Executive Insights | July 2010 | By Jordan Melnick

The Man with a Plan

Mike Taylor is in charge of defending your food supply and is trying to update a 72-year-old food safety system. If the Modernization Act can get through Washington, it could mean big changes for your brand.

If the Modernization Act makes it through Washington, then restaurants might hav
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Seventy-six million. That’s how many Americans each year get sick from something they eat. Of the 76 million, 350,000 end up in the hospital and 5,000 end up dead.

Seventy-six million people. Roughly one fourth of the total U.S. population, it seems a rather high figure, particularly when we’ve figured out how to swap, replace, and reconstruct human organs. One would think figuring out how to make a safe hamburger would be a cinch.

But understanding why, in an age of spectacular ingenuity, eating remains so dangerous an activity, it is helpful to look at another number: 72. This is how many years have passed since the passage of the Federal Food, Drug and Cosmetic (FD&C) Act, the piece of legislation that still governs much of the nation’s food-safety system.

To be sure, the FD&C Act has been amended many times over the years to meet needs Congress could not have foreseen in 1938. But there is now consensus that the bill is a fundamentally inadequate protection against modern safety hazards like E. coli, Salmonella, and other dangerous pathogens that can contaminate the food supply, causing widespread outbreaks and damaging the reputation of the foodservice industry, particularly restaurants. As David Plunkett, attorney with the Center for Science in the Public Interest, says, “We can’t continue to operate as if it’s 1938.”

The FD&C Act came in response to hazardous foodservice practices like “pouring coal tar and various other ingredients into products in order to make them look more attractive … to really fool the customer,” Plunkett says. It gave the FDA a “police power” to criminally prosecute companies engaging in such practices.

“That’s not the problem we’ve got today,” Plunkett says. “The contamination and the illness and the death is inadvertent. It’s not something that’s criminal.”

Hence the need for a new legislative framework to ensure food safety in the 21st century.

The fundamental weakness of the FD&C Act, according to many food-safety experts, is that it is reactive. What is needed, says Mike Taylor, deputy commissioner for foods at the FDA and a leading figure in the push to reform food-safety legislation at the federal level, is a system that stops safety breaches in the first place.

“We need additional tools to have a food-safety system that is as preventive as possible,” Taylor says. “We don’t have adequate tools now.”

That may soon change. In April, the Senate was about to start debating the FDA Modernization Act, which food experts say would go a long way in updating the food-safety system, but financial reform bumped it from the legislative agenda. Health care reform had done the same months earlier.

The Modernization Act would overhaul the FD&C Act by increasing the FDA’s ability to monitor the nation’s food supply and to take stronger action when safety issues arise. Specifically, the act authorizes the Secretary of Health and Human Services to suspend the registration of food facilities, order immediate recalls of tainted food, and assess and collect fees related to recalls and reinspections. It also empowers the Secretary to track and trace raw agricultural commodities and increases regulation of foreign imports.

“The bill contains the basic elements of a modern, preventive, controlled approach,” Taylor says.

Taylor calls the Modernization Act a “paradigm shift” in the way the government addresses food-safety issues. In fact, it may not have been possible under the Bush administration, which critics say allowed the food industry too much leeway in policing itself.

“The prior administration thought the market could take care of health issues to a certain extent and that the government needed to be a referee standing in the distance and watching for clear fouls,” Plunkett says.

As an example, Plunkett points to the Bush administration’s handling of the Interstate Shellfish Sanitation Conference (issc), a partnership between state and federal agencies, the shellfish industry, and the academic community. The ISSC “was allowed to pretty much set its own policy and food safety really got pushed to the background,” Plunkett says. One consequence was “tremendous problems” with Gulf Coast oysters contaminated with Vibrio vulnificus, a potentially deadly bacterium.

The FDA under the Obama administration, on the other hand, charted a different course early on, going as far as to propose a ban on raw Gulf oysters. After an uproar from Gulf Coast legislators, the administration eventually backed off the proposal, originally set forth by Taylor, then an FDA senior adviser. Still, the ill-fated proposal foreshadowed significant changes on the food-safety front.

“The Bush administration was obviously very pro-business, and now we’re doing a little bit of a correction,” says Melanie Grand, an expert in food-safety policy at Missouri State University. “That needed to happen.”

A little correction could have big implications for restaurants, especially considering the deeply negative impact of food-borne illness outbreaks on the industry. The contamination point for outbreaks is often high on the supply chain, at manufacturing and processing plants. But since 41 percent of people who suffer food-borne illness come in contact with contaminated food at the restaurant level, many in the industry say restaurants endure an inordinate share of the fallout when an outbreak occurs.

“The biggest problem we have is that restaurants get blamed because we are the end-user,” says Christopher Muller, director of the Center for Multi-Unit Restaurant Management at the University of Central Florida. “Restaurants are really at the mercy of the food chain.”

For this reason, the National Restaurant Association (nra) endorsed the Modernization Act and, with a few objections, a similar bill passed in the House last year in July called the Food Safety Enhancement Act of 2009.

“When it comes down to it, one food-borne illness outbreak can really negatively impact a restaurant’s brand,” says Dan Roehl, a member of the NRA’s policy team who works closely on food-safety issues. “Our perspective is that these bills will make the food that restaurants purchase safer.”

One of the NRA’s objections to the House bill involves a requirement that restaurants report to an FDA registry when they determine there is “reasonable probability that an article of food will cause serious adverse health consequences.” At this point, restaurants are not included on the list of “responsible parties” that must report to the registry, and the NRA says changing that would result in significant compliance costs without improving food safety.

“The difficulty with this is trying to deal with the determination factor,” Roehl says. “There was a reason restaurant managers were left out of this initially. These aren’t medical professionals. They really have no idea how to make an evaluation” about the probable risks of food-borne illness.

The NRA also objected to a provision in the House bill requiring “food facilities,” including restaurants, to maintain more thorough records of where they get their food. Since many restaurants already keep a close eye on their supply lines, Roehl says the NRA isn’t opposed to the traceability language per se. But the association worries that codifying record-keeping practices could result in an onerous standard.

“If you go to any restaurant, they can tell you where they get their product from,” Roehl says. “The issues are what kind of record-keeping would restaurants have to have, how long would they have to keep it, and in what kind of format.”

Roehl says the NRA has had “positive dialogue in the Senate” and is confident it will sway legislators to keep the provisions out of the final bill. In another favorable sign, Taylor says the FDA intends to work “very closely with the restaurant industry” in crafting food-safety legislation.

A few reservations aside, the restaurant industry has largely given its blessing to the direction food-safety policy is going under the Obama administration. There is, however, at least one notable dissenter.

David Theno gets much of the credit for saving Jack in the Box from its E. coli disaster in 1993, in which four children died and hundreds of people got sick from eating undercooked meat contaminated with the bacteria. He went on to serve at the San Diego–based company for 15 years, during which he was known as an innovator in the realm of foodservice safety procedures.

Now working as a consultant to the government and the foodservice industry, Theno has concerns about the Obama administration’s ambitions on the food-safety front.

“We’re in a government mode today where the reigning authority seems to think that government is going to fix everything,” Theno says. “I’m not sure the government should be overseeing much of anything.”

As for the Modernization Act, Theno characterizes it as a power grab, a way for Washington to be able to tell food companies how to run their plants. He says the government already has the authority “to do what it needs to do.” For example, the FDA’s ability to recommend recalls shouldn’t be turned into a mandate, Theno says, because companies “would have to be mentally insane” to ignore a recall recommendation in light of the ensuing legal liabilities. When asked about the New York Times article, “The Burger That Shattered Her Life,” a 2010 Pulitzer Prize winner describing how food giant Cargill ignored federal recommendations, Theno says the article contained “about 1,000 misstatements of fact.”

Rather than the government increasing its oversight of the foodservice industry, Theno would like to see companies that already do a good job with food safety—the “good guys,” he calls them—helping government establish a set of best practices to which all companies would have to adhere. In fact, Theno believes such a public-private partnership is the future of food-safety policy.

“The new world will be a collaboration of people who have a goal to make the food supply safer working together to get to better practices,” Theno says.

Despite his general wariness of the government’s approach, Theno is confident the nation’s food supply will continue to get safer—good news for a restaurant segment that knows all too well how a single outbreak can spell disaster.

“In the next 10 years, we’re going to find ways to keep pathogens and threats away from the food supply more systematically and in a better way than we do today,” Theno says. “And while I don’t know that there will ever be zero risk, it will be so low that it will be inconsequential.”

Taylor has similar expectations for the near future, though not surprisingly his outlook includes a bigger role for the FDA, and government in general, in ensuring food safety.

“We’re going to see … continued improvement in the government’s ability to detect problems sooner and contain them sooner,” Taylor says. “We’re going to see much stronger oversight of imports. And I think we’ll see reduction of food-borne illness.”

Perhaps all too aware of the massive task at hand—reducing 76 million to as close to zero as possible—Taylor is quick to stress the need for patience.

“It’s important to see this in a long-term way,” he says. “The transformation we’re talking about is so fundamental, but we’re on a track to see real progress.”