20,000 miles to the plate

©Reuters

Out to dry: workers hang fish on poles at a processing facility on the outskirts of Hangzhou in eastern China

The average cod covers 10,000 miles in its lifetime. If the cod is destined for the dinner plate, it may travel another 10,000 miles once it’s dead.

Trawled in the Bering Sea, the fish slaps down on a conveyor belt in Qingdao, eastern China. In a vast, chilly factory, a small army of workers attack the semi-frozen fish with glinting knives, separating flesh from bone in ever finer parsing.

After it is frozen and loaded into the belly of a cargo ship, the fish disembarks at a processing plant in Europe or the US. It may make yet another journey before ending up, finger-shaped and breadcrumbed, on the plate of a schoolboy in Moscow.

The travels of the cod illustrate the lengths to which the $4tn food industry will go to feed the world while making a profit. It also provides a glimpse of how many hands food passes through from farm to fork, giving unscrupulous bit-players a chance to turn a bigger profit for themselves.

Consumers are increasingly alarmed that failures and abuses of this convoluted supply chain mean they have little idea what they are eating and whether it is safe. Horsemeat has ended up in so-called beef lasagnes in the UK and other parts of Europe. In the US, Yum Brands – parent of Taco Bell, KFC and Pizza Hut – this month issued a profit warning after high levels of antibiotics were discovered in its chicken. In 2008, melamine-laced milk in China killed six babies and left hundreds of thousands more sick.

In the weeks since the horsemeat scandal broke, governments and the food industry have pledged to increase testing of meat. But regulating a fragmented global supply chain is only going to grow more complicated as the food industry prepares to feed an extra 2bn mouths by 2050.

Unilever, the Anglo-Dutch consumer goods conglomerate behind Flora margarine and Dove shampoo, sells 30,000 differently sized products in Europe alone. Globally it calls on more than 160,000 product and service providers linked to production.

The distance these goods travel, from farm to factory to shop, is equivalent to going to the moon and back twice a day, every day. “That’s how much our logistics infrastructure has to deal with today,” says Pier Luigi Sigismondi, chief supply chain officer.

Robert Lawson, co-founder of Food Strategy Associates and a former industry executive, says a supermarket may have 20,000 product lines, many of these with 10-20 ingredients.

“The idea you can check every supplier and every ingredient they are supplying you with – it doesn’t compute. You can’t. It is too enormous a task and at odds with what everyone wants, which is cheaper food.”

Add to that DNA testing, a common practice following the horsemeat scandal, “then the end of cheap food is nigh”, he says.

Multinational manufacturers such as Unilever conduct much of their quality control right through the chain. But as Nestlé discovered when it was obliged last week to withdraw pasta meals from shelves in Italy and Spain and processed products containing meat from a German supplier, monitoring every link in the chain is tough given multiple layers of outsourcing.

“There will be a before and after horsemeat, just as there was a before and after melamine,” says José Lopez, executive vice-president of operations at Nestlé, the world’s biggest food company. “The after will have DNA checks with suppliers, and that means we will have added costs.”

These DNA checks, he and others reckon, will not be restricted to horsemeat but extend to other species which, like horsemeat before the revelations, companies would not have thought to test for.

“I think we will have to invent new ways of managing traceability of the goods we produce. There’s a need for enhanced traceability, not just documented but also analytical,” he adds.

It is a sentiment echoed across the divide of politicians, suppliers and retailers – notwithstanding the blame game that was the inevitable initial reaction – and a revision of the rule book is in many ways overdue.

Laws in much of the developed world have their roots in previous eras where the focus was on safety over provenance. Enforcement has also fallen behind as cash-strapped governments cut inspectors.

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In the US, outrage at industrial food production methods came in the early 20th century, following the publication of The Jungle, Upton Sinclair’s expose of the Chicago meatpacking industry. Legislation followed, creating the predecessors of two agencies that now oversee most of the food industry. The US Department of Agriculture regulates meat, poultry and some egg products, while the Food and Drug Administration regulates most of the balance, including processed foods – as well as prescription drugs and medical devices.

Some see the FDA’s heavier workload as a weakness. “The FDA has too many jobs and too few people to do their jobs adequately, and as a result food safety can get the short end of the stick,” says Caroline Smith DeWaal, director of food safety at the Center for Science in the Public Interest, a consumer advocacy group.

“The USDA has inspectors in the plants every single day ... while the FDA may not visit a plant for five or 10 years.”

But the food industry frequently turns to third-party auditors who test supplier facilities for the retailers and restaurants that buy their products.

“You had that void and third parties became what was necessary in order for the suppliers to be able to communicate to buyers that they had the food safety controls in place,” says Robert Whitaker, chief science and technology officer at the Produce Marketing Association, a trade group.

Cranswick, a midsized UK supplier of meats and pastries, will have nine UK Food Standards Agency inspectors and two veterinarians on each of its sites at any given time, says Adam Couch, chief executive. “The procedures we have to abide by in the UK can make us inefficient and if it is cheaper elsewhere, unscrupulous traders will take that option.”

His view is echoed by a food safety executive at Bright Foods, the Shanghai-based dairy group. “The government’s sampling inspection also happens more frequently in recent years. The strength of government policing is so strong that sometimes it is even too much for us to take.”

For other manufacturers, a big problem is meeting non-standardised rules across a host of different markets. “We think regulation is good,” says Mr Lopez. “Standardised regulations would be better.”

Grumbles about lack of harmonisation reverberate through the food chain. One former industry executive talks about plans to launch a chilled product, in which he checked temperatures in European retailers’ fridges. They went as high as 16°C, and only the UK abided by the recommended 0°C to 5°C.

Lack of standardisation also means production costs vary – and can provide another incentive to look further afield for produce. Take pork. Britain imports half the pork it eats, which is both a symptom and a cause of what can go wrong in the food chain. It is a symptom of the UK unilaterally adopting animal welfare rules that raised production costs, say farmers. As a result, a Danish sow’s living conditions are less bucolic but her bacon is much cheaper.

Farmers are the very first link in the food chain – and often occupy the weakest position in it. Whether midsized British pig farmers or smallholders in the Ivory Coast, they can lack the scale of the big retailers and manufacturers that buy their products. Many farmers face great pressure to keep costs as low as possible or risk being forced from the business.

Fairtrade, a standard-setting body, uses cocoa to illustrate the point. Four companies accounted for more than half the world’s $82bn of chocolate sales in 2010 and have pummelled growers’ share of the spoils: cocoa growers, it says, receive just 3.5 per cent of the average retail value of a chocolate bar, compared with 18 per cent in the 1980s.

Giving the farmer a fairer share, enabling him to invest more to improve yields and quality, would in turn help improve the supply chain, says Justin Sherrard, a global strategist at Rabobank.

Many multinational manufacturers and some retailers concur. The biggest players have teams of agronomists to help farmers boost yields. McDonald’s has devoted an entire global advertising campaign to its bonds with farmers.

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China – a key link in the global supply chain, and fast becoming the world’s largest grocery market – was forced to respond to the melamine scandal. The government dedicated more money and manpower to food safety, but analysts say the results have been mixed.

“I don’t see any qualitative change in the Chinese government’s food supervision after the melamine scandal was exposed,” says Wu Heng, the founder of Zhichuchuangwai, a website tracking China’s food safety.

“The most significant administrative change was the establishment of a national food safety commission, but its real function remains to be seen.”

Zhou Zhiren, of the Government Management School of Peking University, sees food safety improving “step by step, thanks mainly to the awareness of food safety among the public and media supervision”.

Eric Trachtenberg of McLarty Associates, a US strategic advisory firm and a former USDA official in Beijing, is more upbeat thanks in part to a restructuring of the industry in China, with more modern supermarkets and greater penetration by multinationals that bring in higher international standards.

“When you have modern retail, you have companies with better control over the supply chain,” he says.

But Mr Trachtenberg, like others, is also quick to cite the role of Weibo, the Twitter-like messaging service in China.

“There is fear of social media: if a product is not good, it’s going to be on Weibo in three seconds and within a day you will have thousands of people commenting on it.”

That resounds across the global food industry: fear of public reprisal, and losing reputation, is every bit as potent whether propagated by teenagers on Facebook or activists camped out in far-flung parts of the world.

And scandals hurt. In the week after the horsemeat scandal broke in Britain, retail sales of frozen burgers, the product that sparked the revelations, fell 40 per cent, according to Nielsen, the market research group.

The irony is that all these discarded burgers and uneaten horsemeat lasagnes add to tonnes of wasted food, which does nothing for the bottom line of any players in the food chain.

“There is such a huge amount of slack in the system at the moment in how badly we are doing things,” says Tristram Stuart, author of Waste. “The very fact there’s a series of idiocies within our food supply chain [means] there’s also an opportunity.”

Farmers and consumers can only hope it is an opportunity used to maximise quality and pricing – rather than exploited for the reverse.

Additional reporting by Yan Zhang in Shanghai