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How important is Food Traceability?

How important is Food Traceability?

Food traceability regulations in North America are being implemented as a result of the Food Safety Modernization Act (FSMA) in the US and Safe Food for Canadians Act (SFCA) in Canada. Facing pressure to meet regulatory compliance and private food safety standards, food and beverage companies are being forced to review their food safety preparedness plans and address traceability.        

Definitions of traceability

The American Production and Inventory Control Society (APICS) defines traceability in manufacturing as being “the registering and tracking of parts, processes, and materials used in production, by lot or serial number.”1 The Codex Alimentarious Commission provides a definition of traceability within the context of food safety. Traceability is “the ability to follow the movement of a food through specified stage(s) of production, processing and distribution.” It is a “tool” used to pinpoint “where the food came (one step back) and to where the food went (one step forward).”2    

Food Safety Regulations

The prevention of foodborne outbreaks and costly product recalls has led governments to support traceability as a way to ensure consumer health, food safety and industry competitiveness. Since 2005, the EU has mandated the full traceability of food products along the food chain.3 In North America, the Codex principles apply and best practices in traceability are currently under review. At the request of the Food and Drug Administration (FDA), the Institute of Food Technologists (IFT) performed a series of product tracing studies.4 These initiatives have stressed the importance of uniform record-keeping and reporting procedures for traceability. These pilot studies also instigated the launch of a global traceability center which will serve as “an authoritative, scientific, and unbiased source for food traceability.”5 Meanwhile, the Canadian authorities are in the process of rolling out the Safe Food for Canadians Action Plan and encouraging regulated parties to adopt the “one step forward, one step back” Codex tracing approach.6 For the Canadian Food Inspection Agency (CFIA), “rapid identification of the origin and movement of food products” is critical for ensuring food safety. In the event of a food safety emergency, proposed regulations under SFCA require that industry submit traceability information to the authorities on request within 24 hours.

Traceability tools

Traceability refers to a series of tools designed to trace the origin and movement of goods from the supplier to the consumer. These tools are used to generate a data trail that may be in paper or electronic form. When implementing a traceability program, three important types of identifiers must be addressed: facility/producer identifiers, product identifiers and supply chain stakeholder identifiers. This is also referred to as the 3Ps (Premises, Product and Parties).7 Electronic records originate from the company’s inventory control systems and may include information from product bar code labels or, increasingly, Radio Frequency Identification Devices (RFID). RFID tags are wireless electronic labels that can be used to generate real time information and locate precisely pallets, cases or individual products without the need for scanning. RFID tags can also provide temperature, humidity or motion information, a significant advantage for perishable and cold chain products. Computerised traceability systems require investment in tracing devices, device applicators and data readers to enable data collection. For the full utilisation and deployment of the technology, the system relies on trained personnel who can analyse “the big data” and verify its accuracy.3 The cost of technology coupled with the need for qualified staff presents challenges for Small and Medium Enterprises (SME). 

Traceability offers more benefits than just food safety

For large companies who are able to invest and take full advantage of technology, the financial benefits far outweigh the implementation costs. Various research studies and pilot projects have shown that the traceability data not only help manage food safety risks but also contribute to overall business performance. 3,7 When traceability is integrated in supply chain activities, companies report financial gains and improvements in warehousing, inventory management and distribution. Businesses generally experience fewer delivery errors, fewer out of stocks and less wastage as well as better response time.A European study mentioned the example of a Spanish frozen food processor who invested €1.8 million and recovered its investment in 18 months.3  In Canada, a pilot project led by the province of Ontario identified that facilities had invested between C$20,000 and C$30,000 to develop and implement internal traceability systems. Interviewed post implementation, 95% of the pilot facilities anticipated that the technology would generate an immediate return on investment.8   

In addition to contributing to a more efficient supply chain function, technology-based traceability tools can help companies derive other benefits. For instance, they can support product differentiation, thereby offering a competitive advantage.3,7 Traceability is based on accurate product descriptions which allow companies to verify formulations and marketing claims to gain consumer trust. Examples of “traceable” product attributes include country of origin, non-GMO, free trade, organic and sustainably produced. Such benefits may favour distributors and big brand producers over small manufacturers.        

Options for Small and Medium Enterprises (SME)

For most SMEs, traceability is understood as identifying which customer received what finished product. Depending on the type of supply chain information used, companies are able to link customer orders to a product code efficiently, thereby practising partial traceability and showing control over their shipped inventory. Narrowing down to particular production dates or “lot tracing” is a more complicated exercise which involves review of production and shipping records which is time consuming and may not be 100% accurate. The proposed Canadian regulations go further and mandate that work in progress, ingredients and packaging materials be traced internally. In the event of a recall, providing accurate production and shipping information on request within 24 hours may prove difficult. Lot tracking capabilities using electronic systems is costly and must offer other financial advantages to SME to be worth implementing. Supplier management and lot tracking of ingredients and packaging materials will prove challenging for small and medium companies who lack funds and human resources. While government funding and outreach is needed, the implementation of a computerised traceability system must also make economic sense and reflect business strategy. Experts agree that high-margin food products may be well suited for the technology since the cost of implementation represents a small percentage of product price and customers are willing to pay a premium for the goods. The electronic tracing of high and medium risk products is also worth the investment to meet regulatory requirements and prevent food safety risks. It may also result in lower insurance premiums while preserving business reputation.          

In summary, the implementation of electronic traceability systems shows good ROI promise.7  The size and capabilities of the business, its place in the food chain and its type of products are factors that will impact the decision to implement. A cost/benefit analysis is recommended prior to upgrading to a technology-based tracing system. The Conference Board of Canada, in its report on traceability (see Appendix B), offers a list of resources to food companies interested in such traceability tools. Click here to access project planning tools, worksheets and checklists.


1-     Eshkenazi. A. (2012). Following the Thread: Traceability, RFID, and Big Data.Retrieved fromAPICS News

2-    Codex Alimentarius Commission. (2006). Principles for Traceability/Product tracing as a tool within a food inspection and certification system (CAC/GL 60-2006). 

 3-      Alfaro, J. A., & Rábade, L. A. (2009). Traceability as a strategic tool to improve inventory management: A case study in the food industry. International Journal of Production Economics.118 (1), 104-110.

 4      Institute of Food Technologists. (2013). IFT launches Global Food Traceability Center.

 5      Canadian Food Inspection Agency. (2013). Safe Food for Canadians Action Plan.  

 6   The Conference Board of Canada. (2012). Forging Stronger Links: Traceability and the Canadian Food   Supply Chain.  

 7   Food in Canada. (2010). Pilot project on traceability proves successful. 


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