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erspectives on Federal Retail Food Grading

June 1977

NTIS order #PB-273163



TECHNOLOGY Assessment B0ARD Congress of the United StatesE M I L I O Q . D A D D A R I O

EDWARD M. KENNEDY. MASS. , CHAIRMANDIRECTOR

MARJORIE S. HOLT, MD. , VICE CHAIRMAN O F F I C E O F T E C H N O L O G Y A S S E S S M E N T D A N I E L V . D E S I M O N E

ERNEST F. HOLLINGS, S.C. OLIN E. TEAGUE, TEX.DEPUTY DIRECTOR

HUBERT H. HUMPHREY. MINN.MORRIS K. UDALL, ARIZ. W A S H I N G T O N , D . C . 2 0 5 1 0CLIFFORD P. CASE. N.J. GEORGE E. BROWN, JR., CALIF.RICHARD S. SCHWEIKER. PA.CLARENCE E. MILLER, OHIO

TED STEVENS, ALASKA LARRY WINN, JR. , KANS.

EMILIO Q. DADDARIO

JUN 1 1977

The Honorable George McGovernChairmanSelect Committee on Nutrition and Human NeedsUnited States SenateWashington, DC 20510

Dear Mr. Chairman:

On behalf of the Board of the Office of Technology Assess-ment, we are forwarding to you the report Perspectives onFederal Retail Food Grading.

The report is an analysis of the U. S. food grading program.It evaluates changes and modifications in the present grad-ing system which would facilitate consumer choices, examinesthe major issues associated with these changes, and outlinesalternative approaches to implementing these changes.

This assessment was performed in accordance with your requestto the Office of Technology Assessment dated September 15,1975. The request was accepted and the study authorized bythe Technology Assessment Board on December 9, 1975.

Chairman Vice Chairperson

ii



FOOD ADVISORY COMMITTEE

Dr. Martin E. Abel (Acting Chairm an) Dr. W. D. Bud d emeierProfessor of Agriculture an d Director of International

App lied Econom ics Agricultural ProgramsDirector, Economic Development Center 113 Mumford HallUniversity of Minnesota University of IllinoisSt. Pau l, MN 55101 Urbana, IL 61801

Dr. David CallDirector of Cooperative Extension103 Roberts HallCornell UniversityIthaca, NY 14853

Dr. M ax MilnerInternational Nutrition Planning ProgramDept . of Food Science & TechnologyRoom 20-A-222

Massachusetts Institute of TechnologyCambridg e, MA 02139

Dr. Roger RevelleCenter for Population StudiesHarvard UniversityNine Bow StreetCambrid ge, MA 02138

Mr. Arnold MayerLegislative RepresentativeAmalgamated Meat Cutters and

Butcher Workm en of North America100 Indiana Avenue NWWashington, DC 20001

Dr. Robert O. NesheimVice President, Research and

DevelopmentThe Qu aker Oats Company617 West Main StreetBarrington, IL 60010

Mr. Lauren SethAgricultur al Consultant801 State Farm RoadWest Des Moin es, IA 50265

Dr. E. T. York Chancellor, State University SystemBoard of RegentsTallahassee, FL 32304

OTA Food Program Staff

J. B. Cordaro, Food Program ManagerMichael J. Phillips, Project LeaderRobert L. Smith, Jr., Research Associate

Thomas L. Sporleder, Consu ltantJane Mason, Secretary

Ann Woodbridge, Administrative Assistant

iv



Preface

This assessment is an analysis of the U.S. food-grading program. Itevaluates those changes and modifications in the present grading system

which would facilitate consumer choices and examines their possible conse-quences.

The assessment w as requested by the Senate Select Comm ittee on Nu tri-tion and Human Needs and endorsed by the Senate Committee onAgriculture, Nutrition, and Forestry. The report identifies and evaluates themajor issues and options available for congressional consideration in foodgrading.

The report was prepared by the Office of Technology Assessment foodprogram staff, under the supervision of Mr. J. B. Cordaro, food programmanager, and Dr. Michael J. Phillips, project leader, with contributions

from: (1) the Food Advisory Committee; (2) the food-grading workshoppar ticipants; (3) Dr. Thom as Spor leder, food grad ing consultant; and (4) Mr.Robert L. Smith, Jr., OTA research assistant. Ms. Jane Mason and Ms. AnnWoodbridge provided clerical and logistic support in preparation of thisreport. The Food Advisory Committee provided advice and commentthroughou t the assessment, reviewed the final draft, and h as recomm endedpublication of this report.

The Technology Assessment Board, governing body of OTA, approvesthe release of this report, wh ich id entifies a ran ge of viewp oints on a signifi-cant issue facing the U.S. Congress. The views expressed in this report arenot necessarily those of the Board, the OTA Advisory Council, or of in-dividual members thereof.



Acknowledgements

The food program staff received advice and assistance from Federal agencyofficials, individuals from the private food sector, consumer groups and widely

known experts. Some participated in workshops, some were the subject of inter-views, others assisted in review, and others helped in numerous ways essential to abalanced understanding of the complex issues involved in this study of food grad-ing.

Their assistance is acknowledged. Likewise, the time made available and theeffort put forward on behalf of OTA and Congress is appreciated.



I.

II .

III.IV .

v .

VI .

Page No.

Summary of Issues, Findings, and Con-gressional options . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 3Issue I: Grade Criteria— Combining Sen-

sory Characteristics and NutritionalCriteria . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Issue II: Voluntary or Mandatory System 7Issue I I I : Grade Designat ion or No-

menclature . . . . . . . . . . . . . . . . . . . . . . . . 9Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 11

Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Methodology . . . . . . . . . . . . . . . . . . . . . . 17

Historical Development . . . . . . . . . . . . . . . 19Diversity in Current Food Grad ing . . . . . 23

Use of Cu rren t Food G rad es. . . . . . . . . 31Perspectives on Federal Food Grading:

USDA, Industry, and Consumers . . . . 33U.S. Department of Agriculture. . . . . . 35

Mandatory Grading . . . . . . . . . . . . . . 36G r a d i n g D e s i g n a t i o n o r N o -

menclature . . . . . . . . . . . . . . . . . . . 36Program Reform . . . . . . . . .; . . . . . . . . 36

Food Processing Industry. . . . . . . . . . . . 37Grade Criteria . . . . . . . . . . . . . . . . . . . . 37Mandatory Grading, . . . . . . . . . . . . . . 37

Consu mer I nteres t Grou ps. . . . . . . . . . . 39Grade Criteria . . . . . . . . . . . . . . . . . . . . 39Mandatory Grading.. . . . . . . . . . . . . . “42Grade Designation or

Nomenclature . . . . . . . . . . . . . . . . 42Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Grade Criteria . . . . . . . . . . . . . . . . . . . . 43Ma n da tory Gra di n g . . . . . . . . . . . . . . . 43Grade Designation or

Nomenclature . . . . . . . . . . . . . . . . 43Possible Functions of a Federal Retail

Food Grading System. . . . . . . . . . . . . . . 45O b t a i n i n g C o n s u m e r I n p u t f o r t h e

Design of a Retail Grad ing System . . . 47

ContentsPage No.

Assessm ent b y Major Categories . . . . . . .Processe d Foods Sector. . . . . . . . . . . . . .

P r e s e n t S t a t u s o f G o v e r n m e n tPrograms. . . . . . . . . . . . . . . . . . . . .

P resent S tatus of Pr ivate SectorPrograms. ... , . . . . . . . . . . . . . . . .

Potential Function and Impact of Retail Gr ad in g . . . . . . . . . . . . . . . .

Summary . . . . . . . . . . . . . . . . . . . . . . .Congre ssiona l Op tions . . . . . . . . . . .

Fresh Fruits and Vegetables Sector . . .P r e s e n t S t a t u s o f G o v e r n m e n t

Programs. . . . . . . . . . . . . . . . . . . . .Potential Function and Impact of

Retail Gr ad in g . . . . . . . . . . . . . . . .Summary . . . . . . . . . . . . . . . . . . . . . . .Congre ssiona l Op tions . . . . . . . . . . .

Fresh Red Me at Se ctor. . . . . . . . . . . . . .P r e s e n t S t a t u s o f G o v e r n m e n t

Programs. . . . . . . . . . . . . . . . . . . . .Present Status of Private Sector

Programs. . . . . . . . . . . . . . . . . . . . .potential Function of Retail GradingPotential Impact of Retail Grading.Technology in Relation to Tender-

ness in Beef. . . . . . . . . . . . . . . . . . .Summary . . . . . . . . . . . . . . . . . . . . . . .Congre ssiona l Op tion s . . . . . . . . . . .

App end ixes and Glossary of Term s. . . . . . . . . .Appendix A: Recent Studies Mentioning

Food Gr ad in g . . . . . . . . . . . . . . . . . . . . . . . .Appendix B: Congressional Interest in Food

Grad in g . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Append ix C: Food Gradin g Workshop Par-

ticip an ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Append ix D: Consumer Inpu t for

“Designing a Retail Grading System . . . . .

Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . .

LIST OF FIGURES

Figure 1. Flow of Food From Farm to Con-su mer . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . .

14Figure 2. Nutritional Labeling . . . . . . . . . . . . . . 16Figure 3. Proposed Organizational Structure

of USDA’s Food Safety an d Qu ality Service 22Figu re 4. Gra d in g of Butter . . . . . . . . . . . . . . . . . 26Figure 5. Fresh Fruits and Vegetables . . . . . . . 27Figure 6. Grading of Processed Fruits and

Vegetables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Figu re 7. M eat G rad es . . . . . . . . . . . . . . . . . . . . .

Figure 8. Proportion of Food Products Grad edat Wh olesa le an d Retai l. . . . . . . . . . . . . . . . . .Figure 9. Federal Government Agencies Active

in Food Pro grams. . . . . . . . . . . . . . . . . . . . . . .Figure 10. U.S. Departmen t of H ealth, Educa-

tion and Welfare—Public Health Service,Food & Drug Administration—Bureau of Foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4848

48

54

57595960

60

61666667

67

7072

74747577

79

81

83

84

87

30

31

50

51

vi i



Figure 11. Food and Drug Administration Figure 15. Marketing Structure of ProcessedPrograms Directed to Control of Food and Foods and Fresh Fruits and Vegetables . . . . 64Cosmetics as Authorized by Various Federal Figure 16. Breakdown of Meat Grades of A c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ” . ” 5 2 Federally Graded Commercial Cattle, 1975. 68

Figure 12. Nutritional Labeling . . . . . . . . . . . . . 53Figure 13. Types of Dates . . . . . . . . . . . . . . . . . . 56

Figure 17. Selected Examples of Voluntary

Figure 14. Examples of Fresh Fruit and Vegeta-Meat Iden tification S tand ards . . . . . . . . . . . . 69

b l e P a c k a g i n g . . . . . . . . . . . . . . . . . . . . . . . ” ” ” ” 6 1 Figure 18. Beef Chart . . . . . . . . . . . . . . . . . . . . . . 73

LIST OF TABLES

Table 1. Availability of Consumer Information Table 3. Nomenclature for Selected Federalfor Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 and State Grades for Fruits and Vegetables 28

Table 2. Nomenclature for Selected USDA Table 4, Selected USD A Grad es for ProcessedFood Grades . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Food Products . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Vlll



Part I

SUMMARY OF ISSUES, FINDINGS,

AND CONGRESSIONAL OPTIONS



Part I

Summary of Issues, Findings,

and Congressional Options

Food grading is basically a sorting process, a method of separating afood product into two or more groups through the use of chosen base cri-teria. Once separation is accomplished, the grade assigned should directlyimpart the criteria used in its determination. Grades are not used for sortingacross p ro d u c t s —i.e., apples from pears—but rather within products—i.e.,apples from other apples.

Present Federal food grades impart little information to the consumer.Federal grade criteria for sorting products are based on sensory charac-teristics-such as taste, flavor, color, or exterior appearance-and evolved asa mechanism to facilitate wholesale transactions in industry. To benefit con-sumers, simple, uniform terminology, increased nutritional information,and standardized systems for grading might be established. The questionnow arises as to whom grades should serve: consumers, industry, or both?

Industry and consumers are affected by:q wh ich food p rodu cts are graded;q what criteria are chosen for the grad e;

. how the grad e is designated on the prod uct; andq where grading occurs in the food distribution channel.

This stud y assesses the social, institutiona l, and econom ic consequen cesof modifying or changing the present grading system to a retail- or con-sum er-oriented grad ing system. Pu blic policy issues of significant concern toCongress and the Nation surrounding Federal retail food grading aredefined.

These issues are:

1) the criteria (or sorting rules) used for grades;

2) whether or not retail grades should be mandatory; and3) the nomenclature used for grades.

The Office of Technology Assessment found that each major foodcategory—processed foods, fresh fruits an d vegetables, and fresh r ed m eat—poses a different problem. Therefore, potential costs and benefits (withrespect to a retail-oriented food-grading system useful to consumers for

S Department of Agriculture Photo



making better food-purchase decisions) differ for each category. The issues,as they relate to each of these broad product categories, are discussed in thetext (see centerfold), and possible congressional options for each gradingissue are identified. Each option has a cost; none are free. Also, each optionhas potential benefit to consumers. Careful consideration should be given tothe net benefit (cost in relation to benefit) prior to ad option of any par ticular

option. In this report, a full range of congressional options are stated regard -less of the p otential relative or absolute net benefit to various p articipan ts inthe food distribution system.

NOTE: A Glossary of major terms used throughout this report appears on page 87.

4



ISSUE I: GRADE CRITERIA-COMBINING SENSORY CHARACTERISTICS ANDNUTRITIONAL CRITERIA

Current food grades are based on criteriareflect ing sensory characterist ics such asflavor, texture, color, or other palatability orcosmetic factors. A major issue in food grad-ing is whether to change this basis to reflects e n s o r y a n d n u t r i t i o n a l f a c t o r ssimultaneously. The issue is complex. Onegeneral p rob lem associa ted wi th makingnutritional content a basis for grades is thatnutrition deals with diet. As one food gradingworkshop (see methodology) par t ic ipan tstates:

We can conceive of a nutr itious diet, but th e con-

cept of a nutritious food product has never beendeveloped. There are many components of anu tritious diet, and the concept of getting themall in a product is very repulsive to nutritionistsand, I think, the populous in general. So there is

a very great difficulty in nutrition labeling. Anyproduct is a component of a diet, and it may be auseful component although it is very lopsided inits individual characteristics. What makes anutritious product is what other products it iscombined with in a day or a period of severaldays. We have a conception of n utritional d iet;we do not have a conception of nutritional prod-uct. 1

Current Government programs for proc-essed foods include regulation of food prod-ucts for wholesomeness and safety, standardsof identity, fair labeling and packaging, andoptional nutritional labeling and gradingsy s t ems . In ad d i t i o n , mo s t ma jo r fo o dmanufacturers have elaborate quality controlp r o g r a m s t h a t a s s u r e c o m p l i a n c e w i t hG o v e r n m e n t r e g u l a t i o n s a n d t h e i r o w nspecifications. Retail grade criteria should notbe changed to reflect some combination of sensory and nutritional factors, as it is notmeaningful to grade processed foods on both.Problems include an inverse relationship be-tween sensory and nutritional characteristicsand the time lag necessary to establish nutri-tional content and grade and label the prod-uct. For processed foods, analysis by OTA in-dicates that the most appropriate vehicle forconveying nutritional information to con-sumers is the nutritional labeling programalready in operation.

With regard to fresh fruits and vegetablesand red meat, nutritional factors apparentlycannot be combined with sensory factors andserve as basis for retail grades. Evidence inthis report indicates that the nutritional con-tent of fresh products is quite similar withinany particular commodity. For example, ap-ples, regardless of variety, tend to have similarnutritional characteristics, as does round steakregardless of cattle breed. This means thatnu t r i t ion in format ion cannot serve as ameaningful basis for sorting (therefore grad-ing) various products within a commoditycategory.

There are a number of options for increas-ing the flow of nutritional information to con-sumers, the intent being that such informationwould facilitate food purchase decisions. Therange is wide. Some options deal directly withgrade criteria changes, while others deal withincreasing consumer nutrition education.

CONGRESSIONAL OPTIONS

The following are some of the options q Congress could support or provide incen-available to Congress for the grade criteria tives for education programs by Govern-issue: ment agencies or the private sector to in-

. Congress could direct the Department of form consumers about:

Agriculture (USDA) to facilitate the adop- ITranSCriptSfrom food grad ing workshop condu ctedtion of a voluntary/ mand atory nutritional by OTA on July 28-29, 1976 (her eafter r eferred to aslabeling program for fresh retail meat cuts. Workshop vol.—). Workshop, vol. I, pp. 136–137.

5



q

q

1.

2.

The nutrition of fresh fruits and vegeta-ble products and also the differences innutritive content from one commodity toanother; andThe nutrition of processed food productsand interpretation and use of the currentnu t r i t iona l label ing p rogram and / o rgrades for processed food products.

Congress could direct the Food and DrugAdministration (FDA) to disseminate infor-mat ion to consumers concerning thoseprograms currently in operation that assurethe safety, wholesomeness, labeling, andidentity of most manufactured or processedfood produ cts.

Congress could d irect USDA to ad minister astandard labeling and variety identificationprogram for fresh fruits and vegetables thatare sold in retail packages.

. Congress could direct USDA to institute avoluntary/ mand atory program of retailmeat grades where grade criteria are basedon yield per pound or per serving. Such aprogram shou ld not be instituted, however,p r io r to a p rogram tha t wou ld a s su reuniform identification of retail meat cuts.

q Since net benefit of any retail grade schemefor meat is highly depend ent up on the typeof meat distribution system in existence,committees of Congress with jurisdictionalauthority could examine the potential forimproving the distribution costs of meatfrom various systems (such as conventionalcompared to centralized frozen) in over-sight hearings. Such hearings could pro-duce further evidence on the potential im-pacts and benefits of retail grade alterna-tives for meat.



Three possible systems for red m eat gradingare analyzed in this report:

1)

2)

3)

yield per pound or per serving;

uniform mandatory retail cut identitylabeling; and

a combination of current grades with the

There is however, a direct relationship be-tween the type of meat distribution systemand the cost of any mandatory retail gradingsystem. This means that net consumer benefitvaries by both the type of grad ing base and thetype of distribution system. Further detailedanalysis, beyond the scope of this report, isnecessary before net consumer benefit from

any combination of grading and distributionother two systems. systems can be determined.


The following are some of the optionsavailable to Congress for the voluntary ormandatory grading issue:

q Congress could m ake grading mand atory:

— for processed foods, designation of cur-rent grades could be made mandatoryon retail packages for selected products.

— for fresh fruits and vegetables, the cur-rent wholesale grade criteria could beused and designation of the grade couldbe made mandatory at retail.

— for fresh red meat, the current carcass-grade criteria could be used, and the

grade could be designated on all in-dividual retail meat packages.

Congress could make grade designations atretail mandatory for any food productwhich is currently graded on a volun-tary/ mand atory basis. That is, if the prod uctis graded, then the retail package must dis-play that grade.

Congress could provide incentives forwidespread adoption by industry of thecurrent voluntary/ mand atory system foreach major product category. Incentivescould include a tax break for business firmsthat adopt the program and/ or a direct sub-s idy to de f ray the in i t i a l cos t o f theprogram.



ISSUE Ill: GRADE DESIGNATION OR NOMENCLATURE

C o n f u s i n g g r a d e d e s i g n a t i o n o r n o -menclature is a major problem for consumersin both fresh fruits and vegetables and proc-essed foods. Uniform, easily understood ter-minology across grades is a basic need to aid

consumers in making food purchase deci-sions.

There are two basic concerns regardinguniform nomenclature, One is the trade-off between meaningfulness and simplicity in ter-minology. That is, extremely simple designa-tion for grades (such as A, B, C) impart nomeaning in terms of grade criteria. More

descriptive grades (such as young, tender, orextra fancy) are more complicated to use butmay be more meaningful.

A second concern is that nearly all con-ceivable grade designations imply rank. Oneobjection to the implication of rank is that asecond- or third-grade product may in fact besuperior to the top grade, depend ing on its useor relative price. If simple grade designationswere uniformly adopted, such implications of rank might mislead consumers or impart in-correct information to them.

There are unsettled questions regarding theoptimum terminology for grades of freshfruits and vegetables and processed foods.However, no reasons have been found for notinstituting uniform designations for theseproduct s, regard le ss o f the t e rmino logychosen.

The terminology currently used for freshred meat is uniform for all such products.

However, one of the more significant con-sumer information needs is standard iden-tification of individual retail meat cuts andstandardized retail package labels. Voluntaryidentification and labeling standards devisedby the National Livestock and Meat Board, ex-ist for fresh beef. This voluntary program hasbeen adopted as law in some States.


The following are some of the optionsavailable to Congress for the grade designa-tion issue:

q Congress could standardize nomenclature .for the firs t , second, third, and fourthgrades for both processed foods and freshfruits and v egetables, so they w ould be con-sistent from one product to another.

q

q Congress could d irect USDA to immed iatelya d o p t t h e n e w s impl i f i ed g rade no-menclature for fresh fruits and vegetables itannounced in July 1976. This would mean

that adop tion of this program would not re-main at the discretion of growers or proc-essors of these commod ities.

Congress could d irect USDA to adm inister astandard labeling and variety identificationprogr am for fresh fruits and vegetables soldin retail p ackages.

Congress could make the current voluntaryprogram on meat identification standardsmandatory for all retail meat cuts. Thiswould facilitate uniform identification of retail meat cuts.

-578 0 - 77 - 3



Part II

INTRODUCTION



Part II

Introduction

Grading is a means of sorting a particular food roduct-e.g., apples—into two or m ore group s based up on criteria selected for sorting. Grades can-not be used for sorting across products—i.e., apples versus pears--onlywithin a product—i.e., one apple from another apple. The purpose of gradesis to facilitate exchange of products between trading partners by providinginformation about the product. Assignment of a grade to any food productrequires som e base criteria, as the grad e itself impar ts the criteria used in itsdetermination.

Both indu stry and consum ers have a stake in w hether food p rodu cts aregraded, what criteria are chosen for the grade if a product is graded, how theinformation is conveyed, and where the grading is done in the vast food dis-tribution system from farmer to consumer (see figure 1). Such issues haverecently surfaced as congressional concerns. This report details the issuessurrounding retail food grading and identifies congressional options withrespect to the issues.

To assist in making purchase decisions, consumers need a variety of in-formation on wholesomeness, safety, nutrition, ingredients, price, weight,and sensory characteristics. Grading can be viewed as a mechanism for pro-viding information on any one or a combination of these items.

Perhaps the three most essential information requirements for con-sumers are:

q the wholesomeness and safety of a product;q the nutritional value of a product; andq the p rod uct’s sensory characteristics.

To view the possible role Federal food grades could play in providing infor-mation in these areas, it is necessary to review current Federal programswhich interact with these consumer information requirements (table 1).

Wholesomeness and Safety

For wholesomeness and safety of a product,there are numerous programs providing thatassurance to consumers . * For example ,Federa l and Sta te mandatory inspec t ion

*Wholesomeness refers to defects in food productswhich are not a health hazard to consumers. Safetymeans tha t the prod uct will possess no defects or im-purities which present a health hazard.

programs ap ply to fresh m eat and pou ltry. Infresh fruits and vegetables the EnvironmentalP r o t e c t i o n A g e n c y ( E PA ) e s t a b l i s h e dtolerance levels for insecticides and the Foodand Drug Administration (FDA) monitorsthese levels and levels of any other additives.In processed food products, good manufactur-ing practice regulations are written and en-

13



Figure 1.Flow of Food From Farm to Consumer

FARM ORIGIN

. . q

ASSEMBLERS, BROKERS, ETC.

I P FOOD MANUFACTURERSAND PROCESSORS IASSEMBLERS

A

EXPORTSGOV'T & IND.

- - — — - - - — - - - - — -

I WHOLESALERS, BROKERS,CHAIN WAREHOUSES

-=———l—=————l -GROCERY STORES SPECIALTY FOOD

STORES

1

II INSTITUTIONALMARKET MILITARY

CONSUMERS I



Table 1– Availability of Consumer Information for Food

Information or Service Currently Provided by MajorFood Categories

ConsumerInformation Fresh Meat Fresh Fruits Processed Food

Requirements & Poultry & Vegetables Products

Wholesomeness/ USDA and/or EPA – Establishes

Safety State Inspection tolerance levelsof insecticides

FDA– Monitorsinsecticide level

Nutrition

Sensory USDA Grades** USDA GradesCharacteristics

FDA* –Good manu-

facturing practices.Standards of identity.

NutritionallabelingMeat – USDAAll others– FDA

USDA Grades

“Work in coordination with U.S. Department of Agriculture and Department of Commerce“For fish – U. S. Commerce Grades.

forced by FDA in cooperation with the U.S.Departments of Agriculture (USDA) andCommerce (DOC). Thus, wholesomeness andsafety are adequately regulated in the majorfood categories. Each of these prog rams is dis-cussed in detail in following sections of thisreport.

Nutrition Information

Nutrition information is conveyed to con-sumers through nutritional labeling of proc-essed foods, such as canned or frozen prod-ucts. This information includes the amount of protein, fat, carbohydrates, and calories perserving. In addition, the product’s percentageof U.S. Recommended Dai ly Al lowance(RDA) for important minerals and vitamins isalso included on the package label (see figure2 ) . N u t r i t i o n a l l a b e l i n g i s v o l u n -tary/ mand atory; that is, a manu facturer doesnot have to p ut n utritional information on theproduct, but if nutritional labeling is used, itmust conform to Federal standards for suchlabeling. However, when a manufacturermakes a nutritional claim for its product oradds nutrients, nutritional labeling becomesmandatory in most cases.

The use of nutritional labeling currently ap -plies only to processed foods. FDA ad-

ministers the program for allexcept processed meat and

processed foodspoultry, which

come under the jurisdiction of USDA. Forfresh meat and poultry, and fresh fruits andvegetables, there are currently no Federalnutritional labeling standards. Even thoughthe nutritional labeling program exists, thereis still concern among Government officialsabout nutrition education. As Dr. RobertAngelotti, Associate Director for Compliance,

Bureau of Foods, FDA, stated:There are segments of our p opu lation that eatimproperly, because there is socioeconomicpressure on them no d oubt, but neverthelessthey eat improperly. There are other segments of our p opulation that eat improperly, but they doso willfully and by choice and they can afford it.Nevertheless, we (Government) should bereaching both kinds of people and trying toteach them what is good nutritional

Dr. Angelotti indicated that one of the objectives of the current nutritional labeling

program was education:One of the objectives of the nutritional labelingsystem was an attempt to teach good nutr itionalhabits to people. The nutritional labeling inoperation tod ay is, in p art, a teaching tool. Not

IWorkShOp, vol. 1, p . 49.

15



Figure 2.

Nutritional Labeling

- - The U.S. RDAs are the amounts of protein, vitamins

and minerals people need each day to stay healthy.These allowances are set by the Food and Drug Ad-

ministration. They are based on body needs for mosthealthy adults.

Set at generous levels, they provide a considerablemargin of safety for most people above minimum bodyneeds for most nutrients.

Nutrition labels list U.S. RDAs by percentage perserving of food.

For example, if the nutrition label says “Vitamin A-10,” that means a serving of the food contains 10 percentof the U.S. RDA for Vitamin A.

U.S. RDAs replace the outdated “Minimum DailyRequirements” (MDR).U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFAREP u b l i c He a l t h Service, Food and Drug Admin ist rat ion5600 Fishers Lane, Rockville, Maryland 20852

U.S. RECOMMENDED DAILY ALLOWANCES (U.S. RDA)F o r ad u l t s an d ch i ld r en o v er 4 y ea r s o ld

NUTRIENTS A M O U N T S

Protein 45 or 65 grams**Vitamin A 5,000 International UnitsVitamin C (ascorbic acid) 60 milligramsThiamine (vitamin B 1) 1 5 milligramsRiboflavin (vitamin B 2) 1 7 milligrams

20 milligramsCalcium 1 0 gramIron 18 milligramsVitamin D 400 International UnitsVitamin E 30 International UnitsVitamin B 6 20 milligramsFolic acid (folacln) O 4 milligramVitamin B 12 6 microgramsPhosphorus 1 0 gramIodine 150 microgramsMagnesium 400 milligramsZinc 15 milligramsCopper 2 milligrams

O 3 milligramPantothenic acid 10 milligrams

65 grams If protein quality IS less than milk protein

DHEW Publication No. (FDA) 76-2049

SOURCE: DHEW Publication No. (FDA) 76-2049.

only does it give you nu tritional information,but it gives it to you in a w ay that you eventuallycome to understand that there is a 100 percentvalue for some Recommended Daily Allowance(RDA) figure. It is clear you shou ld b e striving tomeet that RDA requirement through your totaldiet throughout the day. 2

Sensory Characteristics

Federal food grades presently provide in-formation about a food product’s sensory orq u a l i t y c h a r a c t e r i s t i c s , s u c h a s c o l o r,blemishes, taste, and / or flavor. This informa-tion is presently available for all the majorfood categories.

Federal grade standards for agriculturalproducts evolved in the 1920’s as a mecha-nism to facilitate wholesale transactions forthe food industry. Despite the original intent,

the question arises as to whom grades shouldserve: consumers, industry, or both. PresentFederal food grades impart little informationto the consumer for most commodities. If Federal grades are to have a potential con-

sumer-information role, it becomes necessaryto determine the kind of information useful toconsumers and the mechanism necessary toconvey this information.

Given this situation, this report explores thepotential informational role of Federal foodgrades for consumers. For example, shouldFederal food grades continue to provide infor-mation on sensory differences of food prod-ucts as they do now but p erhaps have uniformnomenclature and be used more extensively atretail? Should Federal food grades provide

information on a product’s nutritional value?Wha t o the r k inds o f in fo rma t ion cou ldFederal food grades convey to consumers?

Z1bid.,pp. 49-50.

16



PURPOSE

T h is as se ss me n t a n al yz es al te rn a ti ve p u r- 2. R ev ie w s cu r r en t p r og ra m s a d d r es si n gposes food grades could serve in providing the these issues; andconsumer wi th more informat ion in themarketplace. More specifically, this report: 3. Analyzes the p otential role and imp act of

1. Develops the issues surrounding the Federal food grades at retail.

present grading program for food;

METHODOLOGY

To accomplish these purposes, a staff back-ground document was prepared identifyingthe issues in the present grading program.Issues were determined via interviews withrepresentative groups affected by grades—Government, industry, consumers. Second, anadvisory group workshop was convened toreview the background document and to

further elaborate on the issues. The advisorygroups consisted of a broad and balancedrepresentation of affected groups includingfood processors, consumers, researchers, andGovernment regulatory agencies (appendixc).

The advisory group convened for a 2-dayconference in July 1976. The group addressed

themselves to the staff background documentand to a list of issues and potential implica-tions distributed prior to the workshop. Thefirst day of the workshop the group met as awh ole to discuss and elaborate on the issues ingeneral. The second day the group dividedinto three working groups representing theprocessed foods, fresh fruits and vegetables,

and fresh red meat areas. In each group theparticipants elaborated on the issues and im-plications of retail food grading for that par-ticular food category. This report is thus acombination of the staff background docu-ment and the results of the workshop.

.578 0- 77 - 4 17



Part Ill

HISTORICAL DEVELOPMENT



Part Ill

Historical DevelopmentThe first official Federal food grade standards were established for

potatoes in 1917. The Food Production Act of August 10, 1917, encouraged

the developm ent and use of standard s as part of produ cing the food neededfor the military and U.S. allies. Although military needs were the major im-petu s for establishing a grad ing system, it was intend ed th at the civilian foodmarket would benefit too. The Government hoped the grading systemwould encourage farmers to grow higher quality produce, reasoning thatsince high qu ality food w ould sell at higher p rices, the farmer wou ld receivemore for what he produced and therefore would be persuaded to grow bet-ter quality food.

The primary reason for grades was to make wholesale transactions sim-ple and more efficient, thereby cutting food costs to consumers in the longrun. Because a common language would be used nationally at wholesale,transactions would be simplified and time would be saved by wholesalers.Some of the cost reduction would be transferred to the consumer, and thusthe consumer would benefit from wholesale grades by paying lower pricesfor food.

As the years went by, the USDA established wholesale grades forspecific food products at the request of the food industry. In 1946, theAgricultural Marketing Act gave USDA the authority for the standardiza-tion of food quality grades and voluntary grading and inspection services.Section 203 (7, U.S.C. 1621-1627) of this Act states that:

The Secretary of Agriculture is directed and auth orized (h) to inspect, certify, and iden -

tify the class, qu ality, qu antity, and cond ition of agricultural produ cts wh en ship ped orreceived in interstate commerce. . , to the end th at agricultu ral products maybe marketedto the best advantage, that trading may be facilitated, and that consumers may be able toobtain th e qu ality produ ct wh ich they desire . . . .

As a result of this Act and growing congressional pressure, a memoran-dum was released by the Secretary of Agriculture on November 2, 1953,establishing the Agricultural Marketing Service (AMS) and placing thegrading system required by the 1946 Act under its jurisdiction, where it hasremained until recently. * The AMS administrator reported to the AssistantSecretary for Marketing and Consumer Services. AMS was organized intofour m ajor food d ivisions: da iry, fruits an d vegetables, poultry, and livestock.

Other divisions within AMS handled cotton and cottonseed, grain, and tobac-co grading, areas which do not enter into this discussion as they are com-modity rather than food-grading programs. In - 1977, the food grading func-tions were shifted to USDA’s Food Safety and Quality Service. Figure 3depicts a proposed organizational structure of this new agency.

Iwayne D. Rasmussen, Historian, Economic Research Service, Interview.

21



Figure 3.PrOpa$qd o q I s -m of USRA’S

Fowi ad QUdityservice

I SECRETARY OF AGRICULTURE I

I DEPUTYSECRETARY OF AGRICULTURE I

11111 1

OTHER I mASSISTANT SECRETARIES q

ASSISTANT SECRETARY FORFOOD & CONSUMER AFFAIRS

FOOD SAFETY & QUALITY SERVICE FOOD & NUTRITION SERVICE

ADMINISTRATOR ADMINISTRATOR

9h

DEPUTY ADMINISTRATOR,

COMMODITY SERVICESt

F&DDIV.

q

* *

MEATDIV.

q

POULTRYDAIRY

DIV.. q

I 1?

DEPUTY ADMINISTRATOR DEPUTY ADMINISTRATOR

MEAT & POULTRY INSPECTION MANAGEMENT SERVICESq *

Grade StandardsGrading/AcceptanceFood Purchasing

Grade StandardsGrading/AcceptanceFood Purchasing

Grade StandardsGrading/AcceptanceEgg Products InspectionFood Purchasing

SOURCE: USDA, AMSD ff i c e o f Information

22



Part IV

DIVERSITY IN CURRENT FOOD GRADING



Part IV

Diversity in Current Food Grading

Federal grades provide information on the sensory characteristics of themajor food categories. The current grading program administered by AMSof USDA is voluntary/ mand atory. There are problems w ith the currentFederal food-grading program, among them confusing nomenclature forgrades and a general lack of useful information conveyed by them to con-sumers.

The present confusion is a result of over 50 years of USDA allowing in-dustry considerable latitude in deciding the grade nomenclature to be usedso that there would be some degree of standardization. The reason for thislatitude is that grading is optional: Industry has the option of not using the

USDA grading system if it does not care for the USDA standards or gradedesignations for their products. Because different industries have differingconcerns and requirements (or at least perceive them differently), the resultis the present d iversity of grades. USDA views th is as an inherent p roblem of the current voluntary/ mandatory system, 1 and therefore appears to give in-dustry most of what it wants to have at least some degree of participation.

USDA indicates that, because some prod-ucts are natu rally more variable than others, itis necessary to have more grades for someproducts than for others. Quality, in general,refers to the u sefulness, desirability, and valueof a product—its marketability—but the pre-cise definition of quality depends on the com-modity. 2 Certain general characteristics, bothobjective and subjective, are used to d eterminea product’s quality. Some of these charac-t e r i s t i c s a r e c o l o r, u n i f o r m i t y, f l a v o r,blemishes (if applicable), size, texture, andmaturity. Most are sensory judgments, but anincreasing number of objective (measured byinstrument) standards are used when they are

economically feasible.The four AMS divisions manage Federal

marketing and grading services for their par-

lusDA Pamphlet. “USDA Grade Standards for Food,How They Are Developed and Used,” p. 9, Augu st 1974.

21bid., p. 5.

ticular food p rodu ct. Each d ivision has its owng r a d i n g s t a n d a r d s a n d n o m e n c l a t u r e ,different not only between the divisions butalso within them (table 2).

Within the Dairy Division, for example,butter is graded and has the grade printed onthe retail p ackage. Flavor, aroma, texture, andthe qu ality of the cream from wh ich it is mad eare some of the criteria in grading butter (seefigure 4).

According to the USDA “How To Buy”series for fresh fruits and vegetables, the topgrades for fresh fruits and vegetables areusually either U.S. Fancy or U.S. No. 1.

However, another pamphlet by the AMS Fruitand Vegetable Division states that U.S. Fancy,U.S. No. 1, and U.S. No. 2 are the order of grades for most fresh fruits and vegetablesthat are graded. This pamphlet also indicatesthat other grade names—U.S. Extra No. 1, U.S.Extra Fancy, and U.S. Combination-are used

2591-578 0 - 77 - 5



Table 2–Nomenclature for Selected USDA Food Grades

Nomenclature forAMS Food

Division Product Top Grade 2nd Grade 3rd Grade 4th Grade

DAIRY ButterCheddar CheeseInstant Nonfat

Dry Milk

U.S. Grade AAU.S. Grade AA“U. S. Extra

Grade”

U.S. Grade AU.S. Grade A

U.S. Grade B

FRUITSANDVEGETABLES

Fresh: CantaloupesCucumbersPeasPotatoesWatermelons

U.S. FancyU.S. FancyU.S. FancyU.S. Extra No. 1U.S. No. 1

U.S. No. 1U.S. Extra No. 1U.S. No. 1u. S. No. 1U.S. Commercial

U.S. Commercial U.S. No. 2U.S. No. 1

U.S. Commercial U.S. No. 2U.S. No. 2

Grade C or SubstandardStandard or cull

Grade C or SubstandardStandard or cull

Processed: Fruits Grade A orFancy

Grade A orFancy

Grade B orChoice

Grade B orExtra Standard

Vegetables

POULTRY PoultryEggs

U.S. Grade AU.S. Grade AA

or Extra Fancy

U.S. Grade BU.S. Grade A U.S. Grade B

LIVESTOCK Beef USDA ChoiceUSDA Prime USDA Good USDA Standard

SOURCE: U.S. Government, Code of Federal Regu/at/ens, 7CFR 46-57, Washington, D. C., 1976.

Figure 4.- Grading of Butter

Butter U.S. Grade A ButterOne way to be assured of high quality butter is

to look for the USDA grade shield on the pack-age. The grade shield (AA, A, or B) means thatthe butter has been tested and graded by ex-

perienced government graders. Butter graders judge quality by U.S. grade standards that setforth the requirements for each grade. They alsotest the keeping quality of butter,

q has a pleasing fIavor;q is made from fresh cream;q is fairly smooth in texture;q rates close to the top grade.

U.S. Grade B Butter:

U.S. Grade AA Butter:

q may have a s l igh t ly ac id f lavo r ;q generally is made from selected sour cream;q is readiIy acceptable to many consumers.

q has delicate sweet flavor, with a fine highlypleasing aroma;

q is made from high-quality fresh sweet cream;q has a smooth, creamy texture with good

spreadability;q has salt completely dissolved and blended in

just the right amount.

SOURCE U S Department of Agriculture

26



for different food products in this particulardivisions (See figure 5.)

Considerable diversity exists for fresh fruitsand vegetables, and the extensive variety of grade nomenclature and criteria is illustratedin the Code of Federal Regulations, Title VII,Parts 46-57. Criteria for the different grades of

a product are usual ly co lor, s ize , s h a p e ,maturity, and the number of defects; but thelower grades may be just as nutritious as thehigher grades. The difference is mainly in ap-pearance, taste, and preference. 4

Three different conditions exist for gradenomenclature of fresh fruits and vegetables(table 3). For some fruits and vegetables, thenomenclature applies for every State in whichthe food commodity grows. For grapefruitand oranges, the nomenclature varies depend-ing on the State in which the product isgrown. Finally, in the case of Washington ap-ples, a State grad e app lies rather th an a USDAgrade. The latter condition is possible becauseFederal grades are voluntary.

Dur ing 1976 , USDA announced newuniform nomenclature for fresh fruits andvegetables. How ever, these changes will beimplemented primarily at the request of in-dustry. The details of this new uniform no-menclature effort by USDA are discussed inthe fresh fruit and vegetable section of thisreport.

Processed fruits and vegetables are thosef rozen , canned , o r o the rwise p re se rvedthrough processing. The nomenclature usedwhen products are graded after processing iseither a letter or an alternative name designa-t ion , Processed grades tend to be moreuniform than those for fresh fruits and vegeta-bles . Criteria for these grades are color,uniformity of size or shape, flavor, texture,maturity, and the number of defects (seefigure 6). 5 While grading criteria for processed

3USDA Pamphlet. “Official Grade Standards and In-spection for Fresh Fruits and Vegetables, ” December1963, p. 3.

4 u s D A Pamphlet. “How To Use Grades in BuyingFood,” September 1971.

5 u s D A Pamphlet. “How To Buy Cann ed and FrozenVegetables,” April 1969.

fruits and vegetables are based mostly onproduct appearance, grade designations arestill diverse.

Figure 5.

Fresh Fruits and VegetablesAlthough most fresh fruits

and vegetables are sold atwholesale on the basis of U. S.grades, not many are markedwith the grade in the grocerystore.

The typical range of gradesfor fresh fruits and vegetables is U.S. Fancy,U.S. No. 1, and U.S. No. 2.

U.S. No. 1 means good quality and is the chiefgrade for most fruits and vegetables. U.S. Fancymeans premium quality–only a few fruits andvegetables are packed in this grade.

The grades are based on the product’s color,shape, maturity, and freedom from defects. Thelower grades are just as nutritious as the highergrades. The difference is mainly in appearance,waste, and preference.

Some packaged produce is marked with theU.S. grade name. When the grade name is shownin this shield, it means the product was packedunder the supervision of an official Governmentgrader,

SOURCE U S Department of Agriculture

In the AMS Poultry Division, the differencebetween A and B for poultry is based on ap-pearance, finish, and meatiness rather thantenderness. 6 However, age of the bird, as indi-cated by the class, determines tenderness; andthis information must, under law, be stated onlabels for poultry. The grades of eggs, on theother hand, are differentiated by appearance(height) of the yolk and white portion of thecracked egg as it lies on a flat su rface. p

The Livestock Division uses names ratherthan letter grades (see figure 7). These gradesare intended to reflect differences in tender-

6w13A pamphlet. “How To Buy Poultry,” July 1968.TUSDA Pamphlet. “How To Buy Eggs,” January 1968.

27



U.S. Grade Aor

Fancy

U.S. Grade B

Extra Standard

U.S. Grade C

Standard

Packed undercontinuous in-spection of the

U.S. Depart-ment of Agri-

culture

Figure 6.

Grading of Processed Fruits and Vegetables

Grade A vegetables are carefullyselected for color, tenderness,and freedom from blemishes.They are the most tender, suc-culent, and flavorful vegetablesproduced.

Grade B vegetables are of excel-Ient quality but not quite sowell selected for color and ten-derness as Grade A. They areusually slightIy more mature andtherefore have a slightly differ-ent taste than the more succu-lent vegetables in Grade A.

Grade C vegetables are not souniform in color and flavor asvegetables in the higher gradesand they are usually more ma-ture. They are a thrifty buy whenappearance is not too important –for instance, if you’re usingthe vegetables as an ingredientin soup or souffle.

This statement may be givenalong with the grade name or itmay be shown by itself. It pro-vides assurance of a wholesomeproduct of at least minimumquality.

The grade names and the statement, “Packedunder continuous inspection of the U. S. Depart-ment of Agriculture, ” may also appear withinshields.

Use of the U.S. grade standards and inspec-tion service is voluntary, and paid for by the user.But most canned and frozen vegetables arepacked and priced according to their quality eventhough a grade is not shown on the label. Some-times the grade name is indicated without the“U. S.” in front of it–for example, “Fancy” or“Grade A.” A canned or frozen vegetable withthis designation must measure up to the qualitystated, even though it has not been officially in-

spected for grade.The brand name of a frozen or canned vegeta-ble may also bean indication of quality. Produc-ers of nationally advertised products spend con-siderable effort to maintain the same qualityyear after year. Unadvertised brands may alsooffer an assurance of quality, often at a slightlylower price. And many stores, particularly chain-stores, carry two or more qualities under theirown name labels (private labels).

SOURCE, U. S. Department of Agriculture,

29



Figure 7.

Meat Grades Prime beef is the best andMain grades are Prime, Choice, and Good. most expensive. Not many

There are lower grades, but you are not likely to stores sell it. Most cutssee them marked on the meat. Some stores may graded Prime will be veryhave beef marked with the Standard or Commer- tender, juicy, and fIavorful.

cial grades.

a Choice beef is high quali-A mark like this may be ty. Steaks and roasts of this

stamped on meat. This is the grade will be quite tendergrade (Choice) you are most and juicy and have a good

fIavor.Several kinds of meat are

graded–beef, lamb, veal, and calf–and thisshield is used on them all. Good grade beef is not as

juicy and fIavorful as PrimeThe beef grades are a guide to how tender or Choice, but it is fairly

most cuts will be–and to how juicy and tender and usually has lessflavorful the meat will be. fat than Prime or Choice.

PRIME

SOURCE: U.S. Department of Agriculture.

ness, juiciness, and flavor as well as the age of the slaughtered animal. In the past, Prime andChoice have been the grades of beef most fre-quently available at retail, but recently leanermeat has been made available under either ahouse grade or USDA Good and Standardgrad es. In sp ite of this developm ent, Choice isstill well recognized by consumers and manytimes the only grade of meat available at thestore. Though the grade designations areuniform for beef, the terminology is con-siderably different from other AMS divisions.

As of February 23, 1976, revised U.S. gradestan dard s for beef became effective. These new

standards have four major changes: 1) all beef carcasses graded will be graded for bothquality and yield; 2) conformation (shape of carcass) will no longer be a factor of thequality standard; 3) leaner beef, due to achange in the marbling (fat) -maturity (age)relationship for animals less than 30 monthsold, will now qualify for Prime and Choice;and 4) range of U.S. Good grade is morerestrictive than before, since the marbling re-quirement essentially has been increased forthis grad e by elimination of conformation as afactor. These changes are discussed in moredetail in the fresh meat section of this report.

30



USE OF CURRENT FOOD GRADES

Informat ion on the proport ion of food commodity. For example, in fresh beef all theproducts graded by USDA at wholesale is beef graded at wholesale retains its grade atavailable, but only rough estimates are availa- retail. However, in frozen fruits and vegeta-ble on the proportion of food products receiv- ables, 70 percent is graded at wholesale while aing wholesale grades which retain their grades very negligible proportion retains the grade atat retail (figure 8). The most extensively retail. The only extensive use of grades at

graded food products at wholesale are fresh retail is in fresh tu rkey, butter, eggs, and freshpoultry, frozen fruits and vegetables, butter, beef. With these few exceptions, grade sym-and fresh beef. The p ropor tion of these retain- bols at retail are infrequent.ing the wholesale grade at retail varies by

Turkey

Chicken

Frozen Fruitsand Vegetables

Butter

Fresh Beef

Fresh Fruitsand Vegetables

Canned Fruitsand Vegetables

Eggs

Cheese

Figure 8.

Proportion of Food Products Graded at Wholesale and Retail

(Percent)10 20 30 40 50 60 70 80 90

II I I I I I I I

] 75/ o 0

5 4 %

5470

3 5 %

3 3 %

2 8 %

6%

7070

70 %

Legend

J /90°0

less than 1%

Source USDA Estimates

31



Part V

PERSPECTIVES ON FEDERAL FOOD GRADING:

USDA, INDUSTRY, AND CONSUMERS



Program. Thus, grading no longer has signifi-cance for sales to Government it once had.

Other USDA officials feel that the food in-dustry generally is against alteration of thepresent grading system. USDA believes thatindustry executives fear change because theyhave n o idea h ow the changes w ill affect costs

or brand share of their prod ucts at retail. Foodindustry people fear losing markets. Fear of the unknow n hind ers change, although indu s-try occasionally requests changes of USDA if problems cannot otherwise be rectified. 4

Mandatory Grading

USDA maintains that the cost of mandatorygrad ing wou ld be high. Estimated costs for thepresent voluntary grading system and for amand atory grading system for the same prod-ucts appear in the 1975 GAO food labelingreport.* The 1974 cost estimated by USDA for

a voluntary grading system for six categoriesof food products (less than 100 percent of theproducts in the six categories were graded)was approximately $183 million. If the grad-ing system became mandatory (100 percentgraded for the same six categories), USDAestimated cost would increase by about $327million to a total of $510 millions Inference isthat the cost of mandatory grading for allproducts would be considerably above $510million. USDA’s belief that cost becomes a sig-nificant factor during this time of economicdifficulty may well be correct. However, atthis time there is little documentation of thecosts being discussed for mandatory grading.

Grading Designation or Nomenclature

The Department’s official posit ion onuniform grade nomenclature is expressed inits comments on GAO’s food labeling report,sent to the Senate and House Committees onGovernment Operations in 1975. USDA’sposition is that it “continues to support thegoal of reducing consumer confusion regard-ing the use of grade nomenclature, ” but it feels

ADr. Clark Burbee, Project Leader, Consumer In-terests, Interview.

sFoOd Labeling: Goals, Shortcomings, and proposed

Changes, U.S. General Accounting Office, p. 122, January29, 1975.

*These estimates were supplied by USDA with nosupporting data and were not analyzed for their ac-curacy by GAO.

there are “too many quality variables amongdifferent classes of food products to enable asingle system to cover all food products.” In-stead, USDA prefers to develop “uniformgrade designations within several groups of similar p rodu cts. ”

For example, with the position advocatedby USDA, the Livestock Division of AMSwould have uniform grade designations suchas those presently used. However, fresh fruitsand vegetables would have a different no-menclature but uniform within that com-modity category. There already has been somemovement in this direction with the pre-viously mentioned proposal for fresh fruitsand vegetables published in the October 6,1975, Federal Register, Mr. Floyd F. Hedlund,Director of the Fruits and Vegetable Divisionof AMS, feels, however, that because of foodindustry resistance to the new grades, it might

take up to 10 years for voluntary use by a sig-nificant number of firms.Program Reform

While the Department supports somereform of its grading program, the Office of the Special Assis tant to the Secretary of Agriculture for Consumer Affairs under theFord Administration favored major reformsof the program. Specifically, this office wantedmandatory retail grading with uniform no-menclature for all four AMS divisions pres-ently grading food. The reasoning behind

this position was that a grading system aidingthe consumer should benefit the marketingsystem as a whole, from farmer to consumer.The office also felt that if a new gradingsystem did come into being, considerableeffort would be needed to educate consumersand that such education should be a require-ment in implement ing any new gradingsystem. 6

Congress is looked upon by some USDAofficials as the only possible and properbranch of Government to change the presentgrading structure. Most USDA officials feelthat without congressional action gradingreform in the m anner wh ich consumer group sprefer would be unlikely.

bMr. Andrew Gasparich, Assistant to th e SpecialAssistant to the Secretary of Agriculture for ConsumerAffairs, Interview.

36



FOOD PROCESSING INDUSTRY

T h e N a t i o n a l C a n n e r s A s s o c i a t i o n r e p r e -sents processors . The Canners have a mem-bership of 500 firms that process 85 to 90 per-cent of a l l canned foods . Also , the Nat ionalAssociation of Food Chains (NAFC) stated inin te rv iew s tha t i t s uppor ted the pos i t ion the

Canner s advoca te . M oreover, N A F C rep re -sents 200 companies in a country where 50percent of the value of food for at-home con-sumption is sold in chain supermarkets. Sincethe Canners Association is vehemently op-posed to any grade labeling at retail, theweight of the food processing industry’s op-position to increased food grading at retail isapparent.

Grade Criteria

At present, many food processors maintain

that they are not using the USDA gradingsystem at either retail or wh olesale. Del Monteand General Foods, major food companies incanning and packaging of fruits “and vegeta-bles, explained that they have their own foodquality standards which may differ from theUSDA grades. They said their standards of quality were more rigorous than USDA stand-ards. General Foods asserts that this is onereason that Birdseye products, for example,command a premium price. Some firms main-tain they have their own quality specificationsfor raw products in their contractual arrange-

men t , have mechan i sms d i ffe ren t f romUSDA’s to measure raw product quality, andhave stringent quality control requirements.They also adm it that in some cases they do u seUSDA grad es.

USDA grades are not used by some firmsbecause they prefer different criteria. As Mr.Angelotti stated:

Major food manufacturers may not put theofficial (USDA) grade on an y of their p rodu cts.They have their own grade standards, and it istheir perception of quality which they think the

consumer wants or is telling them and theybuild that into their product. They have theirown standards w hich they apply to their prod-uct . 7

WVorkshop, VO1. 1, p . 97.

One company, for instance, argues thatthough canned Frees tone peaches l ack uniform appearance, many consumers prefertheir taste to other canned peaches.

An objective test of taste, as a criterion, was

attempted at Cornell University AgriculturalSt at io n (P ap e r N o . 1 , M e r ch a n d i s i n g E x - periences, September 1959). After USDA in-spectors were presented with eight differentapplesauce to grade, 652 people tasted alle i g h t a p p l e s a u c e a n d r e g i s t e r e d t h e i rp r efer en ces . T h e r e s u l t s o f t h e s t u d ydemonstrated that most people preferred thetwo applesauce graded USDA Grade C. 8 Thisstudy supp orts arguments of food processors.Industry fears the average consumer will in-terpret “A” or other higher sound ing grade tomean that product flavor is “best” when that

may not be true.Historically, food-processing industry op-

position to grading at retail dates back at leastto 1935. In hearings that year before a sub-committee of the Senate Commerce Commit-tee, Henry Stude, representing the AmericanBakers Association, testified against portionsof a bill that was to become the Federal Food,Drug, and Cosmetic Act of 1938, He said: “Wefeel that it is . . . impr acticable and un wise tostandardize the taste, likes, and dislikes of theconsuming public. The result of such an at-

tempt to d efine standards of quality and iden-tity would be to bring all food m akers down toa common denominator. . . .“ Inference is thatthe basis for quality is taste. Mr. Stude alsotestified that consumers could distinguish bythemselves what is good quality. 9

Mandatory Grading

Some members of the food industry stillmaintain that mandatory grading may reducecompetition by discouraging introduction of super io r p roduct s. They ins is t tha t foodmanu facturers wou ld h ave no incentive to im-

gOdonna Mathews, Grade Labeling, June 14-August13, 1971.

g74th Congress. Hearing before a subcommittee of the Senate Committee on Commerce, Vol. 276, March 2,1935.

37



prove products if they are not already in thehighest grade. They believe standards couldlack flexibility needed to allow industry toseek improvements in growing, processing,packaging, or transportation. 10

The main food industry objection to man-datory grading is its potential cost. Processorsfeel that small canning and packaging opera-

tions might be unable to meet mandatory in-spection and grading costs and be forced toshu t dow n. Larger plants, better able to absorbcosts because of lower per unit grading costs,could continue to operate. Although smallcanning operations are the numerical majorityof canning operations in this country, theirtotal output is less than that of the eightlargest canning firms. In 1972, of 1,201 can-ning firms, the eight largest accounted for ap-proximately 50 percent of the Nation’s can-ning product ion. 11 Industry maintains thatmany food chains depend on these smallmanufacturers to process their private labelsand that the food distribution system wouldbe hurt by shut downs of small manufac-turers. 12 In general, the existence of numerousFederal agencies already regulating food proc-essors in terms of labeling, safety, pollution,backhauling, pesticides, advertis ing, andenergy results in a total cost that helps to d riveout small processors.

This position is supported by research com-pleted by C. R. Hand y and D. I. Padberg. Theyfound that very large retail chains have theirprivate label stock processed by relativelysmall firms and that major brands--e.g., DelMonte-are sold primarily through mediumsized and small retailers. These relativelysmall firm processors have little or no m arket-ing capability. If they have a brand, it meanslittle to consumers. Brand development costsare exorbitant for their small volume, and pri-vate label programs enable them to specializein the physical functions of food processing—their primary competitive advantage. 13

10Mr. Robert Wait, Washington Representative for

General Foods, Interview.1 IBureau of Census: 1970 Annual Survey of Manufac-tu res Report, Concentration Ratios, Table 4.

IZRichard Dougherty, Assistant Vice President, Na-tional Canners Association, Interview.

lqMr. C.R.Handy, and D r. D. I. Pad b erg ,“A Model of Competitive Behavior in Food Industries,” A merican journal o f Agricultural Economics, May 1971.

While the cost of mandatory grade labelingis a legitimate concern of the food industry, arecent Grocery Manufacturers of America(GMA) survey (March 6, 1975) concluded that$8.4 billion worth of food products wouldhave nutritional labeling by the end of 1975.The survey indicated that for the $8.4 billionthe initial average cost of putting the informa-

tion on labels per dollar of sales is .004 centsand that the average continuing cost of nutri-tion labeling is .00016 cents per dollar of sales. 14 One food industry objection to nutri-tional labeling was its potential high costs.GMA’s survey would indicate that industry’sconcern for nutritional labeling costs wasoverstated, at least for a voluntary programwhich currently operates for nutritional label-ing. Thus, manufacturers’ cost concernsr e g a r d i n g m a n d a t o r y g r a d i n g c o u l d b esimilarly overstated.

A r g u m e n t s a b o u t c o s t s h in g e o nco st / b en efit r at io s. So m e fo o d i n d u s t r yofficials interviewed believe consumer benefitfrom mandatory grading would not be worthcosts incurred by the consumer. Food indus-try position on cost-benefit is based on thefollowing: 15

(a)

(b)

The American consumer is already buy-ing high quality foods at reasonableprices; and the quality and variety of this food is the best in the world.Quality of food is high because ind ustry

is regulating itself. The competitivemarketplace demand s that a given com-pany produce quality food, or the con-sumer will be dissatisfied and the firmwill lose business.

Others would reply that brand names—i.e.,Del Monte, Green Giant, and Birdseye--servea function similar to retail grades. The argu-ment is that brand names have proven them-selves to consumers over time as providinghigh quality products. Consumers can easilyidentify products by their brand name andcompare quality of various brand name prod-ucts. If consumers like the product, then theywould be able to identify the same qualityproduct for future purchases by the brand

IAPackagingand Labeling, Vol. 6, No. 26, July 2, 1975.15 Richard Dougherty, interview.

38



name. Brand names thus serve as a means of assuring consistent quality over time, but atsome cost to the consumer by having to paypromotion costs of brand names.

Industry also argues that mandatory grad-i n g c o u l d n o t a c c o m m o d a t e q u a l i t ydifferences due to geography. They contendthat quality of produce, for example, variesbecause weather and soil conditions differ invarious regions. Some industry people fearmand atory grading could not take this into ac-count. This argument may be valid. However,with regard to soil differences and their effecton product quality, FDA maintained that thenutritional variation of produce due to soildifference is nominal and does not ultimatelyeffect food nutrient differences. 16 In additionto possible soil-related natural quality varia-tion, other factors such as the amount of sunshine and rainfall are important. One na-

tional processor indicates that tomato juicemade from Midwest tomatoes may have anaverage Vitamin C content equ al to 86 percentof that of juice packed from Californiatomatoes in the sam e season du e to differencesin sunshine. Conversely, juice from theirCalifornia tomatoes may have only one-half the calcium of the Midwest juice du e to hard er

water present in some Midwest locations.The food industry representatives inter-

viewed believe the industry will oppose anylegislation establishing mandatory grading.They also saw little need for comp romise sincemany feel that costs of a mandatory systemwould prevent it from being enacted. The Na-tional Canners Association supports con-sumer cost evaluations in the hope that con-sumers will stop much of the regulatorylegislation if they understand how much itcosts.

CONSUMER INTEREST GROUPS

Grade Criteria

Consumer groups and advocates, unlikeUSDA and industry officials, want mandatoryquality grading as an information tool forconsumers to compare food. Consumer repre-sentatives want grading criteria changed toreflect nutrition and “life-giving values. 17

They feel present standards, based primarilyo n p h y s i c a l a p p e a r a n c e , b e n e f i t t h e

wholesaler but not consumers. Grades, theycontend, should reveal whether the foodproduct is nutritious and wholesome, notmerely its appearance.

The term “quality” is loosely defined. Twodefinitions exist: one is quality based onpreferences and sensory characteristics, whileanother is quality based on nutrition. Con-sumer representatives want Federal foodgrades to include the product’s nutritionquality in addition to the already defined sen-sory product quality, with more emphasis on

nutrition and less on sensory factors. USDAmaintains that both nutrition and sensory

IGl%iera/Register, January2150.

17E]len ~ w a l , National

view.

29, 1973, Vol. 38, No. 13, p.

Consumers League, Inter-

characteristics cannot be included in onestandard but th at nu tritional labeling is a sup -plement to USDA grades. 18

Both Ms. Ellen Zawal, National ConsumersCongress, and Ms. Ellen H aas, formerly of theNational Consumer League and presently astaff member of the Community Nutrition In-stitute, are confident that the grading systemthey and other consumers advocate can b e

designed to satisfy everyone concerned. Theyassert that the problems inherent in develop-ing useful uniform, retail grades in wh ichnutrient values are a factor can be overcome.

Though consumer advocates are quite con-fident that their positions are well-founded,they have presented little evidence supportingtheir positions. They want nutritional value topartially determine grades. However, theyhave little or no supporting evidence thatnutritional value can be accurately measuredor that such grades can be effectively imple-

mented on a national scale. At the same time,consumer representatives will respond that

la Richard L. Feltner, Ass i s t an t Secre t a ry o f Agriculture. Letter to Senator George McGovern, Chair-man, Senate Select Committee on Nutrition and HumanNeeds, October 8, 1975.

39



An Alternative to thePresent Food Grading Program

Voluntary/ Mandatory System

Processed Food Products

Present—U.S. Grade A

Alternative—U.S. Grade A

Present—U.S. Grade B

Alternative—U.S. Grade B

Present Grade Criterion:Canned Tomatoes—These typical sam-ples of U.S. Grade A, U.S. Grade B,and U.S. Grade C canned tomatoesshow that in the higher grades, thecolor is redder and more of the tomatoportions are in whole or large pieces.

Alternative:Same as the present grade criterion,

Present—U.S. Grade C

Alternative—U.S. Grade C

40

Us. Department of Agriculture p



Fresh Fruits and VegetablesPresent Grade Criterion:

Present—U.S. FancyFlorida Grapefruit —These samples of

Alternative—U.S. Grade A u.S. Fancy, U.S. No. 1, and U.S. No. 2Florida Grapefruit show that U.S. Fancygrapefruit has better color and shape,smoother skin texture, and is free frombruises and other skin damage.

Alternative:Same as the present grade criterion.

Present—U.S. No. 1

Alternative—U.S. Grade B

Present—U.S. No. 2

Alternative-U.S. Grade C

U.S. Departmentof Agriculture photos.

Fresh Red MeatPresent Grade Criterion—

Present—U.S. Prime Carcass Grade:Alternat ive—U.S. Grade A

Beef Rib Steaks—These three steaks,

all the same cut, show the top threebeef grades—U.S. Prime, U.S. Choice,and U.S. Good. As beef increases inquality, it has more marbling (flecks offat within the lean), is more tender, juicy, and flavorful.

Alternative:Present—U.S. Choice - -

Retail Cut Grade—Based on yield perAlternative--U.S. Grade B lb. or per serving. Yield is the trim or

amount of external fat in relation tolean per retail cut. Grade A would havethe highest ratio of lean to fat, Grade Bthe next highest, and Grade C the least.

Present—U.S. Good

Alternative—U.S. Grade CU.S. Department of AgriculturePhotos.

41



SUMMARY

As a result of its study, OTA has identifiedthe major issues surrounding the presentFederal food-grading system. These are:

q

q

q

Criteria used for grad ing,

Mandatory or voluntary grading,Nomenclature u sed for grading.

Government agencies charged with ad-ministering the present grading program, con-sumer group s, and the food processing ind us-try all have different perspectives on eachissue.

Grade CriteriaPresent grade standards are disputed by

both industry and consumer groups, but fordifferent reasons. Both question how muchphysical appearance should have to do withgrad e. Both contend that factors su ch as color,shape, lack of blemishes, and uniformity arenot the most important criteria for grades.Some consumer groups view nutritional con-tent or health value of food as the primaryquality factor on which to base grades. Indus-try views sensory characteristics as the con-sumer’s real criteria for quality and hencegrading. USDA maintains that both nutritionand sensory quality cannot be included in onestandard and that nutritional labeling shouldbe a sup plement to USDA grad es. USDA givesno indication that it intends to attempt reformor modification of present grade standards toinclude nutritional values.

Mandatory GradingBecause they are voluntary, USDA grades

do n ot app ear on all produ cts for wh ich grad -ing programs exist at either wholesale orretail. Of the two marketing levels, grades are

used least at retail. Industry maintains thatgrades should not be made mandatory at thewholesale or retail level because it wouldreduce competition, costs would outweighbene f i t s to the consumer, and qua l i tydifference due to geographic location couldnot be taken into account. USDA does notfavor mandatory grades at either marketinglevel because it maintains the program wouldbe too costly. Some consumer groups believegrades are needed at retail, and the only waygrades would be used at retail is if the law re-quires industry to use such grades.

Grade Designation or NomenclatureOne of the principal reasons for consumer

confusion about food grades is their variety.C o n s u m e r s a r e p e r p l e x e d b y t h e m a n ydifferent letters, numbers, and words and bythe fact that there are at least ten differentterms denoting the top grade for various foodproducts. USDA’s position is that it continuesto support the goal of reducing consumer con-fusion regarding grade nomenclature but feelsthere are too many quality variables amongdifferent classes of food products to enable asingle system to cover all food products.USDA prefers to develop uniform gradedesignations within several groups of similarproducts, such as within fresh fruits andvegetables.

43



Part VI

POSSIBLE FUNCTIONS OF A FEDERAL

RETAlL FOOD GRADING SYSTEM



Part VI

Possible Functions of a Federal

Retail Food Grading System

The discussion thus far has brought issues surrounding food gradinginto focus. This section ad dr esses what the role of Federal food g rad es couldbeat the retail level. First, problems in obtaining consumer input on the subject are discussed, exemplifying the difficulties encountered in determiningexactly what kind of retail grading system consumers want. Next, becausethe issues differ from one food group to another, a separate section is pre-sented for each major food category: processed foods, fresh fruits andvegetables, and fresh red meat. Each section covers the pr esent status of bothGovernment and private industry programs, the potential function of Federal retail grades in light of these programs, and the potential impact of changing the present Federal grading system to a more consumer-orientedone.

OBTAINING CONSUMER INPUT FOR THE DESIGN OF ARetai GRADING SYSTEM

User input for designing a system is highIydesirable. For a retail grading system this in-volves consumer input. In order to obtainconsumer input the most common method

employed is consumer surveys.Two types of situations need to be defined

in assessing useful output from surveys of consumer views, preferences, and opinions.The first situation is where the consumer isaware of the topic being surveyed and has“prefo rmed” v iews and op in ions . In th i ssituation, consumers are not asked to think oranalyze. The interview process simply inven-tories attitud es already d eveloped and formed.Surveying preformed attitudes, opinions, orpreferences is r elatively easy, straightforward ,

and inexpensive.Useful output f rom consumer surveys

becomes more difficult, however, when thetopic of the inquiry is one with which con-sumers are generally unfamiliar and thereforethey have no preformed orderliness or posi-tion. In this situation the interview process

may be asking the consumer to do the im-possible, Consumers are being asked to giveinformation they do not have. They have onlywhat was given to them by the interviewer. If

the proposition is presented so that it is ab-solutely sterile of value judgments, they mayfind it very difficult to analyze and say whattheir feelings or views are. On the other hand,if the proposition is laden with values, the in-terviewer is very likely to get back those sam evalues or opinions.

Consumer input in the design of Federalretail grades is an examp le of the second situa-tion. Experts have considerable difficulty con-ceptualizing the operational mechanics anduser implications of retail grades. It may be

naive to expect consumers to efficiently anddirectly advise on how to des ign such asystem that would operate effectively.

Individual consumers desire accountabilityfrom the food distribution system. Account-ability means that someone, including publicrepresentatives as well as private firms, is

47



paying attention to important m atters such as bol that this issue is being ad dressed. Thu s,nutrition and safety. Even though individual although individual consumers may notconsumers may not use information such as possess strong opinions concerning thenutritional labeling routinely as a purchase specifics of retail grad es, a more general d esireaid, consumer groups may give careful sur- for accou ntab ility of the system exists amongveillance to nutritional quality in general and consumers. For further elaboration on thisspecific terms. The ind ividual sees it as a sym- topic see appendix D.

ASSESSMENT BY MAJOR CATEGORIES

Processed Foods Sector

Present Status of Government Programs

USDA Grading System: The present grad ingsystem for processed foods is authorizedun der the Agricultural Mar keting Act of 1946.A processed food is defined as any fruit,vegetable, or other food product which hasbeen preserved by any recognized commercialprocess, includ ing, but n ot limited to, canning,freezing, dehydrating, drying, the addition of chemical substances, or fermentation. 1

The current grading sys tem is volun-tary/ mand atory and d esigned to facili tatewholesale transactions without the necessityof onsite inspection, but in some cases thegrade appears on the retail package. Gradeshave been established for canned fruits andvegetables, frozen fruits and vegetables, anddairy products. The grades establish criteriafor differentiating these products according tosensory differences. The main criteria forthese are color, uniformity of size or shape,f lavor, texture , matur i ty, and number of defects.

Grade d esignations for p rocessed foods lack uniformity. Designated grades of selectedproducts of canned fruits and vegetables,frozen fruits and vegetables, and dairy prod-ucts vary substantially (table 4). For mostgrades of fruits and vegetables there are twosets of nomenclature. For example, either U.S.Grade A or U.S. Fancy can be used to desig-

nate the top grade of all processed fruits andvegetables. For the second, third, and fourthgrades the nomenclature is not uniform. Insome produ cts such as orange marmalade, the

I u . s , Government. Code of Federal Regulations, T CFR,52.1, p. 39.

48

second grade is U.S. Grade B or U.S. Choice,while another produ ct such as canned squashhas as the second grade, Grade C or U.S.Standard. In the third grade the nomenclaturecan be either U.S. Grade/ U.S. Stand ard , as thethird grade of green olives, or substandard, asthe third grade of canned squash. Dairy prod -ucts, a separate classification, have a no-menclature radically different from the fruit

and vegetables nomenclature.Wholesomeness and Safety Programs: The Food

and Drug Administration (FDA), in coordina-tion with the U.S. Departments of Agricultureand Commerce, exercises regulatory controlover all processed food products through theauthority provided in the several Acts ad-ministered by these agencies and departmentsof the Federal Government. Figures 9, 10, and11 s h o w F e d e r a l G o v e r n m e n t a g e n c i e s i n -volved in food programs.

The Food, Drug, and Cosmetic Act and theFair Packaging and Labeling Act are the basicFederal food laws of the country and apply toall foods, food ingredients, and packaging thatare offered for sale in interstate commerce.These two Acts and the regulations issuedund er them are intend ed to assure that foodsare safe, wholesome, and nu tritious; labeledtruthfully; and packaged so that deceptionrelative to quality and quantity of packagecontents is preclud ed. The Food, Dru g, andCosmetic Act is both a safety and labeling act,whereas the Fair Packaging and Labeling Actaddresses labeling and packaging only.

The Public Health Service Act providesauthority for controlling the safety andwholesomeness of food and drink servedaboard interstate common carriers and forcontrolling the sanitary operations of establishments that prep are food intended for



Table 4.

Selected USDA Grades for Processed Food Products

Grade NomenclaturesProductGroup Product Top Grade 2nd Grade 3rd Grade 4th Grade

Canned Fruit U.S. Grade AFruits Cocktail or U. S.

Fancy

Orange U.S. Grade AMarmalade or U. S.Fancy

Green U.S. Grade AOlives or U. S.

Fancy

U.S. Grade B Substandardor U. S.Choice

U.S. Grade B U.S. Grade C U.S. Gradeor U. S< or U. S. D or Sub-Choice Standard standard

U.S. Grade B U.S. Grade C Substandardor U. S. or U. S.Choice Standard

Canned Tomatoes U.S. Grade AVegetables or U. S.

Fancy

Peanut U.S. Grade AButter or U. S.

Fancy

Squash U.S. Grade Aor U. S.Fancy

U.S. Grade B Substandardor U. S.

Standard

U.S. Grade B Substandardor U. S.ExtraStandard

U.S. Grade C Substandardor U. S.Standard

Frozen Apricots U.S. Grade AFruits or U. S.

Fancy

Cranberries U.S. Grade Aor U. S.Fancy

Concentrated U.S. Grade AOrange or U. S.

Juice Fancy

U.S. Grade B U.S. Grade C Substandardor U.S. or U. S.Choice Standard

U. S. Grade B U. S. Grade Cor U. S. or U. S.Choice Standard

U.S. Grade B Substandardor U. S.

Choice

Frozen Lima Beans U.S. Grade AVegetables or U. S.

Fancy

Peas U.S. Grade Aor U. S.Fancy

French U.S. Grade AFried or U. S.Potatoes Fancy


U.S. Grade B U.S. Grade Cor U. S. or U. S.Extra StandardStandard


Dairy Butter U.S. Grade U.S. Grade A U.S. Grade BProducts AA

Cheddar U. S. Grade U.S. Grade ACheese AA

Instant U. S. Extra U.S. StandardNonfat GradeDry Milk

SOURCE U S Government, Code of Federal Regu/at/ens, 7 CFR 52206, Washington, D C, 1976

49



service aboard interstate common carriers. Inaddition, the Public Health Service Act pro-vides for assistance to the States in t he controlo f c o m m u n i c a b l e d i s e a s e s t r a n s m i t t e dthrough food and water, and wi th th isau thor i ty FDA ma in ta ins Fede ra l -S ta tecooperative programs directed toward main-taining safety and wholesomeness of milk,shellfish, and food served in restaurants.

Under the statutes FDA performs inspec-tions of food-processing establishments ,warehouses, and distribution systems, and as

appropriate, collects samples of products forlaboratory analysis to determine that thestandards, guidelines, tolerances, and labelingspecifications for the products are being met.Imported foods are inspected at dockside andare not r eleased b y the Cu stoms Office for en-try to the United States until FDA has ascer-

tained that the product meets Federal law re-quirements.

Certain products, by virtue of their inherentnature or because of the preservation processapplied, have greater risk of rapid microbialdevelopment that cause human illness. Theseproducts and processing establishments arecons idered high r isk and inspec ted wi thgreater intensity, comprehensiveness, and fre-quency than establishments processing prod-ucts in a lower risk category. Examples of high-risk products and establishments includemilk, fish, meat, low-acid canned foods, filledpastries and ready-to-eat entrees that requireno further cooking.

The inspection tool for the h igh-risk areas isthe Hazard Analysis Critical Control Point(HACCP) inspection designed to identifyhazards associated with the product or proc-

50



Figure 10.

U.S. Department of Health, Education and Welfare--Public Health Service,

Food &thug Administration--Bureau of Foods

Special Assistantfor Programs and

Organization

Assistant toDirector for

International Standards

RegulatoryGuidance I

Food & ColorAdditives

CompliancePrograms

IndustryPrograms I

DIRECTORDeputy Director

Associate Directors

Management

Compliance

Sciences

Technology

Nutrition

AdministrativeOperations Staff

q

Program Planning& Evaluation Staff

TechnicalOperations Staff

TechnologyDivisions

s Mathematics

I Nutritiont

I ConsumerStudies t

FoodService

Administrative Operations Staff Associate Director for Management

August 1 ,1976

SOURCE: Departmentof Health Education, and Welfare-Food and DrugA d m in is t r a t io n .

ess. In addition to the comprehensive HACCP Standards o f I d e n t i t y :The Food, Drug, andinspections, other inspections are conducted Cosmetic Act also provides that standards of to record general housekeeping procedures, q u alit y, id e n tit y, a n d q u a n t i t y m a y besanitary operations, control over filth and established when in the judgment of theother defects, and adherences to standards, Secretary of Health, Education, and Welfarel a b e l i n g r e q u i r e m e n t s , f o o d a d d i t i v e such standard s will promote honesty and fairtolerances, and good manufacturing practices. dealing in the consumer interest. So far as is

51



Figure 11.

Food and Drug Administration Programs Directed to Control of Food

Agency Program

FOOD

SAFETY

FOODECONOMICS

COSMETICS

ANIMAL DRUGSAND FEEDS

Projects Within AgencyProgram

Food Sanitation Control

ChemicalContaminants

Mycotoxins and OtherNatural Poisons

Food and ColorAdditives

Quality Control

Nutrition

Milk Safety

Shellfish Safety

Food Service

Interstate Travel

Food Economics (FoodLabeling and food

standards)

Cosmetics

Safety of Animal derivedhuman foods

and Cosmetics as Authorized by Various Federal Acts

Objectives of Projects

Inspect establishments for compliance with regulations, guidelines, standards, etc., andtake corrective regulatory action.

Establish safe guidelines and tolerances for industrial chemicals and heavy metals infoods. Regulatory action against products not meeting tolerance or guideline.

Establish safe guidelines and tolerances for mold toxins (aflatoxins) and plant poisons(solanine in potatoes) in human food and animal feed.

Process food and color additive petitions and GRAS affirmation petitions for denial orapproval of requested safe conditions of use and cyclically review all previously approvedsubstances added to food.

Promote the adoption and use by industry of quality assurance practices in manufactureand encourage participation in the FDA Cooperative Quality Assurance Program.

Promote use of sound nutritional principles by public, determine compliance with nutri-tional labeling, establish regulations for food fortification and regulations for foods forspecial dietary purposes, regulate micronutrient uses, regulate nutrient quality of newfoods (plant proteins).

Provide for the safe production, distribution and retail sale of Grade A pasteurized milkand milk products through assistance to the States and through the continuous updatingand publication of the Pasteurized Milk Ordinance and Code; administer the interstateMilk Shippers Agreement.

Provide for the safe growing, harvesting, processing and sale of bivalves through assist-ance to the States and through administration of the national, cooperative industry, state,federal National Shellfish Safety Program.

Improve hygienic practices and food protection measures used in the more-than 500,000food service establishments through assistance to the States and through publication ofthe Food Service Sanitation Model Ordinance and Code.

Prevent the spread of communicable diseases by controlling the safety of food and bev-erages served aboard interstate carriers and wastes discharged from such carriers.

Prevent misleading label statements, fraudulent filling and weight declaration practices,misleading packaging, and degradation of product in the marketplace through ingredientlabeling regulations, regulations for standards of identity, quality and fill of container,and regulations for slack fill.

Remove from the marketplace cosmetics-and cosmetic ingredients that have been dem-onstrated to be harmful to consumers.

Review New Animal Drug Applications and applications for additives to animal feeds toassure that unsafe residues of the drugs or additives are not present in the edible tissuesof animals.

AuthorizingAct

Import Tea Actand FD&CA

FD&CA

FD&CA

FD&CA

FD&CA

FD&CA

FD&CAand

PHSA

FD&CAand

PHSA

FD&CAand

PHSA

FD&CA &PHSA

Import Tea Act,FD&CA, and

FPLA

FD&CA

FD&CA

SOURCE: Department of Health, Education, and Welfare-Food and Drug Administration.



practical , such s tandards are establishedunder the common or usual name of suchfoods. Presently, approximately 400 foodshave been standardized by regulation underthis authority. 2 Some food for which stand-ards have been promulgated include breadproducts, canned fruits and vegetables, dairyproducts, nut products, fish products, and

jams and jellies.Food standards mean that for a food prod-

uct to be sold legally under its common orusual name, it must be made in accordancewith certain specifications. The promotion of honesty and fair dealing on behalf of the con-sumer is accomplished through preventingproduct degradation in the marketplace. Eggbread, for example, cannot be labeled as eggbread unless it contains a minimum quantityof eggs stipulated in the standards.

Food standards are not only developed inthe United States but are also being d evelopedinternationally. Codex Alimentarius, trans-lated freely as code of food standards andregulations, is a collection of internationallyadopted food standard s drafted an d p resentedin a uniform manner. Such standards attemptto protec t consumer hea l th by insur ing

wholesome, acceptable foods, and to promotefair practices in world food trade. Publicationof the standards also is intended to harmonizefood definitions and requirements in differentcountries and, in doing so, facilitate interna-tional trade. Codex standards eventually willbe d eveloped for all principal p rocessed, semi-processed, and raw foods that go in distribu-

tion channels for human consumption.

Nutritional Programs: In 1973, FDA an-nounced the Food Nutrition Labeling Regula-t ions , which provided for the voluntarydeclaration of the calorie, protein, carbo-hydrate, and fat content and the percentage of U.S. Recommended Daily Allowance (RDA)for protein and seven vitamins and mineralsin each processed products. The Food andDrug Administration has established a stand-ard format for the nutritional labels, which in-clude the following items: 1) serving size, 2)servings per container, 3) calorie content, 4)protein content, 5) carbohydrate content, 6)fat content, and 7) the percentage of U.S.Recommended Daily Allowances (RDA) forprotein, vitamins, and minerals in each serv-ing (figure 12). Nutrition experts, scientists,doctors, home economists, and industry and

Figure 12.Nutritional Labeling

SO

Nutrients listed are for

I one serving. INumber of servings

per container.

Labels may show amountsof cholesterol & sodium

in 100 grams of foodan d in a serving.

I

NUTRITION INFORMATION(per serving)

C a r b o h y d r a t e 25 GramsFatSod iu m (9 70 mg/ 10 0gm ) 275 Mil ligr ams

Percentage of U S Recommended DailyA l l o w a n c e s ( U . S . R D A ) I

R i b o f l a v i n 25 r I

Nutrients in metricweight as grams

(1 ounce= 28 grams),

Percentages of U.S., Recommended Daily

Allowances.

2Dr. Robert Artgelotti, Overzl iew of FDA FOOd COII trOl

Programs, paper presented at the 36th An nual Meeting of the Institute of Food Technologists, June 7, 1976.

53



movement, to identify and handle consumercomplaints, to rotate stock, and to identifyprod uct loss in the event of a recall. As a resultof today’s increased consumer concern, thefood industry is providing clearly identifiedinformation on freshness of product whenpurchased and, in some cases, anticipatedhome storage life. Figure 13 lists examples of

date coding being used by manufacturers.Private Labeling and National Brands: Infor-

mation is conveyed on the quality of productssold under manufacturer’s brands and prod-ucts sold u nd er retailer’s or other d istributor’sbrands—i.e., private label. Many manufac-turers strive to establish strong consumerpreferences for their brands and in somebranches of the food industry incur substan-tial advertising and sales promotion costs forthis purpose.

Brand names and private labels are an in-strument of differentiation, and as such theybecome a vehicle of change. In merchandisinga brand, a company wants to differentiate tomake it stand out differently in consumer’sperceptions from other brands. This has beenvery u seful in our society because of rising in-comes and changing needs of consumers onthe one hand and technological changes thatenable changing a p rod uct’s characteristics onthe other. Society benefits from productchange through new produ cts such as conven-ience foods.

What brand names and private label prod-ucts have done over the years is to establish aperceived quality of a product. Thus there is afunction, in an informational sense, of a brandname. As Dr. Angelotti indicated:

You know when you buy Green Giant greenbeans, your perception of that quality is consist-ent and you can expect your perception to bemet the way you want it to be met each time youbu y Green Giant green b eans. The variation isminimized.

When you start talking about grades, that is

where the rub comes in. I buy Green G iant greenbean s because as I perceive quality, I want thatin that p roduct. I might n ot buy G reen Giant’scorn because it is not mushy enough for me. It ishow I perceive it.

Figure 13.

Types of Dates

Several types of open dates may be used on fooditems:

Pull Date–This is the last day the retail store maysell the item as fresh. The date is designed to allowyou a reasonable amount of time to store and use theproduct at home even if it is purchased on the pulldate. How long the product should be offered for saleand how much home storage time is allowed are de-termined by the processor, based on his knowledge ofthe product and its shelf life. When you see “Sell byJan. 15” on a package it doesn’t imply you shouldn’tuse the product after that date. The date representsthe last day of fresh sale so you will have time to storeand use it at home.

Quality Assurance or Freshness Date–This showshow long the processor thinks his product will be atpeak quality. Some time after the “freshness date”(and there will always be a cushion of time allowed),the food will no longer be of optimum quality. Thisdoesn’t mean that it will be unacceptable or that youshouldn’t use it; it does mean that the processorwould like you to use the product while it is at its peak.The label on the item might say something like “Betterif used by January 1974. ”

Pack Date–This is the date of final packaging orprocessing. Although it is sometimes used, it may notbe very helpful to shoppers who don’t have the tech-

nical expertise to judge the shelf life of thousands ofdifferent items.

Expiration Date–This is the last day the item shouldbe consumed. It is virtually never used because qual-ity changes occur slowly and it is simply not possibleto say that an item will be acceptable one day andunacceptable the next.

Of these dates, the “pull date” and the “qualityassurance or freshness date” are in most widespreaduse.

When you see an unexplained date on a food pack-age you might check with the store manager or writeto the processor. But it is important to remember that

the date is not a “throw away” date.After you get the food home, a good general rule isto rotate food on your shelves in order of freshness.For peak quality, use the items before or within areasonable time after the date shown on the package.

If you start talking about grades, what are yougoing to do with that? The thing that brand

56

SOURCE U S Department of Agriculture Economic Research Service



names offer to the population in my view is justthat, the selection for them to exercise their per-ceptions of quality. As they know when theybuy this brand, it is consistent over time, andthey will always get essentially the same productif they stick to that brand n ame. 6

That is one reason why most companies donot use the established grades for their proc-

essed products . They have their own s tand-a r d s , a n d i t i s t h e i r p e r c e p t i o n o f q u a l i t yderived from consumer surveys that is used toset their own standards. Thus the brand nameis doing something useful for the manufac-turer and conveying informat ion to the con-s u m e r.

Potential Function and Impact of Retail Grading

Grade Criteria: The present public programs,such as the wholesomeness and safetyprograms and standards of identity programsconducted by FDA, assure the public that theprocessed food they buy is safe for humanconsumption. The nutritional labelingprogram provides consumers with nutritionalinformation. In add ition th e p rivate sector,through quality control programs and datecoding, provides additional assurance that thefood consumers buy is safe and wholesome.Given this, the question to be addressed iswhat add itional useful role might grades p er-form? Whatever role grades might play, mostof the food grading workshop participants feltthat grades should continue to differentiate

sensory characteristics only and not combinewith nutritional characteristics as additionalgrade criteria.

M a n y p r o b l e m s w e r e r a i s e d o n t h efeasibility of combining nutritional charac-teris t ics with sensory characteris t ics . Dr.Wedral stated that:

Sensory characteristics of a product are notrelated to nutrition. For example in canningpeas , there are different grades ref lect ingdifferent colors or various defects, but they mayall have the same nutrition. With orange juice,some of the earlier prod ucts or crops of orangesmay be higher in vitamin C; however, they haveless appeal from a color or flavor standpoint.That is why earlier varieties are not preferred.The product may be the most nutritious, but has

the m ost defects, or the m ost off color or be th eleast uniform. How can you say this is Grade Aand this is Grade B? 7

Other problems expressed were those in-volving the time factor. Most participants inthe workshop agreed i t i s imposs ible toanalyze the products coming into a canningplant for nutrient qualities. Dr. Wedral stated:

In nutritional labeling, companies have beenpermitted to establish nutrient data banks inorder to support their claims. (In other words,the nutr i t ional informat ion on th is year ’spackage represents information collected overmany years.)

If a grading system were adopted that incorpo-rated nutritional characteristics (and data bankswere utilized), the grade on the p roduct wouldbe reflective of previous years’ grades. Thus, forexample, canned tomatoes packed and labeledGrade B due to information in the data bank might in reality be Grade A.

Thus, if a grading system w ere adopted that in-corporated n utritional characteristics, the gradeon th e produ ct would b e reflective of the lastyear’s grade. For example, canned tomatoesfrom a plant are Grade B this year when thisyear’s might really b e Grade A. 8

Voluntary or Mandatory: Grades carry infor-mation to the consumer, as do brand namesand private labels. However, there is a schoolof thought that believes brand names are avehicle for change and cause new processedproducts to evolve. Grades, on the other hand,have just the opposite effect. According toProfessor Daniel I. Padberg, Department of Agricultural Economics, University of Illinois:

Brand names through differentiation in themarketplace have become a vehicle of change.Grades on the other hand have the oppositeeffect-one of stabilizing, one of identifying alevel of characteristic, requiring it an d th erebystabilizing. 9

Further, Dr. Timothy Hammonds, VicePresident for Research, Food Marketing In-stitute, indicated mandatory grades may limit

consumer choice in the longer run:Mandatory grading would be a way of choosingamong those products that are in the market

bWorkshop, VO1, 1, p. 9 6 .

TWorkshop, vol. I, pp. 69-70.BIbid., pp. 70-72.gWorkshop, vol. I, p. 79.

5 7



I am talking about the practical aspects of gettinga system accepted by all parties and not just th econsumers. And you are going to have to offersomething to those people that are going tomake u se of it. And I thin k that they are going tohave to get some kin d of advantage.

In order to do this and for them to get away fromstrictly an A system, nobod y is going to adver-tise that they sell B anything. They are not goingto set up a system that w ill advertise a B or 2. 12

I n s u m m a r y, t h e q u e s t i o n o f w h a t t e r -minology to choose is an unsettled issue. Eventhough optimum terminology is unsettled,strong support for uniform terminology wasevidenced.

Summary

The potential role of retail grades for proc-essed food products can only be defined inlight of the current Government and private

sector programs and their respective func-tions. Currently, Government programsregulate food products for wholesomenessand safety, provide standards of identity, fairlabeling and packaging, nutritional informa-tion, and a grading system designed pr imarilyfor wholesale transactions. Most manufac-turers have elaborate quali ty controlprograms that assure compliance withGovernment regulations and have insituted avoluntary date coding to ensure productfreshness for consumers.

Terminology of current grades for retailprocessed products is confusing. For grades tobe used more extensively at retail, un iformterminology across grades that is simple tound erstand is a basic need.

National brand n ames and private labelshave substituted for grades at retail. Theyhave established a perceived quality of a pr od-uct for the consumer through time. Brandnames and private labels have allowed societyto exercise its perception of that quality byselection of one brand name over another.That is one reason m ost compan ies do not u seestablished grade standards for their proc-essed p rodu cts. They have their own gradestandards w hich are more d etailed than cur-rent Federal grade standards.

lzworkshop, VO1.V, pp. 45-46.

The consensus of workshop participantswas that whatever role retail grades play inprocessed foods, possible grade criteria shouldnot include differentiating products based ona combination of sensory and nutritionalcharacteristics. It is impossible to establish ameaningful grade when incorporating nutri-tional characteristics with sensory charac-

teristics. Problems includ e an inverse relation-ship between sensory characteris t ics andnutritional characteristics for some food prod-ucts. Such a relationship would mean that agrade would reflect an average value betweensensory characteris t ics and nutri t ion andtherefore not adequately reflect either. Also aproblem is the time lag between establishingthe nutritional content and labeling the prod-uct. Consensus of workshop participants wasthat nutritional labeling is the most appropri-ate vehicle for conveying information to theconsumer.

Establishing retail grades for processedprod ucts wou ld likely have a stabilizing effecton product characteristics. There would beless evolution of new products . Thus, if society looks at the choice of wh ether or n ot toinstitute retail grades, an important implica-tion of that choice is what products should bestabilized in terms of characteristics and whatproducts should continue to evolve. Thismeans sorting out those products where cur-rently the differentiation cost is greater thanbenefits to society of differentiation.

Congressional Options

Some of the options available to Congressfor grading processed or manufactured foodproducts include:q

q

Congress could standardize nomenclaturefor the firs t , second, third, and fourthgrades for processed products so theywould be consistent from one product toanother.

Congress could direct the Food and DrugAdministration to disseminate informationto consumers conce rn ing the cu r ren tprograms tha t a re in opera t ion whichassure the safety, wholesomeness, labeling,and identity of most manu factured or proc-essed food products.

5 9



q Congress could support or provide incen-tives for educational programs by Govern-ment agencies or the private sector whichinform consumers about nutrition of proc-essed food p roducts and interpretation anduse of the current nutri t ional labelingprogram and / or grades for processed foodproducts.

q Congress could make designation of the cur-r e n t p r o c e s s e d g r a d e s m a n d a t o r y f o rselected foodshould not bestandardizingsecond, third,

products. Such a programinstituted, however, prior tonomenclature for the first,

and fourth grades.

Fresh Fruits and Vegetables Sector


As reviewed earlier in this document, grad-

ing progr ams of fresh fruits and vegetables areunder the auspices of the Agricultural Market-ing Service (AMS), U.S. Department of Agriculture. Current grades have evolvedover a number of years. Specific fruit andvegetable product grades w ere developed pri-marily at the request of the various food in-dustries involved.

Grades for fresh fruits and vegetables arebased primarily on sensory criteria typicallyi n v o l v i n g c o l o r , u n i f o r m i t y, e x t e r i o rblemishes (in some cases), size, texture, andmaturity. As previously reviewed, the criteriacurrently used for fresh fruits and vegetablesare designed to facilitate wh olesale rather th anretail exchange. These grades essentially servethe p urpose of facilitating wh olesale exchangewithout necessitating onsite inspection.

Few commodities in the fruit and vegetablecategory carry th eir grade, if graded , all theway through to th e retail shelf. Thus, little in-formation is provided by the current gradingsystem as to sensory characteristics, nutri-tional aspects, or wh olesomeness and safety of the produce on the shelf.

The function of grades in processed prod-ucts is conceptually different from the func-tion of grades in fresh products. The informa-tion role for grad es in p rocessed pr odu cts mayrevolve around ingredient or identity stand-ards because sensory quality of processed

6 0

products is not obvious when that product isin a container. For example, attributes of peaches in a can are more difficult to deter-mine prior to purchase than a fresh peach.Some argue that fresh produce is either ob-viously good or poor and that the gradingsystem therefore need not deliver informa-tion, prior to purchase, concerning product

sensory quality. On the other hand, someargu e that the role of the grad ing system in thecase of fresh produce is delivery of informa-tion concerning flavor and nutritive content.Both of these latter pieces of informationwould, presumably, aid consumers prior topurchase.

The Current Standards of Identity Programadministered by the Food and Drug Ad-ministration substantially lessens the need forin fo rma t ion conce rn ing who le somenes s ,safety, and sensory characteristics of proc-

essed products to be conveyed through retailgrades. Commodities may be modified ratherdramatically when processed. A strong needf o r c o n s u m e r i n f o r m a t i o n c o n c e r n i n gwholesomeness, safety, and sensory charac-teristics of these commodities in their proc-essed state has been recognized through FDAprograms. Contrast this with fresh produce,which basically is not altered from its naturalstate. In the latter circumstance, informationconcerning certain quality attributes is availa-ble through observation at point of purchase. ‘Some argue this lessens the need for anyFederal Government involvement in freshfruits and vegetables.

Few fresh fruit and vegetable commoditiesare branded, or carry a brand name designa-tion. This is especially true of produce sold inbulk at retail. There is a trend, however,toward fewer bulk retail sales and morepackaged sales—i.e., bags, boxes, or other con-tainers (figure 14). With packaging, brandnames become more prevalent. So if the trendtoward m ore packaged retail containers con-tinues, brand names may become more preva-lent for fresh products. Currently, though, theinformation role of brand names is not asstrong in fresh produce compared to proc-essed foods.

With respect to pesticides and other chemi-cals on fruits and vegetables, the Environmen-



Figure 14.Examples of Fresh Fruit and Vegetable Packaging

USDA Photos

t a l P r o t e c t i o n A g e n c y e s t a b l i s h e s a s a f etolerance level for pesticides, which FDA en-forces . 13 Because potent ia l ly harmful pes t ic ideresidues are already controlled through theseFederal agencies, it is not a potential functionfor a grading system for fruits and vegetables.

Potential Function and Impact of Retail Grading

Grade Criteria--Nutritional Base: Consumergroups, as previously discussed, would like tosee grading cr i ter ia changed to ref lect nutr i -t i o n o f t h e c o m m o d i t y r a t h e r t h a n m e r e l yphys ical appearance. C o n s u m e r r e p r e s e n t a -t ives want Federal grades to include nutr i -t i o n a l q u a l i t y i n a d d i t i o n t o t h e a l r e a d ydef ined s ens o ry charac te r i s t i c s s uch as ap -pearance or size.

This does not seem to be possible in freshfrui ts and vegetables , based upon workshope v i d e n c e . Wi t h i n a p a r t i c u l a r f r e s h c o m -modi ty such as lettuce, nutrition does notserve as a useful bas is for d iscr iminat ing ors o r t i n g o n e h e a d o f l e t t u c e f r o m a n o t h e rbecause the commodities tend to be basicallythe same in nutr i t ive content . There may be

13WOrkShOp, VO1. I, p . 165.

. I.

significant differences between, for example,lettuce and carrots in terms of nutritive con-tent ; but a grading sys tem can serve todifferentiate only within a commodity catego-ry rather than across commodities. Nutri-tional information on fresh produce may beuseful on an intercommodity basis and bemeaningful to consumers, but not useful onan intracommodity basis. Nutritional infor-mation simply will not serve as a base for

sorting within a commodity because nutritionis essentially invariant within a commodity.

Along these same lines, Mr. Eddie Kimbrell,Ass i s t an t to Admin i s t ra to r o f USDA’sAgricultural Mar keting Service, stated:

Normally a grading system is something thatseparates commodities within a group. For ex-ample, within apples, there would be a set of ap-ples that are different than another set of apples.And grading in this sense would separate thosetwo categories within the same commodity. 14

However, there does seem to be a desire on

the par t of the indus try to have a programcomparable to the nutritional labeling of proc-essed products. Professor Thomas Clevenger,Department of Agricultural Economics of

14WorkShOP,VO1. I, p. 57.

6 1



New Mexico State University, indicated that:There is a desire by the (fruit and vegetable) in-dustry to have nutritional labeling in that thenu tritional labeling at this point in time wouldprobably be on a commodity-only basis. That is,there would n ot be different nutritional labelsfor say, a Grade A if we had one versus a Grade Bor a Grade C. And th at the implementation of

that might h ave to be in terms of some posting of nutritional labeling regarding that commodity atthe point of purchase as opposed to, say, placinga nu tritional label on every banana. 15

As further clarification of nutrition servingas a base for grading, Dr. Angelotti pointedout :

As a rule, on a weight-for-weigh t basis there isno significant difference in nutritional quality of raw agricultural commodities. 16

Even if it w ere possible, a p otential problem of a grading system at retail based upon nutri-

tion is indicated by Dr. Wedral:Would the consumer think a peach that is GradeA would supp ly the same amount of nutrients asa green bean that is Grade A? I think it (nutri-tion basis for grades) would create a tremendousamount of confusional T

D r. We d r a l c o n t i n u e d b y i n d i c a t i n gdifficulties concerning laboratory techniquesused to analyze particular nutrient values. Shesaid:

Variability in laboratory techniques used indetermining n utrient content can alone account

for differences in label claims. In one collabora-tive study involving several laboratories, theaverage vitamin A content of samples of tomato

juice taken from the same lot was determined tobe 20,9 percent RDA w ith a stand ard d eviationof 6.3 percent RDA. This means th at dep end ingupon the lab that ran the analyses, someonecould claim as little as 15 percent or as high as 25percent RDA for vitamin A. And really bothclaims would be based on tests on the sametomato juice. 18

The significance is that fresh produce wouldbe subject to th e same v ariability in laboratory

Swork shop, VO1. V, p. 30.lbworkshop , Vol. 1, p . 58.IT1bid., p . 73.16E.R. E]kins, “lnterlaboratory Variability in Nutrient

Analyses : Two Cooperative Studies,” / ounzal of the AOAC, Vol. 57, No. 5, 1974, p. 1193.

technique if graded based upon nutrition con-tent.

Other Bases: For fresh fruits and vegetablestwo potential information needs arise for con-sumers. One is information prior to purchaseconcerning yield per pound or the amount of edible product. A second potential informa-tion need is with respect to variety.

One possible basis for reflecting grade atretail is a per-serving basis on commoditiessuch as lettuce, oranges, grapefruit, bananas,peaches, avocados, cantaloupes, and water-melons. These commodities have in commonvalues which vary from one another on a cost-per-ounce serving basis. However appealingsuch a basis may be for a grading system,problems that are practically insurmountablewould be experienced in implementation. Onedifficulty w ould be in the technology and test-ing necessary to determine the amount of edi-ble product per unit of each and every in-dividual commodity. A second factor is thatsubjective judgment can be constantly exer-cised during the purchase decision concerningprod uct value (on a p er-serving basis). For ex-ample, consumers can and do make subjective

judgments concerning the value of particularprod uce from a bulk d isplay at retail. Hence, aretail grade based upon yield (edible servingsper unit such as pound, head, or bunch) maybe of marginal benefit to consumers in aidingpurchase decisions.

A second possible criterion for grades onfresh fruits and vegetables would be labelingwith respect to variety. The idea of varietylabeling would be to convey informationregarding such aspects as use or flavor of theproduct. For example, in strawberries or ap-ples the variety would convey to an informedconsumer some characteristics concerningflavor and, in the case of apples, appropriateend use for that commodity. However, thevariety labeling idea for conveying informa-tion at retail is limited. There are a number of

commodities for which knowing variety maynot assist in a purchase decision. In addition,an adequate job is probably being done in-s tore a t point of purchase regarding thevariety of product. As an example of this, ap-ples are commonly labeled according to theirvariety at the point of purchase. Thus, the

62



var ie ty label ing concept has l imited useful-ness.

Voluntary or Mandatory Systems: The ques-tion of voluntary or mand atory grades on anycommodity basically revolves around ex-pected use at retail. Net benefit to consumersfrom voluntary programs would, of course,vary greatly d epending u pon the extent of usethat was assumed for a voluntary system.

There seems to be a significant differencebetween the expected adoption of voluntaryor voluntary/ mandatory grades compared to avoluntary/ mandatory program such as nutri-tional labeling. Voluntary grades may not beexpected to be used the same way as nutri-tional labeling, indicated Professor Padberg:

One thing would be markedly different in grad-ing consum er prod ucts from the nutritionallabeling experience is that, if voluntary, it(voluntary grades) would not be taken up at all.A very minor take, That is very different thannutritional labeling. Nutritional labeling gavelarge processors a great stake in consumer reac-tion, a vehicle that w as perceived in ou r researchand their research as being useful.

I t i s a l so ex t reme ly f l ex ib le . I t doesn ’ tcategorically restrict what they can do. They justhave to tell about it. And so in their process of differentiation, tha t enables th em (processors) togive Government legitimatized informationabout their differentiating activities. So it hasbeen a very functional part of their marketingactivities, where grad es are quite counter to th at.

I think grad es, although discussed as a vehicle orchoice, would be restrictive on items in themarket.

Can you imagine being a produce buyer for alarge chain trying to stock stores with two orthree grades of cantalope? There would be apreferred grade in everything and the produceror grower is going to learn how to meet thatpreferred grade.

So voluntary grades have different meaningthan voluntary nutritional labeling and I think voluntary grading systems for consumer prod-ucts is no system at all.

Maybe that is all right, but I think in term s of im-plementation, 1 would get a very different takeon the part of the large firms as compared tonutritional labels. 19

lgWorkshop, Vol. 1, pp. 230-231.

In essence, the expectat ion would be thatv o l u n t a r y o r v o l u n t a r y / m a n d a t o r y g r a d i n gsystems for fruits and vegetables carried to theretail level would not be adopted to the samee x t e n t t h a t n u t r i t i o n a l l a b e l i n g h a s b e e nadopted on a voluntary/mandatory bas is forprocessed foods ,

T h e r e a r e t h r e e b a s i c s y s t e m s u n d e r t h ev o l u n t a r y / m a n d a t o r y i s s u e . O n e i s a c o m -pletely private voluntary system. A second is ac o m b i n a t i o n v o l u n t a r y / m a n d a t o r y s y s t e m ,w i th a th i rd be ing a comple te ly manda to rysystem. With a completely private system, thestandards and the adoption of those standardsis done on a pr ivate bas is and voluntar i ly.U n d e r t h e v o l u n t a r y / m a n d a t o r y s y s t e m , aGovernment s tandard is established, and thena n y o n e w h o g r a d e s p r o d u c e w o u l d b e r e -quired to adopt the system. However, grading,for any particular f irm, would be on a volun-

ta ry bas i s .T h e m a n d a t o r y s y s t e m w o u l d

establish Government s tandards, and all pro-duce would be required to be graded. From ac o n s u m e r i n f o r m a t i o n v i e w p o i n t , t h e o n l yserious systems would be the last two—that is,e i ther a voluntary/mandatory or a mandatorysystem. The completely voluntary and privatesystem would be of li t t le use in providing con-sumer informat ion with respect to purchasedecisions.

There are some general cost considerationsrelevant to a mandatory grading system. Thes tructure of the market ing channel in freshfruits and vegetables (see figure 15) is signifi-cantly different from the marketing channelfor processed food products. In the lattermarketing channel, there are points of con-centration, particularly at the processor level.There are no similar p oints of concentration inthe fresh fruit and vegetable marketing chan-nel. The impact of this structural difference inthe marketing channel from production toconsump tion is that no convenient place existsin the fresh fruit and vegetable channel to in-tercept a large proportion of the commodity

so that it can be economically graded. As Mr.Kimbrell indicated:Unless there is an assembly point in th e market-ing channel, then grading by a third party mayreally be a problem. 20

WA/orkshop , Vol. 111,p. 3

63



d oesn’t fit it. That is a sad fact. But g rad ing is notgoing to change that, I don’t think. 23

Thus, the structure of the industry is directlyrelated to its geographic dispersion and thelack of concentrated points through which theproduct flows. A strictly mandatory system ofgrades would be extremely expensive due tothis dispersion.

In terms of use of grades on a voluntarybasis, incentives for grading by industry werenot c lear. Professor Clevenger addressed th isissue in general:

What incentives would be there if grading werevoluntary? Grades would really have to conveysome specific types of information that are notnow commu nicated to differentiate produ cts if it(grading system) were to be implemented on avoluntary basis.

And I don’t think that w e are positive that in factwe could devise a grading system that wou ld dothat in the case of fresh fruits and vegetables. 24

At a different point in the workshop proceed-ings, Professor Clevenger continues on thesame topic but with specific reference to freshfruits and vegetables:

It seems to me there is an excellent option forgetting to be voluntary and for industry to use itas a competitive device just as w e have in n utri-tion labeling. The same argument we applied tonutrition labeling we could once again applyhere . 25

The cost of a system is sometimes felt by con-sumer representatives to be an excuse for cer-tain courses of action. As Ms. Cross indicated:

I can’t quite go to the actual cost because I knowif industry doesn’t want to do it, they will talk about the cost, and if they do want to do it as avoluntary nutritional labeling program, they arenot complaining about the cost. 26

However, the analogy between the cost in-curred in nutritional labeling versus the costin grading fresh fruit and vegetables does notseem to hold. As Dr. Thomas Sporleder,agricultural economist from Texas A&MUniversity, indicated:

zsWorkshop, Vol. V, p. 39.zgWorkshop, Vol. III, p.35ZSIbid., p. 63.zbIbid., p. 66.

There is a tremendous difference, though, in thecost, it seems to me. In nutritional labeling thereis a big start-up cost, and after the systembecomes operational on a permanent basis it isnot very much.

When you are talking about grading fresh fruitsand vegetables, it is a continuous cost. There isno s t a r t -up and then d r ibb l ing ou t (o f cos t s )afterwards. It is just constant, continuing.

And so there is a tremendou s difference in thecosts we are talking abou t. It wou ld be m ore ex-pensive to grad e fresh fruits and v egetables thanit is to institute nutritional labeling on cannedproducts. 27

Uniform Nomenclature:As previously dis-cussed in this report, consumer advocateswant uniform nomenclature for variousgrades which might cover all commoditiesgraded under Federal standards. With respectto fresh fruits and vegetables, existing regula-tions could be changed to make grade ter-minology uniform and easier for consumersand industry to understand. This could assistconsumers’ use of the current grading system.

The structure for the terminology makesU.S. Fancy, U.S. No. 1, U.S. No. 2, and U.S. No.3 t h e f o u r d e s i g n a t e d t e r m s a p p l y i n guniformly to fresh fruits and vegetables thatare graded. With the new simplified ter-minology, the criteria on which an individualproduct is graded may remain unchanged.The program announced by the U.S. Depart-ment of Agriculture potentially will takeseveral years before the new uniform no-menclature is adopted.

From the food grading workshop, no argu-ment or disagreement prevailed concerningwhether or not there was a need for uniformnomenclature. There was overwhelmingagreement that uniform nomenclature wouldbe desirable from consumers’ viewpoint andwould not be contrary to the interest of indus-try, However, there was disagreement onwhat the uniform nomenclature should be,Concerns about the aspects of uniform no-

menclature have at least two dimensions. Oneis the need for simplicity in any uniform no-menclature scheme. A second concern is im-plication of rank that comes from most

zWorkshop, Vol. III, pp. 66-67.

65



Government agencies or the private sec-tor which inform consumers about nutri-tion of fresh fruit and vegetable productsand the differences in nutritive contentfrom one commodity to another.

. Congress could direct USDA to ad-minister a standard labeling and varietyidentification program for fresh fruitsand vegetables which are sold in retailpackages.

. Congress could direct USDA to facilitateadop t ion o f a vo lun ta ry / manda to rynutritional labeling program for freshfruits and vegetables.

. Congress c o u l d m a k e t h e c u r r e n twholesale grade designation mandatoryat retail for fruits and vegetables that arecurrently graded .

q Congress could make grading mandatoryfor all fresh fruits and vegetables usingthe current wholesale grading criteriaand designate such grad es at retail.

Fresh Red Meat SectorFresh r ed meat refers prim arily to beef. This

is because beef accounts for the largest pro-portion of consumer expenditures on meat. In1976 it accounted for 54 percent of the $46.1billion consum ers spent on all meat. Poultry isexcluded from this decision because: 1) inrelation to beef it accoun ts for a small p ropor -tion of consumer expenditures on meat (12.5percent in 1976); and 2) the present carcassgrading system for poultry is suitable for con-sum er pu rchase decisions since most pou ltryis sold by carcass at retail. 28


T h e r e a r e t w o G o v e r n m e n t p r o g r a m swh ich influence meat gr ades at retail. The bestknown system which currently exists for redmeat is a carcass-grad ing system sp onsored bythe U.S. Department of Agriculture and

reviewed earlier in this document. Thissystem is not a retail grading system, butagain is oriented to facilitating wholesale ex-

change of meat products. The current gradesare carcass grades and not retail cut grades.

A second major Government program is acombination of Federal an d State inspection of meat carcasses. This inspection essentiallyassures safety in the food p rod uct. The insp ec-tion system is mandatory for meat. Thus, allred meat in commercial channels sold throughretail outlets is inspected under this program.

The extent of use in the US. Department of Agriculture grading system is widespread bu tnot total. About 50 percent of the commercialcattle slaughtered were federally graded in1975 (see figure 16). Of this total that wasfederally graded, 5.1 percent was Prime, 77.3percent was Choice, 12.9 percent was Good,0.7 percent was Standard, 0.4 percent wasCommercial, 3.1 percent was Utility, and 0.5percent was Cutter-and the Canner gradewas insignificant. 29

Two concerns emerge for consumers interms of the present Government programsrelating to grading of meat. One is that thegrading system is not used for all beef and,secondly, the grading system is still orientedtoward wholesale exchange and therefore notcarried to retail shelf in a manner that op-timally assists consumer purchase decisions.

Present Status of Private Sector Programs

An active trade association in meat is theNational Live Stock and Meat Board withheadquarters in Chicago, Ill. In September1973, the National Live Stock and Meat Boardannounced voluntary meat ident i f ica t ionstandards. An industrywid e Cooperative MeatIdentification Standard s Comm ittee developedfresh m eat identification stand ard s in an effortto eliminate confusion at the meat counter(see figure 17). This committee reduced 700frequently used names to 314, of which about150 were expected to be used by the averageretailer, The project was coordinated by theNational Live Stock and Meat Board in

cooperation with the Food Marketing InstituteNational Association of Retail Grocers of theUnited States, and the National Association of Food Chains, as well as other interested

ZWJSDA, National Food Situation, Economic ResearchService (ERS), December 1976. Zgworkshop, Vol. I, p. 251.

6 7



Figure 16.

Breakdown~of Meat Grades of Federally GradedCommercial Cattle, 1975*

(Percent)

o 10 20 30 40 50 60 70 80 90 100

Prime

Choice

Standard

Commercial

Utility

Cutter

Canner

77.3%

12.9%

Insignificant

q MY about 50% of the cattle slaughtered in1975 were federally graded.SOURCE: Office of TechnologyAssessment.

groups representing various industry seg-ments. Under the voluntary identificationsystem, each fresh meat label at retail wouldindicate the name of the species—i.e., beef—the primal or wholesale cut from which theretail cut is derived—i.e., round-and a stand-ardized retail name—i.e., round steak, Thisvoluntary program is gaining widespread ac-ceptance and h as even been ad opted as a lawby some State legislatures. Basic to any retail-oriented grading system would be uniformidentification of the retail cut. This voluntaryprogram provides a basis for that uniformidentification.

Another program of the private sector that

potentially may evolve is a national educa-tional and research program sponsored byb eef p ro d u cer s . Enabl ing leg is la t ion toestablish such a national program throughfunds provided by p roducers has passed Con-gress and has been approved by the President.

Some time early in 1977, a referendum will beheld among beef producers to either approveor disapprove the financing of such a programthrough contr ibut ion of beef producers on av o l u m e b a s i s . I f t h e p r o g r a m i s a p p r o v e d ,educational material and services could be ini-t ia ted through th is nat ional program whichwould provide nutr i t ional informat ion, andother consumer-oriented information (such ascooking and preparation ideas for particularend uses).

There are some brand names at retail forfresh meat. The informational role of thesebrand names would be consistency in quality

over time. That is, they would assist con-sumers in the sense that the same brand namewould be of comparable quality from onepurchase to the next. However, these brandnames w ould not assist a consumer in makinga d ecision am ong brand names at a particular

6 8



Figure 17.– Selected Examples of Voluntary MeatIdentification Standards

Arm Chuck SteakArm Steak Beef ChuckArm Swiss SteakChuck Stk. for SwissingRound Bone SteakRound Bone Swiss Stk.

a

BEEF CHUCKARM STEAK

(Braise)

BonelessBonelessBoneless

Arm SteakRound BoneSwiss Steak

Barbecue RibsBraising RibsEnglish Short

Extra LeanFancy RibsShort Ribs

Ribs

English SteakShoulder SteakShoulder Steak,Shoulder Steak,

Half Cut

Stk.

a

BEEF CHUCKARM STEAK BNLS

(Braise)

b c

BEEF CHUCKSHORT RIBS

(Braise, Cook in Liquid)

Bnls.

d

BEEF CHUCKSHOULDER STEAK BNLS

(Braise)

SO U R C E National Live Stock and Meat Board

6 9



time. Few brand names exist for fresh meat ascompared with those for processed products.

Potential Function of Retail Grad ing

Grade Criteria: A common dilemma amongall three commodity categories considered inthis report is that current grading is not in-dicative of value differences to the consumer.Meat grading is done on wholesale cuts butnot retail cuts, although sometimes the retailpackage carries the grade designation of thecarcass from w hich it was cut. For grad es to bemeaningful , grade dis t inc t ions should bemade in terms of value differences. 30 In aneffort to make meat grades deal only with thefabrication of retail cuts, Professor Padbergargues:

The concept of retail meat grades should havetwo criteria: parent m aterial, one; and two, wh athap pens in the fabrication of retail cuts, the trim,

yield qu estion,When you get down to parent material, there islittle problem in th at, one, the parent material isnot a very good pred ictor of consum er values inthe first place. The amount of consumer valueyou get from going up the grades in parentmaterial is small. And, two, there are a lot of in-novative opportunities for changing the parentmaterials. 31

Professor Padberg continues:

What Prime, Choice, and Good have told theconsumer is something pertaining not to their

market but somebody else, And if you are goingto have grade to deal with their values, it wouldbe less confusing instead of more to ha ve a newset of names because you are talking about adifferent set of values and a d ifferent set of tran-formations. 32

Anoth er concern specifically related to meatis the relationship between nutrition and thecurrent wholesale grading system. Concernabout fat content, both in terms of trim andintramuscular, have led some to questionwh ether or not grades in m eat could be basedon nutritional content. Workshop evidence onthat point indicates overwhelmingly thatnutrition would not serve as a useful basis forgrades when combined with palatability con-

siderations. Professor Zane Palmer addressedthis issue:

Marbling is almost always positive in its rela-tionship to p alatability but is not th e indicator of tenderness, juiciness, and flavor that we oncethought it was. 33

Professor Palmer continues along a similar

line:Nutritional superiority and palatability do notnecessarily have to go hand in hand; they cansometimes go in opp osite directions. So how canyou average out the two extremes and come outand say it is average in nutrition and average inpalatability when that represents neither ex-treme value? And for this reason I think you areaveraging apples, doughnuts, and coming outwith oranges, and it is just not valid to do that. 34

Mr. Kimbrell agreed, saying:It would be mu ch better to have both the gradeand fat designation if you want nutritionallabeling, but you wou ld confuse the issue if youcombined them into one designation. 35

Thus the workshop consensus was thatnu t r i t iona l l abe l ing may be a des i rab leprogram for retail cuts of meat but that itshould not be combined with or in any wayconsidered as a grade criteria. The primaryreason for this is the confusion which wouldresult from such combinations.

Another consideration in attempting to makenutritional content the basis for grade was in-dicated by Professor Padberg:

Anothe r th ing tha t has been a ve ry g rea tdifficulty in labeling problems is the basic topicof nutrition itself. We have a conception of nutrition that deals with diet. Now to go from adiet to a food product is a very basic difficulty.

We can conceive of nutritious diet, but the con-cept of a nutritious food product has not everbeen developed. There are many components of a nutritious diet and the concept of getting themall in a p rodu ct is very repulsive to nutritionists,and I think the populace in general. So here is avery great difficulty in nutrition labeling. Any

product is a component of a diet, and it maybe auseful comp onent althoug h it is very lopsided inits individual characteristics. What makes anutritious product is what other products it is

Soworkshop, Vol. IV, p. 35.Slworkshop, Vol. IV, pp. 64–65.szIbid., p. 72.

Wbid., p. 5.stIbid,, pp. 2-3.Ssworkshop, Vol. 1, p. 151.

7 0



combined with in a day or a period of severaldays. We have a conception of nutritional diet;we d o not have a conception of nu tritional prod -uc t . 36

Dr. Angelotti summarized this point by say-ing:

We ought to be thinking about nutrition infor-mation and nutrition labeling as somethingdifferent from grading. We want it , peopleshould have it, they should learn to use nutri-tional labels, and that should be an indep endentconsideration at this point in time from grad-ing . 37

When nutrition is considered in terms of vitamin and mineral content of food, theabove discussion applies. That is, if nutritionis conceived as the content of a particularproduct in terms of vitamins and minerals,then w orkshop consensus w as that such infor-mation would best be supplied on a separatelabel on a fresh meat package. There is con-cern by some that the percent of fat to totalweight on fresh meat may be nutritionally sig-nificant from a health standpoint. Along theselines, workshop participants discussed twopossible systems for retail grading of freshmeat. The systems are yield, either on a per-pound basis or per-serving basis, and uniformmandatory labeling. Each will be discussed inturn in the following paragraphs.

The potential system of yield per pound orper serving is conceived as dealing with trim(or the amount of external fat in relation tolean per retail cut) in grade standards. In addi-tion, intramuscular fat or marbling may ormay not be included as part of the grade cri-teria. Such a conceptual system may increasethe relationship between grade values andnutritional values. An illustration of how sucha conceptual system might work is given byProfessor Padberg:

A grade standard might include two or threethings. One might be th at the first grade (a retailcut) might come from Prime carcasses and thenit might have other criteria to deal with trim or

internal fat as w ell.Maybe grade two would come from a Choicecarcass and perhaps have the same trim stand-ards, but not the internal fat, so you would end

sbWorkshop, Vol. I, p. 136.sTIbid., p. 143.

up with some retail grade that deals with con-sideration of value to the consumer, of whichtrim is probably the most important.

What this would do would certainly give themarket system a lot better information. Becauseyou w ould h ave a price for Grade 1 and differentprice for Grade 2. Now, you have the scramblefor the difference, and you do not know whateconomic values accrue to different trim. So interms of making a m arket work better and mark-ing products described better, in terms of func-tions of grade, I think this would identify thefunctions of a grade. 38

It would be necessary to define retail cutsthrough some s tandard uniform sys tembefore such grad ing could be operational. Thismeans that a system such as the currentvoluntary system of the National Live Stock and Meat Board 39 would need to be univer-sally adopted before a yield-per-pound or per-serving grade would be feasible.

Another difficulty with such a systemwould be the logistic of implementation.Professor Palmer addressed this point:

Composition of a meat product is not deter-mined until you finish the fat trim and knowhow much bone you are going to remove. So onfresh meats, it would be extremely difficult todevelop meaningful information on composi-tion, on say a steak, or a roast, or pork chop, orwhat have you.

And th erefore it is so variable and the shelf life isonly 72 hours after you cut it anyhow, which

means that you have a deadline between thetime that you set up exactly what the retail cut isun til the time that it is sold, so most of it is soldbefore that time period. So as I see it in freshmeat, to have nutritional information on thatspecific cut can be virtually impossible. But,what you m ight want to do if you wanted to d oanything would be to say what it (nutrition) isin general,

The best you could hope to d o on an individu alretail cut is to determine in general nutrition if on a fat constant basis or a fat and bone constantbasis. 40

This also illustrates the logistic difficulty of grading individual retail meat cuts. Shelf life

SgWorkshop Vol. IV, pp. 8–9.39 Un jform Refa i~ Meat ~~entitv Standards, National Live

Stock and Meat Board Publication, Chicago, Ill. 1973.qoworks hop , Vol. I, p. 131.

71



on fresh retail cuts of meat is typically nomore than 3 to 4 days. This is an extremelyimpor tant ph ysical characteristic of fresh m eatcompared to either processed products of fresh fruits and vegetables.

Other Bases for Grading: Another system isone involving uniform mandatory labeling of fresh meat at retail. Although some may notconsider this to be a grading system per se,such a system wou ld p rovide consumer infor-mation via labels and in that sense serve thesame func t ion a s g rades . Th i s concep tamoun ts to making a system mand atory at theFederal level such as the National Live Stock and Meat Board meat identification standards,Some suggest that the primary consumer in-formation need with respect to fresh meats atretail is a standard identification of retail cutsover time and over geographically separatemark ets. The contention is that consumers canreadily determine value of individual retailcuts by simply looking at the amount of exter-nal fat in relation to total weight. If this con-tention is accepted, then uniform mandatorylabeling would provide unique and distinctinformation which consumers cannot other-wise determine.

An extension of this second system may ormay not involve mandatory wholesale gradeidentification for individual retail cuts. Asmentioned previously, with the current beef grading system, carcasses are graded but in-dividual cuts are not. Of course, carcasses arethe parent material from which retail cuts arederived (see figure 18). Mandatory display of the grad e of a carcass from w hich a retail cut isderived could be part of a un iform m andatorylabeling program. Such extension of the presentwholesale grading system would providemore uniform consumer information withrespect to grade than is currently available.

Potential Impact of Retail Grading

Costs for any fresh m eat grading system ap-

plicable to retail cuts depend upon the dis-tribution system which is assumed prior tocalculating costs, Three distinct and separatedistribution systems can be d efined, One is thecurrent distribution system using currenttechnology. A second is centralized processingof fresh retail cuts, while a third is centralized

processing of frozen retail cuts. Each of thesesystems is explained in turn.

Curren t technology is to fabricate retail cutsat the retail store level. This means that pri-mals, subprimals, or carcasses are transportedthrough the marketing channel from eitherpacking plants or distribution centers to retail

stores. In the meat workrooms of retail stores,individual retail cuts are cut and packaged.This distribution system is the one used formost distribution today.

Centralized processing of fresh meat cutsimplies that th e fabrication of ind ividu al retailcuts is not d one at the r etail store level but at amore centralized location such as retail chaindistribution center or even a packing plant.However, because of the physical limits onshelf life of individual fresh retail cuts, there isa time limit on handling and transportingfresh cuts. If these cuts are fabricated at thedistribution center or packing plant, shelf lifemay be a limiting factor on feasibility of thesystem. Shelf life on individual fresh retailcuts may be extended by rather sophisticatedpackag ing t echn iques ( such a s vaccumpackaging), but this is relatively expensivepackaging compared to conventional packag-ing. Some experimentation has been donewith centralized p rocessing of fresh retail cuts,but du e to the shelf life limitations men tioned,the system has not been widely adopted.

A third distribution system is centralizedprocessing of frozen retail cuts. The obviousfactor mitigated by freezing is shelf life. Freez-ing extends shelf life while preserving prod uctquality, so that transportation and storagetime are eliminated as a problem. Freezing ismost useful for beef but may not be as advan-tageous for other red meats.

Current freezing technology for beef is toflash freeze individual retail cuts with eithernitrogen or carbon dioxide. With this system,beef is cut centrally, frozen at the central loca-tion (either distribution center or processingplant), shipped in freezer vans, and sold in afrozen state at the retail case. This system po-tentially offers cost savings over the previoustwo systems described, even though it isrelatively energy intensive. The system has

7 2



Figure 18

B E E F C H A R TRETAlL CUTS OF BEEF - WHERE THEY COME FROM AND HOW

Rib Steak Boneless

Rib Eye ( Delmonico )

Roast or SteakCHUCK

Porterhouse Steaki ’ .

Boneless -

Top Loin Steak

Filet Mignon)Steak Or

Roast (also from Sirloinla

SHORT LOIN

1

Pin BoneSirloin Stea k

flat Bone Sirloin Steak6 .

\

Wedge BOne SirloinSteak

‘ \q

Boneless Sirloin Steak

SIRLOINBroil Panbroil Panfry

TO COOK THEM

FORE SHANK

Top Round Steak Rump Roast (Rolled)

ROUND

./ ,

Shank Cross Cuts

SHORT PLATE I

Short RibsSkirt Steak Rolls*

(also from other cuts)Ground Beef

FLANKBraise cook in liquid

Ground Beef ‘L

Flank Steak *

Beef Patties Flank Steak Rolls*

TIPBraise

~ * -T IP Kabobs*

May be Roasted, Baked, Broiled, Panbroiled or PanfriedNat ional Live S tock and Meat Board

Photo: National Live Stock & Meat Board, Chicago, Ill.

73



concerning retail meat grade criteria based onnutr i t ional content , Workshop evidence indi-c a t e s o v e r w h e l m i n g l y t h a t n u t r i t i o n w o u l dnot serve a useful basis for grades when com-b i n e d w i t h p a l a t a b i l i t y o r o t h e r s e n s o r ycharac te r i s t i c s . The p r imary r eas on i s tha tnutritional superiority and palatability are notnecessar i ly pos i t ively correla ted , Combining

t h e t w o w o u l d r e s u l t in confus ion. Mostworkshop participants thought nutritionallabeling separate from grade criteria was amore d esirable progr am for retail cuts of meat.

A prerequisite to adoption of an individualretail cut grading system would be standard-ized fabrication, retail cut nomenclature, andlabeling procedures. Given standard iden-tification of retail cuts, a grading system basedon yield of edible meat on a weight basiswould be possible. Such a system would haveboth advantages and disadvantages, as dis-

cussed above.

Cost and net consumer benefit would de-pend significantly on the type of meat dis-tribution system that existed. In essence, thetechnical feasibility of reflecting the composi-t ion o f mea t—tha t i s , f a t , v i t amins , and /o rm i n e r a l s — e x i s t s . N e t c o n s u m e r b e n e f i t ,h o w e v e r, v a r i e s g r e a t l y b y t y p e o f g r a d i n gsys tem and by type of d is t r ibut ion sys tem.Further detailed analysis would be necessaryt o d e t e r m i n e n e t c o n s u m e r b e n e f i t f o r a n ycombination of grade system and distr ibution

system.

Congressional Options

T h e f o l l o w i n g a r e s o m e o f t h e o p t i o n savailable to Congress for grading fresh meat:

Congress could make the current volun-ta ry program on meat ident i f ica t ionstandards mandatory for all retail meatcuts. This would facilitate uniform iden-

tification of retail mea t cuts.Congress could direct USDA to facilitatethe adoption of a voluntary/ mandatorynutritional labeling program for freshretail meat cuts.

Congress could d irect USDA to institute avoluntary/ mand atory program of retailmeat grades where grade criteria arebased on yield per pou nd or per serving,Such a p rogram should not be instituted,however, prior to a program that wouldassure uniform identification of retailmeat cuts.Since net benefit of any retail gradescheme is highly dependent upon thetype of meat distribution system in exist-en ce, co m m i t te es o f C on g r e ss w i t h

jurisdictional authority could examinethe potential for lowering the distribu-tion costs of meat from various systems(such a s conven t iona l compared tocentralized frozen) in oversight hearings.Such hearings could produce further evi-dence on the potent ia l impacts and

benefits of retail grade alternatives formeat.

Congress could m ake grading mand atoryfor all fresh red meat using the currentcarcass grade criteria and designate suchgrad e on all individ ual retail meat cuts.

75



APPENDIX A

RECENT STUDIES MENTIONING FOOD GRADING

Though the food-processing industry is stronglyaga ins t chang ing the p re sen t USDA g rad ingsystem, other sectors of the economy, severalFederal reports, and some individuals within theFederal Government favor changes in the gradingsystem. Changes have been advocated in suchGovernment reports as the Report of the NationalCommission on Food Marketing, dated June 1966; the

Report of the 1969 W hite House Conference on Food, Nutrition, and Health; the Report of the Consumer Panel of the National Nutrition Policy of 1974, c o n -ducted by the Senate Select Committee on Nutri-tion and Human Needs; and the 197.5 GAO Report on Food Labeling. This section reviews changes pro-posed by these reports without judgments on themerits of the proposed changes.

The Report of the National Commission on FoodMarketing

T h e C o m m i s s i o n o n F o o d M a r k e t i n g ,established by Public Law 88-354, began its work in January 1965. The bipartisan Commission waschartered to study and appraise the marketingstructure of the food industry.

Of the various reports mentioned above thatdealt with food grading, the Food Marketing Com-miss ion was the only report which t rea ted

economic and marketing consequences of foodgrades in detail. The Commission said that Federalgrades was one of the several factors which con-tributed to the rapid reconcentration in cattleslaughtering after World War 11 because the wideuse of Federal grades for beef made it easier for newfirms to comp ete for customers on equal terms w ithpackers whose names were already well known. 1 Itnoted that eggs and butter use retail grades andhave low firm concentration, In early 1966 the top13 firms p rod uced only 10 percent of the fresh U.S.table eggs, and butter w as the least concentrated of any dairy product. 2 The Commission report’s im-plication is that grades seem to produce less con-

centration and therefore more competition forproducts carrying retail grades,

1 U S D A publication. Report O J the hlutionfll Commissionon Food Marketing, Food from Fanner to Consumer, June1966, p. 25.

ZIbid., pp. 33-45.

The Commission’s majority opinion concludedthat consumer grad es should be developed and re-quired to ap pear on all foods for which such gradesare feasible, that are sold in substantial volume toconsumers, and that belong to a recognized prod-uct category. Besides providing consumers w ith thechoices and unbiased information they need to getthe m ost satisfaction for their money, the Commis-sion also hoped that consumer grades wouldreduce the excessive use of promotion and con-tribute to a better performance of the food indu stry.The Commission also concluded that uniform no-menclature in the form of A,B,C should be u tilizedexcept for foods for which other nomenclature iswell established. 3

However, a minority opinion felt there was in-sufficient evidence to allow the Commission torecommend development and implementation of consumer grades . The minority opin ion main-tained that administrative rigidity would makemeaningful consumer grades unfeasible, thatquality judgments are personal, and thereforemeaningful Federal quality standards for con-sumers could not be devised, and that the Commis-sion had no evidence to support its view that thecost for consumer grades would be nominal.Finally, the minority disagreed with the majorityconclusion that consumer grades would reduce theamount of advertising. They felt, rather, that con-sumer grad es would increase the amount of adver-tising to offset the “equalizing” effect of grading.The minority opinion concluded that not havingstudied what the result would be, the majority isguilty of willfully tampering with an importantcomponent of our economy without knowledge. 4

The Report of the 1969 White House Conferenceon Food, Nutrition, and Health

The White House Conference convened repre-sentatives of all sectors of food prod uction and dis-tribution system to investigate America’s food su p-

ply, nutritional needs, and nutritional capabilitiesin ord er to recommend a national food p olicy. Food

sIbid., p. 109.4USDA Publication < Report of the National commission

on Food Marketing, Food From Fanner to Consumer, June1966, p. 130 and 153.

79



APPENDIX B

CONGRESSIONAL INTEREST IN FOOD GRADING

Several food labeling bills were introduced inthe 93rd Congress; one of them—H.R. 1656, theConsumer Food Grading Act-dealt with food grad-ing. H.R. 1656 was introduced by CongressmanRosenthal (D-NY) and referred to the AgricultureCommittee. The bill, which sought a uniformsystem of quality grades for consumer food prod-ucts, died in committee without any hearings orother action.

In the 94th Congress, Congressmen Karth (D-MN) and Price (D-IL) have each introd uced id enti-cal bills, H.R. 3011 and H.R. 1367, both titled Con-sumer Food Grading A ct and both awaiting action inthe Domestic Marketing and Consumer Subcom-

mittee of the House Committee on Agriculture. Inaddition to calling for uniform nomenclature at theretail level, the bills give the food industry the op-tion of stating the correct grade on the productlabel or including the statement: “Not qualityg raded by the Un i ted S ta te s Depa r tmen t o f Agriculture.”

Congressman Rosenthal has introduced anotherbill, H.R. 42, the Consumer Food Labeling Act. Thisbill had 58 co-sponsors and at the close of the 94thCongress was awaiting action before the followingInterstate and Foreign Commerce subcommittees:Consum er Protection and Finance, chaired by Con-gressman Van Deerlin (D-CA); and H ealth and En-vironment, chaired by Congressman Rogers (D-FL). Both subcommittees expressed interest in H.R.42, but neither subcommittee considered this billby the close of the 94th Congress. While portions of the bill could be considered within the jurisdictionof the House Agriculture Committee, ChairmanFoley would have to wait until the bill reaches theHouse floor before this possible claim of mutualconsideration could be decided. If ChairmanFoley’s claim of mu tual consideration is gr anted bythe full House, then either all or portions of H.R. 42would be sent back to the Agriculture Committee.

Title V of the bill was labeled the “ConsumerFood Grading Act,” and the content and wordingof Title V was identical with H.R. 3011 and H.R.1367. Food grading, however, was only one of themany labeling issues which H.R. 42 considered,

wh ile H.R. 3011 and H.R. 1367 dea lt only w ith foodgrading.

Congressman Gilbert Gude (R-MD) had a bill,H.R. 472, before the Interstate and Foreign Com-merce Committee that would have amended theFederal Food, Drug, and Cosmetic Act to establish auniform grading system based on the nutritionalvalue of foods which would be applied to all foodsold in interstate commerce. The grad ing code w asto be “simple and easily understandable,” and aprogram of consumer education about the newsystem was to be triggered if the bill was enacted.This system would take into account the nutri-tional or non-nutritional value of the product

being graded. This bill also died in the previouslymentioned subcommittees of the Interstate andForeign Commerce Comm ittee.

Congressman Gude’s bill was introduced as aresult of a consumer questionnaire he circulated inhis Maryland district. The Congressman dis-covered that consumers are not using existinggrades to compare products but that some effort isbeing made by some consumers to use the nutri-tional information provided to them. Consumersindicated they were interested in quality ratingbased primarily on nutrition as well as in morenutritional information, and they favored the samequality grades for a variety of food products.

Legislation on food grade labeling was not in-troduced in the Senate for the 94th Congress.Neither of the two Senate Committees—Labor andPublic Welfare , and Commerce , which have

jurisdiction over any food labeling bills—had anylegislation introduced to them.

All of these food gra ding bills appear intend ed tohelp consumers in food shopping at a time whenfood costs are rising, Some bills seek to make thegrading nomenclature uniform, others call forgrade standards to incorporate nutritional factorsof a product, and still other bills limit revising the

standards for a particular product, primarily beef.In all, at least 13 bills were introd uced in the H ouseduring the 94th Congress; none of them, however,were reported out of committee.

81



Bills Affecting Federal Food Grades in the 94th Congress

Bill

H.R. 42

H.R. 472

H.R. 836

H.R. 995

H.R. 1367

H.R. 3011

H.R. 3547

H.R. 3986

H.R. 4401

H.R. 5266

H.R. 6606

H.R. 9268

H.R. 10776

Sponsor

Rosenthal

Gude

Peyser

Rosenthal

Price

Karth

Rosenthal

Oberstar

Barrington

Peyser

Rosenthal

Rosenthal

Richmond

Title

Nutritional LabelingAct

NutritionalGrading

NutritionalGrading

Truth in FoodLabeling Act

Consumer Food GradingAct

Consumer Food GradingAct

Marketing Practices DisclosureAct

Marketing Practices DisclosureAct

Food Labeling Act

Beef Grading Restriction

Consumer Food LabelingAct

Consumer Food LabelingAct

Consumer Beef GradingAct

Committee

Interstate& ForeignCommerce

Interstate&ForeignCommerce



Agriculture

Agriculture




Agriculture



Agriculture

82



APPENDIX D

CONSUMER INPUT FOR DESIGNING A RETAIL GRADING SYSTEM*

The proximity and success of wholesale grades is

probably an important factor in leading people toconclude grades would work effectively at retail.Yet some rather startling contrasts occur when theextension of the gra ding concept is set in the tra ns-action between the retailer and the consumer,rather than in the transactions among middlemenback in the system. Some of these contrasts m ay beuseful in appraising some particular problemsassociated with getting user input into the processof determining and using retail grades.

User input has been an important aspect of creat ing grades and grading programs at thewholesale level. At this level, users are experts,spending their l ife in the practical or theoreticalstudy of the market transactions under considera-tion. When public agencies developing gradingsystems or enforcement procedures need in forma-tion on any aspect of market behavior, they cansimply telephone active traders and ask them. Inadd ition, the hear ing pr ocess is an effective wa y forpublic agencies to acquire information. Since usersare experts and would be directly affected by anyprogram, they are motivated to inform themselvesof imminent public decisions about grades and torespond to hearing calls.

In addition to the availability of expert informa-t ion and the willingness of experts to respond, thesubject matter of importance in transactions amongexperts is objective facts about the products. Some-times these objectives facts may be difficult tomeasure, such as color, but even this attribute of some products is quantifiable electronically. Unlikethe characteristics of final consumer products—such as style, convenience, and other rath er su bjec-tive attributes—the expert’s p rimary focus is on ob-

jective characteristics of the product.

Private product definitions, particularly productbrand s, have relatively small meaning and impor-tance to transactions am ong experts. Experts tendto develop and execute transactions on the basis of

objective information an d product definitions orratings. Competing private product definers are

*This section is based on a paper written for theOffice of Technology Assessment by D. I. Padberg en-titled “Consumer Input for Consumer Grades and Prod-uct Labels, ” October 1976.

therefore less developed and have less momentum.

The formulation of grades simply amounts to thegroupings of objective product attributes alreadyund erstood and used by traders into uniform prod -uct definitions. Users are often motivated tocooperate because, being experts, they can p erceiveadvantages in a uniform system to themselves andtheir trading partners.

Special Problems Related to User Inputs for Retail Grades

In the transaction between the retailer and thefinal consumer, objective information about prod-uct characteristics may be important, but it sharesthe stage with many other subjective charac-teristics. The image of a product, as well as its tech-nical characteristics, affects its value. While expertsare rationally motivated to give meticulous care tobuying products at the lowest price, consumersmay be rationally motivated toward very differentobjectives. Consumers are exposed to thousands of items on a shopping trip. A careful analysis of thebest buys would take many minutes and perhapshours. Even after such analysis, it is questionablewhether or not the technically best buy would besufficiently cheaper than the product purchased byhabit to justify such time expenditure. So it may be

quite rational for consumers to have a purchasepattern in which consumption habits and spon-taneity are more imp ortant d eterminants of choicesthan analysis of objective facts about products.Also, consumers are accustomed to making prod-uct judgments and evaluations based on privatecommunicators such as brand names, and con-sidering a new public system is somewhat foreignto them.

It goes without saying that obtaining user inputfor defining the most appropriate and functionalsystem of retail grades is very different from thesimpler counterpart process for wholesale grades.Consumers are not sufficiently interested or awareto respond in large numbers at hearings, as expertswould. They may find it very difficult to answerq u e s t i o n s a b o u t t h e i r a t t i t u d e s t o w a r d o rpreferences for a retail grading system which isgenerally unfamiliar to them. This means that,even with special initiative on the part of thepublic, it may not be easy to accurately reflect con-

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sum ers’ long-term interest pertaining to retail foodgrades.

Reasonable Expectations for Consumer Surveys

In our complex society, more and more impor-tant determinations are taken by the action of groups and less and less by the action of in-dividuals. As food p roducts have grown in num berand changed in character, the primary initiative inthe design an d selling of a food p rodu ct is taken byproducers or manufacturers. The consumer as anindividual reacts passively. In this situation,manufacturers must go to consumers in somesurvey method and probe the consumers’ interestsfor potential products. The public, in designinggrading systems for food products at retail, mustsimilarly go the passive consumer for informationuseful in designing a functional grading system.

Two types of situations need to be defined inassessing useful output from surveying consumers’views, preferences, and opinions. The first situa-tion is where the consumer is aware of the topicbeing surveyed and has “performed” views andopinions. In this situation, the survey objectivesand methods are relatively simple. Little time isneeded in conversing with the consumer as tobackground or definitions of the topic or productbeing surveyed. Consumers are frequently andconveniently surveyed in the supermarket with aquest ionnaire requir ing f ive to ten minutes .Telephone surveys are also quite credible in thissituation. Reactions to political candidates orpreferences pertaining to known products are ex-amples of situations where this relatively shallowinventory of preformed attitudes and reactions iseffective an d useful.

In this situation, consumers are not asked tothink or analyze. The interview process simply in-ventories attitudes already developed and formed.In short, surveying preformed attitudes or opinionsor preferences is relatively easy, straightforward,and inexpensive.

Useful output from consumer surveys becomesmore difficult, however, when the topic of the in-quiry is one about which consumers are generallyunfamiliar and therefore about which they have nopreformed positions. In this situation, a mu ch moredelicate interview process must be followed. First,the consumer has to have the topic introduced. In-troducing a new topic to a consumer for which andabout which a reaction is to be solicited is pre-carious. It is most difficult to describe a topic suchas retail grades without conveying an emotionalapproval or disapproval. In terms of consumers’reaction to this introduction of the topic, their

ability to receive and appraise it depends con-siderably on their previous experience. If similarconcepts and activities are within their experience,it will be much easier for them to receive, classify,and react to the topic. On the other hand, con-sumers wh o do not find through experience a func-tional context in which to receive, analyze, andreact may be unable to give a useful interpretation.In this latter case, they will be searching most ac-tively for clues from the person introducing thetopic on how to evaluate it. The interviewer is try-ing to be neutral: the interviewee is searching forclues.

In this situation, the interview process may beasking the consumer to do the impossible. Con-sum ers are being asked to give information they d onot have. They only have what was given them. If the proposition is presented so it is absolutelysterile of value judgments, they may find it verydifficult to analyze and say what their feelings orviews are. On the other hand, if the proposition islaiden with v alues, the interviewer is very likely to

get back those same values or opinions.The implications for the process of obtaining

consumer input in the design of Federal retail foodgrades is clear. Experts have considerable difficultyconceptualizing the operational mechanics anduser implications of retail grades. It may be naive toexpect that consum ers can efficiently and directlyadvise on how to d esign such a system that wouldoperate effectively.

The pivot point of this argument turns on whatyou expect the consumer knows about the subjectof retail food grad es specifically or “p rodu ct infor-mation on product labels” generally. Experts who

have spent their professional lives dealing withfood product characteristics have the tendency toassume: 1) that these characteristics are importantto consumers; 2) that consumers in large numbersare concerned and worried about these matters; 3)that consumers have preformed attitud es about theideal kind of information they want on labels; and4) that consumers would use such informativelabels. After conducting thousands of interviewsrelating to consumer reactions to unit pricing andnutritional labeling, Padberg feels such “facevalue” in terpre ta t ions of the meaning to con-sum ers of informative labels are n aive. Informativelabels have meaning and usefulness to consumers,

but m eaning and use are different than experts an-ticipate. 9

9R.J. Lanahan, J.A. Thomas, D.A. Taylor, D.L. Call,an d D.I. Padberg, Consumer Reaction to hlutrifional IrIfor-mation on Food Product Labels Search, Vol. 2, No. 15, Cor-nell University, 1972.

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What Do Consumers Want?

In today’s affluent society food consumed athome is by an d large a m aintenance activity, neces-sary but not the central focus of life. The “goodlife” involves creative, humanitarian, and otherfulfilling activities. From a very young age, weleave the household frequently for extendedperiods of time to find these activities. Consumers

want (and are willing to pay for) many kinds of professionals to do the work of preparing food forconsumption inside or outside the household. Theyare even willing to pay professionals to suggestthings for them to buy. Consumers want to reactrather than to plan.

Consumers want to purchase food quickly andhave assurances that this maintaining substance issafe , wholesome, nutr i t ious , and economical .While consumers do not want to analyze productquality definitions or ingredient labels as a part of the purchase decision, they want to feel that some-one is accountable for the nutrition of the productthey will offer their family. In other words, theywan t to be able to hold th e food d istribution systemaccountable. Accountability used to be a personalmatter in the small business world of the past,wh ere the grocer, local butcher, or baker w as also aneighbor. The gigantic modern firms ship ping foodall over the country and around the world are ex-tremely impersonal. The imp ersonal natur e is not aparticular problem because consumers have theirown hierarchy of preferences for personal interac-tion. The grocer may not be h igh on th is list. None-theless, the consumer still wants accountability.

The important function of informative labelsand public initiative in defining products is essen-

tially twofold. To the consumer it means account-ability. It means that someone, including public

representatives as well as private firms, is payingattention to important matters such as nutritionand safety, etc. To manufacturers its meaning ismuch more compl ica ted and comprehens ive .N u t r i t i o n a l l a b e l s , f o r e x a m p l e , s t i m u l a t e dmanufacturers to a great deal more nutritional sen-sitivity than they had previously. It provided abasis of comparing their product values which didnot previously exist, and they were most sensitive

to it. That comp arison became not th e sole elementbut another important element in their competitiver iva lry with o ther food manufacturers . Eventhough individual consumers may not use this in-formation routinely as a point of p urchase aid, con-sumer groups may give careful surveillance tonutritional quality in general and specific terms,So, in this case as usual, the important actions anddeterminations are the results of initiatives of groups rather than individuals. The individual seesit as a symbol that th is issue is being add ressed. Theinitiative, action, and changes result from interac-tions of various groups-competing firms, con-sumer groups, or governmental agencies.

In summary, individual consumers desire ac-countability from the food distribution system, butit may be naive to expect consumers to have inputinto the design of a retail grading system for food.Useful input into the design of the mechanics orimplications of various retail grade schemes is notlikely to come from individual consumers, sinceconsumers would be asked to give feelings and in-formation about their desires which they do notpossess. Although individual consumers may notpossess strong opinions concerning the specifics of retail grades, a more general desire for account-ability of the system exists among consumers, A

retail grade system could be a part of the account-ability which consumers desire.

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GLOSSARY OF TERMS

Grade criterion—the standard on which thesorting process separates a product into twoor more groups.

Grade designation or nomenclature-a set of terms used to sign ify the various grades.

Grading--a sorting process which separates aproduct in to two or more groupsthe use of a base criterion.

Mandatory system-grades are establthe Federal Government and usegrades would be required by law.

t h r o u g h

ished byof these

Nutri t ion labeling-a voluntary declarationof the calorie, protein, carbohydrate an d fatconten t and the p ercentage of U.S. Recom-

mended Daily Allowance for protein andseven vitamins and minerals in each proc-essed food product.

P r i v a t e v o l u n t a r y s y s t e m — g r a d e s a r eestablished by industry and used volun-tarily.

Processed food s--any fruit, vegetable or otherfood product which has been preserved bythe recognized comm ercial p rocess, includ-ing, but not limited to, canning, dehydrat-ing, drying, the addition of chemical sub-stances, or fermentation .

Retail—that level of the marketing systemwhich sells goods to ultimate consumers forpersonal or household consumption,

Safe—refers to a food product possessing nodefects or impurities which present a healthhazard.

Standards of identi ty—regulation issuedunder the Food, Drug and Cosmetic Actwhich states that for certain processed foodproducts to be sold legally under its com-mon or usual name, it must be made in ac-cordance with certain specifications.

Variety identification program--a potentialcri terion for grading fresh fruits andvegetables based on labeling w ith respect tovariety. This criterion would convey infor-mation regarding such aspects as appropri-ate end use or flavor of the product.

Voluntary/ Mandatory system—grades areestablished by the Federal Government andany bu siness firm th at elects to enroll in theprogram m ust ad opt the established grades.

W h o l e s a l e — t h a t level of the marketingsystem which sells in quantity usually forresale.

Wholesome-a term which refers to defects info o d p ro d u c t s w h ich a re n o t a h ea l thhazard to consumers.

Yield per pound or per serving-a potentialcriterion for gradingfresh meat based onthe amount of external fat in relation to leanper retail cut,

o

perspectives on federal retail food grading

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