The Impact of Food Traceability

At Withum, our goal is to stay on top of trends relevant to our customers in the food and beverage industry. Did you know that some of the top current trends in the industry relate to responsible sourcing, sustainability, and transparency?

With that in mind, you should be interested to know that the FDMA final rule on Requirements for Additional Traceability Records for Certain Foods (Food Traceability Final Rule, also known as Section 204 of the FSMA) was passed on November 15, 2022. In general terms, the intention is to improve food safety in America. According to the FDA:

About 48 million people in the U.S. (1 in 6) get sick, 128,000 are hospitalized, and 3,000 die each year from foodborne diseases, according to recent data from the Centers for Disease Control and Prevention. This is a significant public health burden that is largely preventable.

In 2011 the Food Safety Modernization Act (FSMA) was signed into law. Section 204 of the FSMA further expands the law by creating a list of foods that require additional recordkeeping.

The final rule covers the entire food supply chain, from origin to destination, and includes both foreign and domestic firms within that range. If you or your company is involved in the food and beverage industry you should take a good look at these rules as they are likely to impact you. Here is what you need to know:

Because the Food Traceability Final Rule requires entities to share information with other entities in their supply chain, the most effective and efficient way to implement the rule is to have all persons subject to the requirements come into compliance by the same date. The compliance date for all persons subject to the recordkeeping requirements is Tuesday, January 20, 2026. 

The idea is for the rule to go into effect as of January 2023, given 60 days after the final rule publication. The FDA has determined that companies would then have three years to become fully compliant.

The requirement is that those who are involved in the harvesting, production, and handling of the items listed on the Food Traceability List (FTL) must maintain certain records including Key Data Elements (KDEs) which are related to Critical Tracking Events (CTEs). They must then provide these records to the FDA and their supply-chain partners within a reasonable time frame; generally defined as 24 hours, although the requirement is case-dependent.

The very first question we are hearing is, quite naturally, what foods are affected? We recommend going to the official Food Traceability List as we are certain it will continue to be updated over time.

In general, the following foods are subject to the new rules:

It is important to understand the recordkeeping requirements related to these foods. The first point to discuss is the CTEs. The idea is to set up Traceability Lot Codes (TLCs) for foods on the FTL, which would then be linked to all the relevant records, so they can be tracked at every step of the food supply chain. The goal is better linkage and communication, along with a focus on improving interconnectivity so that food-related contaminations can be quickly detected and mitigated. These improvements to the data chain will allow the FDA to quickly identify the entity within the food supply chain at which the origination event occurred. By comparison, under the current rules, the FDA must go to each point in the chain and interview all entities to narrow down the search, which takes much longer.

The CTEs, in plain language, refer to different events in the supply chain. These events are as follows:

The tracking metrics known as KDE correspond to the various CTEs, and the requirements vary depending on which event is occurring. As such we recommend going directly to the FDA’s guide to understanding them.

In general terms it is important to understand that depending on your entity’s operations, you might be required to record several datasets of KDEs. Let us say that you are a distributor of fresh fruit and that your company also processes the fruit into ready-to-serve portions. In a case like this, your entity would be considered a receiver, a transformer, and a shipper and so you would be required to maintain three separate datasets. As noted above the KDE requirements vary according to the CTE but they typically are comprised of food varietals, date of reception, quantity, unit of measure, origin, description, date of initial packing, and reference document number and type.

Our reading of the rule indicates that noncompliance may result in certain regulatory actions, including the issuance of advisory letters, court actions, and administrative actions including mandatory recall of violative foods or suspension of a facility’s food registration to prevent the shipment of food.

Are you prepared to comply with the traceability requirements of the new rule? While you will have three years to get up to speed, we believe that preparation should begin immediately as the implementation of an efficient food traceability solution is likely to be challenging.

Author: Andrei Adams, CPA | [email protected]