1975* (Percent) o 10 20 30 40 50 60 70 80 90 100

Prime

Choice 77.3%

12.9%

Standard

Commercial

Utility

Cutter

Canner Insignificant

● MY about 50% of the cattle slaughtered in 1975 were federally graded. SOURCE: Office of Technology Assessment.

groups representing various industry seg- Some time early in 1977, a referendum will be ments. Under the voluntary identification held among beef producers to either approve system, each fresh meat label at retail would or disapprove the financing of such a program indicate the name of the species—i.e., beef— through contribution of beef producers on a the primal or wholesale cut from which the volume basis. If the program is approved, retail cut is derived—i.e., round-and a stand- educational material and services could be ini- ardized retail name—i.e., round steak, This tiated through this national program which voluntary program is gaining widespread ac- would provide nutritional information, and ceptance and has even been adopted as a law other consumer-oriented information (such as by some State legislatures. Basic to any retail- cooking and preparation ideas for particular oriented grading system would be uniform end uses). identification of the retail cut. This voluntary program provides a basis for that uniform There are some brand names at retail for identification. fresh meat. The informational role of these Another program of the private sector that brand names would be consistency in quality potentially may evolve is a national educa- over time. That is, they would assist con- tional and research program sponsored by sumers in the sense that the same brand name beef producers. Enabling legislation to would be of comparable quality from one establish such a national program through purchase to the next. However, these brand funds provided by producers has passed Con- names would not assist a consumer in making gress and has been approved by the President. a decision among brand names at a particular

68 Figure 17.– Selected Examples of Voluntary Meat Identification Standards

Arm Chuck Steak Arm Steak Beef Chuck BEEF CHUCK Arm Swiss Steak ARM STEAK Chuck Stk. for Swissing (Braise) Round Bone Steak a Round Bone Swiss Stk.

Boneless Arm Steak BEEF CHUCK Boneless Round Bone Stk. ARM STEAK BNLS Boneless Swiss Steak (Braise) a

Barbecue Ribs Braising Ribs BEEF CHUCK English Short Ribs SHORT RIBS Extra Lean (Braise, Cook in Liquid) Fancy Ribs bc Short Ribs

English Steak Shoulder Steak BEEF CHUCK Shoulder Steak, Bnls. SHOULDER STEAK BNLS Shoulder Steak, (Braise) Half Cut d

SOURCE National Live Stock and Meat Board

69 time. Few brand names exist for fresh meat as siderations. Professor Zane Palmer addressed compared with those for processed products. this issue: Marbling is almost always positive in its rela- Potential Function of Retail Grading tionship to palatability but is not the indicator of tenderness, juiciness, and flavor that we once Grade Criteria: A common dilemma among 33 all three commodity categories considered in thought it was. this report is that current grading is not in- Professor Palmer continues along a similar dicative of value differences to the consumer. line: Meat grading is done on wholesale cuts but Nutritional superiority and palatability do not not retail cuts, although sometimes the retail necessarily have to go hand in hand; they can package carries the grade designation of the sometimes go in opposite directions. So how can carcass from which it was cut. For grades to be you average out the two extremes and come out meaningful, grade distinctions should be and say it is average in nutrition and average in 30 made in terms of value differences. In an palatability when that represents neither ex- effort to make meat grades deal only with the treme value? And for this reason I think you are fabrication of retail cuts, Professor Padberg averaging apples, doughnuts, and coming out argues: with oranges, and it is just not valid to do that.34 The concept of retail meat grades should have Mr. Kimbrell agreed, saying: two criteria: parent material, one; and two, what It would be much better to have both the grade happens in the fabrication of retail cuts, the trim, and fat designation if you want nutritional yield question, labeling, but you would confuse the issue if you When you get down to parent material, there is combined them into one designation.35 little problem in that, one, the parent material is not a very good predictor of consumer values in Thus the workshop consensus was that the first place. The amount of consumer value nutritional labeling may be a desirable you get from going up the grades in parent program for retail cuts of meat but that it material is small. And, two, there are a lot of in- should not be combined with or in any way novative opportunities for changing the parent considered as a grade criteria. The primary materials.31 reason for this is the confusion which would result from such combinations. Professor Padberg continues: What Prime, Choice, and Good have told the Another consideration in attempting to make consumer is something pertaining not to their nutritional content the basis for grade was in- market but somebody else, And if you are going dicated by Professor Padberg: to have grade to deal with their values, it would Another thing that has been a very great be less confusing instead of more to have a new difficulty in labeling problems is the basic topic set of names because you are talking about a of nutrition itself. We have a conception of different set of values and a different set of tran- 32 nutrition that deals with diet. Now to go from a formations. diet to a food product is a very basic difficulty. Another concern specifically related to meat We can conceive of nutritious diet, but the con- is the relationship between nutrition and the cept of a nutritious food product has not ever current wholesale grading system. Concern been developed. There are many components of about fat content, both in terms of trim and a nutritious diet and the concept of getting them intramuscular, have led some to question all in a product is very repulsive to nutritionists, whether or not grades in meat could be based and I think the populace in general. So here is a on nutritional content. Workshop evidence on very great difficulty in nutrition labeling. Any that point indicates overwhelmingly that product is a component of a diet, and it maybe a useful component although it is very lopsided in nutrition would not serve as a useful basis for its individual characteristics. What makes a grades when combined with palatability con- nutritious product is what other products it is

Soworkshop, Vol. IV, p. 35. Wbid., p. 5. Slworkshop, Vol. IV, pp. 64–65. stIbid,, pp. 2-3. szIbid., p. 72. Ssworkshop, Vol. 1, p. 151.

70 combined with in a day or a period of several up with some retail grade that deals with con- days. We have a conception of nutritional diet; sideration of value to the consumer, of which we do not have a conception of nutritional prod- trim is probably the most important. uct.36 What this would do would certainly give the Dr. Angelotti summarized this point by say- market system a lot better information. Because ing: you would have a price for Grade 1 and different price for Grade 2. Now, you have the scramble We ought to be thinking about nutrition infor- for the difference, and you do not know what mation and nutrition labeling as something economic values accrue to different trim. So in different from grading. We want it, people terms of making a market work better and mark- should have it, they should learn to use nutri- ing products described better, in terms of func- tional labels, and that should be an independent tions of grade, I think this would identify the consideration at this point in time from grad- functions of a grade.38 ing.37 It would be necessary to define retail cuts When nutrition is considered in terms of through some standard uniform system vitamin and mineral content of food, the before such grading could be operational. This above discussion applies. That is, if nutrition means that a system such as the current is conceived as the content of a particular voluntary system of the National Live Stock product in terms of vitamins and minerals, and Meat Board39 would need to be univer- then workshop consensus was that such infor- sally adopted before a yield-per-pound or per- mation would best be supplied on a separate serving grade would be feasible. label on a fresh meat package. There is con- cern by some that the percent of fat to total Another difficulty with such a system weight on fresh meat may be nutritionally sig- would be the logistic of implementation. nificant from a health standpoint. Along these Professor Palmer addressed this point: lines, workshop participants discussed two Composition of a meat product is not deter- possible systems for retail grading of fresh mined until you finish the fat trim and know meat. The systems are yield, either on a per- how much bone you are going to remove. So on pound basis or per-serving basis, and uniform fresh meats, it would be extremely difficult to mandatory labeling. Each will be discussed in develop meaningful information on composi- turn in the following paragraphs. tion, on say a steak, or a roast, or pork chop, or what have you. The potential system of yield per pound or per serving is conceived as dealing with trim And therefore it is so variable and the shelf life is (or the amount of external fat in relation to only 72 hours after you cut it anyhow, which lean per retail cut) in grade standards. In addi- means that you have a deadline between the tion, intramuscular fat or marbling may or time that you set up exactly what the retail cut is until the time that it is sold, so most of it is sold may not be included as part of the grade cri- before that time period. So as I see it in fresh teria. Such a conceptual system may increase meat, to have nutritional information on that the relationship between grade values and specific cut can be virtually impossible. But, nutritional values. An illustration of how such what you might want to do if you wanted to do a conceptual system might work is given by anything would be to say what it (nutrition) is Professor Padberg: in general, A grade standard might include two or three The best you could hope to do on an individual things. One might be that the first grade (a retail retail cut is to determine in general nutrition if cut) might come from Prime carcasses and then on a fat constant basis or a fat and bone constant it might have other criteria to deal with trim or basis.40 internal fat as well. This also illustrates the logistic difficulty of Maybe grade two would come from a Choice grading individual retail meat cuts. Shelf life carcass and perhaps have the same trim stand- ards, but not the internal fat, so you would end SgWorkshop Vol. IV, pp. 8–9. 39 Un jform Refa i~ Meat ~~entitv Standards, National Live sbWorkshop, Vol. I, p. 136. Stock and Meat Board Publication, Chicago, Ill. 1973. sTIbid., p. 143. qoworkshop, Vol. I, p. 131.

71 on fresh retail cuts of meat is typically no processing of frozen retail cuts. Each of these more than 3 to 4 days. This is an extremely systems is explained in turn. important physical characteristic of fresh meat compared to either processed products of Current technology is to fabricate retail cuts fresh fruits and vegetables. at the retail store level. This means that pri- Other Bases for Grading: Another system is mals, subprimals, or carcasses are transported one involving uniform mandatory labeling of through the marketing channel from either fresh meat at retail. Although some may not packing plants or distribution centers to retail consider this to be a grading system per se, stores. In the meat workrooms of retail stores, such a system would provide consumer infor- individual retail cuts are cut and packaged. mation via labels and in that sense serve the This distribution system is the one used for same function as grades. This concept most distribution today. amounts to making a system mandatory at the Federal level such as the National Live Stock Centralized processing of fresh meat cuts and Meat Board meat identification standards, implies that the fabrication of individual retail Some suggest that the primary consumer in- cuts is not done at the retail store level but at a formation need with respect to fresh meats at more centralized location such as retail chain retail is a standard identification of retail cuts distribution center or even a packing plant. over time and over geographically separate However, because of the physical limits on markets. The contention is that consumers can shelf life of individual fresh retail cuts, there is readily determine value of individual retail a time limit on handling and transporting cuts by simply looking at the amount of exter- fresh cuts. If these cuts are fabricated at the nal fat in relation to total weight. If this con- distribution center or packing plant, shelf life tention is accepted, then uniform mandatory may be a limiting factor on feasibility of the labeling would provide unique and distinct system. Shelf life on individual fresh retail information which consumers cannot other- cuts may be extended by rather sophisticated wise determine. packaging techniques (such as vaccum packaging), but this is relatively expensive An extension of this second system may or packaging compared to conventional packag- may not involve mandatory wholesale grade ing. Some experimentation has been done identification for individual retail cuts. As with centralized processing of fresh retail cuts, mentioned previously, with the current beef but due to the shelf life limitations mentioned, grading system, carcasses are graded but in- the system has not been widely adopted. dividual cuts are not. Of course, carcasses are the parent material from which retail cuts are A third distribution system is centralized derived (see figure 18). Mandatory display of processing of frozen retail cuts. The obvious the grade of a carcass from which a retail cut is factor mitigated by freezing is shelf life. Freez- derived could be part of a uniform mandatory ing extends shelf life while preserving product labeling program. Such extension of the present quality, so that transportation and storage wholesale grading system would provide time are eliminated as a problem. Freezing is more uniform consumer information with most useful for beef but may not be as advan- respect to grade than is currently available. tageous for other red meats.

Current freezing technology for beef is to Potential Impact of Retail Grading flash freeze individual retail cuts with either Costs for any fresh meat grading system ap- nitrogen or carbon dioxide. With this system, plicable to retail cuts depend upon the dis- beef is cut centrally, frozen at the central loca- tribution system which is assumed prior to tion (either distribution center or processing calculating costs, Three distinct and separate plant), shipped in freezer vans, and sold in a distribution systems can be defined, One is the frozen state at the retail case. This system po- current distribution system using current tentially offers cost savings over the previous technology. A second is centralized processing two systems described, even though it is of fresh retail cuts, while a third is centralized relatively energy intensive. The system has

72 Figure 18 BEEF CHART RETAlL CUTS OF BEEF - WHERE THEY COME FROM AND HOW TO COOK THEM

1 Pin Bone Sirloin Steak

flat Bone Sirloin Steak Top Round Steak Rump Roast (Rolled) 6. Rib Steak Boneless Porterhouse Steak \ i’.

Boneless - Wedge BOne Sirloin Steak Top Loin Steak

● ‘\

Rib Eye ( Delmonico ) Filet Mignon) Steak Or Roast or Steak Roast (also from Sirloin la Boneless Sirloin Steak

CHUCK SHORT LOIN SIRLOIN ROUND Broil Panbroil Panfry

FORE SHANK SHORT PLATE FLANK TIP I Braise cook in liquid Braise

./ , Short Ribs Skirt Steak Rolls* Shank Cross Cuts L Ground Beef ‘ Flank Steak *

~*- (also from other cuts) Ground Beef Beef Patties Flank Steak Rolls* TIP Kabobs*

May be Roasted, Baked, Broiled, Panbroiled or Panfried National Live Stock and Meat Board

Photo: National Live Stock & Meat Board, Chicago, Ill.

73 been used on an experimental basis for beef process is patented by a proprietary meat and is currently being used by some proc- packer, and fresh beef so processed is cur- essors and retailers, but the system has made rently at retail under a brand name of the no major inroads in the mass distribution of packer. The technique was developed several beef. years ago. There is a direct relationship between the A newer technology, currently being type of distribution system and the cost of any researched at several universities, is post- retail grading system. The cost of any man- mortem but pre-rigor electrical stimulation of datory retail grading system would be beef carcasses with, for example, 320 volts at 5 prohibitive under the current distribution amps for 20 seconds. Although this technique system where retail cuts are fabricated at the is still in the experimental stages, results thus retail store level. Professor Palmer elucidates: far indicate such treatment significantly ten- derizes beef of several grades. Another tech- Naturally, if you do it at each individual retail market, your cost of grading service is going to nology for tenderization of beef is termed be prohibitive. Right now you have one grader “mechanical tenderization. ” The process has out in Iowa, for example, and I suppose that one increased in application during the past grader would grade 800 or 1,000 carcasses a day. several years. This technology uses a machine And if you go to a retail store, it would take one with tiny blades or knives which significantly retail grader per store and he would be grading tenderizes the meat. every few carcasses.41 There is a relationship between such tech- This means that the cost of that grading nologies and the function of retail grades. If service on a per-unit basis increases substan- significant new technologies are developed tially when the grade is established at retail which tenderize meat on a rather uniform compared to a product concentration point, basis regardless of grade, then the necessity such as a packing plant. Any centralized dis- for grade being based on tenderness (and tribution system would alleviate this burden- therefore maturity and marbling) would be some cost at retail and be significantly less ex- significantly reduced. Similar technologies pensive than grading at the retail level with- have already altered the functions of grades out changing consumer benefit from the grad- but future impact is not clear at this point. ing system.

Costs involved in actually grading prod- Summary ucts, via inspection costs, are sensitive to the above distribution systems. However, the en- The fresh meat industry currently uses the forcement aspect implied by voluntary or grade system best known to consumers, mandatory grading programs may not be as although it is basically a wholesale-oriented sensitive to the type of distribution system. system. The system is voluntary/mandatory, The workshop provided no indication as to and there is uniform grading terminology the magnitude of enforcement cost on any across fresh meat products. However, the cur- voluntary or mandatory system. However, rent grading system is voluntary and not used this is a substantial cost consideration which for all meat. Nor is the carcass grade would need extensive investigation before any necessarily identified on an individual retail particular system could be fully evaluated in package. terms of cost. One of the most significant needs for con- sumer information regarding fresh meat at Technology in Relation to Tenderness in Beef retail is identification standards for retail beef There are several ways to influence beef cuts devised by the National Live Stock and tenderness; some methods of tenderization Meat Board that provide standardized iden- are of long standing, others relatively new. tification and labeling. This program has even Use of protelytic enzymes as a tenderizing been adopted as law in some States. Concern about fat content, both in terms of dlworkshop, Vol. IV, p. 30. trim and intramuscular, raises the question

74 concerning retail meat grade criteria based on Congressional Options nutritional content, Workshop evidence indi- The following are some of the options cates overwhelmingly that nutrition would available to Congress for grading fresh meat: not serve a useful basis for grades when com- bined with palatability or other sensory Congress could make the current volun- characteristics. The primary reason is that tary program on meat identification nutritional superiority and palatability are not standards mandatory for all retail meat necessarily positively correlated, Combining cuts. This would facilitate uniform iden- the two would result in confusion. Most tification of retail meat cuts. workshop participants thought nutritional labeling separate from grade criteria was a Congress could direct USDA to facilitate more desirable program for retail cuts of meat. the adoption of a voluntary/mandatory nutritional labeling program for fresh A prerequisite to adoption of an individual retail meat cuts. retail cut grading system would be standard- Congress could direct USDA to institute a ized fabrication, retail cut nomenclature, and voluntary/mandatory program of retail labeling procedures. Given standard iden- meat grades where grade criteria are tification of retail cuts, a grading system based based on yield per pound or per serving, on yield of edible meat on a weight basis Such a program should not be instituted, would be possible. Such a system would have however, prior to a program that would both advantages and disadvantages, as dis- assure uniform identification of retail cussed above. meat cuts. Cost and net consumer benefit would de- Since net benefit of any retail grade pend significantly on the type of meat dis- scheme is highly dependent upon the tribution system that existed. In essence, the type of meat distribution system in exist- technical feasibility of reflecting the composi- ence, committees of Congress with tion of meat—that is, fat, vitamins, and/or jurisdictional authority could examine minerals —exists. Net consumer benefit, the potential for lowering the distribu- however, varies greatly by type of grading tion costs of meat from various systems system and by type of distribution system. (such as conventional compared to Further detailed analysis would be necessary centralized frozen) in oversight hearings. to determine net consumer benefit for any Such hearings could produce further evi- combination of grade system and distribution dence on the potential impacts and system. benefits of retail grade alternatives for meat. Congress could make grading mandatory for all fresh red meat using the current carcass grade criteria and designate such grade on all individual retail meat cuts.

75