Ed Treacy Vice President, Supply Chain Efficiencies Produce Marketing Association etreacy@pma.com February 1, 2011
Agenda Update on Food Safety Legislation Introduction to the Produce Traceability Initiative 2
Food Safety Legislation Update The Food Safety Modernization Act was signed into law on January 4 th, 2011 For Retailers: Posting of Recall FDA to draft rules requiring the posting of recall notices at grocery chains with at least 15 stores, which must display a recall notice in a prominent and conspicuous location in the store The notice must be posted within 24 hours of when it appears on the FDA website 3
Food Safety Legislation Update For both Suppliers and Retailers: Recall and Outbreak Response FDA may request a voluntary recall by a company If the company refuses the Secretary can order a recall The bill also calls for improved collection and usefulness of data relating to outbreaks and mandates better cooperation between and training of FDA, the U.S. Centers for Disease Control and Prevention, and state and local officials. 4
Food Safety Legislation Update For both Suppliers and Retailers (continued): Traceability and Recordkeeping FDA shall establish a system that improves the capacity to effectively track and trace food FDA to conduct studies and pilots, including a fruit and vegetable pilot FDA must issue regulations requiring enhanced recordkeeping for what it determines and makes public to be high risk foods. The system must be science based and technologically neutral and have benefits that outweigh the burdens of the additional requirements It is not required to contain the full pedigree of information or require product tracing to the case level Grocery stores buying directly from farms are exempted from recordkeeping requirements for those products, other than retaining for 180 days records documenting the source of the food. 5
Food Safety Legislation Update For both Suppliers and Retailers who deal with imports and recalls: Importer Verification of Foreign Suppliers Importers will be required to verify that food imported is produced in compliance with U.S. food safety laws Importers of record must verify that food he or she handles was produced in compliance with applicable U.S. laws and is not adulterated Records relating to verification must be made available to FDA upon request Types of verification activities may include monitoring records, lot certification, annual on site inspections, checking food safety plants, and periodic testing or sampling FDA will provide guidance on developing a foreign supplier verification program within one year and the requirement is to take effect January 2013 6
Food Safety Legislation Update For both Suppliers and Retailers who deal with imports and recalls (continued): Fast Track Entry FDA shall establish expedited entry for importers that participate in a voluntary certification program by July 2014 Importers will pay a fee for this service Fast track program will not begin until after FDA completes its work on the accredited certifiers program 7
Food Safety Legislation Update For Suppliers: Produce Standards FDA must issue proposed regulations on science based produce standards to be issued for those types of fruits and vegetables the agency determines need standards in order to minimize risk to human health by January 2012 FDA must prioritize the implementation based on known risks, including the history of outbreaks 8
Food Safety Legislation Update For Suppliers (continued): Food Safety Plans Each food facility must have a written food safety plan that includes hazard analysis and preventive controls, a description of verification and recordkeeping, and procedures for monitoring, recall, and tracing The food safety plans must be available to FDA during an inspection The food safety plans must address risks from intentional contaminations such as terrorism Each facility must update its food safety plan every three years or when it makes a significant change in the facility. 9
Food Safety Legislation Update For Suppliers (continued): Small and Local Farms and Facilities The bill exempts facilities or farms that meet certain qualifications from the food safety plans and the produce standards : Food from very small facilities which FDA will define, or The food at the facility or farm has an annual value of $500,000 or less and a majority of the food is sold: directly to consumers (without limitation on geography), or directly to restaurants or retail establishments that are less than 275 miles away from the farm or facility or are in the same state. If these conditions are met, then the entire facility or farm is exempt even the food that goes to other sources. Exempt facilities avoid the requirement to have a food safety plan Exempt farms do not have to adhere to the produce standards FDA may lift the exemption for a particular facility or farm if there is a direct link to a food outbreak or when necessary to protect public health 10
The Produce Traceability Initiative 11
Produce Traceability Initiative PTI is a voluntary initiative created in 2007 by the Produce Industry; the growers, packers, shippers and buyers, to implement a more effective whole chain traceability process. 12
Produce Traceability Initiative PTI was created in response to the 2006 Spinach Crisis that had a huge economic and consumer confidence impact The 2006 Spinach crisis proved that what was in place was not good enough for our industry 13
Traceability Today The length of time this whole system trace back and trace forward took caused the entire Spinach category to be recalled 14
Traceability Today Today, all Companies are required by the Bioterrorism Act of 2002 to have an internal process with record keeping of one up and one down traceability One step up Who did you ship it to? One step down Where did you get it from? 15
Traceability Today Currently, the process of performing a whole chain Trace Back and Trace Forward takes too long There is no common link between supply chain partners Each party identifies the same case of produce as something different in their organization A full end to end Trace can take weeks due to the number of links in the supply chain and non electronic storage of traceability information 16
Current FDA trace back process is slow Due to a lack of an identifier that connects through the supply chain Date: Invoice #: 5/5/2008 38947 Section QTY. Pack Size Description Code 454681 100 25 25# Tomato Bulk 6x6 LG 501785 Date Invoice # 5/5/08 89000 SECTION QTY PACK SIZE DESCRIPTION 615444 6 50 50# Yellow Onion Med 050# 602588 6 50 50# White Onion Med 050# 645879 2 16 3# Bag White Onion 016@ 648055 1 10 10# Oragne Hbanero 010# 648044 10 25 25# Tomato Bulk 6X6 LG 692000 1 12 32OZ Mini Bag Red Potato 012@ Tomato Distribution Company 22 Loveapple Way Toma, TO 00001 SHIP TO The Restaurant Foodtown, USA 301-555-5923 Shipping Report DATE CUSTOMER ID Invoice ORDER DATE ORDER NUMBER SHIP DATE No. 5/3/08 34511 5/3/2008 9260 Pallet No Cartons / Manifest / Produc t Size 1985 Fruitplant Avenue To: ORDER NUMBER 2200 88 / 2144 / Beefsteak Tomato 4X5 Shipper: Pick, EM 00005 Tomato Distribution Co. 2289 88 / 2144 / Beefsteak Tomato 4X5 Fruit Haulers R Us. 8506 22 Loveapple Way 2226 88 / 2144 / Beefsteak Tomato 4X5 Consignee: Shipment Date Date: 04/25/2008 April 20, 2008 Toma, TO 00001 Fruit Growers, Co. 4452 88 / 2144 / Beefsteak Tomato 4X5 Destination Quantity Desc ription 1985 Fruitplant Ave. Est. Arrival 04/25/2008 2233 88 / 2186 / Beefsteak Tomato 4X5 Pick, EM 00005 Pallet count 7 2698 88 / 2144 / Beefsteak Tomato 4X5 500 Box, Greenhouse Tomatoes, Size 2896'35' 88 / 6144 / Beefsteak Tomato 4X5 Pallets Boxes Produc t Size 1 88 Whole Tomato Order # 4421 (88) 5*5,3 Please contact Customer Service at [Phone] with any questions or comments. 2 88 Whole Tomato Pallet No (88) 5*5,3 Cases / Produc t THANK YOU FOR YOUR BUSINESS! 3 88 Whole Tomato 3300 100(88) 5*5,3 Beefsteak Tomato 4 72 Whole Tomato 3374 100(72) 5*5,3 Beefsteak Tomato 5 88 Whole Tomato 3380 100(88) 5*5,3 Beefsteak Tomato 6 88 Whole Tomato 3467 100(88) 5*5,3 Beefsteak Tomato 7 88 Whole Tomato (88) 5*5,3 BILL TO May, 4 2008 [ABC12345] The Restaurant 8 Gourmet Lane 8 Gourmet Lane Foodtown, USA 301-555-5923 17
FDA Perspective Key Areas For Improvement Product Connectivity /Linkages Documentation Speed An interoperable system to rapidly link product (or ingredient) from farm/manufacturer to form 18
Traceability Today Trace Back Grower/Field Shipper Wholesaler Distribution Store/Restaurant Center Trace Forward 19
FDA Trace back Flow Diagram Store/ Distributors Shippers Packers Restaurant Farms 20
Produce Traceability Initiative 2007 Industry asks associations to develop a system for whole chain traceability 2008 Tomato Jalapeño Crisis Oct 2008 PTI action plan launched May 2010 Realign milestones 4 & 5 with milestone 6 2006 2007 2008 2009 2010 2006 Spinach Crisis 2008 PMA, UFPA & CPMA form PTI Feb 2010 PTI Steering Committee in Dallas Partner with GS1 New governance structure Oct 2010 Leadership Council and working group meetings 21
PTI Mission To create an Action Plan for the produce industry to adopt an effective Whole Chain Traceability program by incorporating the use of technology and use of common standards to serve as linkages between internal traceability programs 22
Produce Traceability Initiative PTI Leadership Council (37) PTI Leadership Council (37) PTI Steering Committee Executive Committee (10) Commodity Interest Groups Working Groups Master Data Implementation Industry Communications Technology 23
PTI Leadership Council 24
PTI Milestones Milestone Target Date 1: Obtain a Company Prefix from GS1 2009 2: Assign GTINs to Cases 2009 3: Provide GTIN Information to Buyers 2009 4: Show Human Readable Information on Cases 2011 5: Encode Information in a Barcode 2011 6: Read and Store Information on Inbound Cases 2011 7: Read and Store Information on Outbound Cases 2012 25
Current Food Industry Initiatives 2009 2010 2011 2012 2013 2014 2015 Produce GS1 Company Prefix and GTIN Encode and scan inbound case barcode Scan outbound case barcode Foodservice GS1 Company Prefix and GLN GTIN, Encode barcodes, and Phase 1 Attributes for GDSN Scan inbound barcodes, and Phase 2 Attributes for GDSN Scan outbound barcodes, and Phase 3 Attributes for GDSN Goal: 75% adoption in industry Meat & Poultry Q3: Traceability Guidelines Item and Case ID and barcodes adopted Seafood Q3 Q1 2011 Traceability Guidelines Deli, Bakery, Dairy 26
Retailers Engaged in PTI Food Lion Chair of PTI Leadership Council PTI Implementation Working Group PTI Master Data Working Group Wal Mart PTI Leadership Council PTI Implementation Working Group The Kroger Company PTI Leadership Council PTI Implementation Working Group 27
Retailers Engaged in PTI Publix PTI Leadership Council PTI Implementation Working Group PTI Master Data Working Group SUPERVALU PTI Leadership Council PTI Implementation Working Group PTI Master Data Working Group Safeway PTI Leadership Council Wakefern PTI Leadership Council 28
Why Implement PTI in your company? Your largest competitors are implementing PTI The efforts to implement PTI in your distribution system will be applicable to the other Fresh initiatives 29
Why Implement PTI in your company? To reduce the economic impact of a recall to your company To maintain consumer confidence by identifying which stores did NOT receive the recalled product 30
Why Implement PTI in your company? To protect your sales in the event of a recall To take advantage of product arriving in your distribution centers with PTI labels To save labor in your distribution centers when verifying if recalled product has been received and/or shipped 31
PTI Tools Tools have been developed to reduce impact on Distributors and Retailers Hybrid Pallet Label Eliminates need to scan each case on receipt Will facilitate EDI / ASN Standardized case label PTI voice pick code 32
What is the Produce Traceability Initiative? Whole Chain Traceability A Voluntary Initiative Case Labeling at time of packing Capturing and electronically storing the information on the Case Label Tying the Case Label information to your existing in house traceability systems 33
Whole Chain Traceability Why is this important to the Produce Industry? To reduce Human Risk by identifying the source and span of affected produce QUICKLY To reduce Business Risk by identifying quickly what product is NOT affected by recalls To increase consumer confidence in the Produce Supply Chain 34
What the PTI Is Not About x It is not ITEM level Traceability x It is not DataBar for use on PLU stickers x It is not the serialization of lot numbers x It is not a central repository of traceability data x It is not Farm to Fork 35
What the PTI Is Not About x It is not scanning at store/foodservice operation level x It is not about changing your systems to use GTIN as your item number x It is not about throwing away or replacing your current traceability systems x It is not a mandatory requirement created by the associations 36
What the PTI Is Not About x It is not a program for only the large growers x It is not about retailers punishing the growers x It is not about making the Retailers and Distributors more efficient at the cost of the Grower / Shippers x It is not about squeezing out the small growers 37
What the PTI Is It is about labeling the case/carton/bag/bin at time of packing It is about Whole Chain Traceability It is about reducing the impact of recalls on the entire produce industry 38
What the PTI Is It is about reducing the risk to your business It is about reducing the time it takes to perform whole chain trace back and trace forwards It is about the industry leading the government It is about maintaining and increasing consumer confidence in the produce they eat 39
Now what? Do not fear PTI, embrace it Keep it simple Do not over think it Do not wait until the end of this year to start looking at implementing PTI 40
Now what? Consider using the data generated from the implementation of PTI to enhance your business Engage in pilots with your trading partners Learn from others who have Implemented PTI 41
Now what? Look at ways to implement PTI as an enhancement to your current systems and procedures, not as a replacement Talk to the your IT people or system providers about what it will take to implement PTI for your business 42
Now what? Talk to the associations if you are unsure of the requirements Talk to your peers who have gone ahead of you Talk to your suppliers on what they are doing and what you can learn from them Look for and measure the benefits your company can achieve from the implementation of PTI 43
Now what? Form a project team and start the PTI implementation process for yourbusiness Evaluate your current state Determine the best implementation approach for your business Start today! 44
www.producetraceability.org Questions? 45
Questions? 46