Mister Beacon Episode #164
Food Safety Modernization Act - All Hype or Ready for Primetime?October 25, 2022
This week on Mr. Beacon we speak with Ed Treacy, Vice President of Supply Chain and Sustainability at International Fresh Produce Association (IFPA), about the current state of food safety in the world. Ed explains to us all the information you need regarding the Food Safety Modernization Act (FSMA), as well as the opportunities for investment.
Are we ever going to get to the point where we can limit food waste during an outbreak? Ed seems to think we’re well on our way.
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Steve Statler 00:00
Welcome to the Mr. Beacon podcast. This week, I am interviewing Ed Tracy, who is vice president of Supply Chain and Sustainability at IFPA, which is the International Fresh Produce Association. If you're someone that eats food, then you have dealt with members of the IFPA. They're the growers and the processes and the retailers and the technology suppliers for food. And this is something that we can all relate to, we all eat, and none of us want to get sick. And we have an interest in making sure that these systems are safe and efficient. But also, as technologists, it's a huge opportunity. We have legislation that's coming, that's going to force investment, but it's not a blank check. So Ed is going to explain to us a bit about FSMA, the Food Safety Modernization Act, he's going to tell us a bit about the context and the problems that are being solved and where the opportunities are. So I think you're really going to enjoy Ed. He's a great character. With enormous experience. I really enjoyed this conversation. I hope you do. The Mr. Beacon ambient IoT podcast is sponsored by Wiliot, bringing Intelligence to Every Single Thing. Well, Ed, welcome to the Mr. Beacon podcast. It's great to have you on.
Ed Treacy 01:34
Thank you, Mr. Beacon.
Steve Statler 01:38
Well, this podcast kind of started off all about Bluetooth and indoor location and asset tracking. And then we realized and our audience is entrepreneurs, solution designers, and just people that want to learn about this stuff. And we figured out pretty quickly that you need to understand what the technology is being used for. And I think that's where you come in you are you have a catbird seat on an industry that is really embracing and needing active trace traceability technology, and there's lots of different tech that's being used. So what I want to do in this discussion is learn a bit about your market, your organization, what you do, and some of the things that are driving technology adoption and standards in the fresh produce area. And we're just coming up to the big trade show that your organization sponsors in, in Orlando. So I'm excited. I'm gonna go there. I'm excited about that. But maybe we should take a step back and for you to introduce yourself and your organization.
Ed Treacy 02:49
All right, and I'm at Tracy, I am the Vice President of supply chain and sustainability with the International fresh produce Association. And if PA or as Europeans know us, if if Pa was formed by the joining are uniting of two great produce trade associations, the United fresh produce Association, and a why work for Produce Marketing associations we united and came together and on January 1, this year 2022. And we're doing more of the same deeper, wider and bigger and show you mentioned is our global produce and floral show in Orlando at the end of October. And you know, it's a Expo and education in a really a meeting of as I tell people 22,000 of my closest friends in the industry. And are we also put on approximately 28 or 29 other events around the world. Our global show is our largest but we do a food service show a retail show a couple floral and a host of other regional show owes, and we have 2900 ish members and member companies and every employee of that company is a member of ours. We have an a full blown affiliate in Australia, New Zealand based in Melbourne, Australia. I FPA ANZ or Australia, New Zealand and they deal with that part of the world. They're like a franchisee we're very, we're financially and content wise, very connected, they put on a show. In addition to that we have country councils, which is a group of members who come together to address local issues in their operating region. We've country councils in South Africa, Brazil, Mexico, Chile, and think that's it. And then we have over 1000 volunteer members who serve on a council or a committee. The country councils are an example of that. On top of that, we have food service Council on retail counsel and organic counsel and Government Affairs in political action. And in my world, I work in the science and tech area. We have a supply chain Council, a Sustainability Council, a product identification committee, we have a technology council we in our food service area with probably the largest Council is our foods food safety council. And through those, we bring industry together and address concerns and challenges as a as a whole industry. And in addition, we're involved in other initiatives coalition's or things that aren't solely owned or managed by us. And one of those is the produce traceability initiative. And that was a, an industry led initiative to address guess the lack of traceability hold chain traceability within our industry. And that was formed back in 2008, and 2009, after the 2006, spinach, food equalized issue. And what that proved to our industry was we don't have our act together as far as being able to track and trace and recall product when there's an issue. And one of the challenges, you know, we've always had and this really highlighted and is we operate in a commodity market, where Bran is really the third or fourth decision criteria. When consumers buy fresh produce. Its quality, its price, it's perception of food safety, and then brand may come in. And you know, one of the challenges we have is when you you know, people get sick and they get asked what do you eat? I think I know lettuce or tomatoes or this or that when you ask him what brand of tomato Oh, did you eat? You know, you get a blank stare? When you ask someone what brand of mayonnaise you ate, you can guarantee they can, not only can they tell you, they can go to their shelf and grab the jar and say, Yeah, this is it, and I put this on my sandwich two weeks ago, and, you know, turn it over here, it's a lot number and you know, they can proceed from there with us operating in a commodity market. And, and all the way through the consumer and highly perishable product, by the time you get sick enough, go to a doctor, that product even had any packaging, and only half the product here and this side of the pond is packaged, the rest is loose, even if you had it that that's in the landfill somewhere being recycled. And and so the industry got together. And one the reason or one of the uses of their trades associations is we can and we're very good at forming and managing initiatives like this. So back then, United fresh and PMA, of which were both now in the Canadian produce marking Association. were asked by their members to create this initiative and you know, lead us and take us from where we need to go. We quickly brought in GS one because that's the language our industry speaks business to business. And we created the produce traceability initiative.
Steve Statler 12:12
Amazing what what is, what's the progress, like? So I remember that spinach, E. coli scan was more than a scare was real people got sick. But My Kinda, yeah, my recollection is basically all the spins in the country basically got thrown away. And obviously, that's tremendously wasteful. I don't know whether that's actually what happened, but
Ed Treacy 12:41
you're spot on. And it was the largest recall to to date, if you will. And given the lack of progress of the FDA and local, state health officials in identifying the source of the contaminated product. FDA want to and CDC went to the press and said, You need to tell people fresh frozen doesn't matter if it's spinach, throw it out, or it could kill you. And what was happening and there was little over 200 people sick, and five people died. And it was one scene from end of August, oh six, every week, another person would die. And then finally, FDA said we got a throat all spinach. You can imagine what it did to our reputation as an industry. Our consumers thought we had much better way of tracing our product and executing recalls. And what happened you know, the the human life was that was paramount on driving us, you know, we kill our people ate this product. Five of them died. One was a two year old boy named Kyle all good. Whose mother made them a spinach smoothie and it killed off. The other four were elderly, ladies, and that really rocked the industry. And we said Go collectively, we got to, we're better than this, we got to be better. And that's why we got together and got great input and all the CEOs of the industry leading companies across the the supply chain banded together and said, What do you need for us to do? We need to do it. And you know, as well, you know, livelihoods were wiped out multi generation, grower and processors of spinach were instantly out of business. And there was tremendous financial impact. But that was secondary to the health impact of those affected people. As well, because we consumers were aware that Oh, is spinach isn't safe? Well, the consumption of other leafy greens went down. And what the shame is, we're the only product you can eat, that if you eat more, you'll be healthy, and healthier, and no other commodity or food group can claim that we have it. And, you know, the nutrition conference at the White House last week was a long overdue, but the main theme of that was, we need to get our US consumers eating more healthy products, fruits and vegetables in order to improve their health. So, roll forward 10 or 12 years after the initiative, we landed on a standardized case labeling barcoded case label process, using just one standard label. And last count, around, we're creeping up on 70% of all cartons in the US supply chain are PTI compliant, and labeled with PTI labels, and put that in perspective.
Steve Statler 17:48
So ATI is produce traceability and
Ed Treacy 17:51
initiative, it has his own website, produce traceability.org, there are 25 Plus best practices and guidance documents and everything you need to know about doing this and executing and creating your labels is on the website. And we spent 1000s of hours on that effort. And, and it's been beneficial. You know, for our somewhere around 6 billion cases of produce in the US supply chain, which means we've got over 4 billion labels being applied every year. Not a bad measure of success, but I won't be happy until we have 6 billion labels being applied. Right rolling forward. In 2011, the US government introduced the food safety moderate Modernization Act, which outline and Section tool for of that act on talk to traceability specifically. And you know, we had been quite involved with PTI with the FDA and letting them know what we're doing how we're making out and, and knowing the FISMA regulations were coming, we wanted to ensure that they were aligned with what we had created and they did when they're finally the initial draft was released. But in the mean In time, we still had recalls, we're still affected the health of many people in this country. We had a couple of bad bouts with cantaloupes. And the worst was in Colorado, where 44 people lost their lives. And we're able to successfully and fairly quickly identify the source of that. And that was good. Then couple years later, we had a spat of Romaine recalls. And some of those rails will be able to identify the source quickly. Some were not and we think, there they weren't specific to a field or processing plant, but they're in the possibly the environmental area, possibly, water source was contaminated. And but we did narrow it down to an area. And then a good thing happened, I believe, or industry, Frank Yiannis, who was a VP of food safety at Walmart, who was a big proponent of PTI joined FDA as Deputy Commissioner, and traceability and they regulation was his in his area of responsibility. And then we saw the FISMA tool for draft rule. It probably 90% aligned with PTI. There were some elements that we as an industry felt added no value to executing a trace back and recall. And we'd let them know that. And when, you know, I put together a committee to write the comments of our members, and we submitted those, and we're anxiously awaiting the final rule, which has to be to the federal register by November 7. And then it'll be probably a couple of weeks process after that, that it'll be made public. And then our our effort in compliance starts up till now PTI has been voluntary. They will not and cannot say you need to, you know, implement PTI but if PTI solves 95% of the solution, our industry already knows what direction we're going. And the last 5%. And, you know, we've been very good at labeling the cases on the front end of the supply chain on the packing process. The rule of thumb, when the product goes in the box, the label goes on the box. What's been lacking in Walmart's done a good job and couple other retailers, Knox and Publix on using and capturing and storing that information. In what FISMA 204. If the draft rule as a good indication, all those subsequent receivers of fresh produce will have to do their part in capturing and storing and being able to report back out down to the lot number level to the regulators when requested. And in a sortable spreadsheet format within 24 hours.
Steve Statler 24:42
Interesting. So you've this is like more than I could have asked for in terms of an overview of what's happening in this space. And I find it really interesting and there's a few kind of detailed questions just so where are we in terms of the legislation? So you mentioned And those FISMA and you said 204 is 2004, or
Ed Treacy 25:05
no, section 204. FISMA is a mile long document, and section 204 of FISMA deals with food traceability, and, and it. And it only applies to around 20 ish. commodities that are on the food traceability list are currently on the list. However, our industry and major buyers have indicated that they cannot support one process in their business. For tomatoes and leafy greens and sprouts, they need to have one process for all produce. And my background. I came from grocery retail, I ran the distribution operations for major retailers, and I agree, yeah, it's hard enough to train your people to do it one way and asking them if it's a case that alleges do this and capture this information, then do it. This with it? But if as strawberries Yeah, you don't have to do you know, step 579 11. That that'll never happen. And so we're treating, even though FISMA 204, we'll do an address and then force only a specific list of commodities. We are treating it as if it applies to all produce, because the buyers will treat it that way.
Steve Statler 27:15
And that's a good thing, I guess. Yes. Yeah. And it's going to be implemented.
Ed Treacy 27:20
And on items, not on the list until it is. Right. Yeah.
Steve Statler 27:28
So where are we in? So you mentioned the FISMA was created. And there's a lot of work that's been going on? And you mentioned moving on to compliance? So it's, it's an act that exists, it was passed, but it was phased in is that the
Ed Treacy 27:46
Yeah, an act as a law. And then it has many components. And each of those components require regulations. visma 204, is a regulation dealing with or a series of regulations dealing with food traceability. And we're now and the process is the government releases a draft rule. First, they hold a series of listening sessions and consultations and learn and that and they're very, very good at that. Then they draft a first draft rule, they release it, they asked for comments, they got 1000s and 10s of 1000s of comments. They need to sift through consider those, update the draft rule, finalize the rule, and then once the final rule is drafted, they have to socialize it through a number of government bodies. One is the Office of Budget management, make sure they're regulation is not going to bring financial hardship on the in overall on the industry. And there's a whole bunch of checks and balances internal that they have to go through. And then they hand it over to the Federal Register. And that's the agency that officially posted it and makes it public and then and they take a couple of wigs from time they get it until that happens. And then as part of the regulation, there's an effective date and and then forcement aid. And on the current draft regulation, it said the effective date would be 60 days after being posted. And the enforcement date would be 24 months beyond that. If that doesn't change, we're gonna be held accountable to the new regulations on traceability, somewhere middle of January 2025, which is not that far down the road, if you think about some of our major retailers, you know, Kroger, last count had 59 produce distribution centers across the country, they have to affect change, and they got 1000s of stores, they have to change their processes on receiving and capturing and storing and sharing data when court requested. And the current regulation work requires them to track lot number all the way to an individual store or restaurant. They're referred to as retail food establishments. But they don't do that now. And that's a huge undertaking, in order to implement that and implement it effectively.
Steve Statler 31:43
So I just lost track of what you were saying there. So were you talking about like restaurants? When does Yeah,
Ed Treacy 31:50
they're included. And the way the current regulation, draft regulation reads is any food or retail food establishment, and I think they have to have greater than 10 full time equivalent employees. It illuminates very few, maybe some convenience stores or a very, very small, you know, kiosk in a mall or something like that. But anyone with 10 or more full time employees restaurant or store needs to track lot number by product and be able to produce that within 24 hours in a electronic sortable spreadsheet format to the government. If there, get the phone call.
Steve Statler 32:54
Interesting. Well, I'm interested in this on many fronts. One is, obviously I am a consumer of food. And so I don't want to get sick. And I have got sick many times from, but who knows how and why. And I'm really interested in improvements in that because because no one enjoys being sick. But obviously, I work in the technology business. You know, Willie has auto ID technology that will hopefully make conforming some of these processes easier. And you know, this podcast has a bunch of other folks with competing and different technologies. So I'm interested in talking about how technology can help in this process and where people are at and what the problems are, you know, what can what can be solved. And I think back seven years ago, before I joined Willie, I was a consultant in this space, Bluetooth tagging Bluetooth beacons. And I had a really fascinating project for a company that made herbs and spices and they had a very progressive guy there. He was actually son of the owner, and he wanted to really shake things up. And he wanted to track everything that came in to their processing plant everything that went out, he wanted to track every tool machine and person who touched what and be able to expose that information, you know, get the information from his suppliers and expose it to his customers. He wanted this to be a differentiator, and he just felt like things could be better than they were. And I remember, you know, he's struggled tremendously because, you know, a lot of the software systems that they were using had no way of absorbing this information and so forth. So, where, where are the opportunities for technology to help in this process? It seems like we have a compelling event. 2025 as you point out is not far away. If you start now on a new project, you're going to be struggling to get it live in 2025 at any scale. I assume that the penalty is For not conforming and not good and, and, you know, penalties to one side, we pointed out the consequences when things go wrong. It's just bad for the industry. And we want people to be consuming more healthy vegetables and not get sick. It's the right thing. So where are the opportunities? Where are the gaps? Where would you suggest people that are creating software and tools focus their energies?
Ed Treacy 35:27
I think and I've been quite vocal about it is company and there's been a new FDA held a challenge a technology challenge to for technology companies to provide or create low cost traceability solutions. And that helped. And I certainly got interest of Silicon Valley and our challenge. I think, come if I was running a tech company, I would focus on process processes are devices that can be integrated into the current work that's being done by people who move boxes of produce through the supply chain from the packing until a point of consumer buying and, and then you can do to incorporate that into their normal activities, rather than okay, we need to budget and RFID people will kill me, but everyone needs to put a five cent tag on every carton, and everyone needs to install a fixed RFID reader on every doorway that produce goes through, Well, that'll be great, and it would work. But inbound tation rate would be very low because it's huge capital A huge expanse and additional labor. If we can capture this information or in current processes, or tie it to making your business more efficient, oh, if you did this slight change. You improve your productivity or this or that. Oh, and by the way, you get traceability components that are required for you. Absolutely, you know, one of the good example is in the and mainly applies to the foodservice and small store side of the supply chain but I've seen companies implement for produce deliveries. So foodservice distributors. They've ensured every carton has a PTI label on it for fresh produce. And they've implemented UPS FedEx style scanning at point of delivery, and having run foodservice distribution operations and having paid out millions of dollars in unfounded shortage claims. You know, if you back a truck in and you're unloading 35 cases, produce into a restaurant or a commissary or small store, you can scan 35 times and give them a clean invoice and all of a sudden you eliminate your claims department because you scan it and you sign for the scan at time of delivery. And if the label is on our wrong carton, all deal with that and that's very rare. And normally the claims are got the cheap stuff and you charge me for the expensive or I only receive a Tina 20 cartons. Company solutions like that are paid benefits. You know, aside from traceability, they justify themselves and have a very high ROI. And seen some are fairly easy and standalone to implement and don't require a sa P or IBM consultant to help you implement solutions like that and where companies have thought, okay, how can I solve another problem and piggyback traceability on top of that, and that one is, you know, and had I had that functionality when, in Canada, we owned company I worked for, we owned the largest food service company in the country, called circle food service, if I would have rolled that out to all 34 of my DCS overnight, and I would have been a hero. And I would have, you know, added 10s of millions to the bottom line of the company. No solutions like that. That's a great example. But integrated solutions that solve other problems. Because doing something an additional step or process or system purely for traceability. It's like trying to convince someone to buy more insurance. Where's the ROI? I know, I'm my, my grandfather started the business hence father ran, I run it now. And we've never been involved in a food safety recall today. So why would I change everything I'm doing just for that. But if you can say, hey, you can redeploy Ada, your clerks on your claims desk in an especially environment where we can't find people. And you know, have redeploy them into other areas of your business. Now you got someone listening?
Steve Statler 42:27
Absolutely. I think that's amazing advice. And yeah, so if we can extend shelf life, if we can improve quality, if we can reduce the burden of staff requirements in this time, when it's really difficult to get staff, and we can bring people into conformance with the regulations, then that's the way to go. But telling people just to take medicine that's expensive, and they don't even know where they're going to get sick. Well, we all know how challenging that is. But if you can help them help their business at the same time, and we got a chance that rising to some of these very important challenges that you've raised, raised. So Ed, I gave you like, less than five minutes to come up with this list. But what are the three songs that have some meaning for you? What are your three favorite songs?
Ed Treacy 43:21
Right now in my life. I number one is my favorite artist, Bob Seger. And my favorite song by him is turn the page. I just think that's a deep and a great song. The
Steve Statler 43:45
second one, but before we go on to the second, I just just unpack that a little bit. What is it that you get out of that song? What's the messaging that
Ed Treacy 43:55
brings me back to my youth? I saw him I've seen him, I think eight times. The saxophone by alto Reed is amazing. In the song, and when I hear it, it's about him being on the road touring, and I can just always picture myself in his shoes. And and, you know, he had long hair and was you know, during the song, people say when he walks into a restaurant is a woman or a man. I had long hair as a teenager and it was always a fight between my mother and myself on the length of my hair. And so it you know, evoked and still does a lot of a fun moment in my life.
Steve Statler 45:04
That's beautiful. So are you? Are you a musician? Do you what were parts of? What does music mean to you?
Ed Treacy 45:12
I can't carry a note in a bag. But I grew up. My father was a early in his career a professional singer in Ireland, and that's how we met my mother, my sister has recorded eight or 10 or 12. cassettes and CDs, show you how long she's been doing it. And she's an Irish folk singer. Tours, rational Irish folk music. And my brother had a band, you know, through high school and early adult adulthood, and I was hanging out with them. And I was the roadie and yeah, they were Greg, Ben, play plus, if you will. But I've always hung out with musicians and live music. I love love attending concerts and listen to just about any live music. Lungs is performed well.
Steve Statler 46:34
Awesome. I feel the same way. feel the same way
Ed Treacy 46:37
schedule, musicians through my life, and some by chance and some on purpose. And yeah. I just really, really appreciate like, good live music.
Steve Statler 46:54
Do you meet do you do the meet and greet things? Sometimes you buy a concert ticket and
Ed Treacy 47:00
cheap to do that.
Steve Statler 47:04
I recently went to a heaven 17 concert, which is an early 80s synth pop band from the UK and they came to the House of Blues in San Diego and my friend knew someone who knew the band and we had the meet and greet tickets for it. Well, it would have been cool but I think they saw who was in the meet and greet party which is basically a bunch of 60 year old plus guys and they decided that they were too tired to do it. But I saw later on in the concert they did do them meet and greet when the when the demographics are slightly different. Okay. So that anyway, that was what it was. So song one what what song two,
Ed Treacy 47:53
Stein, Song two is really. And I've always loved the movie stand by me. And the music and that and the lead song by Benny King, stand by me. And it's a specially relevant at this stage in my life with pertaining to my wife, and she's always been with me and standing by me and supporting me. And I first heard the song and saw the movie decades before I met her but it's very relevant now.
Steve Statler 48:36
Amazing, great choice. And what's, what's the
Ed Treacy 48:41
and the last is back from that era. And it's the memories it evokes, in my mind in my childhood in growing up in northern Ontario, and it's sitting on the dock of the bay by Otis Redding. And I grew up in Toronto, but every weekend we had a cottage 160 miles north on Georgian Bay, and my fondest memories were for probably from six years until I young adulthood. We ended up moving up to that small town of Parry Sound selling our business in Toronto and moving up there and I spent a lot of time on the water around Georgian Bay and and sitting on the dock of the bay and every time I hear that song, it just takes me right back to a happy place.
Steve Statler 49:56
Awesome, awesome. So very literal meaning and it's yeah For one as well, yeah, very good. Well, Edie, thanks very much for sharing that with us. I really enjoyed it.
Ed Treacy 50:07
Not a problem. Thanks for forcing me down memory lane.
Steve Statler 50:14
Excellent. Well, Ed, I have really enjoyed this conversation. We're running out of time. And we, we, I feel like we just scratched the surface, we haven't even gone on to sustainability. So I want to try and get you back on the show another time. But I just want to thank you for painting this really important picture. And I feel like we just got a bit smarter out of off to spending a bit of time with you.
Ed Treacy 50:38
Oh, Phil, you and your audience found it helpful. And I look forward to discussing sustainability and probably bring my tomorrow, my director of sustainability along, because she knows far more on that subject than I. But you're right, that is a hot, hot, hot topic on sustainability.
Steve Statler 51:11
Well, I'm glad to hear it. I'm glad to hear it. And, you know, again, if we can help and make things sustainable and safer, at the same time, then that's all to the good. Ed, I look forward to seeing you at the show in Florida, and I really appreciate you taking time out to talk with us.
Ed Treacy 51:29
All right, take care and stay safe. So that was
Steve Statler 51:33
Ed Tracy, and what an amazing character and encyclopedic knowledge he had, I can't wait to meet him in person. We've spoken a few times when he joined the AFPA. We were in the sustainability challenge that the FDA organized. And I'm proud to say that we we were one of the winners of that. And that's really what got me into this space, and just a whole world that I hadn't really been aware of this ecosystem. I think it's huge ecosystem. But it's one that requires really great solutions. So I think it's a great opportunity for a lot of our listeners, and even if you're not going to create a new traceability system, or align what you're doing with the new legislation. I hope you found it interesting. please do tune in next time. We really appreciate your engagement. And we every time you spread the word you're helping us and it's really cool when you rate and review us once again. Thanks a lot for joining us.