In an effort to achieve greater transparency in the supply chain and to ensure customer confidence in their product, Walmart has mandated that their fresh produce suppliers must use case labels compliant with the Produce Traceability Initiative (PTI). Walmart began enforcing the mandate as of November 1, 2013 but will not begin rejecting produce until January 1, 2014 in an effort to work with suppliers. With Walmart leading the way, other retailers are sure to follow suit. 

PTI is a voluntary, industry-wide effort promoting the adoption of GS1 standards with a goal of “implementing case-level electronic traceability in the produce industry,” according to the PTI website. Widespread acceptance of this standard would vastly improve and maximize the effectiveness of current trace-back procedures, while also helping prevent and control the outbreak of foodborne illnesses. Suppliers will be able to take advantage of a vastly improved supply chain and data interchange, especially in the event of a recall, and retailers and consumers will benefit from greater visibility into the origin and remaining shelf-life of fresh produce.

Walmart’s mandate of PTI compliant labels will serve to educate the broader retail and produce distributor (including growers, packers and processors) communities, making them aware of the wide-ranging benefits of such a standard in enhancing product quality and expediting delivery. We fully expect comparable retailers to seek to limit Walmart’s resulting product differentiation by mandating this standard with their produce vendor partners.

Rigorous labeling standards, covering everything from format and orientation down to required displayed information, could be a significant obstacle for suppliers scrambling to adhere to this requirement. VDC believes that PTI compliance regulations create a tremendous opportunity for label generation software and hardware vendors not only through the sales of their products, but through training, support, and implementation services for growers and suppliers.

Food traceability initiatives (including PTI and the recently revised country-of-origin labeling requirements) are designed to keep consumers well-informed about the source of their food, helping them make intelligent purchasing decisions. We certainly do not want another horsemeat scandal on our hands now, do we?

(A special thank you to Scott O’Leary for his significant contributions to this blog post. Scott is currently a Research Assistant in VDC’s AutoID & Data Capture practice.)