Monday, July 20, 2020 - The Regulatory Cost of Hospitality

Video Subtitles:

it's july 20th and today i will be
continuing the dignified hospitality
series
uh looking at the cost of business
specifically
around the regulatory costs and that's
you know not just cost money wise but
it's also
administrative costs and other resources
necessary
to be in the food business and remain
compliant within regulations so
i'll just be here today by myself today
i don't have any planned guests
um if you want to join in please let me
know and
love to have you on and chat but i
figured this is going to be more of a
presentation
uh about uh you know what are the
certain things that
uh uh entrepreneur that wants to be
in the restaurant industry and not just
restaurants but also the food industry
what are the things that they have to be
mindful of
and have to consider in their startup
cost as well as
their maintenance cost of running a
business and
here in southern nevada which is where
t-led is located and within
the jurisdiction that our business has
to be compliance
in in regards to
health code and to food safety
and we work on a you know a fiscal
year schedule so actually right now uh
beginning of july is the start of the
new cycle
for the food establishment permit
program that they have
so i'm actually waiting for and have
been waiting for
some time now uh hi belinda good to see
you
i've been waiting for our health
inspector to come do their inspection
here um
thanks for saying hi belinda i hope
you're doing well i hope you had a fun
tax season i saw you online
motivating people to do their taxes i
love that you're always doing that it's
great
hi marco good to see you talking about
food i'm talking about food regulation
today
i'm gonna kind of highlight what are all
the different
regulatory concerns that a food business
be it
a food manufacturer a warehouse a
distributor a food and importer
as well as restaurants or even the
convenience store
a food retailer what are the
um considerations and most importantly
the costs
because i've been using this dignified
hospitality series to
develop a manifesto of where the food
industry
can go you know not to say that this is
you know the ultimate solution but
you know i'm i've been talking over the
past several weeks with different
professionals within the food industry
from different segments from
everything from bartending and serving
to
cooking to chefing to you know actually
owning restaurants and managing teams
and restaurants as well as
vendors to restaurants so that's like
more on the industrial side and supply
chain side
and kind of talking about what are the
uh
challenges and the issues that running
these types of businesses had before
the pandemic and then also
what issues have come since pandemic
which has been
huge and actually the food industry has
been the hardest hits
uh in in everything that we're dealing
with right now uh so yeah i think
now is the perfect time to make some
adjustments to make some
assessments about what's working what's
not working and what can we do
as an industry as well as in today's
subject we'll be mostly looking at this
as citizens that are represented
with these you know legal systems that
are meant to protect
us as citizens but actually can be quite
inhibitive of innovation
and of sustainability in our food
systems
and those are the food regulations so
just a little bit of historical
background on food regulations here in
the united states
there was a really famous book i'm going
to get the exact date right because
by upton sinclair and that
was written a long time ago
it was written in 19.
1906 well that's a lot sooner than i
thought it was
um but i know that it was
what um actually was originally
published in
january 25th 1905
and it was like an expose on the meat
industry the meatpacking industry
about contamination even about workers
rights
and just how kind of barbaric the
industry was
and that caused some major food
regulation
uh to come about
and actually kind of justified our oh
well so this is it
um the meat inspection act of 1906.
so this was like the first um
you know major food regulation
thing that came along and in the
during the
roosevelt administration there was quite
a bit of
more regulation that was brought about
and then over the years
there's been things added on to it and
other programs added on to it
and most recently in uh 2017
well i believe it was first voted on
again i want to get the dates right
in 2010 it was passed by congress in
2010 it was signed into law
january 4th 2011 but we didn't start
seeing the first regulations being acted
until 2015.
and that's how like the food regulation
system works and so
really if we do want changes uh to
happen to
you know these bureaucratic regulatory
systems around food
we need a lot of time because first you
have to get it
uh you know passed as a law by congress
and senate then you have to get it
signed by the president and then that is
then given to
our bureaucratic organizations who would
then write the actual laws
that would enforce what the act is
proposing that it does
um and so yeah this this process takes a
long time
and uh you know this this most recent
one
is called the food uh safety
modernization act
fisma so that's like you'll mostly hear
it called fisma
in the industry you'll say people oh is
this fisma safe is this fisma compliant
that is just the name of the actual law
that was signed by
congress uh and then the regulations
were proposed by the fda
and these regulations were the most
stringent
food safety regulations that we've had
enacted here in the united states in
over 70 years
you know this this time in 1906 when the
jungle was published and the public
responded
uh to that expose with
you know stronger standards on food
safety
uh was kind of the start of it and it's
really
kind of gotten out of hand now and uh
you know not to say that we don't need
to be concerned with food safety and
concern
with you know holding
food providers restaurants food
companies holding them accountable
for food safety and that's absolutely
correct that we do that
but the challenge remains you know how
how limiting are uh you know
some of these requirements that food
businesses
have to comply with and how much of it
is actually just rigged against them
and there's a lot of criticism and a lot
of it coming from me directly i have
very strong opinions about
the the latest regulation the food
safety modernization act
i have a very strong passionate um
opinion about uh who wrote that who was
motivated to write this regulation
because frankly
a lot of the the stuff that got passed
is really not
improving the food safety of our food
it's justifying why
big food should be the only one to
survive
the only one that should be qualified to
provide
food uh to the public um and so
what's unique about the the food safety
modernization act
uh there's five parts to it
that u.s based food manufacturers have
to have
full gmp programs which they had to have
before
and i'll go into detail about what gmp
means and what's involved in that
but you also have to have hasset
programs and house up is uh
it's an important program for certain
products
um not so important for something like
tea for instance
uh very much not important kind of
irrelevant
and just you know really causing a high
administration
um you know need for these food
companies to remain in compliance
um and uh and then the other parts are
in relation to um you know foreign
supplier
uh verification that like if you're an
importer and so this
this is the part of this new regulation
that affects our business
uh not just helen's business but pretty
much all of the food industry
and i've been saying since these
regulations were first
being written that it was causing it
would cause a huge threat
to the specialty tt industry because
specialty tea
is coming from small scale
artisanal you know family operations
that are usually just top happening
in a very rudimentary fashion in
you know a back shack at their property
at their home
they may be withering tea leaves just
out in the open on the road
and so this um foreign supplier
verification
you know uses a third-party audit system
that your customs agent at the point of
entry of your product
would have to exist this
certification this third-party verified
certification that the
producers of the products that are being
imported
are actually um
having the same food safety compliance
that we have in the united states and so
that's the same gmp
hasset programs and it's just
it's a black or white type of a thing so
in the us
for food companies when it comes to the
fda the fda only has
bandwidth to handle two percent
of all the food in the us as far as like
directly regulating directly inspecting
directly
touching and being involved with two
percent and they of course prioritize
things as well
and so t because of its low water
activity and low susceptibility
to um you know short shelf life and
contamination
t is actually uh very low on the icu
blender
t is very low on the priority list for
the fda
to inspect and be involved with so
if you are a tea company here in the
united states uh
it's actually very unlikely that you are
going to randomly be inspected by the
fda
versus when you're importing your
product and this customs agent
is checking that all the paperworks are
there they
it's a black or white type of a thing
and the fda does not have to exert any
bandwidth in order to
verify that these foreign suppliers are
being audited
and so not only do these foreign
suppliers have to
retrofit their operation and maybe hire
some consulting to help them
navigate these retrofits and these
administrative programs that are there
they also have to hire the third party
auditor to come
in and inspect their facility and issue
the certification
that would be used on their exports to
the united states
or else if those certifications are not
there then the product will be returned
it won't be allowed entry into the
united states um
and so that's why this particular
regulation
has been a bit of a hurdle uh for
for us here at tila and also for us you
know in the in the industry at large
uh because uh shipments have been sent
back ever since
uh earlier last year uh our fda
customs agent here in las vegas um
has been requiring uh you know higher
levels of
documentation and and accountability for
um the products that we're bringing in
and
i have yet to have a shipment returned
myself
you know returned to the producer but i
have heard stories of other companies
that had their products returned
because the documentation was not
correct now i've had the
the fda agent call me and tell me you
know they needed certain documentations
and
thankfully we were able to provide those
but there is a severe threat of your
products not making it here into the
states
because of this regulation so you do
have to be mindful on these
and you know if you're a early stage t
startup
and you're thinking about importing
directly from the grower
i would highly recommend that you become
knowledgeable on this regulation and
make sure that you're in compliance
because
uh you could learn a very expensive
lesson um
you know in business and and how this is
all working
uh but you know today i i want to like
really more focus
on restaurants because this is about
hospitality this is about the restaurant
industry
and the fda doesn't
concern restaurants too much i mean the
fda would definitely be concerning
of the vendors that supply restaurants
to make sure
that those manufacturers are uh you know
up to compliance
but um you know a restaurant is not
dealing directly with the fda
a restaurant is not having to have a
hasset program although um you know
interesting little history fact about
the hasset program
it was developed by nasa that they were
the original ones that came up with the
idea of the house of plan
has up translates to hazard analysis
critical control point
and so this is a program that a food
manufacturer will develop where they
look at all of the processes
that they use and uh determine
at each step in the process is there a
critical point
where you can reduce the chance you can
significantly reduce the chance
of contamination or of you know defect
in your product
um you know and really focusing more on
the the foodborne you know
microorganisms or even it could be
physical contamination or or you know
lots of other things
and and determining what are the limits
that would need to be reached in order
to significantly reduce
the potential of contamination
and how are you going to measure and
calibrate
to ensure that you're accurately
measuring that you're hitting that
standard
every single time you're processing uh
so you know a good example of this is
like in the milk industry
you have to pasteurize milk and
that is a critical control point the
purpose of pasteurizing milk
is to reduce the spores is to reduce the
bacterial load
so that there won't be you know
contamination and spoilage of the
product and potential harm to the
consumer with that product
and so in a hazard program they will
detail all the different steps and
they'll say pasteurization happens here
and this is a critical control point
and um the uh the pasteurizer has to
have a temperature gauge on it that
ensures that every single molecule of
that milk that passes through
uh that heat exchanger that pasteurizer
has to reach a certain temperature for a
certain amount of time
and there's scientific studies that
prove that that combination of time and
temperature is enough to kill
you know the the certain amount of
potential bacteria that could be in that
milk
so that when you bottle it you can be
assured that it's safe
to consume and so hasta programs
are different product product factory to
factory
so it's not necessarily a cookie cutter
type of thing that you can just
slap on to each factory there is a lot
of time
and effort into developing these
programs understanding these programs
and there's still a lot of confusion
about these programs
i mean the fact that the fda is now
requiring
all food companies to have a pass up
program
in itself is not understanding what this
program is when this program was first
launched and again it was developed by
nasa
because they wanted to develop a
standardized way
that they could ensure that the food the
space
food that they're sending up to space
would have
a safe shelf life for the astronauts as
they consume that food
and then actually the first company that
popularized hassep
was jack in the box and this was after
the big
you know food-borne illness scared the e
coli so they had a problem in their beef
patties
uh where uh you know there were a lot of
children actually that got very sick i
think they actually died
and so jack in the box had to really
step up and they were the ones to first
adopt this program and so now at jack in
the boxes and
i think actually at all you know big
chain food restaurants they have hasset
programs as well
um so you know for every single product
that they make there
they have all the steps of how those
products are made how that hamburger is
made
and standards of like the hamburger has
to be on the grill
the grill has to be this temperature and
the hamburger has to be there for this
long to verify
that any e coli if it is there is killed
um and the same thing would happen for
the meat
packing plant that would be processing
the beef for these hamburger patties
they would also be having their own
standards of
you know how um i mean even sanitation
or even a metal detector
could be considered a critical control
point it just depends on the product
like
if the product has a high prevalence of
metal contamination
then it is very important that you have
a metal detector
um as part of the process and in some
cases uh like the case of tea
i mean really to be honest if you're a
tea packing
company you have to have a house up
program and
so many people they they write hasset
programs and they feel like they have to
have a critical control plate
with tea you actually don't have to have
it you can use your gmp program
and the general understanding of tea and
have passive
programs for the farmers for the
producers of the tea to ensure
a moisture content of the tea could be
it you could say okay
every batch of tea has to be tested
moisture content if moisture content is
at the the right sweet point
that you determine for that tea that's
going to ensure that
no mold or bacteria can grow on it um
then that could be considered a critical
control point but once the tea
is here really the only thing that can
happen to that tea
that could you know affect the um
the safety um and the hazards of that
tea
would be a metal detector you know the
last step of packaging just run it
through a metal detector and
if it tests you know to a certain degree
of your metal detector then
you you don't sell that product that
product gets rejected or whatever it
is but the thing about having that as
your ccp if you tell the fda
this is my ccp for this hazard then you
have to not only
measure every single batch to that to
make sure that you're hitting that ccp
but you also have to calibrate your
measuring equipment
and you have to do that frequently and
so there's a lot of like
extra administrative steps you have to
have your employees on top of it you
have to have your management teams
on top of signing off that all these
things are happening
uh and so it's very bothersome so you
know hass up is not something that you
usually see in the restaurant community
and like large chains they will add that
with
that like have these standard operating
procedures uh you will
you know see hasset programs there but
for a restaurant you typically don't see
it
and the fda typically doesn't work
directly with the restaurant
now uh the restaurant does have food
safety standards it does have to meet
and those food safety standards to a
certain degree are more stringent than
the fda
standards and each county
uh or city it just depends you know it's
it's different everywhere you go across
the country
will have their own regulatory bodies
and
regulations that you have to follow a
licensing and permitting
schedules that you have to follow uh i
am not
well versed on these uh programs these
food codes throughout the country
i am pretty well versed on the food code
here in southern nevada
so i figured i'd like look into those uh
and let you know like
you know if you are opening a restaurant
these are all the things that you have
to consider
and this is really the reason why so
much
funding and capital is required up front
when you're wanting to open a new food
business
you have to jump through all of these
hoops
i'm feeling really energized today i'm
drinking some green tea now so we'll see
if that
gets me even more energized i get really
impatient when i talk about this subject
you know because it's
it's really cool it's um you know one of
the the biggest points of convergence
between my past and my presence so my
fat my past as a food scientist
uh you know working in big food i was
often times
you know managing these regulatory
aspects um
and that in itself is a huge expense to
that you would you would need a
full-time
administrative employee that that
usually are highly valued
you know a food scientist is very highly
valued
even if you're freshly out of college
and
ultimately you're going to want one that
has the experience
that they know what they're doing
they're not having to learn as they go
um you know so that could be an another
additional
150 grand a year uh that your company
would need to have
somebody qualified uh be it you know
full-time on staff
or even consultant that would make sure
that you're
remaining in compliance um
you know i'm not i'm not a big fan of
big food
uh i don't know if i ever was i never
questioned it but now i question hell
out of it
um and uh but it's it's
it's interesting now you know that i get
to revisit these things and talk about
these things again because that was
such a big part of my life um you know
in my
in my 20s was um
you know understanding these things so
you know
so another question that i get often uh
and people are a little bit confused
about is the difference between the usda
and the fda
so those are both two different
bureaucracy administrations uh you know
below the white house they're very
different
they work on very different even
languages um
you know one of them is uh their their
code of federal regulations
is is number nine the other one's number
21.
so even their regulations are published
in two very different places
uh the usda handles more of like the
agriculture part of it more of the
growing part of it
although they do regulate some you know
post-harvest
regulations for certain industries uh
which is like the meat industry
i believe the egg industry um
but then you know the fda covers the
seafood industry
and in the milk industry so you know
it's a little bit confusing that
it's not just you know all the way down
the line of like
you know animal products versus
non-animal products there
there is some overlap and some confusion
there uh
and the fda operates completely
different than the usda their food
safety standards are
are very different but i believe
ultimately
even if you are a meat packing plant and
you have to
have your usda inspector on site so
that's another expense meat packers
have to have a full-time usda
you know um officer
you have to have an office for them and
you have to pay their salary
so that they can come in when i used to
work in a meat packing plant
our usda inspector only visited i think
like
once a month and they would come for
just a few minutes to review
the documentation to make sure
everything was signed off and good
and then they'd leave but we still had
to pay their salary we still had to have
an office
on site for them so yeah there's all
these like little extra expenses that
are kind of
i wouldn't say useless but you know
definitely not
worth uh you know that that value
exchange right there
um and so the fda's uh regulation the
main one
that you know causes the most
uh you know frustration for a food
company to manage and and these programs
are
are typically hosted in a
you know large binder multi-page program
that basically says here are all of our
sops that we follow to ensure
that we are compliant with food safety
and creating a food safe product
and then here's all the documentations
where our management will sign off to
verify
uh that we are doing these things that
we say that we're doing daily that we
say we're doing weekly and that we say
we're doing monthly or annually
um so this is kind of a living document
it's not something
that you just like publish and then here
it is and we can
work from here it's like you publish it
and you have to train all of your staff
of like okay this is how we operate here
are
standard operating procedures and then
you have to have the management team
uh signing off on it every day to verify
that each of those steps are being
followed
uh to ensure a safe product within the
gmp so that stands for good
manufacturing practices
so from here on i'll just call it gmp
within the gmp
program there are several different
subparts
so there is organizations and personnel
buildings and facilities equipment
control of components and drug prop
product
containers and closures that's more for
for the
the drug side so with the fda which
makes it even more confusing
is that they regulate only certain food
products including seafood and dairy
but that um
they also regulate drugs like
pharmaceuticals
um and so the fda is is pretty far spent
uh and you can only imagine that most of
their focus is dedicated towards the
pharmaceuticals
because it's a huge industry it's a huge
need it's very dangerous and so yes we
do need lots of regulation and oversight
and how our pharmaceutical industry is
developed but
um
so this is for pharmaceuticals
all right now i got it so
equipments production and process
controls
and defect action levels so you have to
have a program in there about how you
deal
with defective products and recalling
and reworking
um and within each of these there's also
you know more so there's uh defining you
know everything within your sops
what are what is a you know a gmp
personnel exclusions i forget what that
is
but uh it's it's something
and then within building and facilities
you have plant and grounds
sanitary operations sanitary facilities
and controls
and like this stuff goes really deep if
you look at the programs and what the
fda
is going to be holding you accountable
for when they come inspect you
is uh you know in your sanitary
facilities
like how often are your cleaning are you
you know
cataloging and inventorying all your
cleaning chemicals are those things
locked away do you have a program
verifying that those things are locked
away
um and then even um you know your
cleaning equipment so you should have
like
inside cleaning equipment outside
cleaning equipment
uh clean room cleaning equipment and you
color code all those cleaning equipment
to make sure
that you know a broom that's meant to be
outdoors does not make it
indoors or a broom that's meant to be in
your dry storage doesn't make it into
your clean room
so that's why you color code all of
these things and all these details need
to be
like documented and outlined in this
journal essentially it's just a binder
of all these programs
so you know this this stuff takes time i
do consulting
on this and i've consulted with
different food companies
and it can take them months to set all
these things up
you know all come in and give them a
template of what their document
document's going to look like
and then give them a checklist of like
here are all the things that you need to
do
to get into compliance and then once
you're there then you need to do these
like daily
check-offs with your management team to
verify to the fda when they come inspect
you
that you are managing these things so
you know i keep reiterating all of this
uh just so you see how resource
intensive
managing this compliance actually is
uh and they're expecting that like rural
tea farmers in china
are going to um uh that they're going to
like follow
follow all of this so um then
we have equipment and utensils then
within production and process controls
you have
processing and controls warehousing and
distribution
and then your defect program so just
a lot of things to be mindful of now
that's just for fda now if you're a
restaurant
you have to manage your local food code
so for southern nevada
we have an even deeper program that we
have to manage
that that goes into more and then also
it's like the fees that you have to pay
just to have them come in and inspect
you and to manage all of your licensing
so in food establishment we have a
management and personnel
food equipment utensils and linen
water plumbing and waste physical
facilities
poisonous or toxic materials compliance
and enforcement
warehouse regulations um
you know and and then there's several
other things but these are more
um mobile food units that's like food
trucks
portable units for service uh so there's
just like other detailed regulations
but you know just for like a restaurant
or a general food establishment those
ones i've listed off
is what you have to be on the lookout
for and develop programs for
now like those were really quickly to
read off but again
and within each one of those is lots of
detail
in here like in southern nevada and i
know as well as other places too
like when it comes to like your water
plumbing and waste
um you know uh difference between being
in the county and and then also being in
the city
uh which actually we are like we are
like right on the border we're
considered
city city of las vegas while you know
just one block that way
it's the county and the county has
required that any food
establishment no matter what you are
even if you're a dry warehouse
where you literally don't process
anything you don't
you don't touch any food like everything
that you distribute
is packaged already when it arrives to
you just warehouse it and then you
fulfill it for your orders
even if you do that you have to have a
floor sink installed
not even just a floor sink i think a
floor sink and a
grease trap they just made these blanket
regulations and a grease trap is very
expensive to install
it costs like eight thousand dollars you
know just just to install that thing
um and so unless you are moving into
like a second generation kitchen that's
already established
startup costs for a restaurant very high
because you have to
think about all these things like if
you're cooking food
you have to have a hood vent um
and that can also be very pricey
um so and then on top of this the
pricing then we have the actual
fees so
and for some reason i had trouble
finding the fees because
everywhere that i went the links they
had for southern nevada
just takes us to how to like put your
restaurant permit on hold
during covid and they're actually
charging you
they charge you a non-refundable 94 fee
for you to put your restaurant permit on
hold
i guess so they don't come inspect you
and see that you're not operating
so like if you're temporary temporarily
closed because of the pandemic then
um you would have to pay this 94 fee
and then you have to pay to like
re-establish your permit when you reopen
now if you're starting from scratch and
you have to
you have to have them
you know review your plan your build-out
plan and come inspect you before you're
able to operate
um that's very pricey i know whenever i
went
for for this particular location which
we have just a food processing permit so
i don't have a restaurant permit
we don't serve here we're not serving
food
all we're doing is you know packing tea
um
and and and having a warehouse and
fulfilling it so for that permit
uh with my review fees and everything it
cost us a little over eleven hundred
dollars just to establish the
the permit here now every year i have to
pay an additional
900 or 495 dollars to manage this annual
permits that's on top of all of my
county and state and city business
licenses that i also have to maintain
so it's very costly and when i first
went for my first permit
there was a lot of work that i had to do
to retrofit
and i wouldn't say that those retrofits
that i made necessarily made my facility
any more food safe than what
what it was before it was just like
administrative hurdles that i had to
jump through
and stressful
you know i mean even now i've i'm i'm
waiting for my inspector to come
and you know hasn't come which is fine
they could roll up any second now and i
have to end this video and go deal with
that
and we'd be ready for our inspection i'm
sure we do fine but it's just
you know an additional stress that i
have to deal with that i don't
necessarily think
is making my food any more
food safe than anyone else's and
you know there are several other tea
companies even here in las vegas
that are operating without permits or
licenses
and will never get caught or never get
inspected and never have an
issue with it but you know it's the cost
of trying to do something legally
the cost of trying to do it right um is
very expensive but you know for so many
years since i started in this business
it is very common for tea companies to
not be in compliance
uh and officially what i'd like to say
you know to anybody that does work and
tea and own their own business i do
recommend that you
work in compliance because the fda
does have the authority that if um
they
yeah so uh brittany on facebook says
that she has to have five sinks just to
make a cup of tea
yes that's true and it's ridiculous um
and and so you're in tennessee right so
you know these food codes are very
similar
uh you know the fees the licensing fees
and whatnot are different
county to county especially the alcohol
license fees
you know it just depends on on
the state of the industry and how much
things cost
like here here in southern nevada the
alcohol service
license fee is very expensive versus
what i've heard in
new york city i heard is also you know
much more affordable
you know you could easily you know open
up a bar and start serving alcohol but
here in las vegas
it is very very expensive i don't let's
see maybe i can find it quickly
uh
seventy five hundred dollars
license fee uh seven hundred dollars
semi-annual
and um you know for every additional bar
you want to have
in your facility is another 400
so yeah every year you're having to pay
you're having to pay all these fees
you know like there's more money to be
made in alcohol oh a full
alcohol license cost forty thousand
dollars
and then you pay 800 semi-annually 750
for each additional bar on your property
uh if you're a restaurant and you want
to have full-service alcohol it's 30
000. so that first one at 7 500 is just
for beer and wine
but if you want to have you know a full
bar then you've got to start paying the
big bucks
um and a tavern license is 75 000
with a 1200 dollar semi-annual
fee um so i mean yeah so this is like
just alcohol
you know very expensive uh again
you're you're gonna have potential for
higher um
you know higher profits uh because you
know alcohol sales
but you know a time like this you know
you're still having to manage all of
these fees
and right now here in las vegas the bars
can't even be open
so very stressful for those restaurant
tours
um yeah it's really expensive to manage
these things
in the reason why i think it's important
to talk about this
in the context of this dignified
hospitality series that i've been
working on
is that if we really want to
lower the barriers of entry and make
a food service uh
more accessible to you know an increased
community of people that are unemployed
that their whole livelihood and their
whole skill set
is around food which is great we need
food we need people to know food and
know how to cook it know how to produce
it
get it out but you know we
we are having a major culling of
restaurants lots of restaurants um you
know
permanently closing a few weeks ago i
looked at the yelp
yelp report which said that
53 of the restaurants listed on their
platform
have permanently closed since the
beginning of march
that's a lot of newly unemployed people
that yes they'll be able to find
other positions and other jobs and
that's a very valid part of the
conversation here is how
to empower those professionals to
find their confidence to find the right
you know position for their value and
their skill set
but then you know there's also the
opportunity of
of these folks to become entrepreneurs
to become
food providers themselves but with these
you know
high barriers to entry uh you know it's
a real challenge uh to think about that
uh you know if you wanted to just start
a
uh street food stall you know i keep
idealizing i totally romanticize a
street food
uh and i think that there's a place for
food safety regulation within that right
so i think the challenge is going to be
finding that middle spot
where we can have the confidence in the
public
that things are safe that the fda and
you know the local food codes are
keeping their products safe
but how can those systems be modified
to support small-scale entrepreneurship
because
these licensing fees and compliance
you know having five sinks in your
facility i also have five things britney
i have to have five six i have three
compartment for
the dishwashing one utility sink for
you know being able in a big sink to you
know clean mop water or whatever
and then the last one is the hand
washing sink uh and the hand washing
sink has to be different than any other
hand washing sink it has to be
you know directly within a certain
proximity to
where your food processing area is um
you know so i've got this area where i
have this small little space i have five
sinks lined up
and um you know it's nice to have it but
it was it was a very costly
uh costly thing and uh you know i've had
to invest a lot of other things into
retrofitting this space
to remain in compliance and so a small
scale entrepreneur that just wants to
set up
a small street food stall
and current situation would not be able
to do so
and unfortunately though if we didn't
want to make
some changes here um amendments
to our our food safety protocols
uh we would need a lot of time and there
are
uh powerful organizations
that pay top dollar for the best
lobbyists
in this country uh to make sure that
these laws remain
as stringent as possible because a big
organization let's say a golden state
food so golden state foods is a very
large food manufacturer that supplies
all of mcdonald's in the country
they make the ketchup packets they make
the buns they make the cheese they make
everything
and they are doing such large business
their supply chains are huge
they like internally like regardless of
the fda or whatever food regulation like
internally
they need very strong protocols
to manage their quality manage their you
know just even efficiency
and and how their supply chain is
working and waste product
and all of that so they have invested
internally
in all of these high administrative
requiring programs gmps hasseps
um you know cleaning sops
you know sanitation sops
and so you know a big food company
already has these programs in place
because they need them for
how large-scale they are and what
they've done has been able to
to get the government to support them uh
to require that all
food companies need to have these same
programs in place
and a very small scale business
doesn't need those things and is not
able to
to afford to those things and so it's
essentially
uh you know it's it's murder to small
business
uh and it's it's really sad that it's
being disguised as as food safety is
being disguised
as you know a public health requirement
um you know so i think the the
rehaul that would need to be um you know
implemented into
our our regulatory systems would be very
broad
um and it would require very strong
leadership
uh you know to convince to convince
everybody that's needed
uh because the the people that are in a
position or the organizations that are
in a position of influencing these types
of
uh decisions as well as like the think
tanks and
and the places of reference including
universities
right so like university food science
programs agriculture programs
are major consulting points for these
types of regulations
they're all being controlled by uh you
know the big food
that has these interests in mind so of
course they're influencing that
these like huge protocols are required
to you know verify quality when it's not
required
uh mindfulness and good practice is
required
um but you know these uh
these iso level certified requirements
uh you know they're good for big food
but
small scale artisanal food is different
and
when your anthony bourdain says this uh
when he talks about street food
he says that you know when he's
traveling internationally
like he prefers and he feels like it's
safer to eat street food
than it is to eat you know from your
hotel buffet or from your hotel
restaurant
um because uh street food uh
vendors uh they're connected to their
community they're serving their
community they're serving their neighbor
they're serving their uncle they're
serving people that are going to be
coming back to them every day
and so they're going to make sure that
they don't get anybody sick
and you know a lot of street food
vendors they like cook to order
you know and so as long as you see the
food coming hot sizzling from the
griddle directly into
your service container and given to you
i mean that feels
pretty pretty darn safe you know um and
so yeah that's what
mordate had to say about it is that
you know when people are connected to
who they're serving their food to
versus like the jack in the box you go
through the drive through yes there's a
person there but you're really
you're not really connected with them
and that the person that does connect
with you
it's not you know connecting
their uh their craft of creating that
food of cooking that food for you
uh they're hi gabby um they're um
they're just following protocols right
they're just following these hassett
programs
and that's what's going to keep you safe
versus this genuine connection and
interest that they have for providing
sustenance to you
and also keeping you safe because it's
good for business
keeping you alive is good for business
right so um
but yeah we're very far away from from
having a regulatory system that supports
this like smaller scale food production
so we had someone to say sana
t-bar says it's very sad that the small
business cannot always afford the
healthy rules
um that's true
and it inhibits a lot of really great
food businesses from happening
right because you know i i have so many
friends in hospitality
that have a passion and a vision of
opening a place they want to open a
restaurant they want to open this casual
hangout spot where they can provide food
and beverage
and when they look into the details of
how much it costs
to set things up and what they need to
know and it's intimidating as hell
you know you read these regulations like
what does that even mean and so
you know that's where someone like like
myself like a food scientist
would come in and consult on that but
that's not cheap
you know um average
a fee is about 200 an hour you know so
but if you're a big food company that's
nothing
right but if you're a small scale
business it's just not possible
and so you know we're missing out on a
lot of really incredible food businesses
uh just because of these regulations and
again i'm not saying that these
regulations need to go away
like foodborne illnesses pathogens
i mean even viruses like dealing with
covet
they are very serious threats to our
food system
and a strong food system is going to be
mindful of those things and have
programs in place uh that are but it's
not rocket science
you know uh and you know if you're
operating a huge factory that is
dealing with tons and tons and tons of
product and that product is going to be
distributed
to you know vector points all throughout
the world
yeah maybe we need some standardized
protocol there
because there's a lot of room for air in
there and
the human connection in there is really
depleted
so yes you need to make sure that the
humans that
are in that system are following
a certain protocol and that's how you'll
make sure they're doing a good job
but if this is just you know someone in
the neighborhood that's wanting to make
something
and share it with their neighbors
they're going to make sure that
the product is clean and safe and
healthy
and it's a lot easier to do that you
know frying an egg and making sure that
you fry it properly
you know salmonella doesn't doesn't
require
huge temperature and time uh to
uh to be killed it requires little bit
um you know if you're if you're working
with the supply chain that's mixing
product from thousands of different
places and
you know one contaminated source can
contaminate everything then yeah you
need some systems
um but you know in small scale food
production
these systems are not as necessary
you know things like even um when i was
in hawaii i did a lot of work
with the the elementary school systems
and building school gardens
uh and it was kind of a
it was kind of a useless task because
you know you can set up a garden
and then you can set up like the sales
systems or even like the
consuming systems that support the work
required to make that garden
um but it was illegal it was against the
food code
for these schools to be able to process
product even harvest and like sell the
fresh produce it was illegal for them to
do that
they would have needed to have all the
the food code things out stainless steel
everything
five sinks in their space and everything
else that they have to be mindful of
and so a lot of these school garden
projects
didn't have a lot of sustainability to
them because there was no
you know value coming out of it for the
students or
an economic cycle of supporting you know
the continued work you know garden takes
a lot
uh to manage you can't just oh here's a
couple hundred bucks we set up the
garden it's good to go it's like no it's
an ongoing thing
so how to keep uh the value exchange
motivated would be
easily through uh you know a program
where the students could even sell it on
campus
like when i was in the peace corps and
did the solar dryer project in the
caribbean
we were easily able to set up the
sustainability because
the wood shop students that would make
the solar dryers could sell those dryers
themselves into the community
and it was not taboo people thought it
was cool to have this
dryer box in their backyard they could
dry their own fruits at home
and then uh the the homeex students
would
process the fruits the act students of
course
grew the fruits and then the business
students would package and label
and sell the products they made like
dried fruit snacks
and they'd sell them in the cafeteria in
addition to the other food that was
being sold in there
and that was making money for them that
they could then reinvest
into buying more materials planting more
trees
uh so that they can continue that cycle
over and over again
you know i don't think that there's
anywhere here in the united states where
a school can get away with that because
yeah the food code
the health department would be coming in
and saying oh you know
like the solar drying uh the fruit gets
cut
and then it gets placed on a tray inside
this box
this box has ventilation system
that is exposed directly to the outdoor
air
and you want this thing sitting in the
sun so it has to be outdoors
because the food product is directly
exposed to outdoor air
it is not food safe um and it would
never be food safe the only way that you
could retrofit that to become food safe
is if that solar dryer is inside another
space a bigger space
that didn't have ventilation that had
you know all sealed it had to be all
sealed
so i guess you could put it inside of a
bigger glass box that's all sealed
uh to have some kind of filtration
system on the air
between the the processed product you
know the fruits that are being dried and
the uh direct outdoor air
uh so i mean these are all just like the
silly little nuanced things
uh that that make the food business
so difficult and food is like
we need it so
you know like yes we need it safe
but we still need it
and right now uh the direction that
we're going in
is you know the only companies that are
going to survive
this struggle are going to be the ones
that really don't care about what we
need
you know what i mean so uh
yeah i uh i'm glad that i got to go over
this you know and this is useful
information for
for any not just restaurant business but
you know even if you are an aspiring
tea business owner here in the united
states really important to know these
things and
and like i said
for the most part if you don't follow if
you're a tea company and you're packing
tea
in your house and you're storing it in
your closet and you're just fulfilling
it from your house
that's technically illegal it's
technically you should not be doing that
um you could try to get your house
approved as a
commercial food space but it's doubtful
that that would even be
possible um and again you may have to
put retrofits
into your facility to make that possible
um
but so many people so many companies get
away with it because
t is so low on the priority list on the
you know totem pole of of priorities
uh you know tea is a dried product no
one's ever
gotten sick from tea so the fda does not
actively
pursue those things now if someone calls
on you
if there's a whistleblower and this
happens this happened to me actually
to be honest it happened to me here in
las vegas uh where
the the health department just randomly
popped in and they said hey we got a
report
uh that you're selling tea here without
a permit and i was like uh
interesting i just moved into the place
and i didn't think i needed one i was
not processing tea there i still had
a contract manufacturer that was
processing tea
i was just having um you know
i wasn't even having a warehouse i was
just having my office space in las vegas
and so i didn't get in trouble because
they came and they saw what i was doing
but then i did choose to move from
having the contract manufacturer uh
to bringing all of my operation in-house
and so then i went through
the you know the official protocols into
getting that licensing
um but yeah i got reported to and that
can happen to anybody
um you know it could be a competitor it
could be somebody else in town that just
you know wants to try to do what they
can to get rid of you
um you know it was a an absolute
nuisance for me to deal with that
uh but you know it's whatever uh so
that's why i suggest
that that you remain in compliance
because you never know
what you know if a whistleblower you
know reports you then you're gonna have
to deal with it regardless
and if the fda comes inspects you and
you're out of compliance
they can completely recall your product
and require you to
to completely recall it from the market
and they can shut down your business and
make it illegal for you to operate
um so it's just good to be in compliance
it's expensive but it's smart but you
know if
if things get better as far as
you know these regulatory issues maybe
those costs and risk will
go down there is something and you may
see
uh you know you you may question oh i go
to the farmers market and you know
there's somebody that makes
jams out of their kitchen that's not you
know a food kitchen
a certified kitchen how do they do it a
lot of counties have what's called
cottage industry regulations and as long
as you
are not you're not selling
a prepared food that's to be consumed
right there you're selling a prepared
food that's to be consumed
away uh and then you also have to have a
disclaimer on the label saying
you know this product may not be safe
it's you know cottage industry
um then yeah you can do it but um
bye guys uh
there's limits to that too you know i
think a lot of counties give you
only a certain time frame you're allowed
to be cottage industry where they
then they force you to become like a
legitimate food processing facility
and you have to go through all the the
typical channels but
the cottage industry rules are pretty
good for
you know startups uh companies that
maybe
don't want to invest into
um don't want to invest in
into the full regulatory compliance
but you know want to test out a product
in the market you know at the farmers
markets or whatever
but in cottage industry you're only
allowed to distribute your product
within a certain radius
if you start distributing your product
within you know i think it's like 260
mile
radius away from where your your you
know
registered uh address is then you are
compliant within those fda regulations
that food safety modernization act which
means then
you have to have a certified kitchen you
have to have a
gmp program and a hassett program so if
you're
wanting to like start up a cottage
industry thing and you get your cottage
industry license
it is best for you to stay in your local
locality
uh don't make an online store and and
try to sell because once you do that you
put yourself in line
uh you know with being regulated by the
fda
hi robert thanks for tuning in yeah lots
of
cool stuff behind the scenes to think
about yeah i just want i just want
people to understand exactly how
annoying and expensive it is uh to have
a food company
um including restaurants it's very
expensive
and it's a change so you're asking
what's in my gaijon
i have a green tea here i think this
is uh the panda chia it's a green tea
from darjeeli
really nice delightful delightful tea
um yeah i should send you a link to it
we have a new website robert i don't
know if you've seen it
um it's called t
and itspeople.com it's a retail site so
it's like different it's it's like a
branch off brand uh you know and website
to tealette but it's
uh retail and it's where the community
is hosted including all of these videos
that i do
um you can there's there's a drop down
menu and
it has uh all of these videos all
listed with you know short descriptions
of what is talked about so you know lots
of other behind the scenes
cool things i've been talking about uh
over the past
few months since the pandemic started
all right so the link is there you can
see it rubber
on a green gia it's a nice tea this tea
has been selling fast actually a lot of
people getting into it
mostly like cafes and restaurants
getting into it so that's always good
to see uh
robert i hope you're doing well it's
been a while it's been almost a year
since i was in uh
in chicago i don't think i'll be uh
going again
very soon but you know i'm having a lot
of fun
kind of hunkering down here in vegas and
learning more and
developing more um i'll be i'll be
hitting the road again once
once it's safe to do so but
uh i think that's it guys i mean if you
guys have any more questions i'll stay
on for a little bit longer
if you want to ask but i think i kind of
covered the basis
uh you know the difference between a
food processing facility
and a restaurant and the regulations and
kind of start-up fees and management
fees needed
to remain compliant um you know in all
of these fees that i talked about like
that's just for compliance
it's not involving all the other things
you have to consider
you know mostly staffing
right like payroll costs is is a huge
one
but like this like 1100 dollar
food facility plan review i had to pay
just
to start the process of getting my
my food facility permit here at tilet
that 1100 is like it's pretty much just
an administrative fee
uh for you know their offices to
uh be able to process your request
that's not right you know like that's
there's two problems for that you know
in either case are both problems
one of them is it's corrupt as fuck you
know it's like
gangster mentality you know they come
shake you for your
your protection taxes or whatever if
that's the case it's fucked up
and the other case if they legitimately
need that
fee to manage their administrative uh
overhead
that's fucked up too it means they're
not operating well
you know and i think that there's a lot
of things going on in government that
are like that
it's either corrupt or it's inefficient
and either way is bad and either way
needs to be
addressed and reviewed and figured out
uh
how to evolve beyond it because we're
gonna have to
right you know like the the current
system is not gonna be able to continue
the way it has been and that's the
purpose of this manifesto
uh you know and i know today i didn't
propose too many solutions and i didn't
talk
to you know experts in the industry or
stakeholders in the industry but
i'm glad i was able to do this i was
able to you know let you guys know
um exactly what is entailed in
um you know remaining compliant uh
within
a food business so no more questions
came in so i'm gonna be tuning out
a beautiful monday and i'll be seeing
you all tomorrow i'll have some tea
education for you tomorrow
i don't know what i'll talk about but if
you have any requests feel free to
to dm or or email info
i'd be happy to to see if i can
oblige your requests i'll be