Washington businesses break ties to industrial-food chain

STEVE LUNDE had high standards for his Caveman energy bars, aiming to create "a good, simple product." One of his popular bars has just three ingredients: Peanuts, brown-rice syrup and salt.

His good intentions and research, though, couldn't save the Edmonds man from the same sticky web that ensnared companies that thought nothing about handmade products or natural ingredients. The federal Food and Drug Administration turned up at Lunde's door earlier this year, warning him that his peanuts, like those of hundreds of other producers, originated at a plant associated with a massive salmonella outbreak.

The Peanut Corporation of America recall, one of the largest in the nation's history, was connected to nine deaths and hundreds of illnesses. But it also exposed how even companies that pride themselves on being small, natural and pure might unwittingly use the same products as the country's largest corporations. Kmart and Walmart's bakery issued peanut-recall notices, but so did Seattle's Mighty-O vegan doughnuts and fair-trade champion Theo Chocolate. Kroger-owned Fred Meyer was on the recall list, but so was PCC Natural Markets.

Lunde's small business, which began at farmers markets and has spread to natural-foods markets, was hit hard. "God, it was awful, absolutely awful," he recalls now. He couldn't have imagined his company would be involved.

"Nobody realized how centralized processing is for a commodity like that, how widespread," says Russ Ruby, director of merchandising at PCC, who remembers the groans in his office when yet another product was added to the recall list.

That complicated network, where a single producer's goods are distributed by intermediaries throughout the country, tangles up a lot of companies — especially "organic, small, niche players," says Bill Marler of Seattle-based Marler Clark. He's one of the country's leading food-safety attorneys, representing several victims of the outbreak.

"It's hard to scale your product to make it efficient and make money, and to grow, without also expanding your supply chain," Marler says. "And when you start to do that, you lose direct control. It's not like you grow your own peanuts, you blanch your own peanuts, you roast your own peanuts."

True. But, in the recall's aftermath, some of those stuck in that far-reaching food web are disentangling themselves from as many strands as they can.

TWO MILES from the Kingston factory where Lunde hand-cuts his Caveman bars is an incongruous sight for Washingtonians: a small, family-owned peanut factory.

Clark and Tami Bowen run the certified-organic "micro-roastery," CB's Nuts, with — literally — an open door. Anyone walking into the remodeled fire station can peer from the small retail area to the factory floor, watching the peanuts move from enormous hanging cloth storage bags to the carefully tended roaster to the other stages of processing and packing.

"These guys were a lifesaver," Lunde says, dropping by CB's one day on the way to work. Their nuts smell better than any others, he says. They look better, more golden and robust. They taste better — a lot better.

"It's night and day by comparison," Lunde says. "At CB's, I can actually go down and see what they're doing."

When Lunde first made his bars five years ago, he bought raw ingredients from the bulk bins of markets he trusted, such as PCC and Town & Country stores. As he grew, he searched out their same suppliers to assure quality, appreciating the "one-stop shopping." (His distributor, which he still uses, now stocks CB's as well.) But, just as the rise of supermarkets created distance between customers and butchers and cheesemongers, one-stop shopping took away his firsthand quality control.

Within that system, it's hard to know what he could have done differently. The Virginia-based Peanut Corporation of America (PCA) paid for audits to show its customers, and they were glowing. Yet inspectors who went to its Georgia and Texas plants after the recalls reported dead rats and roaches, leaks and mold.

In stark contrast, the Bowens' 1,000-square-foot plant in Kitsap County is shiny clean. And nothing here is warehoused, Tami Bowen says. The pallet of nuts by her side was roasted the day before and was scheduled for pickup the following day.

CB's was founded in 2002, starting out as a cart outside Safeco Field, led by the peanut-loving cravings of Tami's husband, who had sampled fresh-roasted peanuts at Baltimore's Camden Yards. He talked his way into tours of top peanut plants in the South and Southwest, and relentlessly pursued the suppliers he wanted. He learned the ins and outs of the roasting business, even rebuilding an old peanut-skinning machine, which now vibrates the skins off 1,000 pounds of nuts an hour.

When the recall hit, retail customers wanted nothing to do with peanuts of any sort for a while. But CB's did get some new business. And the scare was a wake-up call for Bowen, who never used to check his products for salmonella. He figured he had two "kill zones," salting his products and then roasting them, that would eliminate any risk. Now, CB's sends samples to a Portland laboratory twice a month. It's also a plus for customers, who can see objective data proving the products' safety.

The grail, for Bowen? Cutting through the supply web even more, roasting peanuts grown by Washington farmers. The state's climate is not ideal for the nuts. They've been produced only on a small scale, such as at Alvarez Farms, near Yakima, which sells at local farmers markets.

But Bowen is working on a pilot project with Washington State University researchers and Pasco farmers, seeing if the Northwest's soil and climate could produce enough nuts for a local supply.

"I want that so bad," Bowen says, holding a jar of an early trial crop. "I would love to bring peanuts to Washington."

LUNDE APPLAUDS CB's, but seeking out a trusted local source won't work for every ingredient on his list. The Northwest doesn't produce salt, for instance, or rice. He's experimented with using Washington honey instead of brown-rice syrup, but it makes the bars too sweet for his taste.

Future Caveman products might skew toward products he can find locally, such as hazelnuts. But Lunde is counting on another change to avoid future chaos, simply tightening the way he does business. He tracks each shipment of ingredients now, knowing exactly what batch went into which bars. If a recall happened again, it at least wouldn't hit him as hard.

Tracking, in some ways, has replaced trust at the Seattle-based Cougar Mountain Baking Company, which has built a burgeoning business on quality packaged cookies made in the Northwest. Company founder David Saulnier was first assured by his distributor that his supplies were not affected by the recall, then told they were.

"I had never heard of PCA. I had no idea we were using their peanuts," Saulnier says.

"The peanuts we were getting were in unmarked boxes that were basically, quote-unquote, private-label peanuts. So we have a trust factor with that distributor and figured, OK, they've done their homework, this is a good product. And unfortunately, that wasn't the case."

Now, he requires a name behind every ingredient he takes in. In retrospect, it seems obvious. But "there were so many companies that have multimillion-dollar R&D budgets and things that I'll never have, and they missed it, too."

PCC markets also began requiring companies to disclose their sources for peanuts.

"A couple companies didn't want to do that initially. They felt it was a competitive disadvantage," says Ruby. PCC signed nondisclosure agreements to assure the companies they wouldn't share the sourcing. But they felt they had to know. Mighty-O, for instance, had been burned by buying a topping with peanuts "from a company that brokered products through another company that ultimately was sourced through PCA. It was four steps beyond them," Ruby says.

Local is more than a buzzword in those cases; it's a way to maintain control. And Saulnier does aim to put local products in his cookies. "My blueberry provider is a farm down in Canby, Ore. I visited the farm and learned more than you'd ever want to know about blueberries," he says.

But, like Lunde, he can't get all his ingredients from a local factory or farm. Some, like his macadamia nuts, are imported from other countries. To some degree, he must count on government regulation. Tightening that, says attorney Marler, is key.

"I'm always sort of amazed at the lack of common sense and common self-interest on the part of industries, and on the part of government, to protect themselves from dumb things happening," he says.

Companies making products in today's world are as much consumers as people buying ingredients at grocery stores.

"That's why I'm a big supporter of adequately funding the FDA and FSIS (Food Safety and Inspection Service), and having some rules and regulations," Marler says. Some people might find regulations onerous, but without them, it's hard for consumers and manufacturers alike to ensure the products they're getting are safe — "or, at least, as safe as can be."

WITHOUT NEW laws, without going micro-local, can companies make any bigger breaks from the food web? At Snoqualmie Gourmet Ice Cream in Maltby, owner Barry Bettinger has some answers.

The Snohomish County producer and distributor is small compared to a Haagen-Dazs, but large for a regional business, producing more than half a million pints a year and growing. Over the past year, Bettinger has drawn in the supply lines for virtually every item he adds into his pints and cones.

The products he was buying for his ice-cream flavors, he says, were becoming alien to him. Cheesecake bits had chemicals on the ingredient list, names he didn't even recognize. "Caramel" arriving in his shipments contained no dairy products. The industry-produced cookie dough "was getting worse and worse."

So, he hired a pastry chef to teach him what he needed to know, seeking out a "clean" ingredient list. Now he makes his own caramel with fresh Northwest cream and butter. He bakes his own brownies and chocolate-chip cookies, his own dense New York cheesecake, his own sour cherry compote to swirl into his ice creams. Students at the nonprofit Fare Start organization will be baking cookies to his specifications for gingersnap caramel gelato. "It's amazing how expensive it is to make my own," he says. It would be cheaper to ship the prefab stir-ins from across the country.

Bettinger's switch wasn't prompted by the recall. Unlike most small businesses, Bettinger had a strict Hazard Analysis and Critical Control Points plan in place to improve food safety. When FDA agents showed up at his door, it took just 10 minutes to produce records showing he had purchased a single product that tracked back to PCA — chocolate-covered peanuts — and that they had gone into a single batch of ice cream for a single shop, two years in the past.

Those peanuts wouldn't have gotten in the door today; Bettinger would have coated his own. He rarely deals with distributors now regardless, going directly to the source for most products. And yet, could even he disentangle himself from the national web entirely?

"Oh, no. I don't think it's possible," he says. "There are so few product manufacturers left — I deal with that every day — and fewer and fewer all the time."

Part of the national web, of course, is cost. PCA peanuts were popular in part because they were cheap. Even the federal government — a major buyer of commodity crops — purchased PCA peanuts, using them for free-lunch programs in the schools.

The web, in fact, extends widely through school-lunch programs, where between 15 and 20 percent of the contents nationwide come from the national commodity-foods program, bulk foods that the government buys from farmers. The federal General Accounting Office warned in an August report that schools aren't getting adequate and prompt enough information about potentially contaminated commodities.

The GAO examined the peanut recalls, as well as major recent recalls on ground beef and canned vegetables. Schools in four states had received potentially contaminated peanuts from Peanut Corporation of America, the report said: Idaho, Arkansas, California and Minnesota. Because the federal Food and Nutrition Service, which oversees national school-meal programs, did not immediately place a hold on all PCA peanut products, "children may have possibly consumed these products through the school-meals programs — products that were later included in the expanded recalls. According to the CDC, of the 691 individuals sickened, 226 were school-aged children."

Washington state schools had not received any nuts associated with PCA — which was a relief, says Skip Skinner of the state Office of the Superintendent of Public Instruction. Despite the recall, commodity peanut use in the state has "remained fairly steady," he says. This school year, more than 90,000 pounds of peanut butter have been shipped around the state for use in lunches.

THE EFFECTS of this vastly complex system are more than financial or logistical.

Just ask Bill Rector of Whatcom County, whose 3-year-old daughter was hospitalized for four days in January for a peanut-related salmonella case. She fell ill after eating Austin-brand peanut-butter crackers, which have been linked to other cases in the outbreak. There was "blood coming out of her constantly, they had her on an IV all day," Rector says. For the first 48 hours especially, "it was a nervous thing. They were keeping an eye on her organs and all that."

Rector knows this mostly second-hand, because he was hospitalized in a separate room during the worst of it with his own case of what doctors assume was salmonella from the same source. "It's a horrible, horrible sickness. It felt like I was being stabbed in the stomach."

His daughter, Payton, still needs follow-up checkups and must be on the lookout for Reiter's syndrome, an arthritis that can follow salmonella. Rector is one of Marler's clients in a lawsuit against Kellogg, which produced the crackers.

In terms of the family's trust in their food, a lot has changed. "When my wife goes shopping, first, she doesn't buy any peanut-butter products anymore," Rector says. She cooks at home all the time, she buys vegetables locally, but "it's hard to go shopping, especially when you're on any kind of budget, to buy things, where you don't know where you're getting them from," he says. "She still talks about it . . . 'We don't know this company' and 'Where is it coming from?' There's only so much you can do. . .

"I never even thought about it before."

Rebekah Denn is a Seattle food writer. Follow her blog at www.eatallaboutit.com. John Lok is a Seattle Times staff photographer.

Information in this article, originally published Nov. 17, 2009, was corrected Nov. 25, 2009. A previous version of this story incorrectly stated that Camden Yards was located in Boston. It is in Baltimore.