One reason why food intended for restaurants is not reallocated to supermarkets

Nutrition labeling also frequently doesn’t comply with Agriculture Department and Food and Drug Administration guidelines for consumer sales, said Geoff Freeman, president and CEO of the Consumer Brands Association, a trade organization for the consumer packaged goods industry. A company that sold hamburger buns to major fast food outlets could try to pivot to retail, but that entails changing packaging on the fly, a relaxation of labeling requirements and new distribution contracts.

Here is a longer story, about how supermarkets are changing, by Laura Reiley, interesting throughout.  I’ll say it again: America’s regulatory state is failing us.

Comments

"America’s regulatory state is failing us."

Useless comment when not proposing or creating workable alternatives and an explanation/understanding of its true causes, along with a way to fix those as well.

Literally suggests changing the food labelling requirements based on the quoted article. That’s at least one step.

Per the article, the food labelling requirements have already been changed. Something not highlighted in how this information is presented here, or possibly not noticed in the first place.

And these are real world problems that are not simply handled by repealing food labelling requirements, both changing packaging on the fly and new distribution contracts. The contracts would probably not be too difficult, but packaging does not primarily mean labelling. It means that instead of delivering pallets loaded with 50 lb sacks, it would involve the mill filling entirely different packages, and then being able to handle loading them onto trucks. The same would apply to any number of commodity products - sugar, rice, canned vegetables, etc.

But that's not a regulatory problem.

Yet Tyler, predictably, picks out one issue, which has apparently been at least somewhat addressed:

The USDA and FDA have deregulated labeling and packaging for 60 days to allow food to be redistributed.

There are also state regulatory requirements, such as Prop 65 labels in California. According to the state of California, bagels contain carcinogens because they are baked.

Highlighted in that article is that few consumers are likely to be buying 50 lb sacks of flour or 48 oz tubs of sour cream. Imagine a large scale industrial flour mill simply having all the equipment and packaging to fill grocery store supplies - it's easy if you try, and it really helps to be an economist. (Another verse could involve Imagining a VLCC tying up in Alexandria, it's easy if you don't know anything about tankers or oil refining.)

Also noted (for those that read the entire article) is the fact that labelling requirements have been set aside - "The USDA and FDA have deregulated labeling and packaging for 60 days to allow food to be redistributed."

The apparent shortages of meat are based on meat packing plants going offline due to workers getting infected with Covid-19, resulting in a meat production reduction that means no longer available meat intended for customers is not being allocated at all. Meatpacking being an industry completely unaffected by lockdown orders one should note, so getting it restarted has nothing to do with government decisions at this point.

To get around large minimum orders, your neighborhood could organize a group buy like this guy did. 27 bags of 50 lb of King Arthur All-Purpose flour.

https://www.jefftk.com/p/organizing-a-group-buy-of-flour

Do they use Ziploc bags for storage of consumer appropriate sizes?

And I pay about 30 American cents for a pound of commodity flour at a store, this quoted price seems really quite high - I found that Webstaurant would ship a pallet of flour, 50 bags of 50lbs each, for $1,081 or $0.43/lb.

King Arthur is a premium brand in the flour world.

Sure - and the price quoted is the commodity flour he could not get. The price per pound of King Arthur is $0.56/lb

And looking at the pictures, there is no way that plastic sheeting will keep any animals out. Something he seems to half understand, at least considering how surprised he seemed at how attractive flour is. 50 lb paper sacks are absolutely not intended to be stored where animals, insects, etc. have access (the plastic is no challenge to animals like mice, and lilely not much of a barrier to insects like ants).

> few consumers are likely to be buying 50 lb sacks of flour or 48 oz tubs of sour cream.

You've apparently never been to Costo or Sam's Club.

Suburban families with large houses and SUVs are happy to buy in bulk, separating and freezing portions as necessary.

Meat consumption should be reduced anyway. Covid-19 is way more lethal for fat people.

Eating meat doesn't make a person fat.

You are what you eat. I'm Batman. Pass the bat soup.

Have to completely agree with this - "I’ll say it again: America’s regulatory state is failing us." If the American government had mandated adequate worker protection measures against COVID back in February, America's meat supply would likely not be facing its current disruptions.

It is also notable that in all the countries currently re-opening, standards for worker safety are a major component in ensuring that the pandemic remains in check.

>back in February

Nancy Pelosi was urging people to go to Chinatown on Feb 24.

Stephan, we're all aware that Smithfield executives were coming and going from China before the outbreak.

A public health official last night on Glenn Beck said Smithfield executives coming and going from China was not the cause.

Who owns Tysons? And who owns Cargill? Or JBS? (not the Chinese)

All three companies have shut down meatpacking facilities, not just Smithfield. It is an industry problem, caused by community spread of coronavirus, and has nothing to do with any government actions.

I went to the grocery store yesterday for the first time in awhile, and was pleasantly surprised at just how well-stocked it is. [I've been ordering groceries online and having them delivered, which is convenient and, I assume, safer than shopping in person, but the problem with that method is that some items on my list aren't on the shelves when my shopper happens to do my shopping (I've learned that Monday is a bad door for remote shopping). Other than liquid soap, hand sanitizer, and toilet paper, the shelves were full. And the store has made some safety improvements, such as the installation of a plastic shield between the check-out clerk and bagger and the customers, masks on all of the employees, and a one-way path/requirement in the store aisles. The regulatory state is not failing us if that store is an indication. But it's only one store. Does Cowen shop at his local grocery store? What's his experience? I'll add that hams were in short suppy this past Easter weekend, not due to the regulatory state but the largest processor of pork failed to institute safety measures and had to shut down operations because so many employees had been infected with covid 19.

OK, I'll make an exception for rayward, who probably doesn't know who owns Smithfield.

Owns Tysons? And who owns Cargill? JBS? (trick question - Thiago does)

All three companies have shut down meatpacking facilities, not just Smithfield. It is an industry problem, caused by community spread of coronavirus, and has nothing to do with any government actions.

Last night on Beck, a public health official reported no travel to China either by Smithfield's China based or U.S. based employees.

What does "America's regulatory state is failing us" even supposed to mean? Surely it is not meant to be an argument against food labeling, since the free market only maximizes utility if consumers know what they are buying.

How often do you read the nutrition labels on the food you buy? Very occasionally for me. When I buy frozen chicken fingers for example, I can pretty much guess what's in it.

?? I read them all the time, at least the basic stuff, such as fat content, etc. EG: I used to order a frappacino or the like at Starbucks once in a while, until they started posting nutritional information.

Moreover, the point is that free market types should be advocating for nutrition labeling. The whole theory assumes high levels of information.

Yeah but there might be my beaks in those chicken fingers!

That you are supposed to follow the bouncing ball and sing along.

In the 4th year of Trump's presidency, America is reduced to lining up at food banks while free money from the government slowly clears into their accounts. Handouts and more handouts. Begging and more begging. This is America today.

https://www.motherjones.com/food/2020/04/these-photos-show-the-staggering-food-bank-lines-across-america/

Now you see the pretext for shutting down the economy over a virus with a fatality rate well under 0.01% that half the country already had over the holidays.

"Bu-bu-but the models said!"

Exactly.

Some should tell that to those carrying corpses in Italy, Spain, England, New York City, New York City, etc. "Hey, not everyone will die". Well, the same could be said about Hiroshima and the Biblical Flood.

You don't even have a response, you just go straight to hysteria. The bodies! They're piling up everywhere!

Just places where covid19 is affecting the population. maybe at as high an infection rate as 3%, like in the Netherlands.

Under the Weimar republic, the masses lined up in bread lines while spending worthless currency. Under Trump's America, the masses line up at food banks while spending trillions in newly printed money. When will hyperinflation reach our shores?

Where to file that link. Under we aren't as rich as we think we are? Under what me worry, nothing like being in the 1%? More proof that we need poorhouses, not handouts?

The "regulatory state" is failing those who have lost their jobs due to the cornavirus: millions aren't receiving unemployment benefits because Republicans who dominate state politics deliberately designed the safety net so that it is as cumbersome and inefficient as possible. https://www.washingtonpost.com/outlook/2020/04/15/republicans-harder-access-safety-net/ Give credit where credit is due.

LMAO too true. Democrats in local city governments like New York, LA, San Fran, Cleveland, Detroit have been CRUSHING it for years.

If only that damn republicans weren’t around in New York, the unemployment website wouldn’t be crashing every day....

Here in republican Florida it takes about fuve minutes online to apply for unemployment. And we have a mobile app.

It appears even Florida is having problems with their unemployment system and changed out leadership.

"Last month, Lawson took responsibility for the failure of Florida’s unemployment processing website, CONNECT, which continues to shut down, preventing jobless Floridians from getting weekly payments of up to $275."

https://www.miamiherald.com/news/politics-government/state-politics/article242039926.html

It's not the Republicans who are refusing to replenish the aid funds for small businesses. That bill is sitting in Nancy Pelosi's gigantic refrigerator.

As someone who reads the labels, I know they are quite standardized. You might be buying bismotti or jasmine rice, but darned if the nutritional details aren't just the same. So I would think there are values ready and waiting to be printed on bags of hamburger buns.

(I used to bake a lot, and did buy 25 lb bags of flour. You can put 5 lb in a 1 gal Ziploc, and then freeze them or share them out with your baking friends. White rice also freezes indefinitely.)

"White rice also freezes indefinitely."

I'm guessing that's for cooked white rice otherwise uncooked white rice can sit in your pantry for basically forever.

I live in a humid environment. Even unopened bags can have the tips of the rice go black. Possibly that could be washed off, but it never happens in the freezer.

Wonderful things, glass jars, particularly the larger ones. Maybe a touch old fashioned, but great for sugar, flour, rice, etc. - even after the power goes out.

That's what happens when you let speech to text handle "basmati rice." And possibly my pronunciation was off.

And isn't the obvious answer this:

"We, your local supermarket, are now happy to sell restaurant supplies?"

wink wink, nudge nudge

As someone who works in restaurants, it’s amazing how brutal those labeling regulations are.

There are literally threats of jail time written on the 1lb brown sugar Dixie bag If “sold for retail”.

This isn’t just an issue of 50lb bags of flour being difficult to convert to resale size.

If Sysco started selling their milk to Publix they’d be fined out of business or thrown in jail. Which is shameful because Sysco’s prime unit of sale for milk is 1 gallon size.

Same thing for their block and barrel cheeses and eggs.

So as Tyler says, it’s so much worse than you can imagine.

Heinz ketchup has to be destroyed because If it’s due to go to Sysco, even in a small glass bottle, that’s AGAINST the law.....The Sysco and CBI version of Heinz ketchup has the threat of jail time written on the box if sold for retail.

Shameful to see some of the commentators on this topic support such stupidity in the name of ideology.....

Is that a state thing? Here in California we have a chain called Smart & Final that happily sells crossover restaurant and retail sugar. You can get 50 lb if you want it.

So if you go to restaurant depot versus a sam’s club-they’ll each sell a 25 lb or 50 lb bag of sugar-but it won’t have the same packaging....

lol, or maybe Dixie is just lying!

Sysco has a retail shop open to the public at its distribution centers here in Minnesota. We even have one locally own store that specializes in selling restaurant quantities to the public. They have been unable to keep up with demand for the last month.

It’s not the same thing. Sysco DOES NOT sell restaurant packaging in a retail setting EVER!

It’s against the law! What they do sell is BULK RETAIL packaging like Gordon food service retail division, or Sam’s club or BJ’s.

But the bulk ketchup or gallons of milk slated for the restaurant have a giant not for retail resale warning on the box.

Hellman’s, Heinz, B and W arugula and watercress, T and A farms, block and barrel all of these guys are selling bulk packaged products with different labels.

"T and A farms" Ok, now this just got interesting.

Maybe we are taking about different things. But I can go to the Sysco distribution center in St Cloud, MN and purchase at their retail shop the exact same food, in the exact same packages that I have purchased from restaurant owner friends out of their coolers. I buy uncooked food from both Sysco and restaurants pretty much every time I have a large gathering.

That's Dixie trying to scare you; it has nothing to do with labeling regulations. If it rains, libertarians will find some way to blame it on the government, I swear.

You have a legal right to repackage and resell bulk product. You just can't use someone else's (ie. Dixie's) trademark when you do so. There's over a hundred years of legal precedent on this stuff.

The article says that labelling regulations have been suspended for 60 days. So unless there are state or local ordinances (possible, of course), this is no longer true - "If Sysco started selling their milk to Publix they’d be fined out of business or thrown in jail."

It could be that Publix doesn’t want the liability....

A bunch of regulations getting rolled back with 30 to 60 day time limits is a week inducement for a full scale market adjustment. Lawyers have a big say in this as well....

Using milk specifically, do you honestly think that a perishable product that could be sold will just be tossed out instead?

Milk is being poured out in great quantities. Note that federal regulations restrict the price from dropping quickly.

http://local21news.com/news/nation-world/farmers-forced-to-dump-thousands-of-gallons-of-milk-as-demand-drops-due-to-outbreak

Sysco bought the milk already, and it becomes a loss to Sysco if they do not sell it before the expiration date.

Of course a number of farmers are now being brought to the edge of bankruptcy as meatpacking facilities - from Cargill, Tysons, JBS, Smithfield, etc - are shutting down as the virus affects them. This does not mean that the facilities are just tossing out the meat they already bought - they are processing it. It is the farmers that have lost their buyer, which is another situation.

The whole pandemic is a stress test for society from top to bottom:
1. How widespread is trust in institutions?
2. How agile/nimble is your regulatory state at adapting to emergency?
3. How much flexibility and resilience do your supply chains have?
4. How comprehensive is your safety net?

When the tide goes out you can see which countries are swimming naked.

I think #3 is by far the most difficult to change. Many supply chains have grown longer, more complex, and more specialized to the point that they have virtually no flexibility. Some of that must be a response to regulation, but my guess is that it is more driven by the preeminence of larger and larger companies in these supply chains, focused on short-term profits (as they must). For durable products, maybe that trade-off doesn't come into play during a pandemic. In food, those large companies have influenced regulations to severely handicap small, local, and traditional producers (those handful that have survived). Exactly the kinds of enterprises that are managing to pivot quickly these days.

I think it's less "complexity" as it is "JIT inventory."

JIT inventory at the retail level makes sense (trading expensive storage for cheap storage). JIT inventory at the wholesale/industrial level just trades risk for better balance sheet numbers.

Local restaurants here in Indiana are selling “groceries”, which are just repurposed goods from their distributors. It is being promoted by our governor.

Just what I was thinking. They could even give you all the parts you need for a specific dinner and skip the cooking.

Just what I was thinking. They could even give you all the parts you need for a specific dinner and skip the cooking.

Does USDA have authority to waiver the packaging restrictions cited? If so has anyone asked? Why don't journalists ask these questions?

If OSHA was actually enforcing safety regulations, virtually nothing in the U.S. would be opened. The reuse of N95 masks, handing masks to people without checking their lung function and without proper fitting and training is probably one of the reasons that healthcare workers, first responders, and transportation workers are dying.

It takes more to protect workers than handing them a mask.

Doesn't matter, remember where they got all those N95 masks last month? From industry. Can't reopen your production until your employees have the proper PPE. If you do, the revenuers, and class action attorneys, will be standing right there ready to fine or sue.

And you can't clean N95 masks used to filter particulate that clogs, like you can to kill viruses.

The virus is carried on a particulate such as a droplet made of water and some body fluids. The same goes for touching. The virus is being carried on something else just like in every other infectious disease.

On of the odd things is the media has done no reporting on masks. When one is wearing a mask, one should skip the make up and jewelry. The mask needs to cover both the nose and the mouth with a snug fit.
When looking at pictures on the media, I have been amused how few people are wearing their mask correctly.

Also, the last thing anyone needs on their fingers these days is a ring.

We should remember, those bureaucrats in the positions to be pro-active in easing these regulations are mostly graduates of our finest indoctrination center, status universities. Is it surprising that they lack the capacity for innovation or initiative.

=========
"All this was literally true of America. In old Europe there still survived many checks inherited from the ancien régime. Even in the prime of liberalism, aristocracy and officialdom were struggling for the maintenance of their privileges. But in America there were no such remnants of the Dark Ages. It was in this sense a young country, and it was a free country. Here were neither industrial codes nor guilds. Thomas Alva Edison and Henry Ford did not have to overcome any obstacles erected by shortsighted governments and a narrow-minded public opinion.

"Under such conditions the rising generation are driven by the spirit of the pioneer. They are born into a progressing society, and they realize that it is their task to contribute something to the improvement of human affairs. They will change the world, shape it according to their own ideas. They have no time to waste, tomorrow is theirs and they must prepare for the great things that are waiting for them. They do not talk about their being young and about the rights of youth; they act as young people must act. They do not boast about their own “dynamism”; they are dynamic and there is no need for them to emphasize this quality. They do not challenge the older generation with arrogant talk. They want to beat it by their deeds.

"But it is quite a different thing under the rising tide of bureaucratization. Government jobs offer no opportunity for the display of personal talents and gifts. Regimentation spells the doom of initiative. The young man has no illusions about his future. He knows what is in store for him. He will get a job with one of the innumerable bureaus, he will be but a cog in a huge machine the working of which is more or less mechanical. The routine of a bureaucratic technique will cripple his mind and tie his hands. He will enjoy security. But this security will be rather of the kind that the convict enjoys within the prison walls. He will never be free to make decisions and to shape his own fate. He will forever be a man taken care of by other people. He will never be a real man relying on his own strength. He shudders at the sight of the huge office buildings in which he will bury himself. "
--von Mises, Ludwig (1945). Bureaucracy

A couple restaurants in my area are boxing up fresh food (produce, meat, bread) and selling it as a grocery box. But the markups are still huge (like $50 for produce I could buy at the store for $25, even considering quality/organic/etc). Makes you realize how lucky we are to have grocery store networks setup to operate on razor thin margins.

I’ll say it again: America’s regulatory state is failing us.

With everything except higher ed, right?

I completely agree with Tyler on reducing regulations; but I find it striking that he seems to support a very highly regulated university system that is based on lavish regulations, government privileges, and excluding non-members from the borders of the campuses.

Historians know how bad things can get so they are not likely to be among those who think that things are worse than they thought.

Well, if we read to the end we learn that “ The USDA and FDA have deregulated labeling and packaging for 60 days to allow food to be redistributed.“ maybe the regulatory state is working?

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