Food traceability is the ability of a business to track the movement of various food products (raw materials, food components, finished food products) throughout the entire supply chain stage—from manufacturing to processing and on to market distribution.
The importance of traceability within the food industry has grown in recent years. Food traceability implementation has seen a steady increase due to the staggering number of food recalls. There were 764 recalls in 2016, which was a 22% increase from 2015’s total of 626. With the number of food recalls increasing, more and more companies are investing in food tracking technology to prevent food recalls from destroying their business. The food tracking technology (barcode systems, GPS tracking, etc.) market is expected to be worth $14 billion by 2019.
There is no question that food traceability is important for everyone in the food industry. This includes manufacturers, retailers, and wholesalers. However, its implementation is fraught with challenges. One of the biggest challenges is knowing what makes up an effective food tracking and management system.
Whether you’re a food manufacturer or a wholesaler, it’s crucial that you learn why a food traceability system is a necessity for your business. Listed below are four reasons why:
Why A Food Traceability System Is A Necessity For Food Businesses
1. Food Safety
The main concern of any traceability system is public health. According to the Center for Disease Control (CDC) statistics, nearly 48 million people in the US contract a foodborne illness each year. Out of this number, more than 127,000 are hospitalized with 3,000 people dying each year.
While it is impossible for you to stop food contamination completely, you can significantly lower the risk with an effective food traceability system. Everyone in the industry is responsible for ensuring that food products are safe for public consumption.
2. Real-Time Location Of Food Products
Using food traceability, your business can identify any product’s current location. You will also be able to record, verify, and track a product’s entire history through the supply chain.
If an issue arises in your supply chain, a lot tracking system enables you to trace where that product originated. For instance, if certain products turn up damaged in one area but are intact in another, you can easily identify the areas in which you should begin your investigation.
3. Ease Of Corrective Action
Recalls are a common occurrence in the food industry. In 2017, there were 456 food recalls in the US. The two most common causes of contaminations are Listeria and Salmonella, which can be life-threatening in some cases.
A food traceability system prepares you for such cases by providing you with visibility and transparency in your supply chain. In the event of a contamination, you can respond quickly because you know exactly where the contaminated product is located at. Even if it is on the shelves of multiple stores across the US, your food traceability system can help you to identify the stores selling your contaminated products. You can then initiate an immediate recall to prevent the contaminated products to reach the end-customer.
4. Compliance With Regulations
In the US, there are two main laws that all food business ought to know, these are
- the Bioterrorism Act of 2002, and
- The Food Safety Modernization Act of 2011.
Under the Bioterrorism Act, food facilities are required to register with the Food And Drug Administration(FDA). This includes domestic and foreign facilities that manufacture, process, pack or distribute food for human and animal consumption. In addition, businesses must be able to show the entire movement history of their products. The movement history needs to contain where the products have been, where they currently are, and where they’re going.
The FDA has the authority to recall your food if they have evidence that it poses serious health issues to humans and animals.
Meanwhile, the Food Safety Modernization Act (FMSA) is a law that applies to everyone in the supply chain, from farmers to large manufacturers. The FMSA mandates that all facilities have a proper food safety system, which includes traceability. Facilities must also pay a $500 annual registration fee. This fee helps fund the FDA’s inspections and other activities related to enforcing the legislation.
If your business fails to adhere to the FMSA, the FDA can recall your food, suspend your facility’s registration, and issue you hefty fines. If your non-compliance results in deaths, it will be considered a criminal violation. In this case, you may face imprisonment for up to one year and a maximum fine of $250,000. If you operate a large organization, you can expect the penalties to be heavier.
Challenges To Food Traceability
Food traceability is essential, but implementing a proper system is often not that simple. Before you can start creating your food traceability system, you must first overcome a myriad of challenges which include:
1. High Maintenance Cost
The technology used to implement a food traceability system can be expensive, especially for small and medium businesses. According to a journal article published by the Institute of Food Technologists (IFT), implementing a product tracing system can cost a small or medium up to $6 million dollars. Costs related to implementation such as labor, could cost up to $30,000 dollars a year, while system maintenance could reach $500,000 dollars per annum.
Take product labels, for instance. They have to be durable enough to survive all stages of distribution. Otherwise, you risk losing track of products. However, creating high-quality labels for each and every one of your products is a costly endeavor. Some food business might not have the capital to enforce this across their entire operations.
2. Difficult And Time-Consuming Data Analysis
Managing data is one of the most challenging tasks when it comes to implementing a food traceability system. On any given day, your business handles hundreds of thousands of different food products from various suppliers. This equates to a vast amount of data which can be difficult and time-consuming to analyze, especially if you are managing suppliers from different countries.
3. Increased Consumer Awareness
Now more than ever, people are becoming more conscious about the products they consume. When it comes to food, consumers want to know where ingredients come from, if they’re organic and non-GMO, or if they’re ethically sourced. Consumers demand access to such information, so your food traceability system must be able to provide it whenever necessary.
4. Strict Legal Regulation
You need to take various regulations and food traceability requirements into consideration when implementing your system. This can be a challenge because local, state, and national, and international laws can vary greatly from one another. As such, you have to make sure that your system complies with the regulations of each jurisdiction you operate in.
Criteria For An Effective Food Traceability System
Before attempting to implement a food traceability system, you must first understand what makes for effective one. This way, you don’t set your business up for failure. Here are four characteristics of an effective food traceability system.
1. Proper Documentation
To do this, you need proper documentation. You must have detailed records on hand at all times. These records are beneficial for recall purposes as well as readiness for whenever the FDA inspects your facilities.
Depending on what kind of food product you are selling or manufacturing, your records should contain the following information:
- Contact information (names, addresses, phone numbers, etc.) of all your suppliers
- List of the food products they provide you
- List of product descriptions, quantity provided, the origin, delivery dates, and expiry dates
- Lot identification information for ease of tracking
- The contact information of customers you supplied to, which may include restaurants, supermarkets, individual customers, etc.
- Any other relevant product information which will depend on things like the food product itself and the scale of your business
If you meticulously maintain your records, you can avoid the hassle of a recall. At the same time ensure your compliance with the Bioterrorism Act of 2002 and other regulations that apply to your specific situation.
2. Efficient Inventory Tracking And Management System
For you to maximize your food traceability, you need a lot tracking system. With a high-quality lot tracking software in place, you can effectively track everything from raw food ingredients to finished products in real time, no matter where they are in the distribution process.
You will also reduce your losses and avoid recalls because a lot tracking system allows you to monitor your products’ expiry dates. You can identify expired products and take appropriate action by stopping the sales of your expired products to your customers.
Furthermore, lot tracking and inventory management software will help you manage your inventory more efficiently. You’ll be able to automate and streamline your inventory processes. This saves you time and helps you reduce human error associated with manual recordkeeping.
For example, you can automatically assign lots using the first in, first out (FIFO) method so that you sell your old inventory first and reduce the likelihood of selling expired products.
3. Response Preparedness
In May 2018, Hormel Foods initiated a recall of more than 220,00 pounds of their widely popular Spam product due to metal contamination, specifically for batches produced in February.
Using their batch tracking system, Hormel Foods was able to trace which batches were contaminated. The company was able to respond promptly because their traceability system utilized specific product codes for different batches. As a result of their swift recall, no customer suffered major health issues. The only problems reported were a few minor oral injuries to people who ate the contaminated products.
This is is one of the hallmarks of an effective food traceability system. The company had a great lot tracking system in place and thus were able to take quick action to correct the issue.
4.Transparency And Honesty
It isn’t just your profits at stake. A recall can also permanently damage your company’s reputation. If you need proof, then look no further than American ice cream company Blue Bell.
In 2016, a Listeria contamination resulted in Blue Bell’s sales plummeting to $455 million, a loss of 50% of the sales generated in 2014. The crisis also resulted in three deaths and ruined the Blue Bell brand. As of 2018, the company is still trying to bounce back.
A major reason for Blue Bell’s tarnished reputation is their dishonesty and negligence in dealing with the situation. The company only started recalling products in 2016, but the contamination was already occurring as far back as 2010. However, Blue Bell did not take action even when they found out that several factories violated health codes. More importantly, the ice cream maker did not inform the public until it was too late.
Don’t make the same mistake. Even though you have a traceability system in place, it’s not an anti-recall guarantee. You still need to be open and honest with your consumers in the event of a recall. It is their health and safety at risk, after all.
When it comes to traceability, some ways you can practice honesty and transparency include responding to consumer demands regarding product information (source, ingredients, etc.) and telling your consumers of a situation at its onset instead of after the fact.
Looking to implement a food traceability system for your business? Then take advantage of Sweet’s next-level lot tracking system. Sweet can provide you with smart inventory management software that can help you automate and streamline your inventory processes.
To find out how Sweet can help you, request a free demo today.