Did you know, almost 80% of Americans actually read the labels on packaged food products? Not only do food manufacturers and processors have to ensure these labels are accurate for expecting customers, but they also must comply with complex and changing U.S. Food and Drug Administration (FDA) requirements as well.
For leading food and beverage manufacturers, Enterprise Resource Planning (ERP) software helps streamline the labeling process, helping to ensure compliance, operational efficiency and customer loyalty.
Keeping Up with Changing Regulations
In December 2022, the FDA announced that the uniform compliance date for final food labeling regulations issued in calendar years 2022 and 2023 is January 1, 2026. The FDA issues uniform compliance dates for new food labeling requirements “to minimize the economic impact on the food industry of having to respond separately to each labeling change.”
In theory, by providing a uniform compliance date, food manufacturing and processing companies have the lead time they need to use existing label inventories and invest in—and develop—new labeling materials.
But what happens if these companies can’t meet the deadline?
The FDA may set a different compliance date for special circumstances (but only in some cases). If manufacturers and processors are unable to comply and are not given an extension, they experience costly, disruptive and time-consuming consequences.
Unfortunately, these consequences have been felt by food manufacturing and processing companies that don’t have the tools in place to help them keep up with changing regulations. Without an industry-specific solution to streamline and automate label management, the following issues can occur:
1. Labeling Errors Due to Manual Processes
When food businesses expand into new or international markets, they encounter differing label regulations. These regulations challenge businesses on how to streamline their design, creation and printing processes. When these processes are handled manually, human error (such as inaccurate food labeling) and time constraints (such as using multiple files being shared over email for different sets of labels) are inevitable.
In other words, using manual processes to adapt to new regulations, product data changes or any other modification in food labeling procedures leads to wasted time, resources and money.
2. Fines for Non-Compliance
Per the FDA, there are three categories of label claims for conventional foods and dietary supplements: health claims, nutrient content claims and structure/function claims.
Inaccurate food labeling based on these categories may result in the FDA holding the products from being released and charging a fine. Without the proper tools to help manage the labeling and compliance processes (and to adhere to local, regional, national and industry standards), it’s extremely tough to stay on top of constantly changing labeling requirements.
3. Product Recalls
Product recalls are also a concerning consequence of poor or inaccurate labeling. Some of the most common reasons for label recalls include:
- Undeclared allergens.
- Undeclared ingredients.
- Incorrect information (e.g., wrong shelf-life dates).
- Missing information.
- Incorrect claims.
Product recalls can affect the entire supply chain, increasing time for production, labor, relabeling and shipping. Even more concerning are the customer confidence and financial implications. In an article on recalls, Investopedia notes:
Public confidence has a major influence on consumerism. If consumers can’t trust the companies they buy from, they won’t pay for their products in the future. That’s why recalls have devastating effects on a company. Smaller ones operate without robust cash flow and brand recognition, making them more susceptible to financial losses and brand degradation. This doesn’t mean that large companies are immune to product recalls. Unlike their smaller counterparts, they’re better equipped to withstand the short-term effects of recalls and rarely suffer any long-term financial consequences.
Though larger food manufacturing and processing companies may be able to withstand the negative consequences of a product recall easier than smaller companies, they still have consequences.
This is why food companies of all sizes need a tool to help them manage and streamline their labeling processes. That tool is modern ERP software built specifically for the food industry.
Automate and Streamline Food Labeling with the Right ERP Software
ERP software works as a central repository for a food company’s data. When changes are made to a product or customer’s order (such as an address change, allergen change or ingredient substitute, for example), those modifications are entered into the ERP software and reflected on the label for that product.
Additionally, ERP software built for food and beverage manufacturers and processors helps users automate and streamline their label management processes by equipping them with the ability to:
- Generate customer-specific labels based on individualized bar codes.
- Track lots from the time an ingredient is received to when it is shipped.
- Control inventory with enhanced barcoding capabilities that reduces the need for repacking.
- Print multiple label types, including for containers, products, shipping and mix-load.
- And much more.
These benefits have led many food manufacturers and processors to FoodBusiness ERP—food business software built in Sage X3 and delivered by NexTec Group industry experts. As a reputable ERP vendor, NexTec tracks changing regulations and develops new features and functionality to address compliance needs, thus ensuring customers adhere to new regulations as the industry evolves.
A perfect example of this industry evolution is the recent declaration of sesame as a major allergen. President Biden signed the Food Allergy Safety, Treatment, Education, and Research (FASTER) Act into law in April 2021, requiring food manufacturers to label their products that use sesame or items derived from them by January 1, 2023.
Unfortunately, the law had unintended consequences. Many companies began adding sesame flour to their products, which the Center for Science in the Public Interest (CSPI) responded to by filing a regulatory petition with the FDA to stop food manufacturers from intentionally adding sesame to their products. If the FDA agrees with CSPI, FoodBusiness ERP can help.
FoodBusiness ERP helps manufacturers and processors meet new labeling requirements and produce a quality and compliant product by connecting production, operations, food safety, compliance and recall management capabilities within one solution. Food manufacturers and processors can also rely on NexTec consultants to walk with them through every labeling regulation change that comes their way.
FoodBusiness ERP customer Marta De Varona, VP Finance and Administration at ARA Food Group says, “FoodBusiness ERP does an amazing job for us. We have nothing but good things to say about their skills, professionalism, responsiveness and level of support.”
With FoodBusiness ERP, manufacturers gain control over every part of their business. Contact us today to learn more about our food business software or to set up a free consultation. We’d love to chat.