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The Future of Supplier Data Management

Dana Johnson Downing
February 7, 2019

Automate Your Supply Chain: Does your supplement business struggle to find and manage high-quality suppliers, substantiate label claims, or stay on top of regulatory requirements? TraceGains can help.

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Who could have guessed – even just a decade ago – that something as mundane as a food label would be the focus of so much attention? Certainly, no one could have predicted it would take center stage in a Super Bowl ad. 

But the food, beverage, and supplement industries are in the home stretch for making product labels compliant with the new U.S. Food and Drug Administration rules. Larger food manufacturers – those boasting $10 million or more in annual revenue – “must modify, recalculate and re-label all products in line with the new label regulations, reflecting changes to Nutrition Facts Label, updated scientific information and providing consumers with relevant details to assist in making the best food decisions, according to Q1 Productions, which hosted the 6th Annual Food Labeling: Evolving Regulatory Compliance Conference. Smaller companies have until 2021.

As such, 2019 marks the last full year companies have to transition operations, and labels, to meet the new requirements. But manufacturers have more than the FDAs label requirements to worry about. U.S. regulators have suggested new GMO label rules. Additionally, Canadian authorities have changed allergen labeling requirements, and the pressure to monitor supplier ingredients and labels on an international scale is mounting.

But there's more behind the drive for better, consumer-friendly product labels than regulatory zeal. Consumers have been clamoring for increased transparency for years, applying even more pressure on food industry executives.

With the FDA reporting that nearly half of its published recalls result from incorrect or incomplete listings of ingredients and allergen on labels, documentation becomes that much more critical. FDA inspections can drive this point home painfully. 

When it comes to items and packaging materials, suppliers must disclose attributes such as material composition, allergens, additives, physical and chemical properties, and microbiological susceptibility. The requirement around maintenance records the FDAs instituted has encouraged electronic databases for analysis and compliance.

Talk of this requirement drove a lot of the conversation at the 6th Annual Food Labeling: Evolving Regulatory Compliance Conference late last month in Alexandria, Virginia, and its the motivation behind a session at the conference led by TraceGains CEO, Gary Nowacki, where he discussed Trends in Supplier Data Management, and how the right software can produce more accurate labels, improve supply chain transparency, and make FDA compliance a lot less stressful. 

Other topics that dominated talk at the Q1 food labeling conference included:

A panel discussion on Considering Consumer Interpretation Surrounding GMO Labeling was particularly lively. Industry executives remain concerned about the transition from the term Genetically Modified Organisms (GMOs) to bioengineered (BE) as defined and outlined by the U.S. Department of Agriculture (USDA) in the National Bioengineered Food Disclosure Standard. Many believe it will cause consumer confusion and uncertainty, given the traditional and widely accepted use of GMOs. This evolution in the language concerns many food companies that have already begun production on labeling and marketing the more commonly used term GMO and those organizations making non-GMO certification claims. 

One panelist was Karin Moore of the Grocery Manufacturers Association, who read a long list of terms used to describe BE or GMOs in recent years. She questioned whether the USDA had done research or focus groups with consumers to understand their needs.

According to Moore, the regulation crafted by USDA is far different than expected when the legislation passed in 2016. The panelists concluded that consumers would likely stay confused with the various terminologies, even with the new BE labels. Now we need to socialize a new term, and so far, the government isnt stepping up to do the necessary educational outreach. The Standard's implementation date is Jan. 1, 2020, except for small food manufacturers, whose implementation date is Jan. 1, 2021. The mandatory compliance date is Jan. 1, 2022. Regulated entities may voluntarily comply with the Standard until Dec. 31, 2021. 

A member of the audience questioned whether there would still be a need for non-GMO certifying agencies. Moore described a scenario where a product that requires a BE label could also have a non-GMO Project Verified label due to the threshold differences. Clear as mud, right?

Another exciting presentation focused on Proposition 65 and related enforcement actions. Californias Prop. 65 requires food manufactures distributing the product within California to provide clear and reasonable warnings when products expose consumers to chemicals identified as causing cancer or reproductive side effects.

Recent concern has surrounded chemical compounds found in roasted coffee beans, listed on the extensive Prop. 65 hazard list. Considerations concerning casualty and route of exposure overturned this particular case, but many additional enforcement cases are pending. The food industry is deeply and rightly concerned surrounding Californias enforcement of the law. Attorney David Biderman of the Perkins Cole law firm described new interpretations and enforcing trends, issues surrounding residual chemicals, and clarification on detecting and labeling of metals.

So, will consumers be more receptive to BE rather than GMO? Do Prop. 65 warnings influence how consumers shop? 

In my opinion, they all sound pretty scary. In this regulatory environment, ingredient suppliers and food manufacturers need to invest in technology that helps them operationalize supply chain transparency to give consumers the info they want and need to make informed choices and comply with laws and regulations so that they can avoid costly litigation. 

TraceGains suite of software solutions can help food manufacturers: 

  • Use technology to increase supplier transparency.

  • Quickly acquire data from suppliers.

  • Standard forms that simplify the collection of information about ingredients that require GMO or Prop. 65 disclosure.

  • Automate data transfer between supplier and labeling systems.

To learn more about how TraceGains can help your company Plug In and Go Faster, reach out today by calling 720-465-9400, or you can request a demo right now.

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