The Centers for Disease Control and Prevention (CDC) estimates that each year one in six Americans experiences foodborne illness. Furthermore, nearly 3,000 American die of food-related diseases each year. In addition to the devastating health consequences, there are significant economic impacts. Researchers Malik Altaf Hussain and Christopher O. Dawson found that food safety incidents cost the U.S. economy $7 billion annually. This is due to food recalls, lawsuits, company closures and more. 

Food safety issues can stem from a variety of sources and at any point in the supply chain, whether it be production, handling, harvesting or shipping. The good—and frustrating—news is much of this is preventable. 

The Food and Drug Administration (FDA) has been working to increase food safety since 1906. With its New Era Food Safety Rules, the latest of which was published on November 21, 2022, it has taken a monumental step forward. Technology-enabled traceability is at the core of the FDA’s approach to increasing food safety. The new rule requires companies that manufacture, process, pack or hold foods on the FDA’s Food Traceability List (FTL) to maintain records for critical tracking events (CTE) in a food’s supply chain. These CTEs include harvesting, cooling, initial packing, first land-based receiver, shipping, receiving and transforming food. Furthermore, companies subject to these requirements must develop a traceability plan which includes recordkeeping procedures, how traceability lot codes are assigned, a map of where food is grown and more. 

Companies must comply by Jan. 20, 2026. While the rule allows for companies to do all this tracking manually, maintaining these records without adopting robust software solutions will be incredibly difficult and could put companies at greater risk of non-compliance.

What the New Rules Mean for Food Manufacturers

Here’s what all this means for food manufacturers, practically speaking. Suppose a company manufactures peanut butter, which is on the FTL. In that case, the company needs to create a traceability lot code when it transforms the ingredients into peanut butter for initial packing. Then, this information must be passed to the next link in the supply chain, and the shippers must then record when the peanut butter in that lot code is shipped, and the grocery store records when it’s received. This documentation includes the date of CTEs, quantity and unit measure of the food, and the reference document type and number. 

When a food recall occurs, a midsize manufacturer’s chain must be able to access this documentation to pinpoint the affected lot codes and take action to prevent the contaminated foods from reaching consumers. If companies have to rifle through filing cabinets or hunt through different ERP and CRM systems, they could be at risk of non-compliance and need to pull all their products off the shelves rather than just the affected ones.

 

The Business Case for Food Traceability

If promoting food safety, aligning with consumer preference for traceability, decreasing risk to a brand through recalls, lawsuits, and boycotts, and avoiding non-compliance fees were not enough incentives, there’s a further business case to be made for increased food traceability. In the past, if a company had no traceability and found out that some of its peanut butter had been contaminated, it would have to pull all of its peanut butter off the shelves to make sure no one else got sick. If it had minimal traceability, it might recall all peanut butter from a given factory. However, with advanced, tech-enabled traceability, companies can pinpoint only the affected batches while keeping the rest on the shelves. The FDA estimates that these measures will cut traceback time by 83% and save $2.5 billion to $18.8 billion over the next 20 years. 

 

Three Pillars of Food Traceability 

Of course, if food manufacturers want to reap these savings over the next 20 years, they’ll need to adapt new practices. Until recently, most industry 4.0 solutions that enabled advanced traceability were only accessible to large manufacturers with massive budgets for digital transformation. Now, that’s changing. 

Here are three key pillars of food traceability for mid-size manufacturers:

  1. Digitalization

Increased traceability requires more detailed records, and manual recordkeeping is not scalable enough for modern needs. The days of filing cabinets full of handwritten documents should have ended long ago for manufacturers. Nevertheless, they can still be found on plant floors across the country. 

If manufacturers are serious about traceability, the first step must be digitalization. In most cases, the road to industry 4.0 smart manufacturing will begin with installing sensors on each piece of equipment in a factory. This turns legacy systems into valuable data sources. Then, machines can capture the necessary traceability data without the need for timely and costly human intervention.

  1. Data architecture

Collecting data is just the first step; on its own, it’s not nearly enough. Data becomes valuable when it provides actionable insights for manufacturers, and to do that it must be integrated with modern data architecture. For the gold standard of modern data architecture, manufacturers need to look no further than data lakes. 

Hosted in the cloud, data lakes collect unstructured, semi-structured and structured data from across an enterprise, store this data and then output the data into user-defined dashboards. To return to manufacturing peanut butter, a data lake could store JPEG images from when the peanut butter was mixed, sensor data from the vats showing the temperature, volume and flow of peanut butter, and data from ERP and CRM systems. Then, in an easy-to-use dashboard on a phone, tablet or computer, a plant manager can access all the relevant data for any given lot of peanut butter.

  1. Interoperability

The concept of interoperability is key to the FDA’s New Era Food Safety Rules. In essence, interoperability ensures companies and individuals at different levels of the supply chain can all access and understand data.

For many midsized manufacturers, this presents a difficult challenge. Many manufacturers struggle to integrate data from their own systems, each with unique data formats. Exporting data from multiple systems in a way outside companies can use it can be even more difficult. 

Once again, this is where data lakes can help. Data lakes can turn unstructured and semi-structured data into structured data without destroying the original data. This means manufacturers can output data in sensible formats to supply chain partners while retaining critical data on their production operations. 

 

Food Traceability on a Budget

For most midsize manufacturers “smart manufacturing” may sound nice in theory, but their biggest worry is that the numbers won’t add up on paper. The truth is, until recently the numbers rarely did line up. However, thanks to new approaches, companies can integrate legacy systems, rather than having to replace them, and affordably adopt industry 4.0 solutions. Furthermore, best practices for industry 4.0 adoption include implementing new solutions in short sprints. Done correctly, the ROI from each sprint will fund the next, allowing the entire adoption journey to pay for itself. 

Changes are coming for food manufacturers. These changes will keep consumers safer and increase food traceability. Soon, the days of pulling all the peanut butter off the shelves when a recall occurs will be a thing of the past. Instead, thanks to advanced traceability powered by cutting-edge technology, food manufacturers of all sizes will be able to pinpoint only the affected products, remove them from any level of the supply chain and continue selling safe products. Adapting to these changes will require manufacturers of all sizes to embrace smart manufacturing in bold new ways—and the payoff will be massive.