Food Safety and Traceability in CPG Industry (Part 1 of 2)
These are challenging times for the Consumer Packaged Goods (CPG) industry. Food safety, traceability, health-conscious consumers, retailer power, new regulations and corporate social responsibility are some of the key challenges faced by the CPG industry. Fierce competition and industry consolidation are placing enormous pressure on food companies to cut costs. Meanwhile, increasingly sophisticated consumers are demanding greater levels of corporate accountability as well as constant product and service innovation. These forces are causing food companies to search for new ways to improve margins, increase asset efficiency, manage food safety risks, and grow revenues. This post outlines the Food Safety and Traceability needs of the CPG industry and in my next post I will explain how these needs can be addressed by SAP.
Addressing consumer concerns over Food Safety, Integrating legislation and regulations around Food Safety and tracking, monitoring and tracing products are some of the key business requirements in the Food Safety and Traceability space.
Why is Food Safety a key issue today?
Food safety is a worldwide issue affecting hundreds of millions of people who suffer from diseases caused by contaminated food. The World Health Organization (WHO) calls it "one of the most widespread health problems and an important cause of reduced economic productivity".
- Annually, over 3 million children under the age of 5 die of diarrheal diseases among approximately 1,500 million episodes of diarrhea in developing countries. 70% of these incidences are attributed to food borne illness.
- 6.5 million to 80 million cases of food borne illness occur annually in the United States.
- About 13 million children under the age of 5 die each year from infections and malnutrition, most often attributable to contaminated food.
- Serious and chronic health effects of food borne illness present an additional burden on the health care system, and affect an estimated 3 of every 1,000 prenatal infants.
- The estimated annual medical costs/productivity losses due to the 7 major food borne pathogens range from $6.6 billion to $37.1 billion, according to USDA and Centers for Disease Control and Prevention (CDC) figures.
You can refer to some of the most high profile news articles related to Food recall in US from the recent past:
http://www.fda.gov/Safety/Recalls/MajorProductRecalls/Peanut/default.htm
http://www.fda.gov/Safety/Recalls/MajorProductRecalls/Milk/default.htm
http://www.fda.gov/Safety/Recalls/MajorProductRecalls/Pistachio/default.htm
Having looked at Food Safety, lets understand what do we mean by Traceability in the food industry.
What is Traceability?
“Traceability” means the ability to track any food, feed, food-producing animal or substance that will be used for consumption, through all stages of production, processing and distribution.
Why is Traceability needed?
- Traceability is a way of responding to potential risks that can arise in food and feed.
- It is vital that when national authorities or food businesses identify a risk they can trace it back to its source in order to swiftly isolate the problem and prevent contaminated products from reaching consumers.
- In addition, traceability allows targeted withdrawals and the provision of accurate information to the public, thereby minimizing disruption to trade.
- Safeguards against Bioterrorism.
- Fights product counterfeiting.
- Protects and serves brands through quick and accurate access to information.
With food safety issues being identified almost every month in the EU countries and US, the authorities of EU and US have formulated some strict regulations to contain and eradicate the problem.
The European Union passed a General Food Law in 2002 – Regulation EC/178/2002. The details of it are available at the European Commission website - http://ec.europa.eu/food/food/index_en.htm. They have also provided guidelines on the implementation of traceability in EU. It is published on their website: http://ec.europa.eu/food/food/foodlaw/guidance/index_en.htm.
Similarly, US Food and Drug Administration (FDA) has comprehensive guidelines on product specific safety and traceability regulations. The guidelines are available at the FDA website - http://www.fda.gov/Food/FoodSafety/default.htm.
In my next post I will throw some light on how SAP can help address this issue.
