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Is a sea change ahead in packaged food traceability?

Is a sea change ahead in packaged food traceability?
After implementing a traceability program leveraging GS1 Standards, Mother Earth Mushrooms realized “huge” improvements in their inventory management.

GS1 US discloses 5 major industry stakeholders representing a variety of seafood sources and processing methods that were selected for Proof of Concept, a small exercise to investigate and assess the current state of seafood traceability data.

Angela Fernandez, vice president of retail grocery and foodservice, identifies stakeholders and a brand owner with a food traceability program in Part 2 of our interview with GS1 US (see Part 1, An update on traceability for packaged foods from GS1 US). She also explains why track-and-trace is gaining traction in these markets.

Can you point to companies being proactive in track-and-trace or that have conducted a pilot?

Fernandez: Our team recently worked with the seafood industry to complete a Proof of Concept, a small exercise to investigate and assess the current state of seafood traceability data. A summary of the project is now available on our website.

Five major industry stakeholders representing a variety of seafood sources and processing methods were selected for this project. They are: Trident Seafoods, Bumble Bee Foods, High Liner Foods, Sea Port Products Corp. and Slade Gorton. Participants discovered their individual traceability programs did not align seamlessly and they were able to identify gaps in the way data was captured and shared. They all agreed that a standards based approach is essential for supply chain visibility.

Moving forward, the group will collaborate to define sustainability attributes, format electronic data interchange (EDI) transactions and will test and seek proof of data interpretation outside their own organizations during Phase 2 of the Proof of Concept in 2015.

We work with suppliers all the time who are very aware of the serious consequences without end-to-end traceability. Having precise, accurate traceability has the potential to reduce labor costs internally and externally, avoid category-wide fear of foodborne illnesses among consumers. A good example of a brand owner being proactive is Mother Earth Mushrooms, which recently implemented a traceability program leveraging GS1 Standards. The improvements in their inventory management have been huge. Their old system was based on outdated, manual procedures that were exceedingly labor intensive and potentially inaccurate. What once took hours sifting through paper and deciphering handwriting, now takes just a few minutes with the new product traceability system reports available with just a few clicks.

Mother Earth now has a real-time inventory of raw product received, which farm it originated from, and a final count of inventory. Also because the company sells not just to distributors, but also directly to restaurants and grocery chains, its across-the-board system is easy to manage. In addition to being well equipped to handle a recall, it is now able to fill orders quicker and has improved its overall operational efficiency.

Is there a particular packaged food segment that's especially “ripe” for traceability?

Fernandez: We are finding that interoperability between different, but related product categories is an area of untapped potential. For example, the Produce Traceability Initiative focuses tracking and tracing fresh foods like tomatoes. With better traceability procedures in place to identify, capture and share information about the tomato’s journey along the supply chain, GS1 Standards can better serve a CPG company that manufactures tomato sauce, for example. When all trading partners are able to share Key Data Elements (KDE) at Critical Tracking Events (CTE) for their product’s life cycle, everyone benefits from these central components of integrated traceability. What we mean by “integrated traceability” is the idea that all product categories (produce, seafood, CPG, etc.) can leverage GS1 Standards to enhance their traceability processes, enabling better communication and streamlined operations. Having an integrated approach in retail grocery and foodservice has powerful financial value for stakeholders.

To break it down even further, CTEs are those points along the supply chain where product is transformed or ownership changes to allow for the recording of key product data to enable effective tracing of the product. They include points where the product changes hands from one supply chain participant to another, where product is moved between premises or is transformed in some way.

KDEs contain information collected at each event (CTE). To enable product traceability, these key data elements answer the questions “what, when, where and why” in support of each event. They include things like original source ID (i.e. farm), harvest date, ship date, destination ID, case or pallet ID and recipient date.

These concepts provide a solid foundation for an integrated whole-chain traceability process, and complete implementation will benefit the entire supply chain. Whole-chain traceability is the combination of internal and external traceability processes, meaning a company’s internal data and processes used within their own operations to track a product is integrated into a larger system of external data exchange and business processes that take place between trading partners.

Both processes are needed to effectively trace product up and down the supply chain. Organizations that fully embrace these processes based on the “identify, capture, share” principles of GS1 Standards, which enable for interoperability, reap the benefits of enhanced efficiencies and improved consumer trust.

What would need to happen to provide a “tipping point” for traceability adaption for foods?

Fernandez: We believe we are approaching the tipping point because this is such a critical time of rapid evolution. The real tipping point is anticipated to be when the proposed rules for traceability under the Food Safety Modernization Act are issued and finalized, however we feel that the GS1 US Retail Grocery Initiative formation this year shows an urgent need for collaboration on traceability issues like we’ve never seen before.

Ultimately, food safety drives urgency. Recent commodity recalls are still fresh in consumers’ minds. Businesses are vividly aware of how these emergencies can hurt the entire category for months or years afterward.

Examples of significant recalls in recent years include:

  • 2006 spinach recall cost the spinach industry $37 to $74 million in immediate economic losses, and $350 million in the year following the recall
  • A mistaken 2007 Salmonella finding in tomatoes cost Florida’s tomato industry $500 million
  • 2009 Salmonella outbreak in peanut butter cost U.S. peanut producers $1 billion
  • German bean sprout crisis in May 2011 triggered a consumer panic in Europe and was estimated to have cost farmers $244 million a week
  • Listeria-infected cantaloupe recall in September 2011 caused hundreds of illnesses and 30 deaths

Even if a company has not been linked to a food safety emergency before, it is sound business strategy to be well prepared for product withdrawals or recalls. An electronic, standards-based system will allow companies to precisely track where products go once they leave their possession, limiting the impact of any food emergency. Consumers need to be confident that the industry is able to isolate only the affected product quickly and efficiently—the industry is pulling together to reassure their customers of their ability to protect them.  

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