FSMA & The Future Of Food Safety Explained With Angela Fernandez Of GS1 US

Foreign.

Welcome to the latest edition of the omnitalk Spotlight series, the series that highlights the people, the companies and the technologies that are shaping the future of retail.

I'm one of your co hosts for today's interview, Chris Walton.

And I'm Anne Mazinga.

And today we are turning our attention to a topic that seems to be more and more in the news every single week.

And that topic is food safety.

From listeria outbreaks to HuffPost reports on the five foods we should avoid at airports, there is just no avoiding this topic.

So to help us better understand the developing regulatory landscape around food safety and specifically the Food Safety Modernization Act, AKA my favorite acronym to say, fisma.

It is with great pleasure that we introduce today's guest, Angela Fernandez, the senior vice president of market development at GS1US.

Angela, welcome.

Welcome to Omni Talk.

Thank you.

I'm so glad to be here.

We are excited to talk FISMA with you and many other things.

Chris loves this topic.

He was the one that brought up the five things you should not eat at the airport, Angela.

Because he loves to make sure that everybody is warned about the dangers of food, especially airport food.

So we'll, before we get to the topic at hand and Chris is getting all giddy behind the scenes, why, why don't you a little context for us.

Just tell our listeners what GS1 is and exactly what your role is at GS1US.

Absolutely.

And I will say you're right.

The Food Safety Modernization act is a mouthful.

And FSMA is much more fun to say it is makes it sound a little bit more exciting than it is.

That's okay.

We're going to play out.

That's right.

Yeah.

So it's a little bit about GS1.

So GS1 is actually a global standards organization.

We've been around for 50 years and we were created by industry for industry.

Right.

So we come together and solve common business problems with the community so that we can find a better way to do things, leverage standards so that we can all do things in a similar way to be able to scale some of the benefits because we all share our supply chain.

So 50 years ago, it was about getting folks through the checkout line much faster.

So of us, remember when you had the guns and you used to just put the price tag on the products, so when you got up to the counter, it was not as fast as it is today.

Right.

Where the cashier was keying everything in.

And now you're able to just scan the barcode.

Our very first standard to be able to get through much quicker.

And what started with one single scan on a pack of Wrigley's Gum, as you all shared last year when we had our 50th anniversary.

Right.

Is now a whole system of standards that allows you to identify anything in the supply chain in a globally unique way, be able to capture an automated way, barcodes, 2D barcodes, RFID technology.

And how do you share it?

We all don't use the same system.

Right.

We don't share information the same way.

But if we structure the data the same way, then you can have a different system in.

And Chris, you can have a different one and I can.

And we can still be able to know what we're saying to each other.

Right.

And how to interpret the data.

So that is really what the standards are all about.

And we're in 118 countries supporting 150 countries that implement the standards today.

Support so millions of companies around the world.

And for GS1US, we support obviously the local constituents in the US so how do you apply the standards given local regulation and local business practices?

And so market development, which is the area that I have the opportunity to run for the organization here in the US is really about working with those customers that are at the leading edge of industry.

They're your marketplaces, they're your retailers.

Those the ones that really have a need for the standards, given the use cases that we're facing today around supply chain visibility, management to get to better sales and lower operation costs and also partners.

How do we do that?

Right.

We create the standard, but we don't enable them.

So there's a lot of solution providers out there that do that.

We work with a lot of associations and we even have a government and regulatory team that works inside of D.C.

to kind of educate our policymakers around the standards and how they can be used for programs or for future regulation so that it's not a burden to industry to do things differently for the government.

But they can leverage what they've already done with their trading partners to deliver the wonderful products to all of us as consumers.

So, Angela, how do you get into this?

Because I'm like, there's like political science components, there's engineering and research components, data science.

Like, what is your background?

That kind of got you into cattle herding components too.

I mean, you got to get a lot of people in the room too.

Cold storage.

Yeah.

Right, right.

Yeah.

No, it's so funny.

I was actually at a conference a couple of weeks ago and one of the first things I said was I said how many of you in the room knew that there was a company behind the barcode?

Right?

Because I certainly didn't when I came to the organization 25 years ago.

I mean, who would have thought it?

You just go to the grocery store and you expect it to work, or when you're in hospital, you expect the scans to happen.

Right?

But when you stop to think about it, you're like, okay, it makes sense, right, that there's someone behind there making sure that all of this works for those companies that are operating supply chains today.

Right?

Manufacturing things that we need.

So my background is actually completely different.

I came from the marketing side of business, so I worked for an ad agency for many years.

And when I came to the organization, it was in a marketing capacity.

And it was actually during the time that Produce was experiencing a lot of recalls in 2005 and 2006 that I moved over to the business side.

And so it's almost been my entire career at GS1US that I've been working on this traceability and food safety and endeavor.

Wow.

Yeah.

And I know, I know when we met at FMI and we started talking about fisma, which I'm going to ask you about again in a second, I mean, I thought it was really, it was really interesting to talk to you about it.

And particularly knowing that like, like you mentioned too, we did the, we did the podcast with you all last year on the history of the barcode, which for those listeners out there, if you haven't listened to it yet, and I highly recommend you checking it out, it still is unbelievably in the top 10 of our podcast rankings every single week.

That's how interesting the content is.

And who knew the history of the barcode could be so fascinating.

But, but.

All right, Angela, let's keep moving here.

So, so let's get to it.

What is fisma?

Like, explain it to the audience.

What is that?

What does it mean?

What is it all about?

Besides being a fun sounding acronym right now, I think a lot of folks actually forget.

So when President Obama was, was leading our country in 2011, he actually did some wide sweeping reform around food safety, which was the Food Safety Modernization Act.

And inside of, we had 70 different changes to policies and regulations, as well as new ones that were coming to fruition.

So this was big because we hadn't seen any of these changes come out of the federal government in almost 75 years.

What the industry kind of knew and loved before President Obama was the Bioterrorism act, which was really around one up and one down.

What is Ann selling to me?

What am I selling to you, Chris?

Right.

I had to know who it came from, who it was going to, and what it was that I had, and that was it.

And so when you then saw some of these recalls come into place, it was like, that's not helping us do the tracebacks.

So part of the Food Safety Modernization act was looking at how can we enhance traceability and how can we also do it in a way that allows us to be able to do outbreaks and trace backs much quicker.

So that is really where this came from.

And it was interesting because this was actually the last rule.

FSMA Rule 204, which is all about additional records for traceability, was the last one to come out of the Food Safety Modernization Act.

And there was actually some litigation against the FDA because they had not written the rule yet.

So the last one to come out, it.

It hit us in public.

The rule was released in November of 2022, becoming effective essentially in January 2023 for the industry.

Got it.

So, Angela, I'm curious too.

Like, how does.

How is digital impact, the rollout of this law as well?

Is there.

I mean, I imagine that where we are digitally now is very different than we were, say, back in the Obama administration.

Like, how has that impacted things as well?

Yeah, no, absolutely.

And maybe I'll take a step back before I get to that question, because I think some of the history and where we've been is very important in this effort as well.

I mentioned I've kind of been working on traceability with the industry since I kind of walked into the doors of the Uniform Code Council at the time, which is GS1US.

And part of what we saw in that 2005, 2006 timeframes were some really wide, sweeping recalls.

2006 was when we had spinach, right.

And some people, I think in California had headlines in the newspaper that had FBI just surrounding facilities because spinach was a terrible outbreak.

People were getting sick.

We had deaths that were occurring.

We couldn't trace exactly where it came from.

So we were just getting rid of all the spinach that we had.

And even within that, it took six years for spinach sales to get back to where they were.

And after the spinach recall, we then had tomatoes, which ended up being the jalapeno peppers coming from Mexico.

And so all of this activity really kind of sparked two things.

One is the produce industry kind of came together and said, we really need to figure this out.

And it's not that companies aren't doing what they need to do, they so are.

But the problem is I'm doing it inside of my four walls.

So what I'm doing means something to me.

The way I identify my products, the way I talk about them, how I capture and store information in my system about where I harvested, what fe, how many cartons did I do out in the field, what came into the cooler, it's in my language.

Right.

So then when I turn around and I ship it to Ann, everything I'm sending doesn't make any sense to her.

But inside of her four walls, she can capture all the information she needs to around the product.

Right.

But it was getting to that common language, and I think that's where the standards really provide guidance, is we're now tying your internal traceability systems in an external communication so that everybody can speak that language and understand it, so that we can be effective in the tracebacks.

So, part.

Yeah, Angela, I was going to say, well, like, can you dive in a little bit more and explain to us then, like, how people go about kind of developing capabilities so that they can meet these universal standards that you're talking about?

Yeah, absolutely.

So part of the new regulation for FSMA encapsulates three things that we didn't have previously.

One is traceability lot code.

So again, I probably capture a lot code when I harvest.

I may not pass it on to you and.

Or maybe I just sticker it on a box.

Right, okay.

Or put it, you know, in a.

In a sticker.

That maybe doesn't mean anything to you, but I know it's my lot code because it's a green sticker.

Right, right.

But it's.

How do you pass that on in a way that's meaningful so that we can tie that specific product to that order?

The other thing that is new to the rule is the traceability lock code.

Source.

So who created the code?

Well, I did.

It wasn't Chris.

Chris was just distributing the product to you and.

Right, but those are two things that have never gone with products before through the supply chain.

But they're also challenges because we've got to be able to update our system to accommodate for them in a standard way so that when I then pass that information on, you're receiving it in the way that's intended.

And that's the other piece that Chris was asking about.

Right.

Which is that digital component.

There are very smaller sized businesses, and when you're talking about commodities where market prices are changing on a daily or hourly basis, sometimes we're Writing them on paper, we're still very manual.

So when we go to do a trace back, sorry, Angela isn't here on Monday.

And Angela doesn't want to capture the order, you know, that doesn't help.

And that delays the trace back.

So part of FSMA was also saying, can FDA receive those records within 24 hours of the ask?

And it doesn't have to be through a sophisticated system.

Their minimum viable solution is an Excel spreadsheet.

But to Chris point, it's still digital.

Right.

It's still to pull it out of some system or put it in a Excel file and be able to digitally send that to the FDA to allow them to keep the pace of the outbreak investigation.

Right, yeah, I got, that's why I was asking the question, because I gotta imagine a lot of these records are kept in filing cabinets, you know, depending on who's, you know, who's doing the operation or who's involved in this, you know, part of the supply chain.

So, but going back to what answered too, Angela, like, so, so, so what needs to happen, you know, broadly, if you look at it from a broad lens across the industry of food safety, what needs to happen broadly for them to, to meet these standards, to get up to speed, to the degree that they need to, to get the stuff up to snuff, so, so to speak?

Yeah, well, let me maybe be clear by saying, you know, the, the federal agencies are really good at writing policies and regulations, but they define the what right, not the how.

And listen, it's, it's no surprise.

Our food supply chain has very small margins.

So the how is very meaningful to us because we're all making different investments and the margins on those items means the cost is going to be impacted, which ultimately is going to impact the consumer.

Right.

We want to deliver safe product, but we want to still do it in a cost effective way to make sure the product is there when they need it.

And that's really where we're playing a role with industry to help them become compliant.

Because compliance is not a competitive advantage.

We all have to do this.

So that is really what we provide to industry.

As a not for profit standards organization.

We're able to convene everyone.

So we can convene the producers, those farms that are harvesting, the distributors, the grocery stores, the restaurant operators, even the solution providers, enabling the systems and say, listen, this is what the requirement is.

How can we leverage the existing standards that we're already using today to help us become compliant?

And starting with that foundation then allows us to number One, be able to move a little bit quicker because it's based off of implementation that we already have at some level today to move our product through the supply chain.

But two, it also allows me to be able to enable capabilities based off of my size and the ability that I have as a business.

Right.

So my investment may look differently depending if I'm a small business or I'm a mid sized business or I'm a multinational that has operations and growing operations outside of the country.

Right.

So the standards allow those solutions to really be flexible so that we don't all have to use the same system and have the same digital capability.

I love that expression that compliance is not a competitive advantage.

But, but to that point though, as much as I love that, like where does the reality come in of what the different people within this process can actually afford?

Can you touch on that a little bit too?

Like, because that's gotta be a real dynamic facing some of the potential players here.

Not everyone is Walmart and can put the money towards this.

So like, how do you think about that?

Oh absolutely, it's a great question.

And it's like the million dollar question too, right?

No pun intended.

But it's probably literally or maybe not.

I don't know, multimillion dollar question maybe.

Yeah.

For Walmart, probably much higher for them for sure.

Yeah, yeah.

But for Angela's Farm that you know, is only doing, you know, $300,000 annually in business, right.

So maybe I sell to my local Whole Foods or Walmart.

Right.

And maybe I've got a farm stand.

My capabilities look much different, right.

Than that multinational company.

And I think this is where we are fortunate enough to have those solution providers at our table to help provide a range of solutions.

Right.

So you can implement something that can help you digitize data in the field with a printer for a couple hundred, couple thousand dollars.

Right.

All the way up to the multimillion dollar systems to be able to handle product or volume of distribution or selling of the items that you need.

And I think it is a challenge because everyone knows, knows that there's additional, but it's hard to put a number on that cost because there's so many variables.

What size business am I, what capabilities do I have today?

What do I need to implement?

Right.

So I talked about traceability lock code and traceability lock code source being two additional pieces.

Well, let's say I'm a distributor, I'm capturing product that comes in and product that goes out.

So I'm not always tying the traceability lock code, but maybe I have a homegrown system, so it's going to cost me a lot, probably more money than some others to crack open the system and write some new code to get some of those new fields in place.

Or maybe I'm using a well known ERP system and I can say, hey, I know you've got this data field, can you bring it in?

And that cost structure is going to look a little bit different.

So I think it's hard to put a cost on there for everyone.

But I think this is where the standards allow that cost to be palatable for the size of organization that they are and the capabilities that they need to add on.

Whether they're just looking at the minimum data set for compliance or they're really going to that gold standard implementation where we're digitizing everything and kind of have everything at our fingertips because there's a use case for both.

Yeah, but Angela, the one thing I think about from like a, from an entrepreneur perspective too is like some of what you're saying is a hard pill to swallow because like, you know, where does the ROI come from?

Like, is there an ROI in traceability?

Yeah.

And I would actually say no.

No, there is not.

And I think we learned.

No, there absolutely isn't.

We learned that a lot during the Produce Traceability initiative because I think we're really trying to isolate in order to deliver, you know, track and trace opportunities across the supply chain for faster investigation purposes.

We're never going to find an ROI for looking at that limited scope.

What we have been advising companies is really take a step back.

What are we unlocking when we're looking at the additional data that we're capturing and sharing, what are we doing?

We're providing visibility end to end.

Sometimes I can never see past the product I send to Ann to know what you're doing with it.

Chris, that's what some of these things enable is.

I've now got full visibility from end to end of what's happening with my product or where it's going.

And that's where the ROI comes in.

And again, this is where each company is unique and looking at what those opportunities are.

We've done a lot of pilots and use cases that we've shared back out with the industry.

And I would say, you know, some are very dependent.

Like let's take Subway.

They've got their independent purchasing co op which is like their supply chain arm for, for all of their, all of their Subway restaurants inside of the US and they had actually worked on putting Together, the requirements that came from the Produce Traceability Initiative, which is how do we get to lot code information at every case that is going through the supply chain.

And as they did that and they got to the full visibility of what they were receiving, what was going into their stores, they could automate inventory.

So the folks that were working in those stores actually had an app on their phone where they could just go back in the back room and look at the barcodes for the products that were back there.

And it gave them everything they needed around the freshness, the lock code, should a product come into question.

And they really, they estimated that about 9,200 of hours of labor could be saved annually because that information was automatically available and there was no manual process involved, which was a savings of over $100,000 a year.

Right.

So think of even just taking inventory.

I can automatically scan it with my phone as opposed to somebody going in the back room and clicking things off.

And I would say reversely, on the brand side, we did success story with Ocean Mist last year, and they had also found as they were harvesting product and putting all this information on the cases of product, that they were saving 25 to 35% of their time savings from their crew.

So they were increasing their efficiency because they could see exactly what was happening in the field and when it was going into the cooler and at what time.

Which let's think about that.

That also helps with inventory rotation, first in, first out, which could even affect some of the waste reduction.

Right.

That we see that is so prevalent in the supply chain.

So there's so many use cases that could be unlocked depending on where you're at in the supply chain and what role that you play, that we're really encouraging the folks to say, what information are you getting from a visibility standpoint across your operation or across your supply chain that can really drive value back into the business to help with that ROI you were asking about, Chris.

Yeah.

When you talk and you talk first in, first out, I always think about, you know, your cash cycle and your inventory carrying costs as well.

So.

Yeah, so that, that makes sense.

So, so since you're saying ROI doesn't come from traceability, it comes from visibility.

That's, that's, that's, that's, that's how we should be thinking about this broadly as an industry.

Yeah, absolutely.

And just the labor hours associated with some of those tasks, I mean, you're, that's somebody's whole job when you're talking.

Thousands going to the firing cabinet.

Ann.

Yes.

Yeah.

Or Just, you know, in the back room, I think of the subway example like you gave.

I mean, just in the back room.

Being able to do all of that inventorying and analysis in a matter of seconds lets you operate what's already a really lean business much more efficiently, I would imagine.

Well, let's, let's close with, you know, this question.

Just last month, Angela, you let us know that the FDA extended the food traceability rule by another 30 months.

So I'm wondering, does this mean that all of the food service providers and brands listening can breathe easy?

I'm guessing not.

But what's your stance on that and what does this mean for the industry?

Yeah, that has definitely been a question top of mind for everybody.

Right.

As with the announcement.

And I guess I would go back to my college or high school days, right.

If my test was supposed to be on Friday and my professor said, you know what, we're going to give it to you the following week, does that mean we just wait and cram the night before?

Right.

Do we utilize some of us?

Maybe, Maybe.

Right.

But then we're still hoping and praying, right?

Exactly.

We want.

Yeah, that's great.

You know, I think this is much the same way.

And you know, all kidding aside, I think this is where we really saw the FDA listen to the industry.

So when the rule did come out and it was effective in 2023 and they were asking for everyone to be compliant by 2026, I think there we' really trying to provide some education around.

Listen, this is a change to people to process and technologies for everyone in the supply chain and it's going to be different for everyone as we've talked about.

And we've got to allow time for that because we need to get it right.

We're providing safe food today, it needs to be even safer in the future.

Let's make sure that we're all getting it right and working together.

And that just takes a little bit more time than what we thought was allocated.

So the 30 month extension, we really think this gives us time to stay the course we've already planned for those investments.

Let's keep them going, let's implement, let's start doing some more pilots.

You know, we're hearing from the industry, there are still a lot of questions around.

Well, sometimes my product is delivered, you know, direct store delivery.

It's coming in front of the house, not in the back of the house or I have in store transfers or I'm manufacturing, you know, my product off site and it's being delivered to 50 different stores.

Those are not the rules.

Those are the exceptions of some of the business processes.

Right.

And we need to know how to account for those.

And that's where we still have a lot of questions.

So I would encourage the industry, let's find the answers to those questions in these additional 30 months.

Let's look at those, let's convene, let's determine what this means to us and let's share that information.

Because like I said, this is something that we all have to work towards.

And the more we can share and learn from each other, the faster we can all get there and really start experiencing some of those benefits with the visibility that we're providing across the supply chain.

Right.

And it sounds like the digital capabilities that are now in play in each of these scenarios are accessible to each of these brands are allowing you to do that.

It's just kind of moving forward and taking action to share that out and make sure that we're, we're still working towards that consistency across, across organizations.

So that's, don't cram is, is what we're talking about here.

Let's use this extra time wisely.

That's right.

Oh, go ahead, Angela.

Well, I was just gonna say, I think one of the other things I didn't touch on, but I think it's very prevalent here in the extended time is that the rule affects 19 different products.

Right.

So you're talking about 19 food, different categories and it's not consistent.

It's soft cheeses to fin fish to fresh cut produce and vegetables.

So it also depends on the state of the product as to whether it applies or not.

And there are so many questions inside of that that the industry is still trying to decipher and work towards that.

You know, that allows us some time as well.

And I think one of the things that we've been doing with convening and working with industry is we've also developed this food industry FSMA collaboration where we've brought private and public groups together.

So like trade associations for the different food types, the national association of the State Departments and the association of Food and Drug Organization to really start providing education and communication so that we can answer those questions.

So I think this just gives us more time for that communication sharing.

Yeah, yeah.

I imagine there was some sighs of relief like Ann said, but I imagine at the same time there's probably like something like, yeah, we still got a lot more to do, we got to get going, we got to get this understood and, and figure this out.

I used to hate when my teachers would do that, when they'd pause the test, because I'd be ready to go.

And then I'd have to stay ready to go for four or five more days till the actual test happened.

Angela.

So you're bringing back some horrible nightmares from my high school days.

But.

But, hey, you are.

You are.

You are welcome back anytime.

That was.

That was absolutely fabulous.

Love that discussion.

The time just flew by, too, as you were talking.

Like, I.

I just, like, was so interested in what you had to say.

And.

And I definitely.

I know, and you probably do, too.

You feel more educated about our favorite acronym fisma.

And.

And I believe our audience is going to feel that way too, at the end of this.

So if.

If people want to get in touch with you or anyone else at GS, GS1US, you know, to pick your brains or get help, you know, navigating through all this, like, you.

You know, you spend a lot of time discussing what's the best way for them to do that.

I know.

I appreciate that.

It would be.

They can go to our website@GS1US.org FoodSafety and we would be happy to get engaged and talk some more about this as the two.

You know, I've really.

I've enjoyed our time together.

I can talk about FISMA for days or just food safety since this has kind of been.

Been my career since I've been here.

But, you know, listen, it's.

It's important to all of us, and we.

We've got to take the time to get it right.

So I just appreciate the time to talk about it.

Thank you.

Anytime.

Well, thank you so much, Angela Fernandez of GS1US.

Thanks to all of you for listening in today.

And on behalf of Chris and myself and all of us here at Omnitok, be careful.