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 1. Home
 2. Safety & Security
 3. Food Safety


HOW FDA’S FOOD TRACEABILITY RULE BENEFITS SUPPLY CHAINS

By January 2026, these growers, shippers, logistics providers and retailers will
need to be tracking these products better than they are today and will need to
have the receipts should the FDA come knocking.

April 11, 2023
Glenn Koepke
FourKites
Getty Images


In the face of bird flu and other common food-related outbreaks, safety is a
primary focus for players in the food and beverage supply chain. It’s also a
major concern for the federal government – demonstrated most recently by the
FDA’s new Food Traceability Rule requiring companies that manufacture, process,
pack or hold foods on its Food Traceability List to maintain and provide to
their supply chain partners with data on critical tracking events.

So, this rule doesn’t come as much of a surprise – nor do the items on the
traceability list, such as leafy greens, seafood and eggs. But surprise or not,
by January 2026 these growers, shippers, logistics providers and retailers will
need to be tracking these products better than they are today and will need to
have the receipts should the FDA come knocking.

Meeting this new requirement will take effort. And unlike pharmaceutical
companies – whose profits have facilitated compliance with similar rules through
the adoption of cutting-edge tracing and serialization technologies – food and
beverage companies operate on razor-thin margins.



So, what are players in the food and beverage supply chain up against? Who will
be hit the hardest? What are the best next steps to take? And, in the end, how
do supply chains as a whole stand to benefit?


SMALL FARMERS AND PRODUCERS WILL FEEL THE HEAT

How do you slap a sensor on a head of lettuce, freshly pulled from the dirt? Or
a still-warm egg sitting in sawdust? Many food items don’t go through a
production line and are inherently not serialized. This new ruling puts more
onus on the manufacturer – in these examples, the farmer – to find ways to start
labeling and tracing food products all the way from the soil to the supermarket.

And while the country’s largest farms are increasingly tech savvy, many small
farmers are using applications that are as homegrown as their produce, including
manual processes and spreadsheets, rather than sophisticated enterprise resource
planning (ERP) software to manage their business activities.



But they’ll have to adapt. While enterprise order management and supply chain
visibility have thus far primarily been embraced by middle-market to large
enterprises, now every size stakeholder along the supply chain will be required
to be invested in technology and traceability. Even the smallest suppliers will
need to have this data centrally available and be able to transmit up and down
the supply chain – from harvesting to facilities to transit.


OTHER SUPPLY CHAIN PARTNERS AREN’T OFF THE HOOK

Most of this work being done is in the first mile. But retailers have work to
do, as well, beginning with identifying and understanding their suppliers, as
well as those suppliers’ capabilities and readiness in relation to the FDA rule.
And if a retailer finds their suppliers ill prepared, they might want to start
looking for alternates.

Like small farmers, small or specialized retailers might have a longer road to
compliance. While a big-box grocery store might buy from larger vendors who
operate as a corporate enterprise, many markets that sell more specialty foods
or organics are more likely to source from multiple small, niche farms or family
run businesses that haven’t been able to invest in modern technology. As a
result, these businesses could now be required to track food from thousands of
suppliers. What we will see is companies that are experts in the growing,
harvesting or producing of their goods now need to become supply chain
technology experts, too.

Storage and transportation will, of course, play a part in compliance; knowing
where the products are, along with temperature readings, will be important, even
if the product is sitting in the yard or warehouse waiting to be picked up or
unloaded. However, the onus for compliance is not really on these players. Once
the traceability list products arrive at a warehouse, for example, labeling will
likely have occurred. At that point, warehouse employees should be able to
quickly find out time and location of harvesting or food production, and that
information will need to be easily passed on to transit partners. If a recall
occurs, technology can help them easily locate all the product that's affected,
rather than embark on a multi-day treasure hunt that wastes precious time and
resources. 




COMPLIANCE IS ACHIEVABLE WITH SOME ADJUSTMENTS

This all sounds like a tall order. But it isn’t an unreasonable one – and,
despite its challenges, this ruling shouldn’t put anyone out of business.

First, companies have three years to figure this out. Over the next 12 months,
expect to see stakeholders assessing what this means for their business. Many
will hire consultants to help them better understand new industry standards or
map their end-to-end.

As they identify the processes and quality assurance required to comply,
business leaders will be also doing some serious analysis of pricing and
resources, including labor and technology. Over the next year, we should see
them work out where they need to implement technology, processes and people to
satisfy the FDA’s requirements – as well as how much they can pass the cost of
those adjustments on to the end consumer, without affecting demand.

Expect these adjustments put into place in 2024-25, to be prepared for showtime
in 2026.


SAFER LETTUCE AND OTHER SILVER LININGS

Although the FDA’s new rule will require some adjustments, it will leave the
entire food and beverage supply chain – not to mention the American consumer –
better off. The standardization of the first mile will have countless downstream
benefits for supply chains. Innovation will spread, as many companies will be
modernizing their technology and processes and sharing those best practices
within their networks. We might also see positive externalities in niche areas,
like more modern equipment in refrigerated trucks.





And of course, the new rule should help stop dangerous outbreaks in their
tracks. Until we can completely prevent these events, we’ll need to continue
modernizing the ways we track food, down to the smallest possible level. It will
require effort and investment, but we’ll all be better off in the end.  




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