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Product Recall: The big challenge for food businesses

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As one of the largest producers of food in the world, India faces several challenges in ensuring the availability of safe and quality food for its millions of domestic and global consumers. Global food production, distribution and retailing have never been under greater scrutiny by consumers and regulators than today, especially following several high-profile cases of food contamination and outbreak of food-borne diseases.

Consumer safety, in particular, has become a major concern worldwide leading to an increased number of product withdrawals and recall. The problem is accentuated since food production is now highly globalised with multiple and geographically spread suppliers of raw materials, ingredients, food, additives/ preservatives, distributed processing units, multiple stakeholders and emergence of online and omni-channel food retailing.

With ambitious targets set by the Ministry of Food Processing Industries, Govt. of India, to increase processing of perishables from six to 20 per cent, value addition from 20 to 35 per cent and India’s share in global food trade from 1.5 to 3 per cent in the short term, food safety becomes of paramount importance, resulting in consumer safety and increased brand equity for India, as a supplier of safe and quality foods.

The primary reason behind the distribution of unsafe food is the lack of visibility and information sharing among various supply chain partners. This has become more of a challenge in recent years as the path from food production to consumption has become increasingly complicated with globalisation.

Today, a food product may contain ingredients sourced from multiple locations, passed through different processing facilities, and may have been handled by wholesalers, retailers, and multiple logistics partners before reaching the consumer’s shelf or refrigerator.

A number of regulations, both national and international, mandate operators to comply with stringent statutory requirements from a consumer protection and traceability perspective.

The list of such regulations are only growing with increasing consumer awareness and the consequent demand for reliable, trustworthy and full disclosure of information on food products. The gamut of information demanded includes verifying the accuracy of data on the product label, such as its ingredients, nutritional value, etc., all the way to the source of the ingredients, sustainability, assurance of fair trade practices in its production process, etc.

In particular, the EU 1169/2011 Regulation, which is already in force, mandates a digital imprint of product information for retail as well as online selling of food items. The new law combines two directives – 2000/13/EC (labelling, presentation and advertising of foodstuffs) and 90/496/EEC (nutrition labelling for foodstuffs) – into one legislation.

Further, the US Food Safety Modernization Act (FSMA) enables FDA to better protect public health by strengthening the food safety system. It permits FDA to focus more on preventing food safety problems rather than relying primarily on reacting to them after they occur. The law mandates food firms to employ traceability to achieve higher rates of compliance with prevention and risk-based food safety standards, and to better respond to and contain problems when they do occur.

The Food Safety and Standards Authority of India (FSSAI) has notified several Rules/Regulations governing food safety, which require food operators to have in place a process/system to efficiently and speedily handle food withdrawals/recalls when required, while keeping the Regulator informed during the process. The proposed amendments to the Consumer Protection Act, 2015, and BIS Act, 1986, will stipulate requirements for putting in place systems to handle product recalls for consumer items.

The Big Challenge – Lack of Visibility

The lack of visibility and an absence of structured information sharing among the various supply chain partners is the root cause of letting unsafe food go unchecked, besides impeding recalls.

In recent instances of food recall, companies were seen contending with some crucial questions – How many batches or lots are affected? What will be the scope of recall? Where are these specific lots in the supply chain?

One of the prime reasons behind these uncertainties is the lack of visibility and information. Despite food products being withdrawn or recalled on a regular basis, manufacturers at best have in place processes only to recall products till their first distribution level. Beyond this, other points of distribution and trading partners are unlikely to have any kind of structured track & trace system in place that could seamlessly receive, exchange and share information on product movement in the supply chain and correlate that with the physical consignments.

This makes recalls ineffective as access and information is available only for a fraction of the contaminated batches in the marketplace, which can seriously damage the brand image of the company.

What authorities, suppliers, buyers as well as end users/ consumers need is fast, accurate and complete traceability information and full chain visibility.

To execute effective recalls, manufacturers require a recall solution overlaid on a robust track & trace system, encompassing the full supply chain regardless of state or country. This requires defining a shared minimum set of requirements and clear accountability on what action is required from each trading partner across the chain.

Another risk food processing companies in India face while sourcing raw food items is the uncertainty over the quality of raw material/ ingredients because of the lack of reliable information on the agricultural process, quality of seeds, pesticides, etc.

This gives us reason to believe that in the absence of reliable product information, food processing companies are themselves becoming victims of low quality raw material that are high on pesticides and other harmful substances.

Need for a Common Traceability Solution Using Global Standards

A common traceability standard is essential to make the product (food item) visible at all levels in the supply chain. Traceability is a key element to improve security, control quality, combat fraud and manage complex logistical chains. Public and private traceability systems are implemented by using automated data capture, electronic data processing and electronic communications. They reduce the risk and uncertainty across both the supply chain and between trading partners.

An effective traceability solution involves associating flow of information with the physical flow of traceable items in order to ensure product authenticity and information sharing among supply chain partners. Companies can achieve ‘accurate and speedy information’, food product/ consignment visibility, and execute accurate product recalls and withdrawals by implementing bottom-up and top-down traceability systems.

Food safety is all about prevention — recall prevention, protecting brand reputation etc. — as well as response. Beyond prevention and simply having the ability to effectively track recalled products, traceability solutions also play a key role in data collection, thus affecting the overall timeliness of your response. If your company is recording all of its production information manually and keying it into a system, there is the obvious chance for human error. Data collection with bar code scanning within the traceability solution increases the accuracy and timeliness of transactions.

A traceability system can help certify a food product is fit for consumption when its unique identity is authenticated at every step of the supply chain and no error or discrepancy is reported against it. Besides,it also helps locate defective or unsafe foods in order to remove them promptly from anywhere in the distribution chain including retailer shelves. In the event of any discrepancy, the unique identification system of the implicated product helps firms to identify the source(s) and the extent of the problem across the supply chain.

Empowering Consumers Through Additional Information

Traceability is an indispensable tool to fulfil the consumers’ need for additional information on a product than what is printed on the label. It is an excellent way to ensure that a food product conforms to the requirements of people’s religious beliefs or respects their lifestyle choices. As a result, various bodies around the world have been created to certify that food and food premises are halal, kosher, organic or eco-friendly.

Traceability systems can make the work of these certification bodies easier by sharing trustable information. Different labelling options, available under traceability solutions, can guarantee that the food items bearing them conform to ethical and/or religious values. Firms can, thus, build a relationship of trust with their consumers through their capability to provide information related to any item, whenever required.

Global Traceability Standard (GTS) is the key to finding the most efficient ways to produce, assemble, warehouse, and distribute products. These systems monitor internal supply as well as link suppliers with their buyers, allowing automated stock management, product master data management, end-to-end product and consignment visibility and other supply-related activities. It leads to a more efficient supply chain and, therefore, reduced costs of operation.

The ability to reduce costs often marks the difference between success and failure. This is more significant for the food industry, where margins are thin and hence supply management, including traceability, turns out to be an increasingly important area to enhance competitiveness.

Besides, brands realise that being good is not good enough anymore. They want to create consumer experiences that are exceptional—even memorable. That’s why companies are literally rethinking how they do business, re-examining every aspect of their supply and demand chains.

In this new holistic retail environment, ‘Data Quality’ is a key step to create memorable experiences. It offers retailers and brand owners a chance to communicate the value of their products more completely in the eyes of consumers. As the velocity of commerce escalates (more products to sell and more channels to sell them through), the quality of the information about those products becomes extremely important—perhaps more important to the purchase journey than the actual quality of the product itself. If the product information doesn’t provide the consumer with what (s)he needs when shopping online or offline, (s)he may not even consider it. So information has truly become ‘part’ of the product.

Using GS1 Global Traceability Standards

GS1, a not-for-profit, industry-led global standards body headquartered at Brussels, Belgium, with a global network of over 110 member organisations around the world, has been dedicated to the design and implementation of global standards and solutions to improve the efficiency and visibility of supply and demand chains for more than 40 years. Their widely implemented standards enable unique and universal identification of products, assets, services, entities/locations, data capture and seamless sharing of information between supply chain stakeholders, including manufacturers /suppliers, retailers, logistics providers and also consumers enabling safety, security and sustainability in global supply chains.

The organisation, in close collaboration with key industry stakeholders across the world, has over the years built a set of effective traceability standards.

These traceability standards have been successfully implemented and used in several developed western economies. GS1 India leads the local implementation and has immense expertise and knowledge on how to implement traceability and recall systems in the country.

According to the organisation, unlike proprietary solutions for internal traceability developed by solution providers, the key differentiator of a traceability solution built and based on the GS1 Global Traceability Standards (GTS) is its interoperability and scalability feature. This provides exceptional reliability especially when identifying and locating products during a food safety problem across the entire supply chain.

By being interoperable and standards-based, the traceability solution can be flexible and vendor independent. This helps in reducing costs of the end-product to businesses and consumers. It enables automated capture and exchange of information (identify, capture and share), ensuring seamless information flow and faster data sharing/ querying between stakeholders, providing the much-needed upstream and downstream visibility in the food value chain. The GTS also enables going beyond just the ‘one step up, one step down’ approach, and can perform event-based tracking across the chain.

Using universally accepted GS1 standards help overcome barriers to commerce that can be created by using company-specific standards. Trading, tracking and tracing goods becomes less expensive as the need to fulfil different identification and communication requirements of each importing country or company can be eliminated.

The GS1 system enables efficient supply chain management and international trade by providing standard tools that allow all supply chain participants to communicate in one global language of business. Key concepts driving GS1 system application can be summed-up as:

  • Automation of business processes by means of automated data capture (ADC) and electronic data processing (EDP).
  • Communication of information in the fastest and most accurate manner by means of standard electronic messages that automatically update computer applications with data from trading partners.
  • Time compression, which offers strategic opportunities to improve customer satisfaction, not just by efficient produce traceability, but also by reengineering business processes across the supply chain.

Facilitating Compliance with Regulatory Requirements

The GTS includes a Compliance Criteria developed for proactive monitoring of manufacturers’ products and processes. The compliance process helps manufacturers in safeguarding product security, quality, certification, origin and content while ensuring compliance with current national and international traceability and recall regulations. The use of the GTS can help manufacturers better prepare for and meet several regulatory requirements such as:

  • ISO 22005:2005
  • ISO 9001:2008
  • HACCP (HAZARD ANALYSIS AND CRITICAL
  • CONTROL POINT) standard
  • BRC (British Retail Consortium) Standards
  • IFS (International Featured Standard)
  • SQF (Safe Quality Food) SQF 2000 CODE
  • Global Gap

GS1’s GTS also helps exporters meet the EU Regulation 1169/2011, which requires manufacturers to make food labelling easier to understand and display the same information which is on the product packaging (label) digitally (online) as well. It is aimed at empowering consumers by providing greater clarity on ingredients, nutrition and allergens by standardizing food labelling.

How GS1 Global Traceability Standards Work?

GS1 standards provide the framework required to support the traceability (business) process. GS1 GTS, developed in 2005 with active participation of food industry across the world, defines the globallyaccepted method for uniquely identifying:

  • Trading partners
  • Trading locations
  • Trading items involved
  • Logistics units involved
  • Inbound and outbound shipments

It also defines the essential pieces of information that have to be collected, recorded and shared when designing and implementing a traceability system. A robust traceability solution can help companies answer questions like:

  • Where are my products?
  • Where, when, and in what quantities were my products produced?
  • What quality-assurance data is available for each of my products?
  • Where, when, and in what quantities were the products shipped to and from?
  • Who supplied the raw ingredients and when?
  • Were the raw ingredients used in any other products?

Because of its ability to provide globally unique identification of trade items, assets, logistic units, parties and locations, the GS1 System is particularly well suited to be used for traceability purposes.
This meets the core need to be able to trace back and track forward (one step up, one step down and beyond) at any point along the entire supply chain, no matter how many trading partners and business process steps are involved.

GS1 Traceability Standards in Action

Leading business organisations around the world have endorsed the use of the GS1 traceability solution.

A. Chipotle Mexican Grill
Chipotle Mexican Grill, a US restaurant chain, adopted a traceability solution to advance its commitment to food safety. To deliver on its Food with Integrity mission and serve food made from the very best ingredients, the company needed to effectively engage with a large network of supplier partners to establish a company-wide traceability process.

It implemented a traceability programme leveraging GS1 Standards for sharing standardised product information at every step along the supply chain – applying proven best practices developed by various industry segments. The benefits accrued by the company are:

  • Increased efficiencies in quality assurance and logistics and real-time visibility of food and other products at each point in the supply chain.
  • Improved stock recovery process.
  • Ability to capture and share quality attributes throughout the supply chain and enhance reporting at the restaurant level.
  • More direct access to supplier-provided information on sustainability efforts.

Chipotle’s Food with Integrity mission is strengthened by the traceability programme it launched with Chipotle growers and suppliers, to attain the company’s goal of end-to-end supply chain traceability. This enables the company not only to ensure the safety and quality of the food it serves, but also that its suppliers are adhering to environmentally and socially sound practices.

B. Deploying traceability for native producers in Peru
About 300 tonnes of herbs, such as thyme, rosemary, mint, oregano and others, are produced by small and midsized herb producers in Peru for export to Europe.

To become more competitive in the export market, an association called BioAquipa (previously Ecolife) that groups 615 aromatic herb producers in the region of Arequipa adopted the GS1 traceability standards. The group established a traceability process map for the aromatic herbs supply chain, including points of control, registries of information and responsibilities, as well as a set of traceability templates and guidelines for each point in their supply chain.

The benefit came in the form of 80% time savings while retrieving upstream batch information. Furthermore, in 2008, the system passed a critical test when a European client’s quality control laboratory identified a problem that caused the export process to be halted. Immediately, teams in Peru carried out their own analyses, testing all the processes along the exact path that the flagged batch had travelled. Using the standardised traceability registries filled in at each point of the supply chain, they quickly ruled out the possibility of any local contamination. With this information, the client investigated further at their end and found that the source of contamination was caused by their own quality control laboratory.

Besides, a recall case of oregano export in 2011 also demonstrated the benefits of GS1 traceability standards for BioAquipa. In this incident, the produce was found to be contaminated by mould in a container received by a client. Such contamination is uncommon but could sometimes happen due to changes in humidity and long distance transportation. However, with the right traceability process in place, the team identified the exact contaminated batch of 36kg, saving the rest of the container – which was 5.4 tons worth of herbs.

C. Traceability for Exported Indian Grapes

Export of grapes from India to the European Union was adversely impacted after higher amounts of pesticide residue than the permissible limit was reported. The highly fragmented grape industry, with manual supply chain processes lacked visibility in the movement of grapes. The industry didn’t have the infrastructure to support sharing of information among concerned authorities and stakeholders.

The Agricultural and Processed Food Products Export Development Authority (APEDA) built an internet based, traceability system using GS1 Standards to integrate the grape export industry stakeholders on a single platform for full chain visibility.

With the implementation of the traceability solution, which brought all the stakeholders on a single platform, the organisation reported a rise in farmers’ earnings by 40%, FOB increased from 6 euro to 9.5 euro per carton of 5 kg. Further,the solution today benefits 40,000 farmers and 100+ exporters. The traceability solution enhanced the brand equity of India in the export of grapes, and APEDA won the National Award for this implementation.

In Conclusion

The Indian food industry presents a very large opportunity to every stakeholder. This is primarily driven by the changing nature of the Indian consumer, who is more informed and willing to try new products; and the strong production base of the country. he industry-wide adoption of global traceability standards and guidelines is critical for companies seeking to improve collaboration and coordination to ensure food safety.

GS1 Global Traceability Standards provides the ability to verify a product’s history, location or application, which is critical to manage the product quality. Once a problem is detected, traceability allows a manufacturer to identify which batch or lotthe item came from, and from there, where those potentially off-quality items went to.

GTS would enable food companies in India involved in both domestic supply and exports to comply with different Regulatory requirements as well as buyer (retailer) requirements in India or worldwide, in a single, consistent, interoperable and structured manner. It would also facilitate technology/vendor neutral solutions which are affordable for both SMEs and large food companies. Having an effective traceability solution in place enables businesses to better understand, prepare for, and exceed both regulatory compliance and customer satisfaction.