Perspectives on Federal Retail Food Grading

June 1977

NTIS order #PB-273163
TECHNOLOGY Assessment B0ARD Congress of the United States EMILIO Q. DADDARIO

EDWARD M. KENNEDY. MASS., CHAIRMAN

DIRECTOR

MARJORIE S. HOLT, MD., VICE CHAIRMAN OFFICE OF T ECHNOLOGY A SSESSM ENT DANIEL V. DESIMON E

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

DEPUTY DIRECTOR

HUBERT H. HUMPHREY. MINN. MORRIS K. UDALL, ARIZ. W ASHINGTO N , D.C. 2051 0

CLIFFORD 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 McGovern

Chairman

Select Committee on Nutrition and Human Needs

United States Senate

Washington, DC 20510

Dear Mr. Chairman:

On behalf of the Board of the Office of Technology Assessment, we are forwarding to you the report Perspectives on

Federal Retail Food Grading.

The report is an analysis of the U. S. food grading program.

It evaluates changes and modifications in the present grading system which would facilitate consumer choices, examines

the major issues associated with these changes, and outlines

alternative approaches to implementing these changes.

This assessment was performed in accordance with your request

to the Office of Technology Assessment dated September 15,

1975. The request was accepted and the study authorized by

the Technology Assessment Board on December 9, 1975.

Chairman Vice Chairperson

ii
T ECHNOLOGY A SSESSMENT B OAR D Congress of the United States EMILIO Q. DADDARIO

EDWARD M. KENNEDY, MASS., CHAIRMAN DIRECTOR

MARJORIE S. HOLT, MD., VICE CHAIRMAN O FFICE OF T ECHNOLOGY A SSESSMENT ‘ DANIEL V. DESIMON E

ERNEsT F. HOLLINGS, S.C. OLIN E. TEAGUE, TEX.

HUBERT H. HUMPHREY. MINN. MORRIS K. UDALL, ARIZ.

CLIFFORD 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

W ASHINGTO N , D.C. 2051 0

JUN 1 1977

DEPUTY DIRECTOR

The Honorable Edward M. Kennedy

Chairman

Technology Assessment Board

Office of Technology Assessment

Congress of the United States

Washington, DC 20510

Dear Mr. Chairman:

The enclosed report,

sents OTA's analysis

grading system which

products.

Perspectives on Federal Retail Food Grading, preof changes and modifications in the present food

would facilitate consumer choice in buying food

The assessment was requested by the Chairman of the Senate Select Committee on Nutrition and Human Needs and endorsed by the Chairman of the

Senate Agriculture, Nutrition, and Forestry Committee. The report has

been reviewed extensively within OTA, by the Food Advisory Committee,

and by personnel from the Federal agencies, industry, and consumer

organizations which will be affected by this study.

Specifically the report, (1) identifies and analyzes changes in the

grading system needed to facilitate consumer choice, (2) identifies and

analyzes the major issues associated with these changes, and (3) presents to Congress alternative approaches to accomplishing these changes.

A consumer-oriented food grading system has become an important issue in

Congress and the Administration. In addition to the requesting committees, the House Agriculture Committee and the House Interstate and

Foreign Commerce Committee have expressed interest in receiving the

report. The USDA Assistant Secretary for Nutrition and Consumer Services has

consumers

useful to

sider the

indicated a desire to revamp the food grading system to aid

in making sounder purchase decisions. This report will be

Congress both to draft legislation in this area and to conAdministration’s suggested changes.

Sincerely,

●

EMILIO Q. DADDARIO

Director

111
FOOD ADVISORY COMMITTEE

Dr. Martin E. Abel (Acting Chairman) Dr. W. D. Buddemeier

Professor of Agriculture and Director of International

Applied Economics Agricultural Programs

Director, Economic Development Center 113 Mumford Hall

University of Minnesota University of Illinois

St. Paul, MN 55101 Urbana, IL 61801

Dr. David Call

Director of Cooperative Extension

103 Roberts Hall

Cornell University

Ithaca, NY 14853

Dr. Max Milner

International Nutrition Planning Program

Dept. of Food Science & Technology

Room 20-A-222

Massachusetts Institute of Technology

Cambridge, MA 02139

Dr. Roger Revelle

Center for Population Studies

Harvard University

Nine Bow Street

Cambridge, MA 02138

Mr. Arnold Mayer

Legislative Representative

Amalgamated Meat Cutters and

Butcher Workmen of North America

100 Indiana Avenue NW

Washington, DC 20001

Dr. Robert O. Nesheim

Vice President, Research and

Development

The Quaker Oats Company

617 West Main Street

Barrington, IL 60010

Mr. Lauren Seth

Agricultural Consultant

801 State Farm Road

West Des Moines, IA 50265

Dr. E. T. York

Chancellor, State University System

Board of Regents

Tallahassee, FL 32304

OTA Food Program Staff

J. B. Cordaro, Food Program Manager

Michael J. Phillips, Project Leader

Robert L. Smith, Jr., Research Associate

Thomas L. Sporleder, Consultant

Jane Mason, Secretary

Ann Woodbridge, Administrative Assistant

iv
Preface

This assessment is an analysis of the U.S. food-grading program. It

evaluates those changes and modifications in the present grading system

which would facilitate consumer choices and examines their possible consequences.

The assessment was requested by the Senate Select Committee on Nutrition and Human Needs and endorsed by the Senate Committee on

Agriculture, Nutrition, and Forestry. The report identifies and evaluates the

major issues and options available for congressional consideration in food

grading.

The report was prepared by the Office of Technology Assessment food

program staff, under the supervision of Mr. J. B. Cordaro, food program

manager, and Dr. Michael J. Phillips, project leader, with contributions

from: (1) the Food Advisory Committee; (2) the food-grading workshop

participants; (3) Dr. Thomas Sporleder, food grading consultant; and (4) Mr.

Robert L. Smith, Jr., OTA research assistant. Ms. Jane Mason and Ms. Ann

Woodbridge provided clerical and logistic support in preparation of this

report. The Food Advisory Committee provided advice and comment

throughout the assessment, reviewed the final draft, and has recommended

publication of this report.

The Technology Assessment Board, governing body of OTA, approves

the release of this report, which identifies a range of viewpoints on a significant issue facing the U.S. Congress. The views expressed in this report are

not necessarily those of the Board, the OTA Advisory Council, or of individual members thereof.
Acknowledgements

The food program staff received advice and assistance from Federal agency

officials, individuals from the private food sector, consumer groups and widely

known experts. Some participated in workshops, some were the subject of interviews, others assisted in review, and others helped in numerous ways essential to a

balanced understanding of the complex issues involved in this study of food grading.

Their assistance is acknowledged. Likewise, the time made available and the

effort put forward on behalf of OTA and Congress is appreciated.
I.

II.

III.

IV.

v.

VI.

Page No.

Summary of Issues, Findings, and Congressional options . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 3

Issue I: Grade Criteria— Combining Sensory Characteristics and Nutritional

Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Issue II: Voluntary or Mandatory System 7

Issue III: Grade Designation or Nomenclature . . . . . . . . . . . . . . . . . . . . . . . . 9

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 11

Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Methodology . . . . . . . . . . . . . . . . . . . . . . 17

Historical Development . . . . . . . . . . . . . . . 19

Diversity in Current Food Grading . . . . . 23

Use of Current Food Grades. . . . . . . . . 31

Perspectives on Federal Food Grading:

USDA, Industry, and Consumers . . . . 33

U.S. Department of Agriculture. . . . . . 35

Mandatory Grading . . . . . . . . . . . . . . 36

Grading Designation or Nomenclature . . . . . . . . . . . . . . . . . . . 36

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

Food Processing Industry. . . . . . . . . . . . 37

Grade Criteria . . . . . . . . . . . . . . . . . . . . 37

Mandatory Grading, . . . . . . . . . . . . . . 37

Consumer Interest Groups. . . . . . . . . . . 39

Grade Criteria . . . . . . . . . . . . . . . . . . . . 39

Mandatory Grading.. . . . . . . . . . . . . . “42

Grade Designation or

Nomenclature . . . . . . . . . . . . . . . . 42

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Grade Criteria . . . . . . . . . . . . . . . . . . . . 43

Mandatory Grading . . . . . . . . . . . . . . . 43

Grade Designation or

Nomenclature . . . . . . . . . . . . . . . . 43

Possible Functions of a Federal Retail

Food Grading System. . . . . . . . . . . . . . . 45

Obtaining Consumer Input for the

Design of a Retail Grading System . . . 47

Contents

Page No.

Assessment by Major Categories . . . . . . .

Processed Foods Sector. . . . . . . . . . . . . .

Present Status of Government

Programs. . . . . . . . . . . . . . . . . . . . .

Present Status of Private Sector

Programs. ... , . . . . . . . . . . . . . . . .

Potential Function and Impact of

Retail Grading . . . . . . . . . . . . . . . .

Summary . . . . . . . . . . . . . . . . . . . . . . .

Congressional Options . . . . . . . . . . .

Fresh Fruits and Vegetables Sector . . .

Present Status of Government

Programs. . . . . . . . . . . . . . . . . . . . .

Potential Function and Impact of

Retail Grading . . . . . . . . . . . . . . . .

Summary . . . . . . . . . . . . . . . . . . . . . . .

Congressional Options . . . . . . . . . . .

Fresh Red Meat Sector. . . . . . . . . . . . . .

Present Status of Government

Programs. . . . . . . . . . . . . . . . . . . . .

Present Status of Private Sector

Programs. . . . . . . . . . . . . . . . . . . . .

potential Function of Retail Grading

Potential Impact of Retail Grading.

Technology in Relation to Tenderness in Beef. . . . . . . . . . . . . . . . . . .

Summary . . . . . . . . . . . . . . . . . . . . . . .

Congressional Options . . . . . . . . . . .

Appendixes and Glossary of Terms. . . . . . . . . .

Appendix A: Recent Studies Mentioning

Food Grading . . . . . . . . . . . . . . . . . . . . . . . .

Appendix B: Congressional Interest in Food

Grading . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix C: Food Grading Workshop Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix D: Consumer Input for

“Designing a Retail Grading System . . . . .

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

LIST OF FIGURES

Figure 1. Flow of Food From Farm to Consumer. . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . 14

Figure 2. Nutritional Labeling . . . . . . . . . . . . . . 16

Figure 3. Proposed Organizational Structure

of USDA’s Food Safety and Quality Service 22

Figure 4. Grading of Butter . . . . . . . . . . . . . . . . . 26

Figure 5. Fresh Fruits and Vegetables . . . . . . . 27

Figure 6. Grading of Processed Fruits and

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

Figure 7. Meat Grades . . . . . . . . . . . . . . . . . . . . .

Figure 8. Proportion of Food Products Graded

at Wholesale and Retail. . . . . . . . . . . . . . . . . .

Figure 9. Federal Government Agencies Active

in Food Programs. . . . . . . . . . . . . . . . . . . . . . .

Figure 10. U.S. Department of Health, Education and Welfare—Public Health Service,

Food & Drug Administration—Bureau of

Foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48

48

48

54

57

59

59

60

60

61

66

66

67

67

70

72

74

74

75

77

79

81

83

84

87

30

31

50

51

vii
Figure 11. Food and Drug Administration Figure 15. Marketing Structure of Processed

Programs Directed to Control of Food and Foods and Fresh Fruits and Vegetables . . . . 64

Cosmetics as Authorized by Various Federal Figure 16. Breakdown of Meat Grades of

Acts ................................”.” 5 2 Federally Graded Commercial Cattle, 1975. 68

Figure 12. Nutritional Labeling . . . . . . . . . . . . . 53

Figure 13. Types of Dates . . . . . . . . . . . . . . . . . . 56 Figure 17. Selected Examples of Voluntary

Figure 14. Examples of Fresh Fruit and Vegeta- Meat Identification Standards . . . . . . . . . . . . 69

ble Packaging.......................”””” 61

Figure 18. Beef Chart . . . . . . . . . . . . . . . . . . . . . . 73

LIST OF TABLES

Table 1. Availability of Consumer Information Table 3. Nomenclature for Selected Federal

for Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 and State Grades for Fruits and Vegetables 28

Table 2. Nomenclature for Selected USDA Table 4, Selected USDA Grades for Processed

Food 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 a

food product into two or more groups through the use of chosen base criteria. Once separation is accomplished, the grade assigned should directly

impart the criteria used in its determination. Grades are not used for sorting

across products —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 characteristics-such as taste, flavor, color, or exterior appearance-and evolved as

a mechanism to facilitate wholesale transactions in industry. To benefit consumers, simple, uniform terminology, increased nutritional information,

and standardized systems for grading might be established. The question

now arises as to whom grades should serve: consumers, industry, or both?

Industry and consumers are affected by:

● which food products are graded;

● what criteria are chosen for the grade;

. how the grade is designated on the product; and

● where grading occurs in the food distribution channel.

This study assesses the social, institutional, and economic consequences

of modifying or changing the present grading system to a retail- or consumer-oriented grading system. Public policy issues of significant concern to

Congress and the Nation surrounding Federal retail food grading are

defined.

These issues are:

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

2) whether or not retail grades should be mandatory; and

3) the nomenclature used for grades.

The Office of Technology Assessment found that each major food

category—processed foods, fresh fruits and vegetables, and fresh red meat—

poses a different problem. Therefore, potential costs and benefits (with

respect 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 the

text (see centerfold), and possible congressional options for each grading

issue are identified. Each option has a cost; none are free. Also, each option

has potential benefit to consumers. Careful consideration should be given to

the net benefit (cost in relation to benefit) prior to adoption of any particular

option. In this report, a full range of congressional options are stated regardless of the potential relative or absolute net benefit to various participants in

the 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 AND

NUTRITIONAL CRITERIA

Current food grades are based on criteria

reflecting sensory characteristics such as

flavor, texture, color, or other palatability or

cosmetic factors. A major issue in food grading is whether to change this basis to reflect

sensor y and nutritional factor s

simultaneously. The issue is complex. One

general problem associated with making

nutritional content a basis for grades is that

nutrition deals with diet. As one food grading

workshop (see methodology) participant

states:

We can conceive of a nutritious diet, but the concept of a nutritious food product has never been

developed. There are many components of a

nutritious diet, and the concept of getting them

all in a product is very repulsive to nutritionists

and, I think, the populous in general. So there is

a very great difficulty in nutrition labeling. Any

product is a component of a diet, and it may be a

useful component although it is very lopsided in

its individual characteristics. What makes a

nutritious product is what other products it is

combined with in a day or a period of several

days. We have a conception of nutritional diet;

we do not have a conception of nutritional product.1

Current Government programs for processed foods include regulation of food products for wholesomeness and safety, standards

of identity, fair labeling and packaging, and

optional nutritional labeling and grading

systems. In addition, most major food

manufacturers have elaborate quality control

programs that assure compliance with

Government regulations and their own

specifications. Retail grade criteria should not

be changed to reflect some combination of

sensory and nutritional factors, as it is not

meaningful to grade processed foods on both.

Problems include an inverse relationship between sensory and nutritional characteristics

and the time lag necessary to establish nutritional content and grade and label the product. For processed foods, analysis by OTA indicates that the most appropriate vehicle for

conveying nutritional information to consumers is the nutritional labeling program

already in operation.

With regard to fresh fruits and vegetables

and red meat, nutritional factors apparently

cannot be combined with sensory factors and

serve as basis for retail grades. Evidence in

this report indicates that the nutritional content of fresh products is quite similar within

any particular commodity. For example, apples, regardless of variety, tend to have similar

nutritional characteristics, as does round steak

regardless of cattle breed. This means that

nutrition information cannot serve as a

meaningful basis for sorting (therefore grading) various products within a commodity

category.

There are a number of options for increasing the flow of nutritional information to consumers, the intent being that such information

would facilitate food purchase decisions. The

range is wide. Some options deal directly with

grade criteria changes, while others deal with

increasing consumer nutrition education.

CONGRESSIONAL OPTIONS

The following are some of the options ● Congress could support or provide incenavailable to Congress for the grade criteria tives for education programs by Governissue: ment agencies or the private sector to in-

. Congress could direct the Department of form consumers about:

Agriculture (USDA) to facilitate the adop- ITranSCriptS from food grading workshop conducted

tion of a voluntary/mandatory nutritional by OTA on July 28-29, 1976 (hereafter referred to as

labeling program for fresh retail meat cuts. Workshop vol.—). Workshop, vol. I, pp. 136–137.

5
●

●

1.

2.

The nutrition of fresh fruits and vegetable products and also the differences in

nutritive content from one commodity to

another; and

The nutrition of processed food products

and interpretation and use of the current

nutritional labeling program and/or

grades for processed food products.

Congress could direct the Food and Drug

Administration (FDA) to disseminate information to consumers concerning those

programs currently in operation that assure

the safety, wholesomeness, labeling, and

identity of most manufactured or processed

food products.

Congress could direct USDA to administer a

standard labeling and variety identification

program for fresh fruits and vegetables that

are sold in retail packages.

. Congress could direct USDA to institute a

voluntary/mandatory program of retail

meat grades where grade criteria are based

on yield per pound or per serving. Such a

program should not be instituted, however,

prior to a program that would assure

uniform identification of retail meat cuts.

● Since net benefit of any retail grade scheme

for meat is highly dependent upon the type

of meat distribution system in existence,

committees of Congress with jurisdictional

authority could examine the potential for

improving the distribution costs of meat

from various systems (such as conventional

compared to centralized frozen) in oversight hearings. Such hearings could produce further evidence on the potential impacts and benefits of retail grade alternatives for meat.
ISSUE II: VOLUNTARY OR MANDATORY SYSTEM

There are three basic systems that might be

used for grading under the volun -

tary or mandatory issue:

Private Voluntary System

With a private system, the development of

standards for grading and the adoption of

those standards are done by industry and

used voluntarily.

Voluntary/Mandatory System

Under a voluntary/mandatory system,

Federal Government grades are established.

Any business firm that elects to enroll in the

Federal program would be required to adopt

the established grades.

Mandatory System

The mandatory system would establish the

Federal grades, and use of these grades would

be required by law.

A private voluntary system would be of little use as an information aid in purchase decisions as it would not be expected to have wide

industry adoption. From a consumer information viewpoint, the only beneficial grading

system would be either an improved voluntary/mandatory system or a mandatory one.

Federal grade systems for all food products

are currently voluntary/mandatory, and the

relative advantages and disadvantages of this

system-as opposed to a completely mandatory grading system-are as follows:

Mandatory grading of food would be more

costly than the current voluntary/mandatory

system. This means that for a mandatory

system to produce a positive net consumer

benefit, the benefits from a mandatory system

must exceed those of a voluntary/mandatory

system.

For processed foods, OTA’s analysis indicated that a mandatory system probably

would not produce a positive net consumer

benefit. Brand names partially substitute for

retail grades. They have allowed society to exercise its perception of quality by selection of

one brand name over another. A mandatory

grading system would largely duplicate the

information brand names currently provide

consumers.

If retail grades were mandatory for processed foods, an inevitable consequence would

be to suppress differentiation or variability

and evolution of product characteristics. Thus,

if society looks at

to institute retail

the choice of whether or not

grades for processed foods,

an important implication of that choice is

what products should be stabilized in terms of

characteristics, and what products should be

permitted to continue to evolve.

There is no concentration point of firms in

the handling of fresh fruits and vegetables

relative to other product-marketing channels.

This means no economical point exists in the

fresh fruits and vegetables marketing channel

for interception of large quantities of a product for the purpose of mandatory grading. A

strictly mandatory system of grades,

therefore, could be extremely expensive

because the industry is structurally dispersed.

A mandatory system probably would not produce a positive net benefit to consumers, since

mandatory grading costs would be substantial

and the additional information provided

would likely be of marginal benefit to most

consumer purchase decisions.

The current fresh red meat marketing channel, unlike fresh fruits and vegetables, does

have points of relative concentration of firms.

Given this structure, mandatory retail grading

is viewed as potentially more feasible.

However, net consumer benefit from mandatory grading as opposed to the current

voluntary/mandatory system depends on the

type of retail grading system implemented

and on the type of distribution system for red

meat assumed prior to net-benefit calculations.

7
Three possible systems for red meat grading

are analyzed in this report:

1)

2)

3)

yield per pound or per serving;

uniform mandatory retail cut identity

labeling; and

a combination of current grades with the

There is however, a direct relationship between the type of meat distribution system

and the cost of any mandatory retail grading

system. This means that net consumer benefit

varies by both the type of grading base and the

type of distribution system. Further detailed

analysis, beyond the scope of this report, is

necessary before net consumer benefit from

any combination of grading and distribution

other two systems. systems can be determined.

CONGRESSIONAL OPTIONS

The following are some of the options

available to Congress for the voluntary or

mandatory grading issue:

● Congress could make grading mandatory:

— for processed foods, designation of current grades could be made mandatory

on retail packages for selected products.

— for fresh fruits and vegetables, the current wholesale grade criteria could be

used and designation of the grade could

be made mandatory at retail.

— for fresh red meat, the current carcassgrade criteria could be used, and the

grade could be designated on all individual retail meat packages.

Congress could make grade designations at

retail mandatory for any food product

which is currently graded on a voluntary/mandatory basis. That is, if the product

is graded, then the retail package must display that grade.

Congress could provide incentives for

widespread adoption by industry of the

current voluntary/mandatory system for

each major product category. Incentives

could include a tax break for business firms

that adopt the program and/or a direct subsidy to defray the initial cost of the

program.
ISSUE Ill: GRADE DESIGNATION OR NOMENCLATURE

Confusing grade designation or nomenclature is a major problem for consumers

in both fresh fruits and vegetables and processed foods. Uniform, easily understood terminology across grades is a basic need to aid

consumers in making food purchase decisions.

There are two basic concerns regarding

uniform nomenclature, One is the trade-off

between meaningfulness and simplicity in terminology. That is, extremely simple designation for grades (such as A, B, C) impart no

meaning in terms of grade criteria. More

descriptive grades (such as young, tender, or

extra fancy) are more complicated to use but

may be more meaningful.

A second concern is that nearly all conceivable grade designations imply rank. One

objection to the implication of rank is that a

second- or third-grade product may in fact be

superior to the top grade, depending on its use

or relative price. If simple grade designations

were uniformly adopted, such implications of

rank might mislead consumers or impart incorrect information to them.

There are unsettled questions regarding the

optimum terminology for grades of fresh

fruits and vegetables and processed foods.

However, no reasons have been found for not

instituting uniform designations for these

products, regardless of the terminology

chosen.

The terminology currently used for fresh

red meat is uniform for all such products.

However, one of the more significant consumer information needs is standard identification of individual retail meat cuts and

standardized retail package labels. Voluntary

identification and labeling standards devised

by the National Livestock and Meat Board, exist for fresh beef. This voluntary program has

been adopted as law in some States.

CONGRESSIONAL OPTIONS

The following are some of the options

available to Congress for the grade designation issue:

● Congress could standardize nomenclature .

for the first, second, third, and fourth

grades for both processed foods and fresh

fruits and vegetables, so they would be consistent from one product to another.

●

● Congress could direct USDA to immediately

adopt the new simplified grade nomenclature for fresh fruits and vegetables it

announced in July 1976. This would mean

that adoption of this program would not remain at the discretion of growers or processors of these commodities.

Congress could direct USDA to administer a

standard labeling and variety identification

program for fresh fruits and vegetables sold

in retail packages.

Congress could make the current voluntary

program on meat identification standards

mandatory for all retail meat cuts. This

would 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 more groups based upon criteria selected for sorting. Grades cannot be used for sorting across products—i.e., apples versus pears--only

within a product—i.e., one apple from another apple. The purpose of grades

is to facilitate exchange of products between trading partners by providing

information about the product. Assignment of a grade to any food product

requires some base criteria, as the grade itself imparts the criteria used in its

determination.

Both industry and consumers have a stake in whether food products are

graded, what criteria are chosen for the grade if a product is graded, how the

information is conveyed, and where the grading is done in the vast food distribution system from farmer to consumer (see figure 1). Such issues have

recently surfaced as congressional concerns. This report details the issues

surrounding retail food grading and identifies congressional options with

respect to the issues.

To assist in making purchase decisions, consumers need a variety of information on wholesomeness, safety, nutrition, ingredients, price, weight,

and sensory characteristics. Grading can be viewed as a mechanism for providing information on any one or a combination of these items.

Perhaps the three most essential information requirements for consumers are:

● the wholesomeness and safety of a product;

● the nutritional value of a product; and

● the product’s sensory characteristics.

To view the possible role Federal food grades could play in providing information in these areas, it is necessary to review current Federal programs

which interact with these consumer information requirements (table 1).

Wholesomeness and Safety

For wholesomeness and safety of a product,

there are numerous programs providing that

assurance to consumers. * For example,

Federal and State mandatory inspection

*Wholesomeness refers to defects in food products

which are not a health hazard to consumers. Safety

means that the product will possess no defects or impurities which present a health hazard.

programs apply to fresh meat and poultry. In

fresh fruits and vegetables the Environmental

Protection Agency (EPA) established

tolerance levels for insecticides and the Food

and Drug Administration (FDA) monitors

these levels and levels of any other additives.

In processed food products, good manufacturing practice regulations are written and en13
Figure 1.

Flow of Food From Farm to Consumer

FARM ORIGIN

. . ●

ASSEMBLERS, BROKERS, ETC.

I P FOOD MANUFACTURERS

AND PROCESSORS I

ASSEMBLERS

A

EXPORTS

GOV'T & IND. -- —— -- - —----— -

I

WHOLESALERS, BROKERS,

CHAIN WAREHOUSES

-=———l—=————l -

GROCERY STORES SPECIALTY FOOD

STORES

1

II INSTITUTIONAL

MARKET MILITARY

CONSUMERS I
Table 1– Availability of Consumer Information for Food

Information or Service Currently Provided by Major

Food Categories

Consumer

Information Fresh Meat Fresh Fruits Processed Food

Requirements & Poultry & Vegetables Products

Wholesomeness/ USDA and/or EPA – Establishes

Safety State Inspection tolerance levels

of insecticides

FDA– Monitors

insecticide level

Nutrition

Sensory USDA Grades** USDA Grades

Characteristics

FDA* –Good manufacturing practices.

Standards of identity.

Nutritional

labeling

Meat – USDA

All 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) and

Commerce (DOC). Thus, wholesomeness and

safety are adequately regulated in the major

food categories. Each of these programs is discussed in detail in following sections of this

report.

Nutrition Information

Nutrition information is conveyed to consumers through nutritional labeling of processed foods, such as canned or frozen products. This information includes the amount of

protein, fat, carbohydrates, and calories per

serving. In addition, the product’s percentage

of U.S. Recommended Daily Allowance

(RDA) for important minerals and vitamins is

also included on the package label (see figure

2) . Nutritional labeling is voluntary/mandatory; that is, a manufacturer does

not have to put nutritional information on the

product, but if nutritional labeling is used, it

must conform to Federal standards for such

labeling. However, when a manufacturer

makes a nutritional claim for its product or

adds nutrients, nutritional labeling becomes

mandatory in most cases.

The use of nutritional labeling currently applies only to processed foods. FDA administers the program for all

except processed meat and

processed foods

poultry, which

come under the jurisdiction of USDA. For

fresh meat and poultry, and fresh fruits and

vegetables, there are currently no Federal

nutritional labeling standards. Even though

the nutritional labeling program exists, there

is still concern among Government officials

about nutrition education. As Dr. Robert

Angelotti, Associate Director for Compliance,

Bureau of Foods, FDA, stated:

There are segments of our population that eat

improperly, because there is socioeconomic

pressure on them no doubt, but nevertheless

they eat improperly. There are other segments of

our population that eat improperly, but they do

so willfully and by choice and they can afford it.

Nevertheless, we (Government) should be

reaching both kinds of people and trying to

teach 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 labeling

system was an attempt to teach good nutritional

habits to people. The nutritional labeling in

operation today is, in part, 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 Administration. They are based on body needs for most

healthy adults.

Set at generous levels, they provide a considerable

margin of safety for most people above minimum body

needs for most nutrients.

Nutrition labels list U.S. RDAs by percentage per

serving of food.

For example, if the nutrition label says “Vitamin A10,” that means a serving of the food contains 10 percent

of the U.S. RDA for Vitamin A.

U.S. RDAs replace the outdated “Minimum Daily

Requirements” (MDR).

U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Public Health Service, Food and Drug Administration

5600 Fishers Lane, Rockville, Maryland 20852

U.S. RECOMMENDED DAILY ALLOWANCES (U.S. RDA)

For adults and children over 4 years old

NUTRIENTS AMOUNTS

Protein 45 or 65 grams**

Vitamin A 5,000 International Units

Vitamin C (ascorbic acid) 60 milligrams

Thiamine (vitamin B1) 1 5 milligrams

Riboflavin (vitamin B2) 1 7 milligrams

20 milligrams

Calcium 1 0 gram

Iron 18 milligrams

Vitamin D 400 International Units

Vitamin E 30 International Units

Vitamin B6 20 milligrams

Folic acid (folacln) O 4 milligram

Vitamin B12 6 micrograms

Phosphorus 1 0 gram

Iodine 150 micrograms

Magnesium 400 milligrams

Zinc 15 milligrams

Copper 2 milligrams

O 3 milligram

Pantothenic 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 nutritional information,

but it gives it to you in a way that you eventually

come to understand that there is a 100 percent

value for some Recommended Daily Allowance

(RDA) figure. It is clear you should be striving to

meet that RDA requirement through your total

diet throughout the day.2

Sensory Characteristics

Federal food grades presently provide information about a food product’s sensory or

quality characteristics, such as color,

blemishes, taste, and/or flavor. This information is presently available for all the major

food categories.

Federal grade standards for agricultural

products evolved in the 1920’s as a mechanism to facilitate wholesale transactions for

the food industry. Despite the original intent,

the question arises as to whom grades should

serve: consumers, industry, or both. Present

Federal food grades impart little information

to the consumer for most commodities. If

Federal grades are to have a potential consumer-information role, it becomes necessary

to determine the kind of information useful to

consumers and the mechanism necessary to

convey this information.

Given this situation, this report explores the

potential informational role of Federal food

grades for consumers. For example, should

Federal food grades continue to provide information on sensory differences of food products as they do now but perhaps have uniform

nomenclature and be used more extensively at

retail? Should Federal food grades provide

information on a product’s nutritional value?

What other kinds of information could

Federal food grades convey to consumers?

Z1bid., pp. 49-50.

16
PURPOSE

This assessment analyzes alternative pur- 2. Reviews current programs addressing

poses food grades could serve in providing the these issues; and

consumer with more information in the

marketplace. More specifically, this report: 3. Analyzes the potential role and impact of

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

present grading program for food;

METHODOLOGY

To accomplish these purposes, a staff background document was prepared identifying

the issues in the present grading program.

Issues were determined via interviews with

representative groups affected by grades—

Government, industry, consumers. Second, an

advisory group workshop was convened to

review the background document and to

further elaborate on the issues. The advisory

groups consisted of a broad and balanced

representation of affected groups including

food processors, consumers, researchers, and

Government regulatory agencies (appendix

c).

The advisory group convened for a 2-day

conference in July 1976. The group addressed

themselves to the staff background document

and to a list of issues and potential implications distributed prior to the workshop. The

first day of the workshop the group met as a

whole to discuss and elaborate on the issues in

general. The second day the group divided

into three working groups representing the

processed foods, fresh fruits and vegetables,

and fresh red meat areas. In each group the

participants elaborated on the issues and implications of retail food grading for that particular food category. This report is thus a

combination of the staff background document and the results of the workshop.

.578 0- 77 - 4 17
Part Ill

HISTORICAL DEVELOPMENT
Part Ill

Historical Development

The first official Federal food grade standards were established for

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

the development and use of standards as part of producing the food needed

for the military and U.S. allies. Although military needs were the major impetus for establishing a grading system, it was intended that the civilian food

market would benefit too. The Government hoped the grading system

would encourage farmers to grow higher quality produce, reasoning that

since high quality food would sell at higher prices, the farmer would receive

more for what he produced and therefore would be persuaded to grow better quality food.

The primary reason for grades was to make wholesale transactions simple and more efficient, thereby cutting food costs to consumers in the long

run. 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 thus

the consumer would benefit from wholesale grades by paying lower prices

for food.

As the years went by, the USDA established wholesale grades for

specific food products at the request of the food industry. In 1946, the

Agricultural Marketing Act gave USDA the authority for the standardization 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 authorized (h) to inspect, certify, and identify the class, quality, quantity, and condition of agricultural products when shipped or

received in interstate commerce. . , to the end that agricultural products maybe marketed

to the best advantage, that trading may be facilitated, and that consumers may be able to

obtain the quality product which they desire . . . .

As a result of this Act and growing congressional pressure, a memorandum was released by the Secretary of Agriculture on November 2, 1953,

establishing the Agricultural Marketing Service (AMS) and placing the

grading system required by the 1946 Act under its jurisdiction, where it has

remained until recently. * The AMS administrator reported to the Assistant

Secretary for Marketing and Consumer Services. AMS was organized into

four major food divisions: dairy, fruits and vegetables, poultry, and livestock.

Other divisions within AMS handled cotton and cottonseed, grain, and tobacco grading, areas which do not enter into this discussion as they are commodity rather than food-grading programs. In- 1977, the food grading functions were shifted to USDA’s Food Safety and Quality Service. Figure 3

depicts a proposed organizational structure of this new agency.

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

21
Figure 3.

PrOpa$qd o ● I s-m of USRA’S

Fowi ad QUdity service

I SECRETARY OF AGRICULTURE I

I

DEPUTY

SECRETARY OF AGRICULTURE I

11111 1

OTHER I m ASSISTANT SECRETARIES ●

ASSISTANT SECRETARY FOR

FOOD & CONSUMER AFFAIRS

FOOD SAFETY & QUALITY SERVICE FOOD & NUTRITION SERVICE

ADMINISTRATOR ADMINISTRATOR

9

h

DEPUTY ADMINISTRATOR

,

COMMODITY SERVICES

t

F&D

DIV.

●

*

*

MEAT

DIV.

●

POULTRY

DAIRY

DIV.

. ●

I 1 ?

DEPUTY ADMINISTRATOR DEPUTY ADMINISTRATOR

MEAT & POULTRY INSPECTION MANAGEMENT SERVICES

● *

Grade Standards

Grading/Acceptance

Food Purchasing

Grade Standards

Grading/Acceptance

Food Purchasing

Grade Standards

Grading/Acceptance

Egg Products Inspection

Food Purchasing

SOURCE: USDA, AMS Dfficeof 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 the

major food categories. The current grading program administered by AMS

of USDA is voluntary/mandatory. There are problems with the current

Federal food-grading program, among them confusing nomenclature for

grades and a general lack of useful information conveyed by them to consumers.

The present confusion is a result of over 50 years of USDA allowing industry considerable latitude in deciding the grade nomenclature to be used

so that there would be some degree of standardization. The reason for this

latitude 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 grade

designations for their products. Because different industries have differing

concerns and requirements (or at least perceive them differently), the result

is the present diversity of grades. USDA views this as an inherent problem of

the current voluntary/mandatory system,1 and therefore appears to give industry most of what it wants to have at least some degree of participation.

USDA indicates that, because some products are naturally more variable than others, it

is necessary to have more grades for some

products than for others. Quality, in general,

refers to the usefulness, desirability, and value

of a product—its marketability—but the precise definition of quality depends on the commodity. 2 Certain general characteristics, both

objective and subjective, are used to determine

a product’s quality. Some of these characteristics are color, uniformity, flavor,

blemishes (if applicable), size, texture, and

maturity. Most are sensory judgments, but an

increasing number of objective (measured by

instrument) standards are used when they are

economically feasible.

The four AMS divisions manage Federal

marketing and grading services for their parlusDA Pamphlet. “USDA Grade Standards for Food,

How They Are Developed and Used,” p. 9, August 1974.

21bid., p. 5.

ticular food product. Each division has its own

grading standards and nomenclature,

different not only between the divisions but

also within them (table 2).

Within the Dairy Division, for example,

butter is graded and has the grade printed on

the retail package. Flavor, aroma, texture, and

the quality of the cream from which it is made

are some of the criteria in grading butter (see

figure 4).

According to the USDA “How To Buy”

series for fresh fruits and vegetables, the top

grades for fresh fruits and vegetables are

usually either U.S. Fancy or U.S. No. 1.

However, another pamphlet by the AMS Fruit

and 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 vegetables

that are graded. This pamphlet also indicates

that other grade names—U.S. Extra No. 1, U.S.

Extra Fancy, and U.S. Combination-are used

25

91-578 0 - 77 - 5
Table 2–Nomenclature for Selected USDA Food Grades

Nomenclature for

AMS Food

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

DAIRY Butter

Cheddar Cheese

Instant Nonfat

Dry Milk

U.S. Grade AA

U.S. Grade AA

“U. S. Extra

Grade”

U.S. Grade A

U.S. Grade A

U.S. Grade B

FRUITS AND

VEGETABLES

Fresh: Cantaloupes

Cucumbers

Peas

Potatoes

Watermelons

U.S. Fancy

U.S. Fancy

U.S. Fancy

U.S. Extra No. 1

U.S. No. 1

U.S. No. 1

U.S. Extra No. 1

U.S. No. 1

u. S. No. 1

U.S. Commercial

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

U.S. No. 1

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

U.S. No. 2

Grade C or Substandard

Standard or cull

Grade C or Substandard

Standard or cull

Processed: Fruits Grade A or

Fancy

Grade A or

Fancy

Grade B or

Choice

Grade B or

Extra Standard

Vegetables

POULTRY Poultry

Eggs

U.S. Grade A

U.S. Grade AA

or Extra Fancy

U.S. Grade B

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

LIVESTOCK Beef USDA Prime USDA Choice 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 Butter

One way to be assured of high quality butter is

to look for the USDA grade shield on the package. The grade shield (AA, A, or B) means that

the butter has been tested and graded by experienced government graders. Butter graders

judge quality by U.S. grade standards that set

forth the requirements for each grade. They also

test the keeping quality of butter,

● has a pleasing fIavor;

● is made from fresh cream;

● is fairly smooth in texture;

● rates close to the top grade.

U.S. Grade B Butter:

U.S. Grade AA Butter:

● may have a slightly acid flavor;

● generally is made from selected sour cream;

● is readiIy acceptable to many consumers.

● has delicate sweet flavor, with a fine highly

pleasing aroma;

● is made from high-quality fresh sweet cream;

● has a smooth, creamy texture with good

spreadability;

● has salt completely dissolved and blended in

just the right amount.

SOURCE U S Department of Agriculture

26
for different food products in this particular

divisions (See figure 5.)

Considerable diversity exists for fresh fruits

and vegetables, and the extensive variety of

grade nomenclature and criteria is illustrated

in the Code of Federal Regulations, Title VII,

Parts 46-57. Criteria for the different grades of

a product are usually color, size, shape ,

maturity, and the number of defects; but the

lower grades may be just as nutritious as the

higher grades. The difference is mainly in appearance, taste, and preference.4

Three different conditions exist for grade

nomenclature of fresh fruits and vegetables

(table 3). For some fruits and vegetables, the

nomenclature applies for every State in which

the food commodity grows. For grapefruit

and oranges, the nomenclature varies depending on the State in which the product is

grown. Finally, in the case of Washington apples, a State grade applies rather than a USDA

grade. The latter condition is possible because

Federal grades are voluntary.

During 1976, USDA announced new

uniform nomenclature for fresh fruits and

vegetables. However, these changes will be

implemented primarily at the request of industry. The details of this new uniform nomenclature effort by USDA are discussed in

the fresh fruit and vegetable section of this

report.

Processed fruits and vegetables are those

frozen, canned, or otherwise preserved

through processing. The nomenclature used

when products are graded after processing is

either a letter or an alternative name designation, Processed grades tend to be more

uniform than those for fresh fruits and vegetables. Criteria for these grades are color,

uniformity of size or shape, flavor, texture,

maturity, and the number of defects (see

figure 6).5 While grading criteria for processed

3USDA Pamphlet. “Official Grade Standards and Inspection for Fresh Fruits and Vegetables, ” December

1963, p. 3.

4usDA Pamphlet. “How To Use Grades in Buying

Food,” September 1971.

5usDA Pamphlet. “How To Buy Canned and Frozen

Vegetables,” April 1969.

fruits and vegetables are based mostly on

product appearance, grade designations are

still diverse.

Figure 5.

Fresh Fruits and Vegetables

Although most fresh fruits

and vegetables are sold at

wholesale on the basis of U. S.

grades, not many are marked

with the grade in the grocery

store.

The typical range of grades

for 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 chief

grade for most fruits and vegetables. U.S. Fancy

means premium quality–only a few fruits and

vegetables are packed in this grade.

The grades are based on the product’s color,

shape, maturity, and freedom from defects. The

lower grades are just as nutritious as the higher

grades. The difference is mainly in appearance,

waste, and preference.

Some packaged produce is marked with the

U.S. grade name. When the grade name is shown

in this shield, it means the product was packed

under the supervision of an official Government

grader,

SOURCE U S Department of Agriculture

In the AMS Poultry Division, the difference

between A and B for poultry is based on appearance, finish, and meatiness rather than

tenderness. 6 However, age of the bird, as indicated by the class, determines tenderness; and

this information must, under law, be stated on

labels for poultry. The grades of eggs, on the

other hand, are differentiated by appearance

(height) of the yolk and white portion of the

cracked egg as it lies on a flat surface. p

The Livestock Division uses names rather

than letter grades (see figure 7). These grades

are intended to reflect differences in tender6w13A pamphlet. “How To Buy Poultry,” July 1968.

TUSDA Pamphlet. “How To Buy Eggs,” January 1968.

27
Table 3.

Nomenclature for Selected Federal and State Grades for Fruits and Vegetables

Nomenclature for

Product Top Grade Second Grade Third Grade Fourth Grade

Apples U.S. Extra Fancy U.S. Fancy U.S. No. 1 U.S. Utility

Apples1 Washington Extra Washington Fancy

(Washington) Fancy

Grapefruit U.S. Fancy U.S. No. 1; U.S. No. 1 Bright; and U.S. No. 1 Bronze

(Texas)

Grapefruit U.S. Fancy U.S. No. 1 U.S. No. 2 U.S. Combination

(Arizona &

California)

Grapefruit U.S. Fancy U.S. No. 1; U.S. No. 1 Bright; and U.S. No. 1 Golden

(Florida)

Onions U.S. No. 1 U.S. Combination U.S. No. 2

Oranges U.S. Fancy U.S. No. 1; U.S. No. 1 Bright; and U.S. No. 1 Bronze

(Texas)

Oranges U.S. Fancy U.S. No. 1 U.S. Combination U.S. No. 2

(Arizona &

California)

Oranges U. S. Fancy U.S. No. 1 Bright; U. S. No. 1; and U. S. No. 1 Golden

(Florida)

Pears U.S. No. 1 U. S. Combination U.S. No. 2

(Summer & Fall)

Pears U.S. Extra No. 1 U.S. No. 1 U. S. Combination U.S. No. 2

(Winter)

Tomatoes U.S. No. 1 U.S. Combination U.S. No. 2 U.S. No. 3

1 These are grades established by the State of Washington, not USDA.

SOURCE: Compiled from data furnished by Agricultural Marketing Service, USDA.

28
U.S. Grade A

or

Fancy

U.S. Grade B

Extra Standard

U.S. Grade C

Standard

Packed under

continuous inspection of the

U.S. Department of Agriculture

Figure 6.

Grading of Processed Fruits and Vegetables

Grade A vegetables are carefully

selected for color, tenderness,

and freedom from blemishes.

They are the most tender, succulent, and flavorful vegetables

produced.

Grade B vegetables are of excelIent quality but not quite so

well selected for color and tenderness as Grade A. They are

usually slightIy more mature and

therefore have a slightly different taste than the more succulent vegetables in Grade A.

Grade C vegetables are not so

uniform in color and flavor as

vegetables in the higher grades

and they are usually more mature. They are a thrifty buy when

appearance is not too important

–for instance, if you’re using

the vegetables as an ingredient

in soup or souffle.

This statement may be given

along with the grade name or it

may be shown by itself. It provides assurance of a wholesome

product of at least minimum

quality.

The grade names and the statement, “Packed

under continuous inspection of the U. S. Department of Agriculture, ” may also appear within

shields.

Use of the U.S. grade standards and inspection service is voluntary, and paid for by the user.

But most canned and frozen vegetables are

packed and priced according to their quality even

though a grade is not shown on the label. Sometimes the grade name is indicated without the

“U. S.” in front of it–for example, “Fancy” or

“Grade A.” A canned or frozen vegetable with

this designation must measure up to the quality

stated, even though it has not been officially inspected for grade.

The brand name of a frozen or canned vegetable may also bean indication of quality. Producers of nationally advertised products spend considerable effort to maintain the same quality

year after year. Unadvertised brands may also

offer an assurance of quality, often at a slightly

lower price. And many stores, particularly chainstores, carry two or more qualities under their

own name labels (private labels).

SOURCE, U. S. Department of Agriculture,

29
Figure 7.

Meat Grades Prime beef is the best and

Main grades are Prime, Choice, and Good. most expensive. Not many

There are lower grades, but you are not likely to stores sell it. Most cuts

see them marked on the meat. Some stores may graded Prime will be very

have beef marked with the Standard or Commer- tender, juicy, and fIavorful.

cial grades.

a

Choice beef is high qualiA mark like this may be ty. Steaks and roasts of this

stamped on meat. This is the grade will be quite tender

grade (Choice) you are most and juicy and have a good

fIavor.

Several kinds of meat are

graded–beef, lamb, veal, and calf–and this

shield is used on them all. Good grade beef is not as

juicy and fIavorful as Prime

The 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 less

flavorful 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 and

Choice have been the grades of beef most frequently available at retail, but recently leaner

meat has been made available under either a

house grade or USDA Good and Standard

grades. In spite of this development, Choice is

still well recognized by consumers and many

times the only grade of meat available at the

store. Though the grade designations are

uniform for beef, the terminology is considerably different from other AMS divisions.

As of February 23, 1976, revised U.S. grade

standards for beef became effective. These new

standards have four major changes: 1) all beef

carcasses graded will be graded for both

quality and yield; 2) conformation (shape of

carcass) will no longer be a factor of the

quality standard; 3) leaner beef, due to a

change in the marbling (fat) -maturity (age)

relationship for animals less than 30 months

old, will now qualify for Prime and Choice;

and 4) range of U.S. Good grade is more

restrictive than before, since the marbling requirement essentially has been increased for

this grade by elimination of conformation as a

factor. These changes are discussed in more

detail in the fresh meat section of this report.

30
USE OF CURRENT FOOD GRADES

Information on the proportion of food commodity. For example, in fresh beef all the

products graded by USDA at wholesale is beef graded at wholesale retains its grade at

available, but only rough estimates are availa- retail. However, in frozen fruits and vegetable on the proportion of food products receiv- ables, 70 percent is graded at wholesale while a

ing wholesale grades which retain their grades very negligible proportion retains the grade at

at 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 turkey, butter, eggs, and fresh

poultry, frozen fruits and vegetables, butter, beef. With these few exceptions, grade symand fresh beef. The proportion of these retain- bols at retail are infrequent.

ing the wholesale grade at retail varies by

Turkey

Chicken

Frozen Fruits

and Vegetables

Butter

Fresh Beef

Fresh Fruits

and Vegetables

Canned Fruits

and Vegetables

Eggs

Cheese

Figure 8.

Proportion of Food Products Graded at Wholesale and Retail

(Percent)

10 20 30 40 50 60 70 80 90

I

I I I I I I I I

] 75/o

0

5 4 %

5470

35%

33%

28%

6%

7070

70%

Legend

J90°0/

less than 1%

Source USDA Estimates

31
Part V 

PERSPECTIVES ON FEDERAL FOOD GRADING:

USDA, INDUSTRY, AND CONSUMERS
Part V

Perspectives on Federal Food Grading:

USDA, Industry, and Consumers

Issues surrounding the present Federal food-grading system are voluntary or mandatory grading, uniform grade nomenclature, and criteria used

for determining grades. This section provides perspectives from the U.S.

Department of Agriculture, the food processing industry, and consumers.

U.S. DEPARTMENT

USDA’s perspectives were acquired

through interviews with USDA officials, primarily AMS. The following perspectives are

drawn from statements made by those interviewed.

Purpose for Grading

Some USDA officials emphasize that grading systems were devised primarily for

wholesale use. The 1974 Yearbook of Agriculture

has a passage which notes:

They (grading services) were originally

established as an aid in wholesale trading . . . Today, most grading is still done for this purpose,

and the consumer is usually the indirect, instead

of the direct, beneficiary.1

The 1946 Agricultural Marketing Act so

mandates the system. USDA officials who

made this point were not suggesting consumers should not benefit from grading, only

that grading was established primarily to expedite food industry wholesale transactions.

However, the Agricultural Marketing Act of

1946 does not mandate that the food-grading

program serve only wholesale transactions.

The word quality is interpreted by USDA to

be a synonym for grades and the modifying

clauses are also interpreted by USDA to mean

IEleanor Ferris, “USDA Grades Can Help Out Food

Shoppers, ” 1974 Yearbook of Agriculture. U.S. Government Printing Office, 1974.

OF AGRICULTURE

wholesale transaction only. While the General

Counsel’s Office in USDA recognizes that the

wording of paragraph (h) is general and does

not restrict food grading to wholesale use,

AMS prefers a narrow interpretation.2 This

partially explains the reluctance of USDA to

modify food grades.

One USDA official maintains that the use of

grades has declined over the past few years for

several reasons: (1) Costs charged by USDA

for inspecting and grading food products have

increased; (2) A result of a 1973 General Accounting Office (GAO) report was the execution of a USDA-FDA Memorandum of Agreements. 3 Under the agreement USDA would

have informed FDA of products headed for

human consumption that did not meet

minimum standards for a grade. Some elements of the food industry apparently did not

want to deal with FDA if a product could not

meet minimum requirements for a grade,

since this might be due to failure to meet

minimum sanitation requirements as well as

minimum quality standards; (3) The Federal

Government has reduced its purchases for the

military, specifically the Army, for the School

Lunch Program, and for the Needy Persons

zMr. Richard Merryman, General Counsel’s Office,

Marketing Division, Interview.

Sprocessed Fruits and Vegetables: Potentially Adulterated

Products Need To Be Better Controlled~anitation in Some

Plants Need improvement, U.S. Government Printing

Office, February 21, 1973.

35
Program. Thus, grading no longer has significance for sales to Government it once had.

Other USDA officials feel that the food industry generally is against alteration of the

present grading system. USDA believes that

industry executives fear change because they

have no idea how the changes will affect costs

or brand share of their products at retail. Food

industry people fear losing markets. Fear of

the unknown hinders change, although industry occasionally requests changes of USDA if

problems cannot otherwise be rectified.4

Mandatory Grading

USDA maintains that the cost of mandatory

grading would be high. Estimated costs for the

present voluntary grading system and for a

mandatory grading system for the same products appear in the 1975 GAO food labeling

report.* The 1974 cost estimated by USDA for

a voluntary grading system for six categories

of food products (less than 100 percent of the

products in the six categories were graded)

was approximately $183 million. If the grading system became mandatory (100 percent

graded for the same six categories), USDA

estimated cost would increase by about $327

million to a total of $510 millions Inference is

that the cost of mandatory grading for all

products would be considerably above $510

million. USDA’s belief that cost becomes a significant factor during this time of economic

difficulty may well be correct. However, at

this time there is little documentation of the

costs being discussed for mandatory grading.

Grading Designation or Nomenclature

The Department’s official position on

uniform grade nomenclature is expressed in

its comments on GAO’s food labeling report,

sent to the Senate and House Committees on

Government Operations in 1975. USDA’s

position is that it “continues to support the

goal of reducing consumer confusion regarding the use of grade nomenclature, ” but it feels

ADr. Clark Burbee, Project Leader, Consumer Interests, Interview.

sFoOd Labeling: Goals, Shortcomings, and proposed

Changes, U.S. General Accounting Office, p. 122, January

29, 1975.

*These estimates were supplied by USDA with no

supporting data and were not analyzed for their accuracy by GAO.

there are “too many quality variables among

different classes of food products to enable a

single system to cover all food products.” Instead, USDA prefers to develop “uniform

grade designations within several groups of

similar products. ”

For example, with the position advocated

by USDA, the Livestock Division of AMS

would have uniform grade designations such

as those presently used. However, fresh fruits

and vegetables would have a different nomenclature but uniform within that commodity category. There already has been some

movement in this direction with the previously mentioned proposal for fresh fruits

and vegetables published in the October 6,

1975, Federal Register, Mr. Floyd F. Hedlund,

Director of the Fruits and Vegetable Division

of AMS, feels, however, that because of food

industry resistance to the new grades, it might

take up to 10 years for voluntary use by a significant number of firms.

Program Reform

While the Department supports some

reform of its grading program, the Office of

the Special Assistant to the Secretary of

Agriculture for Consumer Affairs under the

Ford Administration favored major reforms

of the program. Specifically, this office wanted

mandatory retail grading with uniform nomenclature for all four AMS divisions presently grading food. The reasoning behind

this position was that a grading system aiding

the consumer should benefit the marketing

system as a whole, from farmer to consumer.

The office also felt that if a new grading

system did come into being, considerable

effort would be needed to educate consumers

and that such education should be a requirement in implementing any new grading

system.6

Congress is looked upon by some USDA

officials as the only possible and proper

branch of Government to change the present

grading structure. Most USDA officials feel

that without congressional action grading

reform in the manner which consumer groups

prefer would be unlikely.

bMr. Andrew Gasparich, Assistant to the Special

Assistant to the Secretary of Agriculture for Consumer

Affairs, Interview.

36
FOOD PROCESSING INDUSTRY

The National Canners Association represents processors. The Canners have a membership of 500 firms that process 85 to 90 percent of all canned foods. Also, the National

Association of Food Chains (NAFC) stated in

interviews that it supported the position the

Canners advocate. Moreover, NAFC represents 200 companies in a country where 50

percent of the value of food for at-home consumption is sold in chain supermarkets. Since

the Canners Association is vehemently opposed to any grade labeling at retail, the

weight of the food processing industry’s opposition to increased food grading at retail is

apparent.

Grade Criteria

At present, many food processors maintain

that they are not using the USDA grading

system at either retail or wholesale. Del Monte

and General Foods, major food companies in

canning and packaging of fruits “and vegetables, explained that they have their own food

quality standards which may differ from the

USDA grades. They said their standards of

quality were more rigorous than USDA standards. General Foods asserts that this is one

reason that Birdseye products, for example,

command a premium price. Some firms maintain they have their own quality specifications

for raw products in their contractual arrangement, have mechanisms different from

USDA’s to measure raw product quality, and

have stringent quality control requirements.

They also admit that in some cases they do use

USDA grades.

USDA grades are not used by some firms

because they prefer different criteria. As Mr.

Angelotti stated:

Major food manufacturers may not put the

official (USDA) grade on any of their products.

They have their own grade standards, and it is

their perception of quality which they think the

consumer wants or is telling them and they

build that into their product. They have their

own standards which they apply to their product .7

WVorkshop, VO1. 1, p. 97.

One company, for instance, argues that

though canned Freestone peaches lack

uniform appearance, many consumers prefer

their taste to other canned peaches.

An objective test of taste, as a criterion, was

attempted at Cornell University Agricultural

Station (Paper No. 1, Merchandising Ex -

periences, September 1959). After USDA inspectors were presented with eight different

applesauce to grade, 652 people tasted all

eight applesauce and registered their

preferences. The results of the study

demonstrated that most people preferred the

two applesauce graded USDA Grade C.8 This

study supports arguments of food processors.

Industry fears the average consumer will interpret “A” or other higher sounding grade to

mean that product flavor is “best” when that

may not be true.

Historically, food-processing industry opposition to grading at retail dates back at least

to 1935. In hearings that year before a subcommittee of the Senate Commerce Committee, Henry Stude, representing the American

Bakers Association, testified against portions

of a bill that was to become the Federal Food,

Drug, and Cosmetic Act of 1938, He said: “We

feel that it is . . . impracticable and unwise to

standardize the taste, likes, and dislikes of the

consuming public. The result of such an attempt to define standards of quality and identity would be to bring all food makers down to

a common denominator. . . .“ Inference is that

the basis for quality is taste. Mr. Stude also

testified that consumers could distinguish by

themselves what is good quality.9

Mandatory Grading

Some members of the food industry still

maintain that mandatory grading may reduce

competition by discouraging introduction of

superior products. They insist that food

manufacturers would have no incentive to imgOdonna Mathews, Grade Labeling, June 14-August

13, 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 the

highest grade. They believe standards could

lack flexibility needed to allow industry to

seek improvements in growing, processing,

packaging, or transportation.10

The main food industry objection to mandatory grading is its potential cost. Processors

feel that small canning and packaging operations might be unable to meet mandatory inspection and grading costs and be forced to

shut down. Larger plants, better able to absorb

costs because of lower per unit grading costs,

could continue to operate. Although small

canning operations are the numerical majority

of canning operations in this country, their

total output is less than that of the eight

largest canning firms. In 1972, of 1,201 canning firms, the eight largest accounted for approximately 50 percent of the Nation’s canning production.11 Industry maintains that

many food chains depend on these small

manufacturers to process their private labels

and that the food distribution system would

be hurt by shut downs of small manufacturers.12 In general, the existence of numerous

Federal agencies already regulating food processors in terms of labeling, safety, pollution,

backhauling, pesticides, advertising, and

energy results in a total cost that helps to drive

out small processors.

This position is supported by research completed by C. R. Handy and D. I. Padberg. They

found that very large retail chains have their

private label stock processed by relatively

small firms and that major brands--e.g., Del

Monte-are sold primarily through medium

sized and small retailers. These relatively

small firm processors have little or no marketing capability. If they have a brand, it means

little to consumers. Brand development costs

are exorbitant for their small volume, and private label programs enable them to specialize

in 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 Manufactures Report, Concentration Ratios, Table 4.

IZRichard Dougherty, Assistant Vice President, National Canners Association, Interview.

lqMr. C.R. Handy, and Dr. D. I. Padberg, “A Model of

Competitive Behavior in Food Industries,” American

journal of Agricultural Economics, May 1971.

While the cost of mandatory grade labeling

is a legitimate concern of the food industry, a

recent Grocery Manufacturers of America

(GMA) survey (March 6, 1975) concluded that

$8.4 billion worth of food products would

have nutritional labeling by the end of 1975.

The survey indicated that for the $8.4 billion

the initial average cost of putting the information on labels per dollar of sales is .004 cents

and that the average continuing cost of nutrition labeling is .00016 cents per dollar of

sales. 14 One food industry objection to nutritional labeling was its potential high costs.

GMA’s survey would indicate that industry’s

concern for nutritional labeling costs was

overstated, at least for a voluntary program

which currently operates for nutritional labeling. Thus, manufacturers’ cost concerns

regarding mandatory grading could be

similarly overstated.

Arguments about costs hinge on

cost/benefit ratios. Some food industry

officials interviewed believe consumer benefit

from mandatory grading would not be worth

costs incurred by the consumer. Food industry position on cost-benefit is based on the

following: 15

(a)

(b)

The American consumer is already buying high quality foods at reasonable

prices; and the quality and variety of

this food is the best in the world.

Quality of food is high because industry

is regulating itself. The competitive

marketplace demands that a given company produce quality food, or the consumer will be dissatisfied and the firm

will lose business.

Others would reply that brand names—i.e.,

Del Monte, Green Giant, and Birdseye--serve

a function similar to retail grades. The argument is that brand names have proven themselves to consumers over time as providing

high quality products. Consumers can easily

identify products by their brand name and

compare quality of various brand name products. If consumers like the product, then they

would be able to identify the same quality

product for future purchases by the brand

IAPackaging and 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 at

some cost to the consumer by having to pay

promotion costs of brand names.

Industry also argues that mandatory grading could not accommodate quality

differences due to geography. They contend

that quality of produce, for example, varies

because weather and soil conditions differ in

various regions. Some industry people fear

mandatory grading could not take this into account. This argument may be valid. However,

with regard to soil differences and their effect

on product quality, FDA maintained that the

nutritional variation of produce due to soil

difference is nominal and does not ultimately

effect food nutrient differences.16 In addition

to possible soil-related natural quality variation, other factors such as the amount of

sunshine and rainfall are important. One national processor indicates that tomato juice

made from Midwest tomatoes may have an

average Vitamin C content equal to 86 percent

of that of juice packed from California

tomatoes in the same season due to differences

in sunshine. Conversely, juice from their

California tomatoes may have only one-half

the calcium of the Midwest juice due to harder

water present in some Midwest locations.

The food industry representatives interviewed believe the industry will oppose any

legislation establishing mandatory grading.

They also saw little need for compromise since

many feel that costs of a mandatory system

would prevent it from being enacted. The National Canners Association supports consumer cost evaluations in the hope that consumers will stop much of the regulatory

legislation if they understand how much it

costs.

CONSUMER INTEREST GROUPS

Grade Criteria

Consumer groups and advocates, unlike

USDA and industry officials, want mandatory

quality grading as an information tool for

consumers to compare food. Consumer representatives want grading criteria changed to

reflect nutrition and “life-giving values.17

They feel present standards, based primarily

on physical appearance, benefit the

wholesaler but not consumers. Grades, they

contend, should reveal whether the food

product is nutritious and wholesome, not

merely its appearance.

The term “quality” is loosely defined. Two

definitions exist: one is quality based on

preferences and sensory characteristics, while

another is quality based on nutrition. Consumer representatives want Federal food

grades to include the product’s nutrition

quality in addition to the already defined sensory product quality, with more emphasis on

nutrition and less on sensory factors. USDA

maintains that both nutrition and sensory

IGl%iera/ Register, January

2150.

17E]len ~wal, National

view.

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

Consumers League, Intercharacteristics cannot be included in one

standard but that nutritional labeling is a supplement to USDA grades.18

Both Ms. Ellen Zawal, National Consumers

Congress, and Ms. Ellen Haas, formerly of the

National Consumer League and presently a

staff member of the Community Nutrition Institute, are confident that the grading system

they and other consumers advocate can be

designed to satisfy everyone concerned. They

assert that the problems inherent in developing useful uniform, retail grades in which

nutrient values are a factor can be overcome.

Though consumer advocates are quite confident that their positions are well-founded,

they have presented little evidence supporting

their positions. They want nutritional value to

partially determine grades. However, they

have little or no supporting evidence that

nutritional value can be accurately measured

or that such grades can be effectively implemented on a national scale. At the same time,

consumer representatives will respond that

la Richard L. Feltner, Assistant Secretary of

Agriculture. Letter to Senator George McGovern, Chairman, Senate Select Committee on Nutrition and Human

Needs, October 8, 1975.

39
An Alternative to the

Present 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 samples of U.S. Grade A, U.S. Grade B,

and U.S. Grade C canned tomatoes

show that in the higher grades, the

color is redder and more of the tomato

portions 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 photos.
Fresh Fruits and Vegetables

Present Grade Criterion:

Present—U.S. Fancy

Florida Grapefruit—These samples of

Alternative—U.S. Grade A u.S. Fancy, U.S. No. 1, and U.S. No. 2

Florida Grapefruit show that U.S. Fancy

grapefruit has better color and shape,

smoother skin texture, and is free from

bruises 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. Department of Agriculture photos.

Fresh Red Meat

Present Grade Criterion—

Present—U.S. Prime Carcass Grade:

Alternative—U.S. Grade A

Beef Rib Steaks—These three steaks,

all the same cut, show the top three

beef grades—U.S. Prime, U.S. Choice,

and U.S. Good. As beef increases in

quality, it has more marbling (flecks of

fat within the lean), is more tender,

juicy, and flavorful.

Alternative:

Present—U.S. Choice - -

Retail Cut Grade—Based on yield per

Alternative--U.S. Grade B lb. or per serving. Yield is the trim or

amount of external fat in relation to

lean per retail cut. Grade A would have

the highest ratio of lean to fat, Grade B

the next highest, and Grade C the least.

Present—U.S. Good

Alternative—U.S. Grade C

U.S. Department of Agriculture Photos.

41
little or no evidence exists which indicates that

nutrition cannot be incorporated. In addition,

while consumer advocates are concerned

about costs of mandatory grading, their concern does not equal industry ’s. Consumer

representatives believe industry’s cost concerns are an expected position for them. In addition, they point to such products as orange

juice, eggs, and poultry which use retail

grades already without any apparent

problems.

Mandatory Grading

Some consumers’ representatives want to

make grading mandatory. They believe the

entire food industry will not use it unless the

law requires it to do so. Consumers want

retail grades to assist them in their shopping.

Interestingly, in 1933 such a system was

desired by Mrs. Harris T. Baldwin, the National Vice President of the League of Women

Voters. She expressed the hope in a hearing

before a Senate Commerce subcommittee with

the following statement: “. . . we are looking

forward to the day when there will be grade

labeling on the food products which we buy in

the stores.”19 However, one OTA panelist, Ms.

Jennifer Cross, consumerism, Consumer Action

in California, perceived no consumer sentiment for mandatory grading:

I certainly would not make grades mandatory if

they are going to add to the cost of the product,

or bog us (consumers) down in a welter of costly

regulations. I detect no consumer clamor at all

for mandatory grades at least as presently

designed. However, I believe shoppers would

use a simple national system, e.g., A, B, C, or 1, 2,

3, which gave some weighting to nutritional

values. 20

The mandatory/voluntary issue is discussed in

more depth in later sections of this report.

Grade Designation or Nomenclature

Consumer advocates want uniform nomenclature for various grades which would

cover all food categories

letter or number system

For example, either a

would be acceptable,

but it must be uniform—A, B, C, etc., or 1,2,3,

etc.,—in addition to limiting the number of

grades for each product.21

Preference for letter grades was indicated

by 43.6 percent of those consumers surveyed

in a 1970 USDA poll, while 31.6 percent

preferred words and 18.2 percent preferred

numbers .

22 Consumer groups consider

uniform grade designations necessary to

allow consumers to easily recognize and understand the grades and thus compare products.

A summarization of desires by consumer

advocates with respect to grading was given

by Ms. Cross and Mr. Rodney Leonard, consumerist, Consumer Nutrition Institute, during the OTA workshop:

. . . There is essential consumer desire for a grading system which generates information on the

nutritional quality, the economic value, and the

relative safety of the product being offered to the

consumer.

Such a system should provide at a minimum,

first, standard grade nomenclature across the

system.

Secondly, standard values within the class or

category (of food products).

And third, mandatory grades, if the processor or

retailer wants to use grading, the standard nomenclature should be stated in symbols that

communicate known values-that is, 1, 2, 3, or

A, B, and C.

The standard values within the categories are

value judgments and should be determined in a

process prior to public hearings where more

than half of those who participate do not have a

conflicting responsibility.23

zlMr. Jim Turner, Lawyer-Consumer Advocate, Interview.

1974th congress. Hearing Before a Subcommittee o f ZZUSDA Consumer Study, “Consumer Knowledge

the Senate Committee on Commerce. Vol. 276, March 2, and Use of Government Grades for Selected Food

1935, P. 38. Items,” Economic Research Service, April p. 23.

Zoworkshop, vol. I, p. 118. Zsworkshop, vol. V, pp. 86-87.

42
SUMMARY

As a result of its study, OTA has identified

the major issues surrounding the present

Federal food-grading system. These are:

●

●

●

Criteria used for grading,

Mandatory or voluntary grading,

Nomenclature used for grading.

Government agencies charged with administering the present grading program, consumer groups, and the food processing industry all have different perspectives on each

issue.

Grade Criteria

Present grade standards are disputed by

both industry and consumer groups, but for

different reasons. Both question how much

physical appearance should have to do with

grade. Both contend that factors such as color,

shape, lack of blemishes, and uniformity are

not the most important criteria for grades.

Some consumer groups view nutritional content or health value of food as the primary

quality factor on which to base grades. Industry views sensory characteristics as the consumer’s real criteria for quality and hence

grading. USDA maintains that both nutrition

and sensory quality cannot be included in one

standard and that nutritional labeling should

be a supplement to USDA grades. USDA gives

no indication that it intends to attempt reform

or modification of present grade standards to

include nutritional values.

Mandatory Grading

Because they are voluntary, USDA grades

do not appear on all products for which grading programs exist at either wholesale or

retail. Of the two marketing levels, grades are

used least at retail. Industry maintains that

grades should not be made mandatory at the

wholesale or retail level because it would

reduce competition, costs would outweigh

benefits to the consumer, and quality

difference due to geographic location could

not be taken into account. USDA does not

favor mandatory grades at either marketing

level because it maintains the program would

be too costly. Some consumer groups believe

grades are needed at retail, and the only way

grades would be used at retail is if the law requires industry to use such grades.

Grade Designation or Nomenclature

One of the principal reasons for consumer

confusion about food grades is their variety.

Consumers are perplexed by the many

different letters, numbers, and words and by

the fact that there are at least ten different

terms denoting the top grade for various food

products. USDA’s position is that it continues

to support the goal of reducing consumer confusion regarding grade nomenclature but feels

there are too many quality variables among

different classes of food products to enable a

single system to cover all food products.

USDA prefers to develop uniform grade

designations within several groups of similar

products, such as within fresh fruits and

vegetables.

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 grading

into focus. This section addresses what the role of Federal food grades could

beat the retail level. First, problems in obtaining consumer input on the subject are discussed, exemplifying the difficulties encountered in determining

exactly what kind of retail grading system consumers want. Next, because

the issues differ from one food group to another, a separate section is presented for each major food category: processed foods, fresh fruits and

vegetables, and fresh red meat. Each section covers the present status of both

Government 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-oriented

one.

OBTAINING CONSUMER INPUT FOR THE DESIGN OF A

Retai GRADING SYSTEM

User input for designing a system is highIy

desirable. For a retail grading system this involves consumer input. In order to obtain

consumer 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 is

aware of the topic being surveyed and has

“preformed” views and opinions. In this

situation, consumers are not asked to think or

analyze. The interview process simply inventories attitudes already developed and formed.

Surveying preformed attitudes, opinions, or

preferences is relatively easy, straightforward,

and inexpensive.

Useful output from consumer surveys

becomes more difficult, however, when the

topic of the inquiry is one with which consumers are generally unfamiliar and therefore

they have no preformed orderliness or position. In this situation the interview process

may be asking the consumer to do the impossible, Consumers are being asked to give

information they do not have. They have only

what was given to them by the interviewer. If

the proposition is presented so that it is absolutely sterile of value judgments, they may

find it very difficult to analyze and say what

their feelings or views are. On the other hand,

if the proposition is laden with values, the interviewer is very likely to get back those same

values or opinions.

Consumer input in the design of Federal

retail grades is an example of the second situation. Experts have considerable difficulty conceptualizing the operational mechanics and

user implications of retail grades. It may be

naive to expect consumers to efficiently and

directly advise on how to design such a

system that would operate effectively.

Individual consumers desire accountability

from the food distribution system. Accountability means that someone, including public

representatives as well as private firms, is

47
paying attention to important matters such as bol that this issue is being addressed. Thus,

nutrition and safety. Even though individual although individual consumers may not

consumers may not use information such as possess strong opinions concerning the

nutritional labeling routinely as a purchase specifics of retail grades, a more general desire

aid, consumer groups may give careful sur- for accountability of the system exists among

veillance to nutritional quality in general and consumers. For further elaboration on this

specific terms. The individual 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 grading

system for processed foods is authorized

under the Agricultural Marketing Act of 1946.

A processed food is defined as any fruit,

vegetable, or other food product which has

been preserved by any recognized commercial

process, including, but not limited to, canning,

freezing, dehydrating, drying, the addition of

chemical substances, or fermentation.1

The current grading system is voluntary/mandatory and designed to facilitate

wholesale transactions without the necessity

of onsite inspection, but in some cases the

grade appears on the retail package. Grades

have been established for canned fruits and

vegetables, frozen fruits and vegetables, and

dairy products. The grades establish criteria

for differentiating these products according to

sensory differences. The main criteria for

these are color, uniformity of size or shape,

flavor, texture, maturity, and number of

defects.

Grade designations for processed foods lack

uniformity. Designated grades of selected

products of canned fruits and vegetables,

frozen fruits and vegetables, and dairy products vary substantially (table 4). For most

grades of fruits and vegetables there are two

sets of nomenclature. For example, either U.S.

Grade A or U.S. Fancy can be used to designate the top grade of all processed fruits and

vegetables. For the second, third, and fourth

grades the nomenclature is not uniform. In

some products such as orange marmalade, the

Iu.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 product such as canned squash

has as the second grade, Grade C or U.S.

Standard. In the third grade the nomenclature

can be either U.S. Grade/U.S. Standard, as the

third grade of green olives, or substandard, as

the third grade of canned squash. Dairy products, a separate classification, have a nomenclature radically different from the fruit

and vegetables nomenclature.

Wholesomeness and Safety Programs: The Food

and Drug Administration (FDA), in coordination with the U.S. Departments of Agriculture

and Commerce, exercises regulatory control

over all processed food products through the

authority provided in the several Acts administered by these agencies and departments

of the Federal Government. Figures 9, 10, and

11 show Federal Government agencies involved in food programs.

The Food, Drug, and Cosmetic Act and the

Fair Packaging and Labeling Act are the basic

Federal food laws of the country and apply to

all foods, food ingredients, and packaging that

are offered for sale in interstate commerce.

These two Acts and the regulations issued

under them are intended to assure that foods

are safe, wholesome, and nutritious; labeled

truthfully; and packaged so that deception

relative to quality and quantity of package

contents is precluded. The Food, Drug, and

Cosmetic Act is both a safety and labeling act,

whereas the Fair Packaging and Labeling Act

addresses labeling and packaging only.

The Public Health Service Act provides

authority for controlling the safety and

wholesomeness of food and drink served

aboard interstate common carriers and for

controlling the sanitary operations of

establishments that prepare food intended for
Table 4.

Selected USDA Grades for Processed Food Products

Grade Nomenclatures

Product

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

Canned Fruit U.S. Grade A

Fruits Cocktail or U. S.

Fancy

Orange U.S. Grade A

Marmalade or U. S.

Fancy

Green U.S. Grade A

Olives or U. S.

Fancy

U.S. Grade B Substandard

or U. S.

Choice

U.S. Grade B U.S. Grade C U.S. Grade

or U. S< or U. S. D or SubChoice Standard standard

U.S. Grade B U.S. Grade C Substandard

or U. S. or U. S.

Choice Standard

Canned Tomatoes U.S. Grade A

Vegetables or U. S.

Fancy

Peanut U.S. Grade A

Butter or U. S.

Fancy

Squash U.S. Grade A

or U. S.

Fancy

U.S. Grade B Substandard

or U. S.

Standard

U.S. Grade B Substandard

or U. S.

Extra

Standard

U.S. Grade C Substandard

or U. S.

Standard

Frozen Apricots U.S. Grade A

Fruits or U. S.

Fancy

Cranberries U.S. Grade A

or U. S.

Fancy

Concentrated U.S. Grade A

Orange or U. S.

Juice Fancy

U.S. Grade B U.S. Grade C Substandard

or U.S. or U. S.

Choice Standard

U. S. Grade B U. S. Grade C

or U. S. or U. S.

Choice Standard

U.S. Grade B Substandard

or U. S.

Choice

Frozen Lima Beans U.S. Grade A

Vegetables or U. S.

Fancy

Peas U.S. Grade A

or U. S.

Fancy

French U.S. Grade A

Fried or U. S.

Potatoes Fancy

U.S. Grade B Substandard

or U. S.

Extra

Standard

U.S. Grade B U.S. Grade C

or U. S. or U. S.

Extra Standard

Standard

U.S. Grade B Substandard

or U. S.

Extra

Standard

Dairy Butter U.S. Grade U.S. Grade A U.S. Grade B

Products AA

Cheddar U. S. Grade U.S. Grade A

Cheese AA

Instant U. S. Extra U.S. Standard

Nonfat Grade

Dry Milk

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

49
service aboard interstate common carriers. In

addition, the Public Health Service Act provides for assistance to the States in the control

of communicable diseases transmitted

through food and water, and with this

authority FDA maintains Federal-State

cooperative programs directed toward maintaining safety and wholesomeness of milk,

shellfish, and food served in restaurants.

Under the statutes FDA performs inspections of food-processing establishments,

warehouses, and distribution systems, and as

appropriate, collects samples of products for

laboratory analysis to determine that the

standards, guidelines, tolerances, and labeling

specifications for the products are being met.

Imported foods are inspected at dockside and

are not released by the Customs Office for entry to the United States until FDA has ascertained that the product meets Federal law requirements.

Certain products, by virtue of their inherent

nature or because of the preservation process

applied, have greater risk of rapid microbial

development that cause human illness. These

products and processing establishments are

considered high risk and inspected with

greater intensity, comprehensiveness, and frequency than establishments processing products in a lower risk category. Examples of

high-risk products and establishments include

milk, fish, meat, low-acid canned foods, filled

pastries and ready-to-eat entrees that require

no further cooking.

The inspection tool for the high-risk areas is

the Hazard Analysis Critical Control Point

(HACCP) inspection designed to identify

hazards associated with the product or proc50
Figure 10.

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

Food &thug Administration--Bureau of Foods

Special Assistant

for Programs and

Organization

Assistant to

Director for

International Standards

Regulatory

Guidance I

Food & Color

Additives

Compliance

Programs

Industry

Programs I

DIRECTOR

Deputy Director

Associate Directors

Management

Compliance

Sciences

Technology

Nutrition

Administrative

Operations Staff

●

Program Planning

& Evaluation Staff

Technical

Operations Staff

Technology

Divisions

■ Mathematics

I

Nutrition

t

I

Consumer

Studies t

Food

Service

Administrative Operations Staff

Associate Director for Management

August 1,1976

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

ess. In addition to the comprehensive HACCP Standards of Identity: The Food, Drug, and

inspections, other inspections are conducted Cosmetic Act also provides that standards of

to record general housekeeping procedures, quality, identity, and quantity may be

sanitary operations, control over filth and established when in the judgment of the

other defects, and adherences to standards, Secretary of Health, Education, and Welfare

labeling requirements, food additive such standards will promote honesty and fair

tolerances, 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

FOOD

ECONOMICS

COSMETICS

ANIMAL DRUGS

AND FEEDS

Projects Within Agency

Program

Food Sanitation Control

Chemical Contaminants

Mycotoxins and Other

Natural Poisons

Food and Color

Additives

Quality Control

Nutrition

Milk Safety

Shellfish Safety

Food Service

Interstate Travel

Food Economics (Food

Labeling and food

standards)

Cosmetics

Safety of Animal derived

human foods

and Cosmetics as Authorized by Various Federal Acts

Objectives of Projects

Inspect establishments for compliance with regulations, guidelines, standards, etc., and

take corrective regulatory action.

Establish safe guidelines and tolerances for industrial chemicals and heavy metals in

foods. 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 or

approval of requested safe conditions of use and cyclically review all previously approved

substances added to food.

Promote the adoption and use by industry of quality assurance practices in manufacture

and encourage participation in the FDA Cooperative Quality Assurance Program.

Promote use of sound nutritional principles by public, determine compliance with nutritional labeling, establish regulations for food fortification and regulations for foods for

special dietary purposes, regulate micronutrient uses, regulate nutrient quality of new

foods (plant proteins).

Provide for the safe production, distribution and retail sale of Grade A pasteurized milk

and milk products through assistance to the States and through the continuous updating

and publication of the Pasteurized Milk Ordinance and Code; administer the interstate

Milk Shippers Agreement.

Provide for the safe growing, harvesting, processing and sale of bivalves through assistance 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 500,000

food service establishments through assistance to the States and through publication of

the Food Service Sanitation Model Ordinance and Code.

Prevent the spread of communicable diseases by controlling the safety of food and beverages 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 ingredient

labeling 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 demonstrated to be harmful to consumers.

Review New Animal Drug Applications and applications for additives to animal feeds to

assure that unsafe residues of the drugs or additives are not present in the edible tissues

of animals.

Authorizing

Act

Import Tea Act

and FD&CA

FD&CA

FD&CA

FD&CA

FD&CA

FD&CA

FD&CA

and

PHSA

FD&CA

and

PHSA

FD&CA

and

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 standards are established

under the common or usual name of such

foods. Presently, approximately 400 foods

have been standardized by regulation under

this authority.2 Some food for which standards have been promulgated include bread

products, canned fruits and vegetables, dairy

products, nut products, fish products, and

jams and jellies.

Food standards mean that for a food product to be sold legally under its common or

usual name, it must be made in accordance

with certain specifications. The promotion of

honesty and fair dealing on behalf of the consumer is accomplished through preventing

product degradation in the marketplace. Egg

bread, for example, cannot be labeled as egg

bread unless it contains a minimum quantity

of eggs stipulated in the standards.

Food standards are not only developed in

the United States but are also being developed

internationally. Codex Alimentarius, translated freely as code of food standards and

regulations, is a collection of internationally

adopted food standards drafted and presented

in a uniform manner. Such standards attempt

to protect consumer health by insuring

wholesome, acceptable foods, and to promote

fair practices in world food trade. Publication

of the standards also is intended to harmonize

food definitions and requirements in different

countries and, in doing so, facilitate international trade. Codex standards eventually will

be developed for all principal processed, semiprocessed, and raw foods that go in distribution channels for human consumption.

Nutritional Programs: In 1973, FDA announced the Food Nutrition Labeling Regulations, which provided for the voluntary

declaration of the calorie, protein, carbohydrate, and fat content and the percentage of

U.S. Recommended Daily Allowance (RDA)

for protein and seven vitamins and minerals

in each processed products. The Food and

Drug Administration has established a standard format for the nutritional labels, which include 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) for

protein, vitamins, and minerals in each serving (figure 12). Nutrition experts, scientists,

doctors, home economists, and industry and

Figure 12.

Nutritional Labeling

SO

Nutrients listed are for

I

one serving. I

Number of servings

per container.

Labels may show amounts

of cholesterol & sodium

in 100 grams of food

and in a serving.

I

NUTRITION INFORMATION

(per serving)

Carbohydrat e 25 Grams

Fat

Sodium (970mg/100gm) 275 Milligrams

Percentage of U S Recommended Daily

Allowances (U.S. RDA) I

 Riboflavin 25 r I

 Nutrients in metric

 weight as grams

(1 ounce= 28 grams),

Percentages of U.S.

, Recommended Daily

Allowances.

2Dr. Robert Artgelotti, Overzliew of FDA FOOd COIItrOl

Programs, paper presented at the 36th Annual Meeting of

the Institute of Food Technologists, June 7, 1976.

53
consumer representatives all had input into

the development of regulations for nutritional

labeling.

Nutritional labeling is designed to provide

specific and meaningful information on the

identity, quality, and nutritional value of a

wide variety of foods to consumers. In addition to the nutrient, vitamin, and mineral

labeling required on the FDA-designed format

for labels, fats and cholesterol content is

shown. The regulation also sets standards for

vitamins and minerals sold as dietary supplements and rules for the definition and labeling

of imitation food products.

The number of foods that are required to

have nutritional labels is limited to only those

products fortified by addition of a nutrient or

those for which a nutritional claim is made in

the labeling or advertising of that food. For

most foods nutritional labeling is voluntary,

but if processors want to nutritionally label

their products, then they must conform to

these standards. The voluntary program has

been adopted by most large processors, and a

significant volume of processed food is currently nutritionally labeled.

Nutritional claims include any references to

protein, fat, carbohydrates, calories, vitamins,

minerals, or use in dieting. Any such reference

makes labeling mandatory. Product s

marketed as “enriched” or “fortified” also require full labeling. Such items include

enriched bread and flour, fortified milk, fortified fruit juices, fortified breakfast cereals,

and diet foods.

Present Status of Private Sector Programs

Quality Control Practices in Manufacturing:

All processing plants have a quality assurance

system to assure that the food products

manufactured and shipped are not adulterated

or misbranded within the meaning of the

Food, Drug, and Cosmetic Act and the

Agricultural Marketing Act of 1946. According to Dr. Elaine Wedral, Director of Research

and Development, Libby, McNeill, and Libby:

We have grade specifics for our own company

for, say, fruit cocktail that is ten pages long,

These regulations are much tighter than the

USDA standard of grading specifications for

fruit cocktails

The basic elements of a quality assurance

system include:4

●

●

●

Ingredient inspection and control, which

requires testing against written standards.

Manufacturing control, which requires

that hazards be identified and critical

control points be established and that

these be monitored with the resulting actions duly recorded.

Distribution control, which requires not

only that the integrity of the- finished

product be protected from the environment in which it is shipped but also that

the finished product as sold be

unadulterated and properly labeled.

To achieve this system requires a detailed

program. These programs may differ among

companies. The following is a typical program

used by the Pillsbury Company’s businesses

to assure product safety and regulatory compliance.5

1. Product Safety Analysis.—A product safety

analysis must be performed on every new, existing, or modified food product offered for

consumption or use. Each business’ research

and development department has the responsibility of completing the food safety analysis,

which includes an assessment of the

microbiological, physical, and chemical safety

of the product. The formulation, processing,

distribution, and recommended end use are

evaluated for any possible contribution to an

unsafe product situation.

2. Product Specifications.—There must be a product specification for each product sold or otherwise distributed. The specification must take

into full account all safety, quality, and

regulatory requirements and specify the use of

all ingredients, process and acceptance tests,

and packaging materials and labels, as well as a

description of the process and of the finished

sWorkshop, vol. I, p. 239.

ACarl A. Smith and James D, Smith, Quality Assurance

System Meets FDA Regulations, paper presented at Symposium on Impact of FDA Regulations on Quality

Assurance, November 1975.

SIbid.

54
3.

product. The product specification also serves

as the vehicle by which Pillsbury’s pure food

policies and the FDA regulations and standards are communicated to the manufacturing

operations.

Physical Systems Hazard Control.—Each business is required to make and maintain an inventory of all food-processing systems and environments and the possible hazards to food

safety that could be caused by them. Whereas

the product safety analysis and the product

specifications are R & D-originated, the physical systems hazard control system is a facilitygenerated set of documents which the facility

must maintain. In order to identify all physical

systems hazards, a clear understanding of each

step in the processing and packaging of food is

necessary. Since flow diagrams aid in defining

the total process, and since physical systems

hazards can be identified on them, we require

each business to:

—Develop and maintain flow diagrams on all

food processing and physical systems and environments.

— Identify all physical systems hazards to product safety.

— Establish and document systems of control for

all hazards.

—Maintain records of control actions for all

physical systems hazards that are critical to

product safety.

4. Purchasing Requirements.-Our purchasing

requirements dictate that all food ingredients

and packaging materials may be purchased

only from an approved supplier. An approved

supplier is one who has submitted an acceptable continuing guarantee, submitted adequate

proof of his ability to furnish products which

meet our quality and safety requirements, and

passed a plant inspection whenever required

by Corporate Quality Assurance. A supplier

may be removed from the list for unsatisfactory

performance.

5. Contractor Requirements.—Any company

product manufactured, packed, or supplied by

a third party—i.e., contract manufacturers or

packers—must be produced in accordance with

an approved written contract and appropriate

approved specifications and food safety

analysis. All facilities to be used in manufacturing or packing of such products must be inspected by qualified personnel for Good

Manufacturing Practices compliance and

proved by Corporate Quality Assurance.

6. GMP Compliance .—Sanitation procedures

apfor

7.

8.

9.

10.

assuring Good Manufacturing Practices must

be documented and religiously observed at

each production, storage, and distribution

facility, including the R & D Center. These procedures are “how-to” instructions for complying with sanitation procedures and do not go

into the technical aspect of why these practices

must be followed. The technical aspects are

handled by in-plant training of the affected

personnel.

Product Recall System.—A product traceability

system must be in effect and capable of tracing

all products or materials sold or distributed

which may require recovery. Each of our

businesses has documented procedures--some

manual, some computerized—for the prompt

tracing of products, and each of the plants must

establish procedures for accomplishing a product trace. Periodic tests of the traceability

systems are conducted and the results are

documented.

Customer Service.—Means must exist to record

and immediately respond to consumer and

customer complaints as well as to correct any

safety or regulatory deficiencies discovered in

products as a result of such complaints. A

product recall might be one result of an action

undertaken because of such a complaint.

Inspections and Safety Incidents.—Each business must have a means to record and respond

to all safety or regulatory incidents that occur.

A regulatory incident is defined as a visit by a

Federal, State, or local inspector or any regulatory agencies including the FDA, USDA, EPA,

OSHA, FEA, military veterinary corps, State

and local health inspectors, civil rights inspectors, etc. Our facilities are defined as many of

our plants, mills, warehouse, restaurants, R &

D centers, etc.

Auditing.—All processing plants, warehouses,

and other storage facilities are routinely

audited by Business Quality Assurance personnel to determine their degree of compliance

with the business and corporate standards

regarding specifications, product safety, and

regulatory requirements.

Date Coding by Manufacturers: Foo d

manufacturers have dated products for years;

however, dates and certain other manufacturer’s information usually appear in some

form of code. In establishing coding, the food

industry was concerned primarily with providing a tool for inventory and quality control. Codes made it possible to trace product

55
movement, to identify and handle consumer

complaints, to rotate stock, and to identify

product loss in the event of a recall. As a result

of today’s increased consumer concern, the

food industry is providing clearly identified

information on freshness of product when

purchased and, in some cases, anticipated

home storage life. Figure 13 lists examples of

date coding being used by manufacturers.

Private Labeling and National Brands: Information is conveyed on the quality of products

sold under manufacturer’s brands and products sold under retailer’s or other distributor’s

brands—i.e., private label. Many manufacturers strive to establish strong consumer

preferences for their brands and in some

branches of the food industry incur substantial advertising and sales promotion costs for

this purpose.

Brand names and private labels are an instrument of differentiation, and as such they

become a vehicle of change. In merchandising

a brand, a company wants to differentiate to

make it stand out differently in consumer’s

perceptions from other brands. This has been

very useful in our society because of rising incomes and changing needs of consumers on

the one hand and technological changes that

enable changing a product’s characteristics on

the other. Society benefits from product

change through new products such as convenience foods.

What brand names and private label products have done over the years is to establish a

perceived quality of a product. Thus there is a

function, in an informational sense, of a brand

name. As Dr. Angelotti indicated:

You know when you buy Green Giant green

beans, your perception of that quality is consistent and you can expect your perception to be

met the way you want it to be met each time you

buy Green Giant green beans. The variation is

minimized.

When you start talking about grades, that is

where the rub comes in. I buy Green Giant green

beans because as I perceive quality, I want that

in that product. I might not buy Green Giant’s

corn because it is not mushy enough for me. It is

how I perceive it.

Figure 13.

Types of Dates

Several types of open dates may be used on food

items:

Pull Date–This is the last day the retail store may

sell the item as fresh. The date is designed to allow

you a reasonable amount of time to store and use the

product at home even if it is purchased on the pull

date. How long the product should be offered for sale

and how much home storage time is allowed are determined by the processor, based on his knowledge of

the product and its shelf life. When you see “Sell by

Jan. 15” on a package it doesn’t imply you shouldn’t

use the product after that date. The date represents

the last day of fresh sale so you will have time to store

and use it at home.

Quality Assurance or Freshness Date–This shows

how long the processor thinks his product will be at

peak 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. This

doesn’t mean that it will be unacceptable or that you

shouldn’t use it; it does mean that the processor

would like you to use the product while it is at its peak.

The label on the item might say something like “Better

if used by January 1974. ”

Pack Date–This is the date of final packaging or

processing. Although it is sometimes used, it may not

be very helpful to shoppers who don’t have the technical expertise to judge the shelf life of thousands of

different items.

Expiration Date–This is the last day the item should

be consumed. It is virtually never used because quality changes occur slowly and it is simply not possible

to say that an item will be acceptable one day and

unacceptable the next.

Of these dates, the “pull date” and the “quality

assurance or freshness date” are in most widespread

use.

When you see an unexplained date on a food package you might check with the store manager or write

to 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 is

to rotate food on your shelves in order of freshness.

For peak quality, use the items before or within a

reasonable time after the date shown on the package.

If you start talking about grades, what are you

going 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 just

that, the selection for them to exercise their perceptions of quality. As they know when they

buy this brand, it is consistent over time, and

they will always get essentially the same product

if they stick to that brand name.6

That is one reason why most companies do

not use the established grades for their processed products. They have their own standards, and it is their perception of quality

derived from consumer surveys that is used to

set their own standards. Thus the brand name

is doing something useful for the manufacturer and conveying information to the consumer.

Potential Function and Impact of Retail Grading

Grade Criteria: The present public programs,

such as the wholesomeness and safety

programs and standards of identity programs

conducted by FDA, assure the public that the

processed food they buy is safe for human

consumption. The nutritional labeling

program provides consumers with nutritional

information. In addition the private sector,

through quality control programs and date

coding, provides additional assurance that the

food consumers buy is safe and wholesome.

Given this, the question to be addressed is

what additional useful role might grades perform? Whatever role grades might play, most

of the food grading workshop participants felt

that grades should continue to differentiate

sensory characteristics only and not combine

with nutritional characteristics as additional

grade criteria.

Many problems were raised on the

feasibility of combining nutritional characteristics with sensory characteristics. Dr.

Wedral stated that:

Sensory characteristics of a product are not

related to nutrition. For example in canning

peas, there are different grades reflecting

different colors or various defects, but they may

all have the same nutrition. With orange juice,

some of the earlier products or crops of oranges

may be higher in vitamin C; however, they have

less 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 most defects, or the most off color or be the

least uniform. How can you say this is Grade A

and this is Grade B?7

Other problems expressed were those involving the time factor. Most participants in

the workshop agreed it is impossible to

analyze the products coming into a canning

plant for nutrient qualities. Dr. Wedral stated:

In nutritional labeling, companies have been

permitted to establish nutrient data banks in

order to support their claims. (In other words,

the nutritional information on this year’s

package represents information collected over

many years.)

If a grading system were adopted that incorporated nutritional characteristics (and data banks

were utilized), the grade on the product would

be reflective of previous years’ grades. Thus, for

example, canned tomatoes packed and labeled

Grade B due to information in the data bank

might in reality be Grade A.

Thus, if a grading system were adopted that incorporated nutritional characteristics, the grade

on the product would be reflective of the last

year’s grade. For example, canned tomatoes

from a plant are Grade B this year when this

year’s might really be Grade A.8

Voluntary or Mandatory: Grades carry information to the consumer, as do brand names

and private labels. However, there is a school

of thought that believes brand names are a

vehicle for change and cause new processed

products to evolve. Grades, on the other hand,

have just the opposite effect. According to

Professor Daniel I. Padberg, Department of

Agricultural Economics, University of Illinois:

Brand names through differentiation in the

marketplace have become a vehicle of change.

Grades on the other hand have the opposite

effect-one of stabilizing, one of identifying a

level of characteristic, requiring it and thereby

stabilizing. 9

Further, Dr. Timothy Hammonds, Vice

President for Research, Food Marketing Institute, indicated mandatory grades may limit

consumer choice in the longer run:

Mandatory grading would be a way of choosing

among those products that are in the market

bWorkshop, VO1, 1, p. 96 .

TWorkshop, vol. I, pp. 69-70.

BIbid., pp. 70-72.

gWorkshop, vol. I, p. 79.

5 7
place when in fact it

variety of products in

is going to reduce the

the marketplace. And I

think ‘that is an unexpected consumer result of

i t .

1 0

So, if society looks at the choice of whether

or not to institute retail grades, an important

implication of that choice is the product it

wants to stabilize in terms of characteristics

and the product it leaves open for evolution.

When grading is instituted, an inevitable consequence would be to suppress differentiation

or variability and evolution of product

characteristics.

According to Professor Padberg:

I am assuming there are subsets of the food industry where differentiation may become a

social detriment. That is to say the canned peas

are not that different today than they were 30

years ago. And we are now supporting several

different labels with minimum differences.

If we had grades, then what would happen?

What I would suspect will happen is that Del

Monte or Green Giant who are now spending

money on marketing peas, which is a standardized product, would use their research and

development capabilities in other areas that

were more amendable to development.11

Thus the potential for grades as a consumer

information vehicle is not a universal product; it is a very selective one. It makes more

sense in some products and relatively less in

others. Sorting them out may be difficult. It

means selecting those products where the

differentiation cost is currently greater than

benefits of differentiation to consumers.

Uniform Nomenclature: Based upon

workshop evidence, concern regarding

uniform nomenclature was in two categories.

One was simplicity in terminology. A second

was whether terminology could be devised

which does not imply rank. Each of these concerns will be discussed in the following

paragraphs.

Optimum terminology would be both simple and meaningful to consumers. However,

there appears to be a tradeoff between

meaningfulness and simplicity in terminology. For example, the simplest system

IO1bid., p. 232.

llIbid., pp. 172-173.

would merely be an A, B, C or 1, 2, 3 system;

but that system would not be meaningful in

terms of conveying grade criteria or standards

to consumers. One would not know whether

A, B, C reflected nutritional information or

other characteristics such as size and flavor or

defects. To this end, descriptive labeling or

grades have been suggested in processed food

products. This system would mean that peas

might be graded and given a descriptive term

such as “young, tender peas” or “mature

peas.” Descriptive terminology, however, is

best suited to processed products rather than

fresh, since the characteristics of those commodities in processed form are less available

to the consumer at the point of purchase than

in the case of fresh. Terms that might be used

for a particular fresh product grade may

already be apparent.

Another difficulty is that all nomenclature

implies rank, with the possible exception of a

designation such as circle, triangle, square.

The latter terminology represents an effort not

to imply rank in the grade. Objection to implied rank is that second or third grade may in

fact be superior for some end uses, or at some

particular relative price, to the top grade.

However, the circle, triangle, and square terminology would not imply grade criteria or

standards.

Regardless of the terminology, the likelihood of most retailers offering all qualities or

grades of a particular commodity is slight. Mr.

Kimbrell expressed the feeling of most

workshop participants when he stated that:

Any grading system, of course, is only as good as

the selection it offers the consumer-that is, a

retail grading system. And without some kind of

a system that will be used that will offer a selection, then the effects of that grading system are

going to be lost,

The people that are going to use it have to be getting something from it such as the retailers

themselves. And in order to set up some kind of

an advertising program, some kind of a system

to incorporate a grading nomenclature therein,

you are going to have to remove some of the

stigma of the lower grades.

In this case, B is derogatory or C is derogatory, 3

is derogatory, 2 is derogatory. So you need some

kind of a system.

58
I am talking about the practical aspects of getting

a system accepted by all parties and not just the

consumers. And you are going to have to offer

something to those people that are going to

make use of it. And I think that they are going to

have to get some kind of advantage.

In order to do this and for them to get away from

strictly an A system, nobody is going to advertise that they sell B anything. They are not going

to set up a system that will advertise a B or 2.12

In summary, the question of what terminology to choose is an unsettled issue. Even

though optimum terminology is unsettled,

strong support for uniform terminology was

evidenced.

Summary

The potential role of retail grades for processed food products can only be defined in

light of the current Government and private

sector programs and their respective functions. Currently, Government programs

regulate food products for wholesomeness

and safety, provide standards of identity, fair

labeling and packaging, nutritional information, and a grading system designed primarily

for wholesale transactions. Most manufacturers have elaborate quality control

programs that assure compliance with

Government regulations and have insituted a

voluntary date coding to ensure product

 freshness for consumers.

Terminology of current grades for retail

processed products is confusing. For grades to

be used more extensively at retail, uniform

terminology across grades that is simple to

understand is a basic need.

National brand names and private labels

have substituted for grades at retail. They

have established a perceived quality of a product for the consumer through time. Brand

names and private labels have allowed society

to exercise its perception of that quality by

selection of one brand name over another.

That is one reason most companies do not use

established grade standards for their processed products. They have their own grade

standards which are more detailed than current Federal grade standards.

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

The consensus of workshop participants

was that whatever role retail grades play in

processed foods, possible grade criteria should

not include differentiating products based on

a combination of sensory and nutritional

characteristics. It is impossible to establish a

meaningful grade when incorporating nutritional characteristics with sensory characteristics. Problems include an inverse relationship between sensory characteristics and

nutritional characteristics for some food products. Such a relationship would mean that a

grade would reflect an average value between

sensory characteristics and nutrition and

therefore not adequately reflect either. Also a

problem is the time lag between establishing

the nutritional content and labeling the product. Consensus of workshop participants was

that nutritional labeling is the most appropriate vehicle for conveying information to the

consumer.

Establishing retail grades for processed

products would likely have a stabilizing effect

on product characteristics. There would be

less evolution of new products. Thus, if

society looks at the choice of whether or not to

institute retail grades, an important implication of that choice is what products should be

stabilized in terms of characteristics and what

products should continue to evolve. This

means sorting out those products where currently the differentiation cost is greater than

benefits to society of differentiation.

Congressional Options

Some of the options available to Congress

for grading processed or manufactured food

products include:

●

●

Congress could standardize nomenclature

for the first, second, third, and fourth

grades for processed products so they

would be consistent from one product to

another.

Congress could direct the Food and Drug

Administration to disseminate information

to consumers concerning the current

programs that are in operation which

assure the safety, wholesomeness, labeling,

and identity of most manufactured or processed food products.

5 9
● Congress could support or provide incentives for educational programs by Government agencies or the private sector which

inform consumers about nutrition of processed food products and interpretation and

use of the current nutritional labeling

program and/or grades for processed food

products.

● Congress could make designation of the current processed grades mandatory for

selected food

should not be

standardizing

second, third,

products. Such a program

instituted, however, prior to

nomenclature for the first,

and fourth grades.

Fresh Fruits and Vegetables Sector

Present Status of Government Programs

As reviewed earlier in this document, grading programs of fresh fruits and vegetables are

under the auspices of the Agricultural Marketing Service (AMS), U.S. Department of

Agriculture. Current grades have evolved

over a number of years. Specific fruit and

vegetable product grades were developed primarily at the request of the various food industries involved.

Grades for fresh fruits and vegetables are

based primarily on sensory criteria typically

involving color, uniformity, exterior

blemishes (in some cases), size, texture, and

maturity. As previously reviewed, the criteria

currently used for fresh fruits and vegetables

are designed to facilitate wholesale rather than

retail exchange. These grades essentially serve

the purpose of facilitating wholesale exchange

without necessitating onsite inspection.

Few commodities in the fruit and vegetable

category carry their grade, if graded, all the

way through to the retail shelf. Thus, little information is provided by the current grading

system as to sensory characteristics, nutritional aspects, or wholesomeness and safety of

the produce on the shelf.

The function of grades in processed products is conceptually different from the function of grades in fresh products. The information role for grades in processed products may

revolve around ingredient or identity standards because sensory quality of processed

6 0

products is not obvious when that product is

in a container. For example, attributes of

peaches in a can are more difficult to determine prior to purchase than a fresh peach.

Some argue that fresh produce is either obviously good or poor and that the grading

system therefore need not deliver information, prior to purchase, concerning product

sensory quality. On the other hand, some

argue that the role of the grading system in the

case of fresh produce is delivery of information concerning flavor and nutritive content.

Both of these latter pieces of information

would, presumably, aid consumers prior to

purchase.

The Current Standards of Identity Program

administered by the Food and Drug Administration substantially lessens the need for

information concerning wholesomeness,

safety, and sensory characteristics of processed products to be conveyed through retail

grades. Commodities may be modified rather

dramatically when processed. A strong need

for consumer information concerning

wholesomeness, safety, and sensory characteristics of these commodities in their processed state has been recognized through FDA

programs. Contrast this with fresh produce,

which basically is not altered from its natural

state. In the latter circumstance, information

concerning certain quality attributes is available through observation at point of purchase. ‘

Some argue this lessens the need for any

Federal Government involvement in fresh

fruits and vegetables.

Few fresh fruit and vegetable commodities

are branded, or carry a brand name designation. This is especially true of produce sold in

bulk at retail. There is a trend, however,

toward fewer bulk retail sales and more

packaged sales—i.e., bags, boxes, or other containers (figure 14). With packaging, brand

names become more prevalent. So if the trend

toward more packaged retail containers continues, brand names may become more prevalent for fresh products. Currently, though, the

information role of brand names is not as

strong in fresh produce compared to processed foods.

With respect to pesticides and other chemicals on fruits and vegetables, the Environmen-
Figure 14.

Examples of Fresh Fruit and Vegetable Packaging

USDA Photos

tal Protection Agency establishes a safe

tolerance level for pesticides, which FDA enforces.13 Because potentially harmful pesticide

residues are already controlled through these

Federal agencies, it is not a potential function

for a grading system for fruits and vegetables.

Potential Function and Impact of Retail Grading

Grade Criteria--Nutritional Base: Consumer

groups, as previously discussed, would like to

see grading criteria changed to reflect nutrition of the commodity rather than merely

physical appearance. Consumer representatives want Federal grades to include nutritional quality in addition to the already

defined sensory characteristics such as appearance or size.

This does not seem to be possible in fresh

fruits and vegetables, based upon workshop

evidence. Within a particular fresh commodity such as lettuce, nutrition does not

serve as a useful basis for discriminating or

sorting one head of lettuce from another

because the commodities tend to be basically

the same in nutritive content. There may be

13WOrkShOp, VO1. I, p. 165.

. I

.

significant differences between, for example,

lettuce and carrots in terms of nutritive content; but a grading system can serve to

differentiate only within a commodity category rather than across commodities. Nutritional information on fresh produce may be

useful on an intercommodity basis and be

meaningful to consumers, but not useful on

an intracommodity basis. Nutritional information simply will not serve as a base for

sorting within a commodity because nutrition

is essentially invariant within a commodity.

Along these same lines, Mr. Eddie Kimbrell,

Assistant to Administrator of USDA’s

Agricultural Marketing Service, stated:

Normally a grading system is something that

separates commodities within a group. For example, within apples, there would be a set of apples that are different than another set of apples.

And grading in this sense would separate those

two categories within the same commodity.14

However, there does seem to be a desire on

the part of the industry to have a program

comparable to the nutritional labeling of processed 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) industry to have nutritional labeling in that the

nutritional labeling at this point in time would

probably be on a commodity-only basis. That is,

there would not be different nutritional labels

for say, a Grade A if we had one versus a Grade B

or a Grade C. And that the implementation of

that might have to be in terms of some posting of

nutritional labeling regarding that commodity at

the point of purchase as opposed to, say, placing

a nutritional label on every banana.15

As further clarification of nutrition serving

as a base for grading, Dr. Angelotti pointed

out :

As a rule, on a weight-for-weight basis there is

no significant difference in nutritional quality of

raw agricultural commodities.16

Even if it were possible, a potential problem of

a grading system at retail based upon nutrition is indicated by Dr. Wedral:

Would the consumer think a peach that is Grade

A would supply the same amount of nutrients as

a green bean that is Grade A? I think it (nutrition basis for grades) would create a tremendous

amount of confusional T

Dr. Wedral continued by indicating

difficulties concerning laboratory techniques

used to analyze particular nutrient values. She

said:

Variability in laboratory techniques used in

determining nutrient content can alone account

for differences in label claims. In one collaborative study involving several laboratories, the

average vitamin A content of samples of tomato

juice taken from the same lot was determined to

be 20,9 percent RDA with a standard deviation

of 6.3 percent RDA. This means that depending

upon the lab that ran the analyses, someone

could claim as little as 15 percent or as high as 25

percent RDA for vitamin A. And really both

claims would be based on tests on the same

tomato juice.18

The significance is that fresh produce would

be subject to the same variability in laboratory

Sworkshop, 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 content.

Other Bases: For fresh fruits and vegetables

two potential information needs arise for consumers. One is information prior to purchase

concerning yield per pound or the amount of

edible product. A second potential information need is with respect to variety.

One possible basis for reflecting grade at

retail is a per-serving basis on commodities

such as lettuce, oranges, grapefruit, bananas,

peaches, avocados, cantaloupes, and watermelons. These commodities have in common

values which vary from one another on a costper-ounce serving basis. However appealing

such a basis may be for a grading system,

problems that are practically insurmountable

would be experienced in implementation. One

difficulty would be in the technology and testing necessary to determine the amount of edible product per unit of each and every individual commodity. A second factor is that

subjective judgment can be constantly exercised during the purchase decision concerning

product value (on a per-serving basis). For example, consumers can and do make subjective

judgments concerning the value of particular

produce from a bulk display at retail. Hence, a

retail grade based upon yield (edible servings

per unit such as pound, head, or bunch) may

be of marginal benefit to consumers in aiding

purchase decisions.

A second possible criterion for grades on

fresh fruits and vegetables would be labeling

with respect to variety. The idea of variety

labeling would be to convey information

regarding such aspects as use or flavor of the

product. For example, in strawberries or apples the variety would convey to an informed

consumer some characteristics concerning

flavor and, in the case of apples, appropriate

end use for that commodity. However, the

variety labeling idea for conveying information at retail is limited. There are a number of

commodities for which knowing variety may

not assist in a purchase decision. In addition,

an adequate job is probably being done instore at point of purchase regarding the

variety of product. As an example of this, apples are commonly labeled according to their

variety at the point of purchase. Thus, the

62
variety labeling concept has limited usefulness.

Voluntary or Mandatory Systems: The question of voluntary or mandatory grades on any

commodity basically revolves around expected use at retail. Net benefit to consumers

from voluntary programs would, of course,

vary greatly depending upon the extent of use

that was assumed for a voluntary system.

There seems to be a significant difference

between the expected adoption of voluntary

or voluntary/mandatory grades compared to a

voluntary/mandatory program such as nutritional labeling. Voluntary grades may not be

expected to be used the same way as nutritional labeling, indicated Professor Padberg:

One thing would be markedly different in grading consumer products from the nutritional

labeling experience is that, if voluntary, it

(voluntary grades) would not be taken up at all.

A very minor take, That is very different than

nutritional labeling. Nutritional labeling gave

large processors a great stake in consumer reaction, a vehicle that was perceived in our research

and their research as being useful.

It is also extremely flexible. It doesn’t

categorically restrict what they can do. They just

have to tell about it. And so in their process of

differentiation, that enables them (processors) to

give Government legitimatized information

about their differentiating activities. So it has

been a very functional part of their marketing

activities, where grades are quite counter to that.

I think grades, although discussed as a vehicle or

choice, would be restrictive on items in the

market.

Can you imagine being a produce buyer for a

large chain trying to stock stores with two or

three grades of cantalope? There would be a

preferred grade in everything and the producer

or grower is going to learn how to meet that

preferred grade.

So voluntary grades have different meaning

than voluntary nutritional labeling and I think

voluntary grading systems for consumer products is no system at all.

Maybe that is all right, but I think in terms of implementation, 1 would get a very different take

on the part of the large firms as compared to

nutritional labels.19

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

In essence, the expectation would be that

voluntary or voluntary/mandatory grading

systems for fruits and vegetables carried to the

retail level would not be adopted to the same

extent that nutritional labeling has been

adopted on a voluntary/mandatory basis for

processed foods,

There are three basic systems under the

voluntary/mandatory issue. One is a completely private voluntary system. A second is a

combination voluntary/mandatory system,

with a third being a completely mandatory

system. With a completely private system, the

standards and the adoption of those standards

is done on a private basis and voluntarily.

Under the voluntary/mandatory system, a

Government standard is established, and then

anyone who grades produce would be required to adopt the system. However, grading,

for any particular firm, would be on a voluntary basis. The mandatory system would

establish Government standards, and all produce would be required to be graded. From a

consumer information viewpoint, the only

serious systems would be the last two—that is,

either a voluntary/mandatory or a mandatory

system. The completely voluntary and private

system would be of little use in providing consumer information with respect to purchase

decisions.

There are some general cost considerations

relevant to a mandatory grading system. The

structure of the marketing channel in fresh

fruits and vegetables (see figure 15) is significantly different from the marketing channel

for processed food products. In the latter

marketing channel, there are points of concentration, particularly at the processor level.

There are no similar points of concentration in

the fresh fruit and vegetable marketing channel. The impact of this structural difference in

the marketing channel from production to

consumption is that no convenient place exists

in the fresh fruit and vegetable channel to intercept a large proportion of the commodity

so that it can be economically graded. As Mr.

Kimbrell indicated:

Unless there is an assembly point in the marketing channel, then grading by a third party may

really be a problem.20

WA/orkshop, Vol. 111, p. 3

63
Figure 15.

<

STATE STATE USDA AGENCIES USDA AGENCIES

●

SERVES

I

However, there are alternatives to the third

party method of grading, as Professor

Clevenger indicated:

The options might be to consider the possibility

of not grading by a third party, but a third party

acting only as a referee.21

Further elaboration of this option was

given by Mr. Kimbell:

There is one of the options that we have had

wherein there may be more of a quality control

kind of system on the part of industry with the

industry doing the sorting and grading itself

under the same kind of standard and supervision applied by other parties, State government

agency or Federal Government agency, or someone who has no financial interest in the product.22

This system is commonly referred to as a

voluntary/mandatory system wherein there

are standards established by a third party. A

z~ibid., p. 4.

221 bid., p. 4.

third party does the monitoring of the system

to be sure that misrepresentation is not permitted, but the industry does the grading on a

voluntary basis. This contrasts to the mandatory system wherein a third party does all

the grading using Federal standards and all

produce is graded.

Because of this structural distinction between fresh produce marketing channels and

processed marketing channels, there is a

serious question as to the applicability of any

grading system to all fresh produce. Professor

Padberg elucidates:

Now the problem with the grading system is

that it favors a centralized commercial operation. To get Federal grading on produce moving

through small local markets would be very expensive.

We have a high price set on human labor, and

we have adjusted our whole system to that. It

favors durable and commercially grown produce. While there is local stuff that has quality

anybody would recognize, a grading system just

64
doesn’t fit it. That is a sad fact. But grading is not

going to change that, I don’t think.23

Thus, the structure of the industry is directly

related to its geographic dispersion and the

lack of concentrated points through which the

product flows. A strictly mandatory system of

grades would be extremely expensive due to

this dispersion.

In terms of use of grades on a voluntary

basis, incentives for grading by industry were

not clear. Professor Clevenger addressed this

issue in general:

What incentives would be there if grading were

voluntary? Grades would really have to convey

some specific types of information that are not

now communicated to differentiate products if it

(grading system) were to be implemented on a

voluntary basis.

And I don’t think that we are positive that in fact

we could devise a grading system that would do

that in the case of fresh fruits and vegetables.24

At a different point in the workshop proceedings, Professor Clevenger continues on the

same topic but with specific reference to fresh

fruits and vegetables:

It seems to me there is an excellent option for

getting to be voluntary and for industry to use it

as a competitive device just as we have in nutrition labeling. The same argument we applied to

nutrition labeling we could once again apply

here. 25

The cost of a system is sometimes felt by consumer representatives to be an excuse for certain courses of action. As Ms. Cross indicated:

I can’t quite go to the actual cost because I know

if industry doesn’t want to do it, they will talk

about the cost, and if they do want to do it as a

voluntary nutritional labeling program, they are

not complaining about the cost.26

However, the analogy between the cost incurred in nutritional labeling versus the cost

in grading fresh fruit and vegetables does not

seem to hold. As Dr. Thomas Sporleder,

agricultural economist from Texas A&M

University, indicated:

zsWorkshop, Vol. V, p. 39.

zgWorkshop, Vol. III, p.35

ZSIbid., p. 63.

zbIbid., p. 66.

There is a tremendous difference, though, in the

cost, it seems to me. In nutritional labeling there

is a big start-up cost, and after the system

becomes operational on a permanent basis it is

not very much.

When you are talking about grading fresh fruits

and vegetables, it is a continuous cost. There is

no start-up and then dribbling out (of costs)

afterwards. It is just constant, continuing.

And so there is a tremendous difference in the

costs we are talking about. It would be more expensive to grade fresh fruits and vegetables than

it is to institute nutritional labeling on canned

products. 27

Uniform Nomenclature: As previously discussed in this report, consumer advocates

want uniform nomenclature for various

grades which might cover all commodities

graded under Federal standards. With respect

to fresh fruits and vegetables, existing regulations could be changed to make grade terminology uniform and easier for consumers

and industry to understand. This could assist

consumers’ use of the current grading system.

The structure for the terminology makes

U.S. Fancy, U.S. No. 1, U.S. No. 2, and U.S. No.

3 the four designated terms applying

uniformly to fresh fruits and vegetables that

are graded. With the new simplified terminology, the criteria on which an individual

product is graded may remain unchanged.

The program announced by the U.S. Department of Agriculture potentially will take

several years before the new uniform nomenclature is adopted.

From the food grading workshop, no argument or disagreement prevailed concerning

whether or not there was a need for uniform

nomenclature. There was overwhelming

agreement that uniform nomenclature would

be desirable from consumers’ viewpoint and

would not be contrary to the interest of industry, However, there was disagreement on

what the uniform nomenclature should be,

Concerns about the aspects of uniform nomenclature have at least two dimensions. One

is the need for simplicity in any uniform nomenclature scheme. A second concern is implication of rank that comes from most

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

65
uniform nomenclature system, which has interesting potential consequences on industry

merchandising practices.

There is no reason that uniform nomenclature should not be implemented for

fresh fruits and vegetables. Consensus was

that uniform nomenclature could be relatively

easily instituted and would be relatively low

cost compared to other possible changes in the

current Agricultural Marketing Service grade

standards. As previously mentioned, the U.S.

Department of Agriculture has announced a

uniform nomenclature program for fresh

fruits and vegetables. However, implementation of this uniform terminology may take

several years.

Fresh fruits and vegetables and processed

product sectors are similar with respect to the

uniform nomenclature issue. In both sectors,

workshop participants expressed concern

both about tradeoff between simplicity and

meaningfulness in terminology and that all

nomenclature implies rank. More detailed discussion of these issues appeared previously in

the Processed Products section of this chapter.

In regard to fresh fruits and vegetables, the

question of what terminology to choose is an

unsettled issue, However, participants voiced

strong support for uniform terminology for

fresh fruit and vegetable grades regardless of

the terminology chosen.

Summary

In terms of consumer information considerations, uniform terminology across

grades that is simple to understand is the most

basic need. Although some question exists

concerning optimum terminology for any

uniform nomenclature, no reasons seem to exist for not instituting uniform nomenclature

across fruit and vegetable commodities

regardless of the standard terminology

chosen.

A second area of consumer information

concern is nutrition. Nutritional information

apparently cannot be combined with grade

criteria or serve as the basis for grading, since

nutritional content is similar within any particular product. This means that nutritional

information cannot serve as a base for sorting

among various products within a category,

such as heads of lettuce. Nutritional information could be provided among categories of

products—that is, lettuce versus carrots—by

placing average nutritional information for

each type of produce at the point of purchase

in retail stores.

Other potential bases for grades do exist for

fresh fruit and vegetables. One possible basis

discussed by workshop participants was a

grading system that reflects a per-serving

basis, A second possible basis discussed was

standard labeling with respect to variety.

Although some may not consider such bases

as a grading system per se, such systems potentially would provide additional consumer

information and thus serve the same function

as retail grades or be a substitute for retail

grades. However, both the variety labeling

concept and the yield-per-serving concept

were judged by most workshop participants

to have limited usefulness for fresh fruits and

vegetables.

In terms of the three systems for implementing grading system—namely, voluntary,

voluntary/mandatory, and mandatory--only

the voluntary/mandatory system seems to be

appropriate for fresh fruits and vegetables.

Evidence exists that a voluntary system would

be no system at all, On the other hand, a mandatory system would not likely produce a

positive net benefit to consumers, since costs

would be substantial in a mandatory system,

while the information provided would be of

marginal benefit to most consumer purchase

decisions.

Congressional Options

The following are some of the options

available to Congress for grading fresh fruit

and vegetable products:

● Congress could direct USDA to immediately adopt the new simplified grade

terminology for fresh fruits and vegetables as announced by USDA in July 1976.

This would mean that program adoption

would not remain at the initiative of

growers or processors of these commodities.

● Congress could support or provide incentives for educational programs by

66
Government agencies or the private sector which inform consumers about nutrition of fresh fruit and vegetable products

and the differences in nutritive content

from one commodity to another.

. Congress could direct USDA to administer a standard labeling and variety

identification program for fresh fruits

and vegetables which are sold in retail

packages.

. Congress could direct USDA to facilitate

adoption of a voluntary/mandatory

nutritional labeling program for fresh

fruits and vegetables.

. Congress could make the current

wholesale grade designation mandatory

at retail for fruits and vegetables that are

currently graded.

● Congress could make grading mandatory

for all fresh fruits and vegetables using

the current wholesale grading criteria

and designate such grades at retail.

Fresh Red Meat Sector

Fresh red meat refers primarily to beef. This

is because beef accounts for the largest proportion of consumer expenditures on meat. In

1976 it accounted for 54 percent of the $46.1

billion consumers spent on all meat. Poultry is

excluded from this decision because: 1) in

relation to beef it accounts for a small proportion of consumer expenditures on meat (12.5

percent in 1976); and 2) the present carcass

grading system for poultry is suitable for consumer purchase decisions since most poultry

is sold by carcass at retail. 28

Present Status of Government Programs

There are two Government programs

which influence meat grades at retail. The best

known system which currently exists for red

meat is a carcass-grading system sponsored by

the U.S. Department of Agriculture and

reviewed earlier in this document. This

system is not a retail grading system, but

again is oriented to facilitating wholesale exchange of meat products. The current grades

are carcass grades and not retail cut grades.

A second major Government program is a

combination of Federal and State inspection of

meat carcasses. This inspection essentially

assures safety in the food product. The inspection system is mandatory for meat. Thus, all

red meat in commercial channels sold through

retail outlets is inspected under this program.

The extent of use in the US. Department of

Agriculture grading system is widespread but

not total. About 50 percent of the commercial

cattle slaughtered were federally graded in

1975 (see figure 16). Of this total that was

federally graded, 5.1 percent was Prime, 77.3

percent was Choice, 12.9 percent was Good,

0.7 percent was Standard, 0.4 percent was

Commercial, 3.1 percent was Utility, and 0.5

percent was Cutter-and the Canner grade

was insignificant.29

Two concerns emerge for consumers in

terms of the present Government programs

relating to grading of meat. One is that the

grading system is not used for all beef and,

secondly, the grading system is still oriented

toward wholesale exchange and therefore not

carried to retail shelf in a manner that optimally assists consumer purchase decisions.

Present Status of Private Sector Programs

An active trade association in meat is the

National Live Stock and Meat Board with

headquarters in Chicago, Ill. In September

1973, the National Live Stock and Meat Board

announced voluntary meat identification

standards. An industrywide Cooperative Meat

Identification Standards Committee developed

fresh meat identification standards in an effort

to eliminate confusion at the meat counter

(see figure 17). This committee reduced 700

frequently used names to 314, of which about

150 were expected to be used by the average

retailer, The project was coordinated by the

National Live Stock and Meat Board in

cooperation with the Food Marketing Institute

National Association of Retail Grocers of the

United States, and the National Association of

Food Chains, as well as other interested

ZWJSDA, National Food Situation, Economic Research

Service (ERS), December 1976. Zgworkshop, Vol. I, p. 251.

6 7
Figure 16.

Breakdown ~ of Meat Grades of Federally Graded

Commercial 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

● MY about 50% of the cattle slaughtered in 1975 were federally graded.

SOURCE: Office of Technology Assessment.

groups representing various industry segments. Under the voluntary identification

system, each fresh meat label at retail would

indicate the name of the species—i.e., beef—

the primal or wholesale cut from which the

retail cut is derived—i.e., round-and a standardized retail name—i.e., round steak, This

voluntary program is gaining widespread acceptance and has even been adopted as a law

by some State legislatures. Basic to any retailoriented grading system would be uniform

identification of the retail cut. This voluntary

program provides a basis for that uniform

identification.

Another program of the private sector that

potentially may evolve is a national educational and research program sponsored by

beef producers. Enabling legislation to

establish such a national program through

funds provided by producers has passed Congress and has been approved by the President.

Some time early in 1977, a referendum will be

held among beef producers to either approve

or disapprove the financing of such a program

through contribution of beef producers on a

volume basis. If the program is approved,

educational material and services could be initiated through this national program which

would provide nutritional information, and

other consumer-oriented information (such as

cooking and preparation ideas for particular

end uses).

There are some brand names at retail for

fresh meat. The informational role of these

brand names would be consistency in quality

over time. That is, they would assist consumers in the sense that the same brand name

would be of comparable quality from one

purchase to the next. However, these brand

names would not assist a consumer in making

a decision among brand names at a particular

6 8
Figure 17.– Selected Examples of Voluntary Meat

Identification Standards

Arm Chuck Steak

Arm Steak Beef Chuck

Arm Swiss Steak

Chuck Stk. for Swissing

Round Bone Steak

Round Bone Swiss Stk.

a

BEEF CHUCK

ARM STEAK

(Braise)

Boneless

Boneless

Boneless

Arm Steak

Round Bone

Swiss Steak

Barbecue Ribs

Braising Ribs

English Short

Extra Lean

Fancy Ribs

Short Ribs

Ribs

English Steak

Shoulder Steak

Shoulder Steak,

Shoulder Steak,

Half Cut

Stk.

a

BEEF CHUCK

ARM STEAK BNLS

(Braise)

b c

BEEF CHUCK

SHORT RIBS

(Braise, Cook in Liquid)

Bnls.

d

BEEF CHUCK

SHOULDER STEAK BNLS

(Braise)

SOURCE National Live Stock and Meat Board

6 9
time. Few brand names exist for fresh meat as

compared with those for processed products.

Potential Function of Retail Grading

Grade Criteria: A common dilemma among

all three commodity categories considered in

this report is that current grading is not indicative of value differences to the consumer.

Meat grading is done on wholesale cuts but

not retail cuts, although sometimes the retail

package carries the grade designation of the

carcass from which it was cut. For grades to be

meaningful, grade distinctions should be

made in terms of value differences. 30 In an

effort to make meat grades deal only with the

fabrication of retail cuts, Professor Padberg

argues:

The concept of retail meat grades should have

two criteria: parent material, one; and two, what

happens in the fabrication of retail cuts, the trim,

yield question,

When you get down to parent material, there is

little problem in that, one, the parent material is

not a very good predictor of consumer values in

the first place. The amount of consumer value

you get from going up the grades in parent

material is small. And, two, there are a lot of innovative opportunities for changing the parent

materials.31

Professor Padberg continues:

What Prime, Choice, and Good have told the

consumer is something pertaining not to their

market but somebody else, And if you are going

to have grade to deal with their values, it would

be less confusing instead of more to have a new

set of names because you are talking about a

different set of values and a different set of tranformations. 32

Another concern specifically related to meat

is the relationship between nutrition and the

current wholesale grading system. Concern

about fat content, both in terms of trim and

intramuscular, have led some to question

whether or not grades in meat could be based

on nutritional content. Workshop evidence on

that point indicates overwhelmingly that

nutrition would not serve as a useful basis for

grades when combined with palatability considerations. Professor Zane Palmer addressed

this issue:

Marbling is almost always positive in its relationship to palatability but is not the indicator of

tenderness, juiciness, and flavor that we once

thought it was.33

Professor Palmer continues along a similar

line:

Nutritional superiority and palatability do not

necessarily have to go hand in hand; they can

sometimes go in opposite directions. So how can

you average out the two extremes and come out

and say it is average in nutrition and average in

palatability when that represents neither extreme value? And for this reason I think you are

averaging apples, doughnuts, and coming out

with oranges, and it is just not valid to do that.34

Mr. Kimbrell agreed, saying:

It would be much better to have both the grade

and fat designation if you want nutritional

labeling, but you would confuse the issue if you

combined them into one designation.35

Thus the workshop consensus was that

nutritional labeling may be a desirable

program for retail cuts of meat but that it

should not be combined with or in any way

considered as a grade criteria. The primary

reason for this is the confusion which would

result from such combinations.

Another consideration in attempting to make

nutritional content the basis for grade was indicated by Professor Padberg:

Another thing that has been a very great

difficulty in labeling problems is the basic topic

of nutrition itself. We have a conception of

nutrition that deals with diet. Now to go from a

diet to a food product is a very basic difficulty.

We can conceive of nutritious diet, but the concept of a nutritious food product has not ever

been developed. There are many components of

a nutritious diet and the concept of getting them

all in a product is very repulsive to nutritionists,

and I think the populace in general. So here is a

very great difficulty in nutrition labeling. Any

product is a component of a diet, and it maybe a

useful component although it is very lopsided in

its individual characteristics. What makes a

nutritious 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.

70
combined with in a day or a period of several

days. We have a conception of nutritional diet;

we do not have a conception of nutritional product.36

Dr. Angelotti summarized this point by saying:

We ought to be thinking about nutrition information and nutrition labeling as something

different from grading. We want it, people

should have it, they should learn to use nutritional labels, and that should be an independent

consideration at this point in time from grading. 37

When nutrition is considered in terms of

vitamin and mineral content of food, the

above discussion applies. That is, if nutrition

is conceived as the content of a particular

product in terms of vitamins and minerals,

then workshop consensus was that such information would best be supplied on a separate

label on a fresh meat package. There is concern by some that the percent of fat to total

weight on fresh meat may be nutritionally significant from a health standpoint. Along these

lines, workshop participants discussed two

possible systems for retail grading of fresh

meat. The systems are yield, either on a perpound basis or per-serving basis, and uniform

mandatory labeling. Each will be discussed in

turn in the following paragraphs.

The potential system of yield per pound or

per serving is conceived as dealing with trim

(or the amount of external fat in relation to

lean per retail cut) in grade standards. In addition, intramuscular fat or marbling may or

may not be included as part of the grade criteria. Such a conceptual system may increase

the relationship between grade values and

nutritional values. An illustration of how such

a conceptual system might work is given by

Professor Padberg:

A grade standard might include two or three

things. One might be that the first grade (a retail

cut) might come from Prime carcasses and then

it might have other criteria to deal with trim or

internal fat as well.

Maybe grade two would come from a Choice

carcass and perhaps have the same trim standards, 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 consideration of value to the consumer, of which

trim is probably the most important.

What this would do would certainly give the

market system a lot better information. Because

you would have a price for Grade 1 and different

price for Grade 2. Now, you have the scramble

for the difference, and you do not know what

economic values accrue to different trim. So in

terms of making a market work better and marking products described better, in terms of functions of grade, I think this would identify the

functions of a grade.38

It would be necessary to define retail cuts

through some standard uniform system

before such grading could be operational. This

means that a system such as the current

voluntary system of the National Live Stock

and Meat Board39 would need to be universally adopted before a yield-per-pound or perserving grade would be feasible.

Another difficulty with such a system

would be the logistic of implementation.

Professor Palmer addressed this point:

Composition of a meat product is not determined until you finish the fat trim and know

how much bone you are going to remove. So on

fresh meats, it would be extremely difficult to

develop meaningful information on composition, on say a steak, or a roast, or pork chop, or

what have you.

And therefore it is so variable and the shelf life is

only 72 hours after you cut it anyhow, which

means that you have a deadline between the

time that you set up exactly what the retail cut is

until the time that it is sold, so most of it is sold

before that time period. So as I see it in fresh

meat, to have nutritional information on that

specific cut can be virtually impossible. But,

what you might want to do if you wanted to do

anything would be to say what it (nutrition) is

in general,

The best you could hope to do on an individual

retail cut is to determine in general nutrition if

on a fat constant basis or a fat and bone constant

basis. 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.

qoworkshop, Vol. I, p. 131.

71
on fresh retail cuts of meat is typically no

more than 3 to 4 days. This is an extremely

important physical characteristic of fresh meat

compared to either processed products of

fresh fruits and vegetables.

Other Bases for Grading: Another system is

one involving uniform mandatory labeling of

fresh meat at retail. Although some may not

consider this to be a grading system per se,

such a system would provide consumer information via labels and in that sense serve the

same function as grades. This concept

amounts to making a system mandatory at the

Federal level such as the National Live Stock

and Meat Board meat identification standards,

Some suggest that the primary consumer information need with respect to fresh meats at

retail is a standard identification of retail cuts

over time and over geographically separate

markets. The contention is that consumers can

readily determine value of individual retail

cuts by simply looking at the amount of external fat in relation to total weight. If this contention is accepted, then uniform mandatory

labeling would provide unique and distinct

information which consumers cannot otherwise determine.

An extension of this second system may or

may not involve mandatory wholesale grade

identification for individual retail cuts. As

mentioned previously, with the current beef

grading system, carcasses are graded but individual cuts are not. Of course, carcasses are

the parent material from which retail cuts are

derived (see figure 18). Mandatory display of

the grade of a carcass from which a retail cut is

derived could be part of a uniform mandatory

labeling program. Such extension of the present

wholesale grading system would provide

more uniform consumer information with

respect to grade than is currently available.

Potential Impact of Retail Grading

Costs for any fresh meat grading system applicable to retail cuts depend upon the distribution system which is assumed prior to

calculating costs, Three distinct and separate

distribution systems can be defined, One is the

current distribution system using current

technology. A second is centralized processing

of fresh retail cuts, while a third is centralized

processing of frozen retail cuts. Each of these

systems is explained in turn.

Current technology is to fabricate retail cuts

at the retail store level. This means that primals, subprimals, or carcasses are transported

through the marketing channel from either

packing 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 for

most distribution today.

Centralized processing of fresh meat cuts

implies that the fabrication of individual retail

cuts is not done at the retail store level but at a

more centralized location such as retail chain

distribution center or even a packing plant.

However, because of the physical limits on

shelf life of individual fresh retail cuts, there is

a time limit on handling and transporting

fresh cuts. If these cuts are fabricated at the

distribution center or packing plant, shelf life

may be a limiting factor on feasibility of the

system. Shelf life on individual fresh retail

cuts may be extended by rather sophisticated

packaging techniques (such as vaccum

packaging), but this is relatively expensive

packaging compared to conventional packaging. Some experimentation has been done

with centralized processing of fresh retail cuts,

but due to the shelf life limitations mentioned,

the system has not been widely adopted.

A third distribution system is centralized

processing of frozen retail cuts. The obvious

factor mitigated by freezing is shelf life. Freezing extends shelf life while preserving product

quality, so that transportation and storage

time are eliminated as a problem. Freezing is

most useful for beef but may not be as advantageous for other red meats.

Current freezing technology for beef is to

flash freeze individual retail cuts with either

nitrogen or carbon dioxide. With this system,

beef is cut centrally, frozen at the central location (either distribution center or processing

plant), shipped in freezer vans, and sold in a

frozen state at the retail case. This system potentially offers cost savings over the previous

two systems described, even though it is

relatively energy intensive. The system has

7 2
Figure 18

BEEF CHAR T

RETAlL CUTS OF BEEF - WHERE THEY COME FROM AND HOW

Rib Steak Boneless

Rib Eye ( Delmonico )

Roast or Steak

CHUCK

Porterhouse Steak

i ’ .

Boneless -

Top Loin Steak

Filet Mignon) Steak Or

Roast (also from Sirloin la

SHORT LOIN

1

Pin Bone Sirloin Steak

flat Bone Sirloin Steak

6 .

\

Wedge BOne Sirloin Steak

‘ \

●

Boneless Sirloin Steak

SIRLOIN

Broil Panbroil Panfry

TO COOK THEM

FORE SHANK

Top Round Steak Rump Roast (Rolled)

ROUND

./ ,

Shank Cross Cuts

SHORT PLATE I

Short Ribs

Skirt Steak Rolls*

(also from other cuts) Ground Beef

FLANK

Braise cook in liquid

Ground Beef ‘ L

Flank Steak *

Beef Patties Flank Steak Rolls*

TIP

Braise

~ * -

TIP Kabobs*

May be Roasted, Baked, Broiled, Panbroiled or Panfried National Live Stock and Meat Board

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

73
been used on an experimental basis for beef

and is currently being used by some processors and retailers, but the system has made

no major inroads in the mass distribution of

beef.

There is a direct relationship between the

type of distribution system and the cost of any

retail grading system. The cost of any mandatory retail grading system would be

prohibitive under the current distribution

system where retail cuts are fabricated at the

retail store level. Professor Palmer elucidates:

Naturally, if you do it at each individual retail

market, your cost of grading service is going to

be prohibitive. Right now you have one grader

out in Iowa, for example, and I suppose that one

grader would grade 800 or 1,000 carcasses a day.

And if you go to a retail store, it would take one

retail grader per store and he would be grading

every few carcasses.41

This means that the cost of that grading

service on a per-unit basis increases substantially when the grade is established at retail

compared to a product concentration point,

such as a packing plant. Any centralized distribution system would alleviate this burdensome cost at retail and be significantly less expensive than grading at the retail level without changing consumer benefit from the grading system.

Costs involved in actually grading products, via inspection costs, are sensitive to the

above distribution systems. However, the enforcement aspect implied by voluntary or

mandatory grading programs may not be as

sensitive to the type of distribution system.

The workshop provided no indication as to

the magnitude of enforcement cost on any

voluntary or mandatory system. However,

this is a substantial cost consideration which

would need extensive investigation before any

particular system could be fully evaluated in

terms of cost.

Technology in Relation to Tenderness in Beef

There are several ways to influence beef

tenderness; some methods of tenderization

are of long standing, others relatively new.

Use of protelytic enzymes as a tenderizing

dlworkshop, Vol. IV, p. 30.

74

process is patented by a proprietary meat

packer, and fresh beef so processed is currently at retail under a brand name of the

packer. The technique was developed several

years ago.

A newer technology, currently being

researched at several universities, is postmortem but pre-rigor electrical stimulation of

beef carcasses with, for example, 320 volts at 5

amps for 20 seconds. Although this technique

is still in the experimental stages, results thus

far indicate such treatment significantly tenderizes beef of several grades. Another technology for tenderization of beef is termed

“mechanical tenderization. ” The process has

increased in application during the past

several years. This technology uses a machine

with tiny blades or knives which significantly

tenderizes the meat.

There is a relationship between such technologies and the function of retail grades. If

significant new technologies are developed

which tenderize meat on a rather uniform

basis regardless of grade, then the necessity

for grade being based on tenderness (and

therefore maturity and marbling) would be

significantly reduced. Similar technologies

have already altered the functions of grades

but future impact is not clear at this point.

Summary

The fresh meat industry currently uses the

grade system best known to consumers,

although it is basically a wholesale-oriented

system. The system is voluntary/mandatory,

and there is uniform grading terminology

across fresh meat products. However, the current grading system is voluntary and not used

for all meat. Nor is the carcass grade

necessarily identified on an individual retail

package.

One of the most significant needs for consumer information regarding fresh meat at

retail is identification standards for retail beef

cuts devised by the National Live Stock and

Meat Board that provide standardized identification and labeling. This program has even

been adopted as law in some States.

Concern about fat content, both in terms of

trim and intramuscular, raises the question
concerning retail meat grade criteria based on

nutritional content, Workshop evidence indicates overwhelmingly that nutrition would

not serve a useful basis for grades when combined with palatability or other sensory

characteristics. The primary reason is that

nutritional superiority and palatability are not

necessarily positively correlated, Combining

the two would result in confusion. Most

workshop participants thought nutritional

labeling separate from grade criteria was a

more desirable program for retail cuts of meat.

A prerequisite to adoption of an individual

retail cut grading system would be standardized fabrication, retail cut nomenclature, and

labeling procedures. Given standard identification of retail cuts, a grading system based

on yield of edible meat on a weight basis

would be possible. Such a system would have

both advantages and disadvantages, as discussed above.

Cost and net consumer benefit would depend significantly on the type of meat distribution system that existed. In essence, the

technical feasibility of reflecting the composition of meat—that is, fat, vitamins, and/or

minerals —exists. Net consumer benefit,

however, varies greatly by type of grading

system and by type of distribution system.

Further detailed analysis would be necessary

to determine net consumer benefit for any

combination of grade system and distribution

system.

Congressional Options

The following are some of the options

available to Congress for grading fresh meat:

Congress could make the current voluntary program on meat identification

standards mandatory for all retail meat

cuts. This would facilitate uniform identification of retail meat cuts.

Congress could direct USDA to facilitate

the adoption of a voluntary/mandatory

nutritional labeling program for fresh

retail meat cuts.

Congress could direct USDA to institute a

voluntary/mandatory program of retail

meat grades where grade criteria are

based on yield per pound or per serving,

Such a program should not be instituted,

however, prior to a program that would

assure uniform identification of retail

meat cuts.

Since net benefit of any retail grade

scheme is highly dependent upon the

type of meat distribution system in existence, committees of Congress with

jurisdictional authority could examine

the potential for lowering the distribution costs of meat from various systems

(such as conventional compared to

centralized frozen) in oversight hearings.

Such hearings could produce further evidence on the potential impacts and

benefits of retail grade alternatives for

meat.

Congress could make grading mandatory

for all fresh red meat using the current

carcass grade criteria and designate such

grade on all individual retail meat cuts.

75
APPENDIXES

AND GLOSSARY OF TERMS
APPENDIX A

RECENT STUDIES MENTIONING FOOD GRADING

Though the food-processing industry is strongly

against changing the present USDA grading

system, other sectors of the economy, several

Federal reports, and some individuals within the

Federal Government favor changes in the grading

system. Changes have been advocated in such

Government reports as the Report of the National

Commission on Food Marketing, dated June 1966; the

Report of the 1969 White House Conference on Food,

Nutrition, and Health; the Report of the Consumer

Panel of the National Nutrition Policy of 1974, conducted by the Senate Select Committee on Nutrition and Human Needs; and the 197.5 GAO Report

on Food Labeling. This section reviews changes proposed by these reports without judgments on the

merits of the proposed changes.

The Report of the National Commission on Food

Marketing

The Commission on Food Marketing,

established by Public Law 88-354, began its work

in January 1965. The bipartisan Commission was

chartered to study and appraise the marketing

structure of the food industry.

Of the various reports mentioned above that

dealt with food grading, the Food Marketing Commission was the only report which treated

economic and marketing consequences of food

grades in detail. The Commission said that Federal

grades was one of the several factors which contributed to the rapid reconcentration in cattle

slaughtering after World War 11 because the wide

use of Federal grades for beef made it easier for new

firms to compete for customers on equal terms with

packers whose names were already well known.1 It

noted that eggs and butter use retail grades and

have low firm concentration, In early 1966 the top

13 firms produced only 10 percent of the fresh U.S.

table eggs, and butter was the least concentrated of

any dairy product.2 The Commission report’s implication is that grades seem to produce less concentration and therefore more competition for

products carrying retail grades,

1 USDA publication. Report OJ the hlutionfll Commission

on Food Marketing, Food from Fanner to Consumer, June

1966, p. 25.

ZIbid., pp. 33-45.

The Commission’s majority opinion concluded

that consumer grades should be developed and required to appear on all foods for which such grades

are feasible, that are sold in substantial volume to

consumers, and that belong to a recognized product category. Besides providing consumers with the

choices and unbiased information they need to get

the most satisfaction for their money, the Commission also hoped that consumer grades would

reduce the excessive use of promotion and contribute to a better performance of the food industry.

The Commission also concluded that uniform nomenclature in the form of A,B,C should be utilized

except for foods for which other nomenclature is

well established.3

However, a minority opinion felt there was insufficient evidence to allow the Commission to

recommend development and implementation of

consumer grades. The minority opinion maintained that administrative rigidity would make

meaningful consumer grades unfeasible, that

quality judgments are personal, and therefore

meaningful Federal quality standards for consumers could not be devised, and that the Commission had no evidence to support its view that the

cost for consumer grades would be nominal.

Finally, the minority disagreed with the majority

conclusion that consumer grades would reduce the

amount of advertising. They felt, rather, that consumer grades would increase the amount of advertising to offset the “equalizing” effect of grading.

The minority opinion concluded that not having

studied what the result would be, the majority is

guilty of willfully tampering with an important

component of our economy without knowledge.4

The Report of the 1969 White House Conference

on Food, Nutrition, and Health

The White House Conference convened representatives of all sectors of food production and distribution system to investigate America’s food supply, nutritional needs, and nutritional capabilities

in order to recommend a national food policy. Food

sIbid., p. 109.

4USDA Publication< Report of the National commission

on Food Marketing, Food From Fanner to Consumer, June

1966, p. 130 and 153.

79
grading was among the many subjects discussed,

and the following recommendations were made by

the panel on food quality:5

(1)

(2)

(3)

(4)

That designations for the grades be standardized so that a simple system is used and is

consistent for all types of food for which

grades are appropriate.

That grading standards should be evaluated

periodically to determine that they continue

to aid the consumer in understanding food

quality.

That grading standards should be adopted to

give consideration where feasible to the

nutritive content.

That a single code of regulatory requirements pertaining to grading standards prevail in all jurisdictions; i.e., Federal, State,

and municipal. The term “requirements”

would imply that the panel was recommending that these standards be mandatory

for all foods graded.

The members of the panel on food quality

believed that quality should be available without

requiring employment by the consumer of technical knowledge of nutrition or elaborate facilities for

home preparation.6

The Report of the Consumer Panel of the

National Nutrition Policy Study of 1974

Members of the Senate Select Committee on

Nutrition and Human Needs accepted recommendations of the consumer panel during the period

June 19-21, 1974. Among the many recommendations made are several on food grading (written by

Syd Margolius, consumer author).7 The report concluded that consumers are unable to compare food

quality and that grade labeling continues to be one

of the consumer’s main wants. The panel’s recommendations for change were seen as necessities if

the consumer is to use grades for comparing food

products. The report recommended the following:

(1) Quality grades need to be simplified, and the

nomenclature needs to be uniform. Present

grades were recognized as confusing for

consumers.

(2) Mandatory retail grades are needed on products which have their wholesale grades used

5white House Conference on Food and Nutrition,

“Food Quality: Guidelines and Suggested Administrative Structure,” p. 144.

GIbid., p. 142.

7UOS+ Senate, ~lect Committee on Nutrition and

Human Needs, National Nutritional Policy Sfudy—1974,

pp. 1980-1983,

(3)

by growers and processors in their transactions. This would exclude some foods from

retail grading.

Changes in the present standards must be

made. The panel believed that too much

emphasis is given to uniform appearance

and color rather than to nutritional considerations or even eating qualities such as

taste and tenderness.

The report also disputed industry’s claims that

Government grades would inhibit manufacturers

from trying to develop new products or better and

more exciting variations. Products that have been

sold with grades at retail--such as meat, poultry,

and juice concentrates—have been improved or

had new variations developed. Products with

grades have achieved consumer acceptance and

confidence, and producers and processors have

been encouraged to improve quality in order to

achieve a higher quality grade. Both consumer and

wholesaler gain from use of grades at the retail

level, the report concluded.

The 1975 GAO Report on Food Labeling

This report devoted a chapter to the USDA

quality grading program.8 It recognized that the

absence of clear and meaningful information concerning the quality of food hinders consumer

efforts to compare the values of competing products.

Consumers, the report noted, are presently having difficulties in comparing the value of products

because the nomenclature is often very technical

and difficult to understand and grade designations

vary from product to product. The report concluded, however, that despite the problems which

hamper consumer use of USDA grades, those consumers who understand the system seem to find it

useful in comparing the value of competing products.

Based on their findings, GAO recommends that

the Secretary of Agriculture revise existing regulations to make grade designations uniform and

easier for consumers and industry to understand,

in order to assist consumers trying to use the

USDA grading system. While the report does support uniform grades, it does not commit itself to a

recommendation that such grades be mandatory at

the retail level because of the possible increase in

food costs, nor does the report assess the present

USDA grade standards as being a valid measurement of food quality.

BFmd Labeling: Goals, Shortcomings, and Proposed

Changes, U.S. General Accounting Office, January 29,

1975, pp. 36-42.

80
APPENDIX B

CONGRESSIONAL INTEREST IN FOOD GRADING

Several food labeling bills were introduced in

the 93rd Congress; one of them—H.R. 1656, the

Consumer Food Grading Act-dealt with food grading. H.R. 1656 was introduced by Congressman

Rosenthal (D-NY) and referred to the Agriculture

Committee. The bill, which sought a uniform

system of quality grades for consumer food products, died in committee without any hearings or

other action.

In the 94th Congress, Congressmen Karth (DMN) and Price (D-IL) have each introduced identical bills, H.R. 3011 and H.R. 1367, both titled Consumer Food Grading Act and both awaiting action in

the Domestic Marketing and Consumer Subcommittee of the House Committee on Agriculture. In

addition to calling for uniform nomenclature at the

retail level, the bills give the food industry the option of stating the correct grade on the product

label or including the statement: “Not quality

graded by the United States Department of

Agriculture.”

Congressman Rosenthal has introduced another

bill, H.R. 42, the Consumer Food Labeling Act. This

bill had 58 co-sponsors and at the close of the 94th

Congress was awaiting action before the following

Interstate and Foreign Commerce subcommittees:

Consumer Protection and Finance, chaired by Congressman Van Deerlin (D-CA); and Health and Environment, chaired by Congressman Rogers (DFL). Both subcommittees expressed interest in H.R.

42, but neither subcommittee considered this bill

by the close of the 94th Congress. While portions of

the bill could be considered within the jurisdiction

of the House Agriculture Committee, Chairman

Foley would have to wait until the bill reaches the

House floor before this possible claim of mutual

consideration could be decided. If Chairman

Foley’s claim of mutual consideration is granted by

the full House, then either all or portions of H.R. 42

would be sent back to the Agriculture Committee.

Title V of the bill was labeled the “Consumer

Food Grading Act,” and the content and wording

of Title V was identical with H.R. 3011 and H.R.

1367. Food grading, however, was only one of the

many labeling issues which H.R. 42 considered,

while H.R. 3011 and H.R. 1367 dealt only with food

grading.

Congressman Gilbert Gude (R-MD) had a bill,

H.R. 472, before the Interstate and Foreign Commerce Committee that would have amended the

Federal Food, Drug, and Cosmetic Act to establish a

uniform grading system based on the nutritional

value of foods which would be applied to all food

sold in interstate commerce. The grading code was

to be “simple and easily understandable,” and a

program of consumer education about the new

system was to be triggered if the bill was enacted.

This system would take into account the nutritional or non-nutritional value of the product

being graded. This bill also died in the previously

mentioned subcommittees of the Interstate and

Foreign Commerce Committee.

Congressman Gude’s bill was introduced as a

result of a consumer questionnaire he circulated in

his Maryland district. The Congressman discovered that consumers are not using existing

grades to compare products but that some effort is

being made by some consumers to use the nutritional information provided to them. Consumers

indicated they were interested in quality rating

based primarily on nutrition as well as in more

nutritional information, and they favored the same

quality grades for a variety of food products.

Legislation on food grade labeling was not introduced in the Senate for the 94th Congress.

Neither of the two Senate Committees—Labor and

Public Welfare, and Commerce, which have

jurisdiction over any food labeling bills—had any

legislation introduced to them.

All of these food grading bills appear intended to

help consumers in food shopping at a time when

food costs are rising, Some bills seek to make the

grading nomenclature uniform, others call for

grade standards to incorporate nutritional factors

of a product, and still other bills limit revising the

standards for a particular product, primarily beef.

In all, at least 13 bills were introduced in the House

during 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 Labeling

Act

Nutritional

Grading

Nutritional

Grading

Truth in Food

Labeling Act

Consumer Food Grading

Act

Consumer Food Grading

Act

Marketing Practices Disclosure

Act

Marketing Practices Disclosure

Act

Food Labeling Act

Beef Grading Restriction

Consumer Food Labeling

Act

Consumer Food Labeling

Act

Consumer Beef Grading

Act

Committee

Interstate& Foreign

Commerce

Interstate&Foreign

Commerce

Interstate&Foreign

Commerce

Interstate& Foreign

Commerce

Agriculture

Agriculture

Interstate& Foreign

Commerce

Interstate&Foreign

Commerce

Interstate& Foreign

Commerce

Agriculture

Interstate&Foreign

Commerce

Interstate& Foreign

Commerce

Agriculture

82
APPENDIX C

FOOD GRADING WORKSHOP PARTICIPANTS

Co-Chairmen: Dr. Michael J. Phillips

Dr. Thomas L. Sporleder

Dr. Robert Angelotti Dr. Amihud Kramer

Associate Director for

Compliance

Bureau of Foods

Food and Drug Administration

Department of Health, Education,

and Welfare

Washington, DC 20204

Dr. Thomas Clevenger

Department of Agricultural

Economics

New Mexico State University

Las Cruces, NM 88003

Ms. Jennifer Cross

Consumer Action

301 Surrey Street

San Francisco, CA 94131

Dr. Richard Dougherty

Assistant Vice-President

National Canners Association

1133 20th Street, NW

Washington, DC 20036

Dr. Jean Geisman

Department of Horticulture

Ohio State University

Columbus, OH 43210

Dr. Timothy Hammonds

Director of Research

Food Marketing Institute

303 East Ohio Street

Chicago, IL 60611

Mr. Eddie F. Kimbrell

Assistant to Administrator

Agricultural Marketing Service

United States Department of

Agriculture

Washington, DC 20250

Department of Horticulture

and Food Technology

University of Maryland

1122 Horticulture Boulevard

College Park, MD 20742

Mr. Rod Leonard

Executive Director

Community Nutrition Institute

1910 K Street, NW

Washington, DC 20006

Ms. Dorothy Lyon

College of Home Economics

University of Tennessee

Knoxville, TN 37916

Dr. Bruce Marion

Department of Agricultural Economics

University of Wisconsin

Madison, WI 53706

Dr. Daniel Padberg

Department of Agricultural Economics

University of Illinois

Champaign-Urbana, IL 61820

Dr. Zane Palmer

Department of Animal Sciences

University of Florida

Gainesville, FL 32601

Mr. Mark Thomas

Director of Merchandising

National Livestock and Meat Board

444 N. Michigan Avenue

Chicago, XL 60611

Dr. Elaine Wedral

Director

Research and Product Development

Libby, McNeill, and Libby

1800 W. 119th Street

Chicago, IL 60643

83
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 to

conclude grades would work effectively at retail.

Yet some rather startling contrasts occur when the

extension of the grading concept is set in the transaction between the retailer and the consumer,

rather than in the transactions among middlemen

back in the system. Some of these contrasts may be

useful in appraising some particular problems

associated with getting user input into the process

of determining and using retail grades.

User input has been an important aspect of

creating grades and grading programs at the

wholesale level. At this level, users are experts,

spending their life in the practical or theoretical

study of the market transactions under consideration. When public agencies developing grading

systems or enforcement procedures need information on any aspect of market behavior, they can

simply telephone active traders and ask them. In

addition, the hearing process is an effective way for

public agencies to acquire information. Since users

are experts and would be directly affected by any

program, they are motivated to inform themselves

of imminent public decisions about grades and to

respond to hearing calls.

In addition to the availability of expert information and the willingness of experts to respond, the

subject matter of importance in transactions among

experts is objective facts about the products. Sometimes these objectives facts may be difficult to

measure, such as color, but even this attribute of

some products is quantifiable electronically. Unlike

the characteristics of final consumer products—

such as style, convenience, and other rather subjective attributes—the expert’s primary focus is on objective characteristics of the product.

Private product definitions, particularly product

brands, have relatively small meaning and importance to transactions among experts. Experts tend

to develop and execute transactions on the basis of

objective information and product definitions or

ratings. Competing private product definers are

*This section is based on a paper written for the

Office of Technology Assessment by D. I. Padberg entitled “Consumer Input for Consumer Grades and Product Labels, ” October 1976.

therefore less developed and have less momentum.

The formulation of grades simply amounts to the

groupings of objective product attributes already

understood and used by traders into uniform product definitions. Users are often motivated to

cooperate because, being experts, they can perceive

advantages in a uniform system to themselves and

their trading partners.

Special Problems Related to User Inputs for

Retail Grades

In the transaction between the retailer and the

final consumer, objective information about product characteristics may be important, but it shares

the stage with many other subjective characteristics. The image of a product, as well as its technical characteristics, affects its value. While experts

are rationally motivated to give meticulous care to

buying products at the lowest price, consumers

may be rationally motivated toward very different

objectives. Consumers are exposed to thousands of

items on a shopping trip. A careful analysis of the

best buys would take many minutes and perhaps

hours. Even after such analysis, it is questionable

whether or not the technically best buy would be

sufficiently cheaper than the product purchased by

habit to justify such time expenditure. So it may be

quite rational for consumers to have a purchase

pattern in which consumption habits and spontaneity are more important determinants of choices

than analysis of objective facts about products.

Also, consumers are accustomed to making product judgments and evaluations based on private

communicators such as brand names, and considering a new public system is somewhat foreign

to them.

It goes without saying that obtaining user input

for defining the most appropriate and functional

system of retail grades is very different from the

simpler counterpart process for wholesale grades.

Consumers are not sufficiently interested or aware

to respond in large numbers at hearings, as experts

would. They may find it very difficult to answer

questions about their attitudes toward or

preferences for a retail grading system which is

generally unfamiliar to them. This means that,

even with special initiative on the part of the

public, it may not be easy to accurately reflect con84
sumers’ long-term interest pertaining to retail food

grades.

Reasonable Expectations for Consumer Surveys

In our complex society, more and more important determinations are taken by the action of

groups and less and less by the action of individuals. As food products have grown in number

and changed in character, the primary initiative in

the design and selling of a food product is taken by

producers or manufacturers. The consumer as an

individual reacts passively. In this situation,

manufacturers must go to consumers in some

survey method and probe the consumers’ interests

for potential products. The public, in designing

grading systems for food products at retail, must

similarly go the passive consumer for information

useful in designing a functional grading system.

Two types of situations need to be defined in

assessing useful output from surveying consumers’

views, preferences, and opinions. The first situation is where the consumer is aware of the topic

being surveyed and has “performed” views and

opinions. In this situation, the survey objectives

and methods are relatively simple. Little time is

needed in conversing with the consumer as to

background or definitions of the topic or product

being surveyed. Consumers are frequently and

conveniently surveyed in the supermarket with a

questionnaire requiring five to ten minutes.

Telephone surveys are also quite credible in this

situation. Reactions to political candidates or

preferences pertaining to known products are examples of situations where this relatively shallow

inventory of preformed attitudes and reactions is

effective and useful.

In this situation, consumers are not asked to

think or analyze. The interview process simply inventories attitudes already developed and formed.

In short, surveying preformed attitudes or opinions

or preferences is relatively easy, straightforward,

and inexpensive.

Useful output from consumer surveys becomes

more difficult, however, when the topic of the inquiry is one about which consumers are generally

unfamiliar and therefore about which they have no

preformed positions. In this situation, a much more

delicate interview process must be followed. First,

the consumer has to have the topic introduced. Introducing a new topic to a consumer for which and

about which a reaction is to be solicited is precarious. It is most difficult to describe a topic such

as retail grades without conveying an emotional

approval or disapproval. In terms of consumers’

reaction to this introduction of the topic, their

ability to receive and appraise it depends considerably on their previous experience. If similar

concepts 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, consumers who do not find through experience a functional context in which to receive, analyze, and

react may be unable to give a useful interpretation.

In this latter case, they will be searching most actively for clues from the person introducing the

topic on how to evaluate it. The interviewer is trying to be neutral: the interviewee is searching for

clues.

In this situation, the interview process may be

asking the consumer to do the impossible. Consumers are being asked to give information they do

not have. They only have what was given them. If

the proposition is presented so it is absolutely

sterile of value judgments, they may find it very

difficult to analyze and say what their feelings or

views are. On the other hand, if the proposition is

laiden with values, 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 food

grades is clear. Experts have considerable difficulty

conceptualizing the operational mechanics and

user implications of retail grades. It may be naive to

expect that consumers can efficiently and directly

advise on how to design such a system that would

operate effectively.

The pivot point of this argument turns on what

you expect the consumer knows about the subject

of retail food grades specifically or “product information on product labels” generally. Experts who

have spent their professional lives dealing with

food product characteristics have the tendency to

assume: 1) that these characteristics are important

to consumers; 2) that consumers in large numbers

are concerned and worried about these matters; 3)

that consumers have preformed attitudes about the

ideal kind of information they want on labels; and

4) that consumers would use such informative

labels. After conducting thousands of interviews

relating to consumer reactions to unit pricing and

nutritional labeling, Padberg feels such “face

value” interpretations of the meaning to consumers of informative labels are naive. Informative

labels have meaning and usefulness to consumers,

but meaning and use are different than experts anticipate. 9

9R.J. Lanahan, J.A. Thomas, D.A. Taylor, D.L. Call,

and D.I. Padberg, Consumer Reaction to hlutrifional IrIformation on Food Product Labels Search, Vol. 2, No. 15, Cornell University, 1972.

85
What Do Consumers Want?

In today’s affluent society food consumed at

home is by and large a maintenance activity, necessary but not the central focus of life. The “good

life” involves creative, humanitarian, and other

fulfilling activities. From a very young age, we

leave the household frequently for extended

periods 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 for

consumption inside or outside the household. They

are even willing to pay professionals to suggest

things for them to buy. Consumers want to react

rather than to plan.

Consumers want to purchase food quickly and

have assurances that this maintaining substance is

safe, wholesome, nutritious, and economical.

While consumers do not want to analyze product

quality definitions or ingredient labels as a part of

the purchase decision, they want to feel that someone is accountable for the nutrition of the product

they will offer their family. In other words, they

want to be able to hold the food distribution system

accountable. Accountability used to be a personal

matter in the small business world of the past,

where the grocer, local butcher, or baker was also a

neighbor. The gigantic modern firms shipping food

all over the country and around the world are extremely impersonal. The impersonal nature is not a

particular problem because consumers have their

own hierarchy of preferences for personal interaction. The grocer may not be high on this list. Nonetheless, the consumer still wants accountability.

The important function of informative labels

and public initiative in defining products is essentially twofold. To the consumer it means accountability. It means that someone, including public

representatives as well as private firms, is paying

attention to important matters such as nutrition

and safety, etc. To manufacturers its meaning is

much more complicated and comprehensive.

Nutritional labels, for example, stimulated

manufacturers to a great deal more nutritional sensitivity than they had previously. It provided a

basis of comparing their product values which did

not previously exist, and they were most sensitive

to it. That comparison became not the sole element

but another important element in their competitive

rivalry with other food manufacturers. Even

though individual consumers may not use this information routinely as a point of purchase aid, consumer groups may give careful surveillance to

nutritional quality in general and specific terms,

So, in this case as usual, the important actions and

determinations are the results of initiatives of

groups rather than individuals. The individual sees

it as a symbol that this issue is being addressed. The

initiative, action, and changes result from interactions of various groups-competing firms, consumer groups, or governmental agencies.

In summary, individual consumers desire accountability from the food distribution system, but

it may be naive to expect consumers to have input

into the design of a retail grading system for food.

Useful input into the design of the mechanics or

implications of various retail grade schemes is not

likely to come from individual consumers, since

consumers would be asked to give feelings and information about their desires which they do not

possess. Although individual consumers may not

possess strong opinions concerning the specifics of

retail grades, a more general desire for accountability of the system exists among consumers, A

retail grade system could be a part of the accountability which consumers desire.

86
GLOSSARY OF TERMS

Grade criterion—the standard on which the

sorting process separates a product into two

or more groups.

Grade designation or nomenclature-a set of

terms used to signify the various grades.

Grading--a sorting process which separates a

product into two or more groups

the use of a base criterion.

Mandatory system-grades are establ

the Federal Government and use

grades would be required by law.

through

ished by

of these

Nutrition labeling-a voluntary declaration

of the calorie, protein, carbohydrate and fat

content and the percentage of U.S. Recommended Daily Allowance for protein and

seven vitamins and minerals in each processed food product.

Private voluntary system—grades are

established by industry and used voluntarily.

Processed foods--any fruit, vegetable or other

food product which has been preserved by

the recognized commercial process, including, but not limited to, canning, dehydrating, drying, the addition of chemical substances, or fermentation.

Retail—that level of the marketing system

which sells goods to ultimate consumers for

personal or household consumption,

Safe—refers to a food product possessing no

defects or impurities which present a health

hazard.

Standards of identity—regulation issued

under the Food, Drug and Cosmetic Act

which states that for certain processed food

products to be sold legally under its common or usual name, it must be made in accordance with certain specifications.

Variety identification program--a potential

criterion for grading fresh fruits and

vegetables based on labeling with respect to

variety. This criterion would convey information regarding such aspects as appropriate end use or flavor of the product.

Voluntary/Mandatory system—grades are

established by the Federal Government and

any business firm that elects to enroll in the

program must adopt the established grades.

Wholesale—that level of the marketing

system which sells in quantity usually for

resale.

Wholesome-a term which refers to defects in

food products which are not a health

hazard to consumers.

Yield per pound or per serving-a potential

criterion for grading fresh meat based on

the amount of external fat in relation to lean

per retail cut,

o

87