By Janez Sodja, Director of Field Sales, EMEA, Loftware (www.loftware.com)
In recent years, the food and beverage sector, already heavily regulated, has seen a raft of regulatory changes across the globe. A few key examples include the EU Regulation 1169/2011, the FDA Nutrition Facts and FSMA requirements, and Mexico’s NOM-051-SCFI/SSA1-2010. These aim to ensure that food labels offer consistency and traceability whilst also, and most importantly, informing consumers about the contents of the food and drinks they are consuming.
Manufacturers and distributors of all sizes must grapple with this challenging and ever-evolving regulatory landscape – not only the requirements that already exist, but also those that have just or will imminently come into effect. One such emerging regulation is the Calories Labelling Regulation, due to come into force in April 2022, which will legislate that any out-of-home food business with 250 or more employees must implement mandatory calorie labelling.
This regulation has caused quite a stir. Some industry hospitality groups are lobbying for a delay in the regulations’ implementation, arguing that the additional costs required to comply will threaten to derail several businesses. Coming after two years of COVID-19 lockdowns and adverse circumstances, the current timeframe for the regulation could pose issues for a sector that would like to focus on recovering from the pandemic.
And yet, abiding by regulations is of vital importance, particularly within the food and beverage sector. Just one misstep in labelling can have disastrous consequences, such as allergy fatalities. “Natasha’s Law”, which came into effect in October 2021 after its namesake Natasha died tragically due to a severe allergic reaction after consuming a baguette that was packaged without listing specific allergen information, is just one of the many food labelling regulations aimed at strengthening standards around allergens and food safety.
Another important point to note is that failing to adhere to labelling regulations has significant financial repercussions, negatively impacting a business’ bottom line. As noted in a recent report from VDC Research, eight in ten large enterprises experience at least one major labelling error per year, costing them upwards of $2M. These costs are driven by scrapping the entire production batch affected by inaccurate labelling, regulatory penalties and fines for non-compliance, and costly product recalls/restocking.
Ensuring compliance with new rules requires effective label and Artwork Management processes across all markets where goods are manufactured, distributed and sold. Unfortunately, many companies in the food and beverage space still rely on patchwork labelling systems and are therefore ill-equipped to meet growing labelling needs.
These systems cause data errors (thereby increasing the risk of mislabelling or non-compliance) and give manufacturers little visibility into their Enterprise Labelling approaches (thereby increasing maintenance and remediation costs). These problems, though concerning to all, can be particularly onerous for small companies that want to scale up and expand into new geographies.
So, how can companies simplify compliance? The answer lies in the cloud. Companies using cloud-based labelling solutions have the agility to make the quick pivots needed to keep up with ever-evolving customer and regulatory requirements.
How does the cloud help?
1. Integrates with sources of truth –
Data needs to be a priority. Disparate data sources add complexity to labelling and open the door to labelling errors. Given the growing importance of traceability within the food and beverage sector, data is only going to become more crucial in the coming years. Companies must streamline their processes and ensure their label data is consistent and reliable. A cloud-based solution removes the need to hardcode labels and eliminates costs associated with creating and updating labels to deal with changing label requirements.
2. Automates and facilitates reviews and approvals –
The cloud enables companies to eliminate manual processes, increasing transparency and accountability, while improving accuracy and reducing time to market. It gives suppliers and co-packers controlled access to labelling and packaging artwork, ensuring they include the information needed in the format required to eliminate the risk of re-labelling.
3. Manages multiple variations–
With so many goods in production, companies need to optimise labelling and artwork processes to easily make changes, while reducing time to market and ensuring their business can cope with an increasing number of stock-keeping units (SKUs). A cloud-based labelling solution enables business users to make quick label changes, ensuring companies are not delayed by or reliant on scarce IT resources to make the necessary edits when a prompt reaction is needed.
4. Effectively manages recalls –
If a company needs to recall a product, they must act fast. Cloud-based labelling and packaging processes support traceability and allow companies to react quickly to identify those product lines impacted.
5. Offers flexibility to scale –
Many food and beverage companies distribute and sell products across several geographies where allergen and other labelling requirements can vary. A cloud-based solution that allows them to extend compliant labelling and packaging to other sites and third parties will help ensure requirements are met as their business scales.
To avoid potential penalties and fines resulting from food labelling errors , companies of all sizes should consider adopting cloud-based labelling and Artwork Management solutions to manage current regulatory requirements, prepare for changes that are in the pipeline, and future-proof their operations.
