The Food Safety Modernization Act and Increased Need for Track & Trace, Part One

To celebrate National Food Safety Education Month, we’re rolling out a series of posts about the impact of the Food Safety Modernization Act (FSMA) on track-and-trace requirements. Our introductory post provided an overview of the FSMA and how it stands to change food-safety measures in general. Now let’s look specifically at why we need a safer food supply chain, and how track-and-trace can help.

None of the participants in the food supply chain—namely the growers, processors and distributors—want contaminated food to reach the consumer. However, a number of factors beyond the control of the food value-chain members can cause food-safety violations, resulting in recalls and withdrawals. In spite of advancements in food science and technology, the number of food recalls has increased from 100 per year in the 1990s to about 300 recalls per year in the 2000s.

As we will see later, these recalls not only result in financial loss, but also the loss of consumer confidence. To maintain financial and brand equity, companies must be able to trace food as it moves from the manufacturer’s supplier(s) to the end consumer.

According to a study commissioned by GSI US, the Grocery Marketing Association and the Food Marketing Institute, manufacturers currently take 30 minutes to 72 hours to complete the recall process, measured from the moment an issue is detected to the moment a recall decision is made. After the recall decision is made, records are searched, emails sent, spreadsheets analyzed and file drawers emptied in attempts to identify where the contaminated food came from and where it has been sent. (For a PDF download of the report, click here.)

While the FSMA does not necessarily require the brand owner or manufacturer to maintain records about its upstream and downstream partners, it is highly recommended that they do so. Brand value, once eroded, is difficult to regain. Many food companies are investing significant money and effort to build awareness for their brands, which can pay off amply in their competitive commodity markets. The negative media image generated by recall coverage, however, can turn an established brand asset into a liability. Nervous consumers can cause distributors and brokers to quickly abandon tainted products in the channel.

Track and trace for the purpose of recalls is a bit like locking the barn door after the horse has bolted. When track and trace encompasses the complete supply chain, however, these technologies can be extended to give consumers greater visibility into the food-product genealogy. Consumers can learn where the produce was grown, who grew it, expiration dates, and if the food was recalled. Shoppers can scan the sticker with their smartphones or go to the website and enter the number from the sticker to track the path the food has taken—along with other information the farmer chooses to share, such as the harvest date, post-harvest storage conditions, etc.

With the increasing spread of this information sharing, track and trace becomes more important. Next up, we’ll look at how SAP ERP solutions like it.CPG empower companies with track-and-trace technology.

Posted on September 8, 2011 at 4:33 pm by Johann Heydenrych · Permalink
In: Consulting, Marketing, SAP, Support, itelligence, Inc. · Tagged with: , , ,

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