Tag Archives: Supply Chain

2018 Food Safety Supply Chain Conference, Blockchain

Beyond Supply Chain Trends: Blockchain, FSMA, Food Fraud, Audits and More

By Maria Fontanazza
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2018 Food Safety Supply Chain Conference, Blockchain
Rick Biros, Priya Rathnam, and Andrew Seaborn, 2018 Food Safety Supply Chain Conference
Priya Rathnam (middle) pictured with Rick Biros, president of Innovative Publishing (left) and Andrew Seaborn Supervisory Consumer Safety Officer, Division of Import Operations, ORA, FDA

How well do you know your suppliers? Can you trust your supplier’s suppliers? What kind of technology are you using to assess and ensure your suppliers are in compliance with regulatory requirements? These are common questions food companies must ask themselves on a regular basis. These and more were addressed at the 2018 Food Safety Supply Chain Conference, held last week at USP in Rockville, MD. Stay tuned for coverage of the event in upcoming articles. In the meantime, here are some top insights shared by FDA and others in industry.

“We’ve issued a limited number of warning letters (two), and they were due to really egregious issues. Where there were previously warning letters issued, we’re seeing a lot more ‘regulatory meetings’.” – Priya Rathnam, Supervisory Consumer Safety Officer, CFSAN, on FDA’s enforcement this fiscal year.

Criteria for FSMA auditors also includes the “soft skills”, aka ISO 19011, auditor personal attributes. –Josh Grauso, Senior Manager, Food Safety & Quality System Audits, UL

Fabien Robert, Nestle 2018 Food Safety Supply Chain Conference
Food fraud costs the industry up to $15 billion annually. – Fabien Robert, Ph.D., Director, Nestle Zone America

It’s concerning that so many QA managers (and other pros) today don’t know extent of risk assessment they need to carry out. – Chris Domenico, Safefood360, Territory Manager for North America

“Blockchain is more than a buzzword at the moment.”- Simon Batters, Vice President of Technology Solutions, Lloyd’s Register

2018 Food Safety Supply Chain Conference, Blockchain
A dynamic panel about blockchain, led by Darin Detwiler, Director: Regulatory Affairs of Food and Food Industry, Northeastern University featured (left to right) Kathy Wybourn, Director, Food Safety Solutions, DNV Business Assurance; Simon Batters,Vice President of Technology Solutions, Lloyd’s Register and Melanie Nuce, Senior Vice President, Corporate Development & Innovation, GS1 US.

Sometimes food safety doesn’t win; sometimes you need the business acumen to show that implementing supply chain efficiencies will create the win. – Gina Kramer, Executive Director, Savour Food Safety International

Bryan Cohn, 2018 Food Safety Supply Chain Conference
Building a robust & smart supply chain = reduce food miles, shrink carbon footprint, and save food waste to increase revenue/acre. – Bryan Cohn, Vice President of Operations, Seal the Seasons

The FSMA Sanitary transportation rule is not as straightforward as you think. We need more training. – Cathy Crawford, President, HACCP Consulting Group

FSMA

FDA Issues Draft Guidance on Supply Chain Program for PC Animal Food

By Food Safety Tech Staff
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FSMA

Under the FSMA Preventive Controls Animal Food rule, certain animal food manufacturers that receive raw materials and ingredients must develop and implement a risk-based supply chain program. This is required if the facility determines that a supply-chain-applied control is the appropriate preventive control for a hazard of an incoming ingredient. In order to better help animal food facilities meet these requirements, the FDA released a draft guidance, “Guidance for Industry #246: Hazard Analysis and Risk-Based Preventive Controls for Foods for Animals: Supply-Chain Program”.

According to an agency news release, the draft guidance will help facilities in the following areas:

  • “Determine whether they need a supply-chain program;
  • Identify and implement the appropriate supply-chain program activities required to approve their suppliers and verify their supplier is controlling the hazard in raw materials or other ingredients;
  • Establish frequency of supplier verification activities;
  • Meet documentation and recordkeeping requirements; and
  • Recognize situations that necessitate or allow for flexibility or different supplier verification activities.”

In addition, the document offers clarification for receiving facilities that are animal food importers and subject to the supply-chain program requirements of the FSVP rule.

The FDA is accepting public comments on the draft for the next 180 days.

Deirdre Schlunegger, Stop Foodborne Illness
Food Safety Culture Club

Educate Consumers about Food Safety Technology

By Deirdre Schlunegger
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Deirdre Schlunegger, Stop Foodborne Illness

It seems the world has gone truly global. Whether it’s using your debit card instead of having to change currency, or having great translation capabilities at our fingertips thanks to sophisticated algorithms made available to everyone, or even being able to see and talk through one portable device with friends in Spain while texting with a friend in Japan on another! Global food safety is another area where tools and technology are constantly evolving to make our lives easier, better, and safer. In the United States, FSMA is addressing this phenomenon.

Almost daily, I find myself reading about new inventions and applications that promise to, not only safely deliver food from across the globe, but also accurately track the steps food takes to get to consumers. Yet, outbreaks, recalls, and traceability issues continue to occur. Whole genome sequencing (WGS) is but one of the technologies being applied to food safety while improving tracking capabilities and changing ideas about accountability.

At Stop Foodborne Illness, we encourage more public dialog to, and education among, consumers regarding advances in food safety technology, including traceability. Consumers need to know that although the struggle with outbreaks is still very real, there is continuous research and significant improvement being made in the effort to keep the food supply safe. I wonder sometimes if there should be a one-stop food safety technology website where consumers could go learn more about how food is grown, processed, transported, and tracked, while listing recent advances, and what is next to come in food safety technology.

We believe there is a great need for consumers to be educated about, and feel confident in, the security in their food supply. Being able to eat healthy food without the fear of illness is imperative. As advanced technology brings a reduction in foodborne outbreaks and recalls, trust will build and grow. It’s a circular process. Sharing what we know with the public advances food science and technology, instilling confidence along the way.

Megan Nichols
FST Soapbox

5 Ways to Manage Risk in the Global Food Supply Chain

By Megan Ray Nichols
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Megan Nichols

In 2017, the cost to import food, which has long been fairly predictable, rose by 6% over the previous year—and the number of possible risk factors has risen right alongside the higher price tag. There are several steps you can take to position yourself as an industry leader and manage risk simultaneously. First, though, it makes sense to better understand what’s at stake.

Why Take Steps to Reduce Risk?

Food has never been a more global market than it is today, and those who operate in the food supply chain are bound by the public’s trust in spoken and unspoken ways. Customers are used to taking for granted that they can walk into a supermarket and walk out with ethically sourced fish and eggs free from E. coli worries.

Not every food product is, or can be, a global one. However, some of these domestic risk factors scale up, just as our businesses do. When the food supply chain crosses borders of any kind, the familiar health and food safety risks are joined by several others:

  • Product mislabeling
  • Unplanned-for natural disasters
  • Spoilage due to any number of unforeseen circumstances
  • Damage while in transit
  • Unpredictable politics and shifts in regulations

A food company’s supply chain can be the weakest link in their food safety program. Learn more at the Food Safety Supply Chain Conference | June 12–13 | Rockville, MDIn all honesty, no list will ever encompass the scope of the risk you take on as part of the global food supply chain. That’s not to say you can’t take steps to reduce your risk—sometimes several types of risk at once—as your operation grows. The following is a look at several practical suggestions, some of them more time-intensive and perhaps cost-prohibitive than others, but all worth a look as the world grapples with globalization in the food industry.

1. Don’t Take Company Culture or Employee Training for Granted

Working safely and conscientiously in a particular trade is not knowledge we’re born with. When you consider the fact that at some level every food product we bring into our homes was handled at one point by another human being, you get a sense of the role proper training and a healthy culture can play in the safety we expect of our food.

Among recently surveyed manufacturers in the global food space, 77% of them said globalization itself was a source of risk. It’s easy to see why. In 2015, a relatively small—though still deadly—Listeria outbreak was traced to just a few Blue Bell Ice Cream factories. The company was almost ruined by the three deaths, the illnesses and the nearly crushing reputational damage.

Some momentary lapse of judgment at one or perhaps two factories almost killed this company. Now scale this type of risk up to the global level and think about the possible worst-case scenarios.

We’ll talk more in a moment about ways to introduce transparency and traceability to the food supply chain, but this is a reminder of the stakes. Mindfulness and conscientiousness in the work we do— not to mention well-rested and satisfied workers—are just as vitally important to look after as profitability.

2. Use Predictive Sales Forecasts and Intelligent Logistics to Avoid Spoilage

Unnecessary food waste and spoilage emerged as a mainstream issue in recent years all across the globe. For example, citizens in the EU are forced to discard some 89 million tons of food each year due to overstocking, poor quality control and a lack of attention paid to consumer trends. The United States throws out 35 million tons of food for the same reasons—a problem that, billed collectively, carries a price tag of $165 billion each year in the United States alone.

The solution has arrived in the form of predictive analytics and more intelligent warehouse and inventory management systems. Domestic and global supply chain partners alike now have access to, in some cases, highly customizable software systems that can provide vital data, such as:

  • Ideal stock levels for perishable items
  • Constant checks on incoming versus outgoing products
  • Intelligent insights into customer behavior patterns and near-future buying patterns

These types of data are highly actionable. They don’t just shield you from monetary risks by cutting down on waste— they can also protect you from public health risks by ensuring spoiled products never make it as far as store shelves.

3. Take Your Packaging More Seriously

Many of us don’t give packaging a second thought. So long as it’s easy to get into, eye-catching and protects the product long enough for the consumer to get their hands on it, it’s good enough — right? Not quite. When manufacturers think about packaging as merely a branding matter rather than as a safety check, the price is sometimes human health and lives.

One obvious solution to make sure your products can travel as far as they need to is to invest in vacuum packaging, even for small-scale operations. Compressed air equipment is a highly affordable way to accomplish this. The USDA and CDC provide guidelines on modified atmosphere packaging (MAP) and controlled atmosphere packaging (CAP).

Packaging material requirements are a global concern as well as a domestic one. The EU provides guidelines for packaging materials that are detailed down to the type of ink used. Knowing about the laws in your sales territories and staying aware of new breakthroughs in material sciences can help you remain in compliance and ahead of the game.

In a global supply chain, high-quality packaging serves not just as a risk mitigator, but also as a possible value proposition for your customers. Having your brand stand out as an example of high-quality products in thoughtful, health-conscious packaging could put you in a unique position.

4. Stay Abreast of Changing Regulations

American politics might be volatile, but one thing that isn’t likely to change is that consumers tend to look toward institutions like the FDA to provide updated guidelines and to pursue strong, consumer-friendly legislation. That means compliance isn’t always a choice, but it also means you have the opportunity to anticipate change and mitigate risks faster than your peers.

A recent example is FSMA. It’s had a long rollout, with plenty of advance warning for the industries it touches, but now most of its rules have reached the implementation stage. This lead time has been advantageous given the scope of the anticipated laws because it’s given food processing companies time to prepare for compliance. In fact, globalization lies at the very heart of it.

FSMA will be challenging at times to enforce, but its ultimate goal is to hold domestic and foreign companies in the global food supply chain responsible for a common set of guidelines and best practices.

What does this mean? It means you have yet another opportunity to establish yourself as an industry leader. The intentions of FSMA are to make every part of the supply chain more agile and better able to respond to emerging health concerns and other sources of risk as they unfold.

5. Use Data to Build Greater Transparency

There has perhaps never been a more important time to take transparency seriously in the global food supply chain. As of this writing, a historically significant outbreak of E. coli among romaine lettuce products is closing in on an “all clear” from the CDC after two difficult months. By the time you read this article it’s entirely possible another outbreak of a different kind might be underway or that some product or another has found itself under a recall. The possibility of reputational damage is greater than ever.

The good news is, even when the unfortunate happens, it’s possible to greatly reduce risk to your brand and your customers’ health. However, you need the tools to help you move quickly in tracing the problem.

Some digital technologies of a more physical nature, such as QR codes or RFID chips, can elevate your supply chain transparency and tamp down risk even further by allowing far more granular traceability for your products as they move about. In some high-profile examples, we’re seeing this concept taken to a logical, if slightly extreme, endpoint: Edible QR codes on restaurant food that contain a full history of the meal’s constituent ingredients.

Even if you don’t take your own efforts this far, this level of traceability can help you react far more quickly to emerging situations such as recalls. You’ll be able to isolate shipments with greater ease and trace contaminated products back to their sources. Also, as The Guardian points out, this technology delivers ethical and perhaps legal peace of mind by assuring you that your partners are trading in ethically sourced goods.

Vigilance and Technology in the Food Industry

The stakes in the food industry are high, as we’ve seen. However, with the right combination of a cultural approach to safety, a mindfulness of changing regulations and the sensible application of technology so you can act on the data you’re gathering, you’ll be in a prime position for global success in this quickly changing field.

Audit

First Audit Stakeholders Meeting to Take Place at Food Safety Supply Chain Conference

By Food Safety Tech Staff
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Audit

The Association for Food Safety Auditing Professionals (AFSAP) announces the selection of the Food Safety Supply Chain Conference as the site for the first Audit Stakeholders meeting on June 13 in Rockville, MD. This historic event will bring together FDA, accreditation bodies (ABs), certification bodies (CBs) and other interested parties to outline the requirements for FDA’s Accredited Certification to better understand the AB/CB roles in FSMA’s use of audits to protect the U.S. food supply.

There are two objectives for this meeting: First, the gaps in the current program must be explained so that all understand the challenges ahead. Second, and even more critical, will be to explore solutions such as creating a Voluntary Scheme Owner that will address those gaps.

Patricia Wester, PA Wester Consulting
Patricia Wester, AFSAP founder, will lead the groundbreaking audit panel at the 2018 Food Safety Supply Chain conference.

AFSAP’s founder, Patricia Wester, spearheaded the meeting to address critical questions regarding implementation of FDA’s Third-Party Audit program and provide a platform to discuss potential solutions.

“FDA’s program involves certification of regulatory compliance, which is an entirely new approach for CB’s currently involved in the GFSI system,” says Wester. “As currently structured, the individual CB’s responsibilities will include activities such as audit checklist development and auditor training requirements that will negatively impact audit consistency and dramatically increase audit costs. Another key concern is maintaining the audit documents, because regulations do not change on a regular cycle like GFSI, further adding costs and variability to the program.”

Supported by AFSAP’s food safety partners, NEHA and ANSI, long-time supporters of AFSAP’s efforts to raise awareness of FSMA’s use of audits, the Food Safety Supply Chain event provided the ideal venue to hold the discussion.

About AFSAP

The Association for Food Safety Auditing Professionals is a member driven association created to advance and support the professional development of food safety auditors globally. As a 501(c)(3) Trade Association, AFSAP provides a universal platform for individual auditors and the auditing community at large to harness their combined experience and knowledge into a powerful tool equal to the significant challenges that lie ahead. Working together, AFSAP members will have an unprecedented opportunity to engage regulatory agencies and external stakeholders with a unified voice, and collaborate on the development of creative solutions to the issues facing the food safety auditing industry.

About Food Safety Tech

Food Safety Tech is an industry-specific eMagazine and Conference series serving the global food industry. Built on the platform of the next generation model for B2B publishing, Food Safety Tech delivers top quality content in a proactive manner through a weekly eNewsletter while maintaining a website, the eMagazine that stores the content providing easy accessibility. This hybrid model provides a two way street of digital communication to the global food industry. Food Safety Tech is published by Innovative Publishing, LLC.

FDA

FDA’s Data Dashboard Helps Companies Meet FSMA Supply Chain Requirements

By Food Safety Tech Staff
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FDA

FDA has launched a new section of its Data Dashboard to help food importers, manufacturers and processors meet supply chain requirements put forth by FSMA (specifically FSVP, and the PC rules). The dashboard provides ease in finding compliance and enforcement information related to companies.

Do you trust your suppliers? What about your supplier’s suppliers? | Food Safety Supply Chain Conference | June 12–13, 2018 | Learn more“The Foreign Supplier Verification Programs rule requires importers to perform risk-based activities to verify that their suppliers are meeting applicable U.S. food safety standards. One such activity is an evaluation of a supplier’s performance and the risk associated with the food, a process that includes evaluating a supplier’s compliance with FDA regulations such as whether the supplier is subject to an FDA warning letter, import alert, or other FDA compliance action related to food safety. The Preventive Controls rules require manufacturers/processors to perform supplier approval if the ingredient supplied contains a hazard requiring a supply-chain applied control. Supplier approval includes consideration of the supplier’s compliance with food safety laws and regulations.” – FDA

The agency also made improvements to its supplier evaluation resources page and added it to the dashboard so that companies can simultaneously search several databases. Users can search for information about warning letters, import refusal and import alerts.

 

Compliance, food safety

Leveraging FSVP Compliance: Do Less, Get More

By Benjamin England, Nicole Trimmer
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Compliance, food safety

With an ever-expanding international food trade and new government demands for food safety and supply chain transparency, the U.S. regulatory landscape is becoming increasingly more complex. FSMA (especially the Foreign Supplier Verification Program) aims to shift responsibilities for imported food safety from FDA to importers in an effort to reduce the regulatory burden on FDA. New regulations bring new burdens to food trade stakeholders, requiring significant investment. However, many of the data obligations of the FSVP rule dovetail with other agencies’ requirements.

Investments in one dataset can be leveraged to improve a company’s overall compliance related to international trade. The key is to integrate FSVP requirements into a strong regulatory compliance program without breaking the bank. This requires identifying data overlap, utilizing compliance integration to work smarter, not harder, leveraging the window of opportunity to collect more (and necessary) data from your foreign suppliers, and calling in the right help when needed.

TRUST…..BUT VERIFY: 2018 FSMA Focuses on Supplier Verification Activities | Learn more at the Food Safety Supply Chain Conference | June 12–13, 2018 | Rockville, MDToday’s International Supply Web

No longer can we reasonably talk about establishing, monitoring and maintaining a supply “chain” when importing anything. International trade in food and its ingredients is rarely bilateral—except for perhaps fresh produce, meat and seafood. Instead, food moves throughout a complex supply web of international transactions. Most processed food now contains ingredients from multiple countries, leading to food safety verification challenges and country of origin questions for finished goods.

The international supply web includes farms (land and aquaculture), agriculture cooperatives, food grade chemicals manufacturers, color and flavoring formulators and manufacturers, raw materials processors and fabricators, finished food processors & packers, warehouses, transportation companies, cooking, canning and irradiating facilities, shippers, exporters, product and commodities brokers, importers, wholesalers, retailers and e-tailers. Any (or all) of these players may be small operations located in different countries or multi-national conglomerates operating on several continents. There is very little food consumed in the United States that is not affected, in some way or another, by international commerce and trade.

Shift to a Preventive System

In 2011, Congress passed FSMA with the goal of moving U.S. food safety from a reactive to a preventive system, and integrating HACCP-like principles into the production of all food. Over the ensuing years, FDA issued seven major regulations that address various facets of food safety.

The Foreign Supplier Verification Program (FSVP) rule was included as a way to ensure that foods imported into the United States are produced in a manner that meets U.S. safety standards. FSVP requires that “importers,” which can be the distributors or retailers of products, verify and document the steps taken to ensure safe production of animal and human food. While the exact FSVP requirements vary depending on the commodity, the FSVP process often includes developing, maintaining and documenting a food safety plan and, as its name suggests, verifying that foreign suppliers are controlling for appropriate hazards. Developing and implementing these plans requires a wide variety of skills, including hazard analysis and risk assessment, establishing preventive controls, developing recall plans, and careful documentation of the process. FSVP also requires that verification activities be carried out by parties who have specific preventive control training, or “PCQIs” (Preventive Control Qualified Individuals).

Most importantly, FSMA and the FSVP rule shift the burden of safety from FDA to the importer. With increased interconnectedness, flaws in food safety documentation can become magnified throughout the system. Note that FSVP covers food safety only—not necessarily food traceability or food security defense—although there are opportunities for crossover ROIs. To achieve FSVP compliance, you need to know who is handling your food before it is imported, what they know about food safety, and how they apply food safety principles.

Cross-agency Data Usage

Approaching FSVP as a stand-alone regulatory compliance initiative is expensive and inefficient. Many activities and data elements that must be kept for other government agencies and their compliance programs should be linked together. The data your foreign suppliers must provide to international carriers for advanced notice to U.S. Customs and Border Protection (“CBP” or “Customs”) by importing carriers (airlines, trucking companies and vessel operators) is relevant to both Customs entry and FDA food safety compliance and documentation. This overlap presents an ideal opportunity to relieve the burden of the new FSVP requirements and kill two birds with one stone. And the overlap and leveraging opportunities are actually quite substantial—if one knows where and how to look for them.

For example, the USDA’s National Organic Program (NOP) regulations specify requirements for the processing, handling and labeling of raw materials and processed goods to meet organic standards. Organic labeling and marketing claims are affirmative assertions that the labeled food has not been exposed to processing steps, processing chemicals or particular substances (e.g., sewage sludge, ionizing radiation) that would cause it to fall out of the regulatory bounds of an organic food product. Where organic processing and handling crosses over to food safety, leveraging organic compliance documentation buttresses the safety of the resulting food—and the importer’s FSVP program.

Additionally, much of the information that the importer must know to properly classify their product under the Harmonized Tariff Schedule (HTS) is the same information that the importer needs for their FSVP plan; the importer must know the products, what they are made from, how they are processed, and how they are intended to be used to both properly classify and verify the safety of their product. Because FDA requires the importer to verify that its foreign supplier has a system that meets the domestic food safety standards, the foreign supplier must also be able to identify its own ingredient and raw material suppliers and their systems for food safety, as applicable. Therefore, the food importer’s FSVP process promotes documentation compliance with CBP’s and other government agencies’ requirements governing the country of origin of materials for applicability of preferential duty rates (e.g., under a free trade agreement) and country of origin labeling.

Another example of data overlap is the FSVP requirement for supplier verification and the responsibility to show correct valuation of your product for Customs. FSVP requires that you verify your suppliers and ensure your product is genuine, and Customs requires that you declare an appropriate valuation and identity for your shipment. If Customs investigates your shipment and determines your valuation is incorrect, it may trigger the Department of Commerce to investigate whether there are anti-dumping and countervailing issues going on with the product.

Issues with anti-dumping and countervailing duties are extremely time-consuming and expensive. In both 2008 and 2016, federal authorities investigated rumors of companies circumventing anti-dumping duties by transshipping food products through third countries (to conceal actual origin of the material). When Customs investigated a honey processing plant, they found evidence that the purported processor of Vietnamese honey was receiving finished product from China and relabeling it as originating from Vietnam. When importers declared imported Vietnamese honey, Customs determined from trace mineral testing that the honey was, as they suspected, Chinese. Customs seized the product. The lesson to learn from this is to know your suppliers and the actual supply web. In the case of country of origin violations, not verifying the country of origin can be costly. Where CBP finds negligence is involved, the agency can look back five years to recoup lost duty plus interest, and can even reopen old liquidated entries and assess monetary penalties. In completing your FSVP plan, requesting documentation demonstrating origin is a small additional step that furthers the strength of CBP-required documentation to support the origin declaration at entry. That’s leveraging.

Document, Document, Document

Under the Customs Modernization Act of 1993, the compliance watch-words for all importers (and customshouse brokers) are “record keeping,” “shared responsibility,” “reporting,” and “due diligence.” Anything that is required for a proper importation is subject to CBP review and audit—whether the requirement arises as supply chain and source data under the Seafood Import Monitoring Program (SIMP) under the National Marine Fisheries Service (NMFS), or organic labeling and compliance under USDA’s NOP regulations, or speciation documentation under the Lacey Act enforced by U.S. Fish and Wildlife (USFW), or FSVP implemented by FDA. Therefore, the engagement between food importer and foreign food supplier forced by FSVP opens the opportunity for the importer to clarify and shore up its documentation obligations for many other coexisting regulatory regimes.

A clear demonstration of this fact is borne out by the regular process that ensues when CBP issues to an importer of record a Customs Form 28 (or “CF28”). The CF28 is a CBP request for additional information relating to an imported shipment. The importer is usually required to respond within 30 days of its issuance. But ordinarily the CF28 is issued months (and sometimes years) after the importation occurred. Therefore, the CF28 process represents a significant challenge to the importer’s record keeping and compliance documentation systems, and legal liability to the importer’s bottom line.
Documents needed to respond adequately to a CF28 include contracts, purchase orders, packing lists, shipping documents, declarations to government authorities throughout the import process, powers of attorney, country of origin certifications, emails and other communications discussing any of these documents. CBP requests these documents to confirm the proper electronic data was submitted with the importation. And, of course, CBP is checking to see if the importer is attempting to circumvent U.S. import or export laws that may deprive the government of revenue.

The identity and location of an importer’s trading partners (including the foreign supplier and its suppliers), contracts between and among them (e.g., related to description, processing methods, equipment used, quality and condition of goods), origin documentation, proofs of packing and shipping, etc., are all subject to production via the CF28 process. Penalties for errors in the documentation that result in a regulatory or administrative action are imposed upon the importer (for failing to document or exercise due diligence in performing its function as an importer under U.S. law).

The FSVP regulation presents an ideal opportunity for the importer to establish and populate a compliance program that integrates its FDA import regulatory obligations with those of CBP and other regulatory agencies, as applicable. Failing to take this rare opportunity—at a time when foreign suppliers are expecting probing questions from their U.S. trading partners—is a mistake.

Because the government is more connected, it is essential to change how you prepare for and respond to issues that arise. Just as the FDA’s FSVP rule aims to move food safety from a reactionary to preventive system, coordinated proactive compliance with all government agency requirements will be necessary for the future. Further, with new regulations, your customs broker may not be equipped to deal with certain areas or when administrative matters escalate. But how do you prepare for any eventuality when the enforcement possibilities seem endless?

When preparing your FSVP plans, reviewing your Customs documentation, and reviewing other government agency requirements, it is critical that you think through all the potential issues that may arise with your product or its supply chain, and address them proactively in your documentation. What might an inspector or compliance officer think about the information provided? Is it thorough, clear, and logical? Does it tell a consistent narrative? What if another agency sees this information? Will they have further questions? The ultimate goal is accurate and thorough data for submissions to FDA, Customs and any other partner government agencies.

Key Steps to Prepare for the Worst-case Scenario

Lastly, let’s not forget that part of being prepared is preparing for the worst-case scenario. What happens when you are confronted by an issue? We recommend taking four key steps. First, marshal your resources (documents, documents). Second, ask, “Who are the key players in the story (e.g., which agencies are involved or could possibly be involved, and what are they requesting)?” The third question, a bit less straightforward, is, “How must I respond? (e.g., is the agency within its regulatory authority and required time constraints; are there conflicts of interest; what is the potential legal exposure to risk for different actions)?” Finally, do a gut check: Are the examinations subjective in nature or qualitative (rather than quantitative)? Is any required testing appropriate for the product? If you feel you cannot confidently answer these questions using current staff, we recommend you prepare for import issues by selecting professionals who have experience with integrated agency regulations and legal compliance requirements. The keys to expediting the process when working with multiple government regulatory agencies are integrating your compliance to ensure you have a true green-means-go light before you ship and being able to present a clear and consistent regulatory narrative to all agencies. This requires a clear understanding of how the government regulatory requirements actually intersect.

DNVGL MyStory, blockchain

MyStory: DNV GL’s Blockchain Labels Tell It All

DNVGL MyStory, blockchain

Italian wine makers are the first to use DNV GL’s blockchain solution MyStory, which allows consumers “to have instant and in-depth access to key products characteristics such as quality, authenticity, origin, ingredients, water and energy consumption and more, all verified by DNV GL along the entire transformation process,” says DNV GL’s Business Assurance CEO Luca Crisciotti. By scanning a QR-code, consumers can see the full history of the product and its journey from grape to bottle.

Steven Burton, Icicle Technologies
FST Soapbox

Could Blockchain Technology Drive FSVP Compliance?

By Steven Burton
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Steven Burton, Icicle Technologies

From farm to fork, food produced today goes through more hands than ever before. A greater number of players in the production of even a single product could increase that the risk for foodborne illness. Not only do companies need to check incoming and outgoing products from their own facilities, but they also need to consider whether products that they are importing from other countries are compliant with local regulations, and whether the products that they are exporting are compliant with the regulations of the destination country.

The current traceability standard of “one step forward, one step back’”is less and less suited for the current global marketplace, and governments are demanding more. Handling all this information is a challenge for food producers of all sizes, around the world.

Taking Traceability Global with FSVP

Needless to say, with 600 million people contracting foodborne illnesses every year, there is a dire need for food traceability and transparency in the food supply chain. If and when something goes wrong, traceability gives oversight agencies greater visibility investigating the root causes of an outbreak to prevent further risk to the public. It also allows companies to minimize the financial impact of a recall if they are able to pinpoint exactly which lot numbers of their products are affected.

In response to the changes in the food industry, in 2011 the USFDA introduced FSMA to implement a more proactive food safety regulatory system. With FSMA came the Foreign Supplier Verification Program (FSVP), which basically extends FSMA regulations to companies supplying food to the United States. All U.S. importers are now required to monitor and manage their foreign suppliers through six steps of hazard analysis, record keeping and more. Given the complexity of the global food supply chain, this is by no means an easy undertaking and it is clear that technology is crucial to achieving this granular level of data management alone. Blockchain technology, however, might be the answer to this problem—and many other related ones.

What is Blockchain Technology?

Evolving from the digital financial world, blockchains are distributed databases that build a growing chain of ordered records, called blocks. This means that any type of information can be stored in a chronological, consistent and secure way; even if multiple users are involved, it is extremely difficult to alter a blockchain.

Since any information on the blockchain is shared with all of its users, they can view any transactions made historically and in real-time. Theoretically, this could allow authorities to pinpoint food problems within minutes, when previously it would take days, potentially saving many lives in the process.

Blockchain in Action in the Food Industry

In 2016, retail giant Walmart started using a pilot version of the technology in its stores, tracking two products using blockchain: A packaged produce item in the United States and pork in China. Walmart announced that the results were “very encouraging,” noting that using blockchain technology could dramatically increase the speed of traceability from days to minutes. In fact, Walmart is now taking it to the next level with a collaboration with one of China’s largest retailers, JD.com, and their suppliers, to bring a higher level of food safety to China.

Other major food suppliers and retailers—Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods and Unilever—have also signalled their intention to work with IBM to create blockchain-based solutions. Blockchain technology is even being used to track the movement of tuna through the ocean and all the way to the consumer.

At the same time, implementing blockchain technology throughout the industry is a mammoth task. As of now, blockchain technology has a problem with scaling up and can only process a limited number of transactions per second, which would not be sufficient given the needs of the global supply chain. According to Coindesk, each transaction costs about $0.20, and can only store 80 bytes of data, so the bill might become quite hefty as well.

There’s also the fact that the food industry is traditionally slow to adopt new technologies. It’s not just about big players like Walmart—small, medium, and large businesses alike need to come onboard in order for this to become an industry-wide standard.

Can FSVP Unlock the Potential for Blockchain Technology?

There are several reasons why blockchain technology could be the key to tackling the complex challenge that is tracking and verifying foreign suppliers. Blockchains can help increase transparency and communication across the food supply chain, ensuring that there are no gaps and that records are widely available and up to date. When all the information about suppliers and products is easily accessible, the potential to increase the speed of recall response is very high.

Blockchain technology is also suited to FSVP’s goals, specifically. One of the main goals of FSVP and FSMA generally is to tackle the issues of food fraud, intentional adulteration and bioterrorism that are unique problems of our time, in terms of scale if nothing else. Such a modern problem requires modern solutions. Because the blockchain, forming the basis of cryptocurrencies like Bitcoin, focuses on security, it could mean that blockchains can help close the gaps that would be exploited by food companies employees, or other actors who harbor ill intent.

The reality, however, is that the level of industry-wide coordination—and voluntary transparency—that would be necessary to deliver real benefits is extremely high. The theoretical possibilities are exciting and hugely impactful; the practical reality is more complex. For blockchain to reach its full potential, it has to be universally mandated, which is highly unlikely given the current circumstances. It seems more likely that adoption in this area could be driven by industry organizations and/or government, but unfortunately, the recently proposed budget cuts for the FDA might block progress in the latter area.

Still, with major food suppliers and retailers leading the charge and taking blockchain technology for a test run, the rest of the industry is waiting with bated breath to see what happens next.

Mahni Ghorashi, Clear Labs
In the Food Lab

The Food Safety Testing Lab as Profit Center

By Mahni Ghorashi
2 Comments
Mahni Ghorashi, Clear Labs

It’s not that the industry has been more reluctant than others to embrace change; rather, the forces that will drive the food’s big data revolution have but recently come to bear.

Regulation is now playing a role. FSMA mandates that the industry embrace proactive food safety measures. That means higher testing volumes. Higher testing volumes means more data.

At the same time, new technologies like next-generation sequencing (NGS) are beginning to find wide-scale adoption in food-safety testing. And NGS technologies generate a lot of data—so much so that the food safety lab will soon emerge as the epicenter of the food industry’s big data revolution. As a result, the microbiology lab, a cost center, will soon emerge as one the industry’s most surprising profit centers.

A Familiar Trend

This shift may be unprecedented in food, but plenty of other industries touched by a technological transformation have undergone a similar change, flipping the switch from overhead to revenue generation.

Take the IT department, for instance. The debate about IT departments being a cost or profit center has been ongoing for many years. If data centers had simply kept doing what they have done in the past—data processing, enterprise resource planning, desktop applications, help desk—maintaining an IT department would have remained a cost center.

But things look quite different today. Companies in today’s fast-changing business environment depend on their IT departments to generate value. Now and for the foreseeable future, the IT department is on the hook to provide companies with a strategic advantage and to create new revenue opportunities.

Netflix, for example, recently estimated the value of their recommenders and personalization engines at $1 billion per year by quadrupling their effective catalog and dramatically increasing customer engagement and reducing churn.

Another great example are the call centers of customer support departments. For most of their history, call centers generated incredibly small margins or were outright cost centers.

Now, call centers armed with AI and chatbots are a source of valuable customer insights and are a treasure trove of many brands’ most valuable data. This data can be used to fuel upsells, inform future product development, enhance brand loyalty, and increase market share.

Take Amtrak as a prime example. When the commuter railway implemented natural language chatbots on their booking site, they generated 30% more revenue per booking, saved $1 million in customer service email costs, and experienced an 8X return on investment.

These types of returns are not out of reach for the food industry.

The Food Data Revolution Starts in the Lab

The microbiology lab will be the gravitational center of big data in the food industry. Millions of food samples flow in and out of these labs every hour and more and more samples are being tested each year. In 2016 the global food microbiology market totaled 1.14 billion tests—up 15% from 2013.1

I’d argue that the food-testing lab is the biggest data generator in the entire supply chain. These labs are not only collecting molecular data about raw and processed foods but also important inventory management information like lot numbers, brand names and supplier information, to name a few.

As technologies like NGS come online, the data these labs collect will increase exponentially.
NGS platforms have dramatically reduced turnaround times and achieve higher levels of accuracy and specificity than other sequencing platforms. Unlike most PCR and ELISA-based testing techniques, which can only generate binary answers, NGS platforms generate millions of data points with each run. Two hundred or more samples can be processed simultaneously at up to 25 million reads per sample.
With a single test, labs are able to gather information about a sample’s authenticity (is the food what the label says it is?); provenance (is the food from where it is supposed to be from?); adulterants (are there ingredients that aren’t supposed to be there?); and pathogen risk.

The food industry is well aware that food safety testing programs are already a worthwhile investment. Given the enormous human and financial costs of food recalls, a robust food-safety testing system is the best insurance policy any food brand can buy.

The brands that understand how to leverage the data that microbiology labs produce in ever larger quantities will be in a position to transform the cost of this insurance policy into new revenue streams.

Digitizing the Food Supply Chain

It’s clear that the food lab will generate massive amounts of data in the future, and it’s easy to see that this data will have value, but how, exactly, can food brands turn their data into revenue streams?

The real magic starts to happen when we can combine and correlate the trillions of data points we’re gathering from new forms of testing like NGS, with data already being collected, whether for inventory management, supply chain management, storage and environmental conditions, downstream sales data, or other forms of testing for additives and contaminant like pH, antibiotics, heavy metals and color additives.

When a food brand has all of this data at their fingertips, they can start to feed the data through an artificial intelligence platform that can find patterns and trends in the data. The possibilities are endless, but some insights you could imagine are:

  • When I procure raw ingredient A from supplier B and distributors X, Y, and Z, I consistently record higher-than-average rates of contamination.
  • Over the course of a fiscal year Supplier A’s product, while a higher cost per pound, actually increases my margin because, on average, it confers a greater nutritional value than the supplier B’s product.
  • A rare pathogen strain is emerging from suppliers who used the same manufacturing plant in Arizona.

Based on this information about suppliers, food brands can optimize their supplier relationships, decrease the risk associated with new suppliers, and prevent potential outbreaks from rare or emerging pathogen threats.

But clearly the real promise for revenue generation is in leveraging food data to inform R&D, and creating a tighter food safety testing and product development feedback loop.

The opportunity to develop new products based on insights generated in the microbiology lab are profound. This is where the upside lives.

For instance, brands could correlate shelf life with a particular ingredient or additive to find new ways of storing food longer. We can leverage data collected across a product line or multiple product lines to create new ingredient profiles that find substitutes for or eliminate unhealthy additives like corn syrup.

One of the areas I’m most excited about is personalized nutrition. With microbiome data collected during routine testing, we could develop probiotics and prebiotics that promote healthy gut flora, and eventually are even tailored to the unique genetic profile of individual shoppers. The holistic wellness crowd has always claimed that food is medicine; with predictive bioinformatic models and precise microbiome profiles, we can back up that claim scientifically for the first time.

Insights at Scale

Right now, much of the insight to be gained from unused food safety testing data requires the expertise of highly specialized bioinformaticians. We haven’t yet standardized bioinformatic algorithms and pipelines—that work is foundational to building the food genomics platforms of the future.

In the near future these food genomics platforms will leverage artificial intelligence and machine learning to automate bioinformatic workflows, dramatically increasing our ability to analyze enormous bodies of data and identify macro-level trends. Imagine the insights we could gain when we combine trillions of genomic data points from each phase in the food safety testing process—from routine pathogen testing to environmental monitoring to strain typing.

We’re not there yet, but the technology is not far off. And while the path to adoption will surely have its fair share of twists and turns, it’s clear that the business functions of food safety testing labs and R&D departments will grow to be more closely integrated than ever before.

In this respect the success of any food safety program will depend—as it always has—not just on the technology deployed in labs, but on how food brands operate. In the food industry, where low margins are the norm, brands have long depended on efficiently managed operations and superb leadership to remain competitive. I’m confident that given the quality and depth of its human resources, the food industry will be prove more successful than most in harnessing the power of big data in ways that truly benefit consumers.

The big data revolution in food will begin in the microbiology lab, but it will have its most profound impact at the kitchen table.

References

  1. Ferguson, B. (February/March 2017). “A Look at the Microbiology Testing Market.” Food Safety Magazine. Retrieved from https://www.foodsafetymagazine.com/magazine-archive1/februarymarch-2017/a-look-at-the-microbiology-testing-market/.