Food Supply Chain Approaches May Trigger Competition

Gone are the days when a member of the food industry could abscond themselves of responsibility for their suppliers’ — or customers’ — handling of their product. The shared responsibility for food safety through supply chains is ever increasing, providing opportunities as well as aggravation. Although the food industry has long held that food safety should not be used as a competitive advantage, there’s increased pressure to prove that your product, and your supply chain, is safer.

The 2008 Salmonella outbreak associated with peanut paste was a watershed moment. As details of the manufacturing operations came to light, the government, industry and stakeholders rightfully asked: “How did no one notice this?”

But, in fact, some had. Some buyers rejected the supplier.

In the past 12 years, the nature of the food industry has changed. The peanut paste outbreak, along with others, drove several sections of the Food Safety Modernization Act (FSMA) related to supply chain controls. Both the Preventive Controls Rule as well as the Foreign Supplier Verification Programs Rule hold manufacturers and importers accountable for the products they use and sell.

Notably, those rules define “supplier” as the entity that grew the food, raised the animal or manufactured/processed the food. In other words, distributors and brokers would not be deemed the “suppliers.” As a result, this has pushed the industry to have a better grasp of those supply chain members that are addressing — or creating — risk. This can be challenging given the global nature of supply chains, particularly for fresh produce, so much of which is imported.

Most recently, the Food and Drug Administration proposed the long-awaited rule that would require additional records to be kept for certain foods. Traceability is a supply chain-wide issue. Although tracebacks are stymied when individual companies lack traceability within their own operations, just because one firm has good traceability does not mean that there isn’t a weak link elsewhere in the supply chain.

The proposed rule seeks to shore up those weak links, in part, by requiring the “traceability lot code” (e.g., the code applied when the product is originated, created or transformed) to carry through to the point of sale or point of service. This would mean retailers, restaurants and the like would need to know the manufacturers’ and growers’ lot numbers of products they received, as opposed to only retaining the purchase order number and/or bill of lading from their immediate supplier.

Additionally, each point in the supply chain would need to be able to provide the point of contact for the lot code generator. This would allow FDA to skip steps during a traceback and go right from the point where a consumer ate or bought a food item, to the entity that made the food. Currently, retailers and restaurants may not have visibility to the growers/manufacturers of the food. This rule would change that.

The reliance on traceability records is greater for produce than for shelf-stable items for a few reasons. First, the packaging of shelf-stable items typically bear a lot code on the product. Produce, especially when sold in bulk, does not. When produce packaging does have a lot code (e.g., on a bagged salad), it is seldom useful because of the perishable nature of the product. People discard packaging. Products with longer shelf lives may still be available in the supply chain when an outbreak is detected, enabling investigators to test product and relate results to specific lots. However, the lineage of fresh produce only exists as historical records.

As buyers begin to realize the responsibility they bear for the food they sell, they are seeking more information and assurances from their suppliers. The industry has relied on third-party audits for many years. However, the role of the audit has evolved from buyers being satisfied with a certificate demonstrating a passing grade, to more detailed questions regarding specific observations and corrective actions.

Some buyers have augmented third-party audits with their own supplemental requirements or have abandoned them in lieu of proprietary audits. In some instances, these efforts are not based on science, but based on the notion that if one is good, two is better. This creates a misguided food safety competition that fails to assess the full supply chain, from farm to fork, to determine the greatest opportunities to mitigate risk.

Ultimately, food safety practices must be tied to consumer health, with collaboration between members of complex, interconnected supply chains.