Local company plays lead role in national reform effort

EricWengerGHF487

EricWengerGHF487 Golden Heritage Foods has tried to make integrity the cornerstone of its local corporate culture.

Now, the Hillsboro-based company?and third largest honey packer in the country?has played a leading role in elevating integrity in the inter?national honey market through an organization called True Source Honey and a companion labeling initiative called True Source Certified.

truecertified1fTrue Source Honey was formed as an effort by several honey companies and importers to call attention to the problem of illegally sourced honey, and to highlight and support legal, transparent and ethical sourcing, said Eric Wenger, director of quality at Golden Heritage Foods and chair of the True Source Honey board.

?At the end of the day, that?s all we?re after here?be honest, be ethical and tell the truth,? he said.

The problem

?The root of this goes back to the early 1990s,? Wenger said. ?China was selling honey into the United States at incredibly low prices?prices far below the cost of production.?

The U.S. placed a tariff on Chinese honey in an effort to offset the low-ball discount. It became less attractive because of the higher price, but it was still cheaper than U.S. honey at that time.

?Most customers and consumers really didn?t want Chinese honey,? Wenger said. ?China, already then, had enough of a reputation that people tended to prefer other sources.?

That reputation was first for marketing contaminated honey, then for diluting its honey through an ultra-filtration process used to make the product passable.

?What you?re left with is a watery, sweet syrup,? Wenger said. ?So you dehydrate it back down to the consistency of honey. Basically, they?ve cleaned it up, but they haven?t changed their practices.

?There?s no country in the world, except perhaps China, that recognizes that as honey. Honey needs to be produced by bees.?

Even so, the low-price market among less-scrupulus competitors, who could pass on the discount to their customers, would be at the expense of companies like Golden Heritage Food that are selling high-quality honey.

To avoid the true origin of their honey and the U.S. tariffs, the Chinese companies began ?laundering? their product through third-party countries in Southeast Asia and South America.

?In probably three or four years, honey was just pouring out of those countries and into the U.S.,? Wenger said.

True Source Honey estimated that the U.S. lost up to $100 million in 2008 and $106 million in 2009 in uncollected duties because of illegal honey imports.

?What companies like Golden Heritage Foods were faced with was: If you?re not going to participate in it, you?re going to have to compete against it,? Wenger said.

?So what do you do??

Joining forces

The first thing Golden Heritage did was join with like-minded U.S. companies to create True Source Honey, LLC.

?They said let?s at least get together and let?s collaborate on some marketing and some customer and consumer awareness,? Wenger said. ?Let?s publicly state where we stand.?

That arrangement functioned for about a year or two, but with limited impact in the marketplace.

?Collectively as companies, we said it?s nice that we have this,? Wenger said, ?but it?s still us telling the truth about what we?re doing and some of our competitors are still lying about what they?re doing.

?So we decided to look into a way to prove (ethical sourcing). That?s when we as a group decided to pursue True Source Certified.?

Similar in concept to the Good House?keep?ing Seal of approval, a ?True Source Certified? label on a honey bottle verifies to the public that the product inside it is ethically sourced and manufactured.

But the founders knew it would take more than the presence of a label to establish credibility in the marketplace.

?The key to this is a third-party audit,? Wenger said. ?The customers in our industry are all very accustomed to third-party audits because they require all manufacturers to go through them for food quality and food safety.

?We said let?s just make an audit for traceability and ethical sourcing. There are already auditors out there for ethical business practices. It really wasn?t a stretch for us to ask a third party to come in and verify our claims of using ethical and legal sourcing practices.?

The group hired InterTek, an international company that does ?tons? of audits around the world.

?We chose them because they have offices in potentially every major honey-producing countries in the world,? Wenger said.

Making an impact

A little more than a year has passed since True Source Certified began. The U.S. honey industry is relatively small, with about a dozen major packers and 20 to 30 regional packers. The alliance for integrity is growing slowly but surely.

?We?ve seen very little objection from anyone, except those we suspect have engaged in suspicious practices,? Wenger said. ?It?s hard to argue with an idea that allows you to prove that you?re following the rules.?

Wenger hopes some of the offending U.S. companies will be prompted to change their ways.

?I think there are a lot of companies that made a decision to turn a blind eye to (fraudulent sourcing) for their own survival,? Wenger said. ?It was either turn that blind eye or go out of business.

?This is kind of an amnesty program for them. Now we?re giving them the means by which they can be completely legitimate, and by which they can now compete against folks who are going to chose to circumvent it.?

Wenger is careful not to give Golden Heritage Foods all the credit for the change, but he acknowledges GHF played a necessary role.

?It takes a catalyst, and I think Golden Heritage Foods was that catalyst,? he said. ?As a group, we tend to prefer action to inaction. We saw something that needed to be corrected in our industry. So it was, what do we need to do to fix it? We went and did it.?

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