BIZTIPS - March 25, 2007

Biz Tips: Food Products Require Special Care
Sunday, Mar. 25, 2007
By Art Hill

As this column goes to press, pet owners across the country are learning that traces of rat poison were found in the dog and cat food that sickened or killed dozens of dogs and cats during the past two weeks (search "pet+food+death"). Six months ago, spinach with minute quantities of Escherichia coli (E. coli) bacteria sickened 205 people in 19 states and killed three (search "spinach+e-coli") .

So what's with our food supply? Can we trust it? What do these incidents mean to small business owners dealing with food products - restaurants, stores, distributors, small-scale producers?

The first lesson for the food-related business owner is that food safety is your top priority. That doesn't mean that food quality isn't important, but the best looking, smelling, tasting, food in the world will go straight to the landfill if there is any question about its safety.

The second lesson is that food products require a discipline and attention to production detail that would make a health inspector smile from ear to ear. Every ingredient, every employee who touches the food, every process step, must be held to the highest sanitary standards. The final FDA report on the spinach incident released last week notes that investigators were able to identify trace amounts of animal feces in the water and fields where the spinach was grown. So in this case where the source was contaminated, a small restaurant serving the spinach would have absolutely no way to know that there was a problem, let alone do anything about it.

That leads us to our next lesson. Business owners need insurance for lots of things, fire, theft, business interruption, defective or spoiled products. This applies more to food-related businesses than almost any other. In a recent conversation, the marketing director of a major food distributor was interested in a product of one of our small businesses, but her first requirement was not samples or testimonials about the product, it was a copy of the producer's insurance certificate. The bottom line? If you're in a business whose product (food) can kill people, you'd better be well insured. $1 million liability coverage is common, and reasonably priced.

A friend in New York is launching a gourmet gravy. He's made it for friends and family for years. He already has a proven product, orders for cases of it, a label design, packaging, a bottler, and enough business experience to know he needs lots more help. He'll need to produce it in a licensed commercial kitchen, complete the labeling to FDA requirements, get city, county, state, and federal certifications, and insurance. He'll need a retail strategy (deli vs. "big box"), and money to put inventory into distribution.

The good news is that there's lots of help available. If he were doing this in Oregon his first two calls should be to his local Small Business Development Center and the Food Innovation Center in Portland. If ever he needed somebody who's "been there, done that" he needs them for his food product.

The other good news is that even when the occasional food disaster occurs, people don't stop eating. We continue to buy from, and eat at, businesses with a solid reputation for health and safety.

So if your dream is to turn that gravy, salsa, or cookie recipe into a business, don't give up just because it's complicated and risky. We have great food to eat today because somebody took the risk, did the work, and watches every step along the way. Shouldn't it be that way with any business?


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