Opinion

Proposed traceability rule: A perspective from the produce industry

From the United Fresh Produce Association Traceability Work Group

Traceability re-emerged as a topic of produce industry focus when the U.S. Food and Drug Administration (FDA) published the proposed recordkeeping regulation as part of the Food Safety Modernization Act (FSMA) (section 204) in September 2020.

An important part of the proposed rule is the focus of traceability and transferring of critical information between supply chain partners. Although not all produce products are included in the proposed rule’s “Food Traceability List,” it does lay out a framework into which all food products may fall one day.

A diverse team of food safety and quality assurance leaders, with the coordinated effort of United Fresh, formed a working group to discuss the proposed rule and some of the concerns surrounding implementation of the proposed rule and traceability more broadly. The work was broken into supply chain segments that include growing and shipping; processing; terminal market, wholesale and broker; then, finally, the distributor. Each of these segments of the supply chain has unique potential issues relative to traceability, regardless of how the FDA finalizes the rule.

The work completed is intended to communicate key complexities and insight into the traceability issues at each step of the supply chain. Although this may not be an exhaustive list, it will provide valuable insight into the industry. This may be used to better inform other food companies on traceability concerns, issues and technology challenges related to fresh produce.

Traceability concerns tend to focus on produce, but the fresh produce industry has proven effective at removing product from the market as needed (e.g., recalls). Issues the FDA is trying to solve within the traceability subject include not only the ability to trace product to the customer, but also, more importantly during an outbreak investigation, tracing product from the end user and then back to the source.

Production of produce and the related supply chain is not as predictable as most processed foods. Produce is not a homogeneous product: each produce item is separate, starting with a seed and finally harvested after reaching the right maturity. Sizes, shapes and grades may vary, even within one field. Numerous items are packed in the field, and weather and other external factors can play into the ability to code and label products. Water can be used to cool the finished product in finished labeled cases. Multiple fields or lots can be harvested in one day for one customer.

As this subject has been elevated, providers have also been active in working with technology solutions that support industry traceability. There are many diverse answers to the traceability questions and each point in the supply chain must make the best decisions for their individual organization, yet be able to communicate and share data with others in a consumable format that is accepted by all others in the supply chain. This is a big ask.

To further complicate matters, there are many in the supply chain not prepared for changes to the industry norms and requirements. Some information may be transmitted by electronic format, while others may be transferred via paper copies of a spreadsheet. Managing the data, paperwork and information is of concern. When the information is shared during a transaction, accuracy of the data and amount of data are still questions that need to be answered to ensure the reliability of information.

Produce supply chain: grower-shipper

The grower-shipper side of the produce industry will have its own unique challenges surrounding the new FDA rule. Currently, grower-shippers can trace back any item, but to have the specific farm information listed with every load prior to shipping will be difficult to provide. This is because grower-shippers rarely can dedicate a specific farm to a specific customer at the time of packing. The grower-shipper cannot, with each individual order, know exactly which farm will reach each customer’s distribution center, as produce is most often aggregated in a cooler that contains numerous farms’ products.

The grower-shipper community will also need new technologies to adapt for field-packed items, as many produce items are packed in a field and not in a packinghouse. Questions being raised surrounding this include: who will assign the lot number and when will it be assigned? Should it be the field packer, the shipper or handler? Or should the lot be assigned at the packinghouse, keeping in mind that not all product passes through a packinghouse?

In addition, grower-shippers are unsure how to share all the required information with each customer. Currently, one common data platform is used to house and share food safety audits. It is widely adopted but is primarily only for the sharing of food safety audits. This would not be a solution for the transfer of the other required information. Each customer will likely have differing data solutions. How do those concepts mesh with all the different solutions each customer will likely adopt?

Grower-shippers have limited visibility to the end user of their products once they are shipped to their immediate customers. End-to-end visibility throughout the produce supply chain may be a significant demand on the resources needed to pilot, implement and interface with the rest of the industry.

Terminal market, wholesaler, broker

The terminal market, wholesaler and broker side of the industry has perhaps the most unique challenges surrounding produce traceability and is poorly understood, even by other members of the produce supply chain. These entities deal with multiple suppliers who have varying traceability levels on the receiving side and then a wide range of customers, including the public, on the other side of their business.

To ensure fully stocked warehouses and high fill rates, it’s also common for these locations to receive similar products from different suppliers, or the same products in different brands from the same supplier. Because of the high volume these handlers process, turnover of product is rapid and new product is constantly being replenished. This can result in difficulties scanning all items in and out. Scanning to record traceability of every inbound unit is time consuming and would increase the time required before product is available to be received into inventory and further distributed.

Once received into inventory, scanning labels during the pick process is a manual process that leaves room for potential error. When scanning, there are few failsafes to prevent scanning of one case while selecting a different one. Warehouse workers moving at a quick pace to fill orders can inadvertently create greater traceability issues if they are not verifying their picks with the scanned data. Potential error can also increase when “cash and carry”-style customers can select and pull their own produce from inventories. This is a common practice at terminal markets and wholesalers.

Brokers commonly arrange for the sale of products between sellers and buyers without physically taking possession of the products themselves. Having complete visibility over traceability can create a challenge when this style of handler does not have any in- person checks to verify the data. If electronic records are received, brokers must accept the traceability record as complete without errors, as they have no way to ensure accuracy if they do not have the physical product.

The Produce Traceability Initiative (PTI) has made great progress in standardizing labels; the usage of this labeling is optional and mostly driven because of retail and foodservice customer requirements. Many suppliers utilize different labeling codes for different styles of product, and outside of PTI-compliant labels, no two suppliers utilize the exact same process. Many labels are not scannable and rely on older human readable format-style labeling. This requires manual reporting of the lot codes and other trace data.

Even within a pallet, not all cartons are labeled with a scannable barcode. The structure of stacking cartons on a pallet prevents scanning of cartons placed in the middle section of the pallet. A pallet tag could be utilized to scan, but this would depend on if all cartons were scanned to the pallet tag before palletizing.

Greater adaption of the PTI-compliant label or another standardization of labels could ease some pain points of inbound receiving, thus allowing warehouse management systems to be fully automated. Although this would alleviate some areas of stress, other challenges, including those regarding customer and employee handling operations, would still need to be managed.

Processor, repacking, transformation

Traceability at the processor level has several unique challenges. Because of the high-speed nature of the environment, many raw lots are combined into similar finished goods. It is not uncommon to have 10 to 15 raw lots being used in one finished product lot. It is also not uncommon for one raw lot to be consumed in multiple finished product lots. Transferring this fast-moving information is challenging and can only be done electronically.

To add to these challenges, many customers have unique data-capturing requirements. Having to train employees to use multiple processes, and in some cases, different scan guns, adds to the complexity of the high speed that is needed. As each customer is delegating their own “need,” there is competition for the limited available space in the processing facility. Customer-specific equipment is expensive and takes up space.

There are some raw products that are procured through tertiary suppliers (brokers). Part of the processor’s challenge is to ensure that all these external suppliers are capturing the correct data and then passing that data along to the processor. How do processors and repackers ensure that the information being supplied is accurate? All the processor can do is pass along information that has been received. It is extremely important that the receiving department is diligent when it comes to receiving the product, as well as the information. Ensuring that receipts are reconciled in a timely manner and cross-checked with records is key for this.

Customers are starting to request more and more information all the time. One step backward is no longer the norm, as most customers want the processor to be capable of sharing information back to the farm. Defining what data is truly required is critical. Do they need field information, harvest and packing crew data, row or line information? Once customers have the information and documentation, what are their intentions with it? A standard for all customers would eliminate cumbersome data from being shared unnecessarily and would provide a benefit to processors and repackers.

Distributor, retail, foodservice

The produce distributor, including those in both foodservice and retail, possess traceability challenges unique to the fresh produce supply chain. Most distributors have warehouses containing thousands of items, with many changing daily, and many handle more than just produce. It is not uncommon for distributors to have hundreds of suppliers and everchanging brands, with multiple brands being of the same item in the same slot. The amount of data that needs to be consumed, stored and shared is often enormous. Thus, management of traceability records becomes a concern.

Much of the focus of the traceability conversation has been on the last mile (grocery store, restaurant, etc.) and/or the distributor. The complexity of the supply chain increases the closer the product is to the food service or retail consumer. In the event of a market action, the current distribution industry can trace and remove suspect product. Tracking of the production or lot code to the customer has been an industry concern, with focus on the rare traceback exercise during an outbreak (which is rare, relative to the volume of products sold and eaten daily).

Many of the produce items that enter the food distribution chain will include multiple lot codes within one pallet or even multiple pallets. This is one of the many reasons the use of the purchase order (PO) is used to track product. The PO can be used to link the product to the supplier. In the event of a market action, the communication is such that the product can be removed from commerce effectively. A change in this area and scanning each item or package on outbound delivery add complicated levels of implementation and may cause a reduction in efficiencies.

Many suppliers feed product into the distribution locations, yet there is not a consistent lot code format. A distribution location may have hundreds of suppliers providing information inconsistently. Each different tracing system that is unique to product categories will cause additional work at the distributor level. Transfer of information between entities can be done electronically (e.g., via advanced shipping notices) or though physical data capture (e.g., scanning). It will require a large commitment for the industry to share data and, just as importantly, consider what to do when the data is delayed, not available or compromised.

In distribution, consistent processes are needed to execute efficiently. A separate process for high-risk produce, seafood or other categories creates unknown complexities. The solution that is implemented will most likely be the solution for all products in the distribution chain, not just those on the FDA food traceability list.

Interoperability of systems

The interoperability of systems may be the largest concern of the produce industry. The grower or first receiver in the produce supply chain has implemented traceability practices aligned with the FDA’s current proposed rule to a greater degree than the rest of the supply chain. Ongoing discussions within the industry show that there is a mechanism for continued industrywide conversation, cooperation and alignment, although full adoption of a fully aligned and interoperable system remains a challenge.

The produce community has concerns with the transmitting of data and utilization of a format that all can be accepted and used by the entirety of the produce industry. The Global Standards 1 organization and the PTI have both been leaders in this area. The industry, regulatory entities and technology will need to solve for this interoperability issue.

Summary

Understanding the complexities within each sector will allow for greater visibility on the issues currently being addressed and the industry-led initiatives to reduce potential pain points in traceability. From harvest practices to standard operating practices at the distribution level, each segment is unique and has developed solutions for their own stage of the supply chain to ensure compliance with current food safety practices and traceability requirements. Data service providers, regulatory entities and other areas of the food industry need to comprehend the challenges each portion of the supply chain experiences and how this impacts the downstream entities.

The fresh produce supply chain relies heavily on manual processes and each item touches many points throughout the system before it ends up on retailers’ shelves or consumers plates. A one size fits all approach to traceability will not work for this industry.

Credit needs to be given for the success of the current traceability practices, with the thought that improvements can be made to streamline certain aspects without creating additional work or disruptions to the supply chain. Instead of creating a novel overarching system, improvements could be made to existing systems. This would allow resources to be divided between aspects that need the greatest improvements and pose the biggest risks to hampering traceability efforts.

Contributors to this column: Shane Sampels, Sysco chair; edited by Kate Burr, Markon; with contributions from Donna Lynn Browne, Naturipe; Mike Sexton, McEntire Produce; and Joan Daleo, Ole Tyme Produce