CALF News Aug./Sept 2018

22 CALF News • August | September 2018 • www.calfnews.net A cross the world, every market is experiencing a boom in e-commerce.We have seen larger companies such as mazon dominate the U.S. market, and even companies such as Jumia breach the Sub-Saharan African markets. What has gained increasing popular- ity over the past decade is the fast-paced growth in e-produce. According to NPD, over $1.8 trillion in consumer e-commerce purchasing is occurring, with some sectors experiencing a 30 percent penetration. While, normally, the food sector is significantly lower, current reports are showing robust growth in this industry of 8-15 percent growth in countries such as China, South Korea, and the United States. In these three countries, e-produce takes shape in multiple forms such as meal kits, home kitchen restocks, or specialty products. The average online retail basket is now diversifying its demand for convenient, fresh produce and meat options. A bumpy road While the convenience of order- ing e-produce has enticed multiple generations with the largest consumer being Millennials, a red flag has been raised among food safety experts across the world. Since e-commerce allows small-batch producers a large platform to market products, there have been instances of incorrect product labeling or counterfeit production. In the United States, food safety experts are wary of a new trend in e-pro- duce. This trend is meal kits that are shipped to individuals’ doorsteps. The Nielsen Company reports that over 10.5 million U.S. households have purchased I N S E A R C H O F Consumer-Driven Changes in Retail Food Markets A Regulatory Dilema By Nick Herrmann Contributing Editor a meal kit in the past six months. They also report that consumer willingness to purchase a meal kit, could exceed 30.1 million households in one to two years. Blue Apron, a leading provider of meal kit delivery in the United States, publishes strict food safety guidelines on their website for the handling and sourc- ing of products. While their packaging facilities are regulated by federal inspec- tors, there are no guidelines for the ship- ment of these meal kits. Rutgers University professor Bill Hall- man placed orders for these meal kits to analyze food safety quality. A shocking 47 percent of 684 items arrived with a surface temperature above 40 degrees Fahrenheit. These packages include both fresh fruits and vegetables, as well as raw meat products including pork, shellfish, poultry and beef. In China it was discovered that 87 percent of restaurants on Ele.me didn’t comply with food safety regulations. This shocking discovery was exposed in 2016 by CCTV consumer rights televi- sion show 3.15. While both studies are concerning, e-produce companies must act to ensure their cold chain and shipping methods are well regulated. Rutgers University reported that consumers have a 95-per- cent confidence rate that these deliv- ered products are completely safe. This confidence allows consumers to blindly assume the items haven’t had a lapse in food safety practices. Regulations and best practices U.S. E-produce companies have no current regulation for when the final product leaves their facilities. These facili- ties are regulated by both USDA and FDA inspectors who view them as retail vendors, according to correspondence with a USDA help line. Once the final product leaves the vendors’ warehouse facilities there’s no regulation of inte- grated cold chain or shipping standards. Most companies in the United States follow best practices, which vary coolant methods from dry ice to gel packs, but do not ensure proper safety temperature. In 2011 the Food Safety Moderniza- tion Act (FSMA) was signed into law. This legislation addressed the challenges facing food safety in the importation of food into the United States but did not address standards for e-commerce and e-produce. Currently, regulators are sug- gesting best practices, but that is up to the individual company to accept. A string of food safety concerns has prompted the largest e-produce market in the world – China – to implement new regulations. In 2016, China passed “Measures of the Investigation and Pun- ishment of Illegal Conducts Concerning Online Food Safety” (Order 27). This order forces suppliers and third-party e-commerce platforms to accept respon- sibility for food safety. Delivery and stor- age of purchased items are also included in this order. In theory, these regulations would encompass produce temperature in transit to the consumer. While this is an exceptional step in food safety, there are still challenges facing the industry in China during implementation. In Japan, e-commerce hasn’t been addressed specifically through policy and regulation. Since the country’s e-produce industry is supplied by a large percent- age of imported product, the most recent legislation has focused on product labeling. In 2015, they combined several portions of food labeling laws into one comprehensive food labeling law. The country does not have laws directly monitoring the shipping of cold chain of e-produce. A final country to examine their e-commerce regulation would be South Continued on page 29 