COOL is a hot topic
among food industry leaders

In March 2009, the US Department of Agriculture’s Country of Origin Labelling (COOL) programme went into effect. As the name implies, this requires that most meats, wild and farm-raised fish and shellfish, fresh and frozen fruits and vegetables, macadamia nuts, pecans, ginseng and peanuts clearly indicate the countries where they were produced, processed and manufactured.

Exempt are processed foods that have “undergone specific processing resulting in a change of character” (e.g. bacon) or foods that have “been combined with another food component” (e.g. breaded chicken tenders or fish sticks).

On the surface, the COOL mandate may seem simple and straightforward, but the US food chain is quite complex, and was even called “antiquated” when it came to dealing with food safety in a recent report from the Trust for America’s Health and the Robert Wood Johnson Foundation. Ground meats, for example, may contain commodities that were born, raised and processed in three different countries. Further complicating this example is the fact that different products from multiple suppliers may also be combined to create the final item offered for sale to consumers.

A simple idea may be diff cult to implement

As a result, there are numerous challenges faced by processors, suppliers and retailers as they attempt to comply with COOL’s requirements. These include:

Tracking historic product movement

Pinpointing a product’s ‘ground zero’ (the country where its journey begins) is a fairly basic
determination, but there are many touch points as it makes its way from pasture to plate.
However, each participant in the chain may have different tracking systems that are not able to communicate with each other, thereby limiting transparency and true visibility into the endto- end transaction.

Lack of electronic tracking

The majority of systems in place are manual processes with paper documentation that must be physically forwarded. As a result, records are only as accurate and timely as the paperwork submitted by the ranch that raises the cattle, the company that slaughters the beef, and the distributor. Electronic solutions are able to automatically track inventory details down to a specific facility or a particular in-transit vehicle and forward them along the supply chain. However, no government standards have been established as to how data is to be collected, so companies are hesitant to risk creating the infrastructure needed to serve multiple-user supply chains that may not meet future guidelines.

Limited functionality of manual systems

Paper-based systems provide only discrete snapshots as a product makes its way through the supply chain. This is a disadvantage in the event of a recall or quality-control issue when time is of the essence and the retrieval of detailed data is critical. For example, manual records might indicate the date a product was shipped from the supplier and when it reached a retailer, but electronic tracking could also provide insight into a given problem by showing the temperature of storage inside the delivery truck along the way. This goes beyond COOL’s requirements, but more such comprehensive details are certainly in line with its intent to better protect the nation’s food supply.

New mandate brings benefits to consumers and businesses

In spite of the challenges, COOL could be the beginning of real advantages to both consumers and businesses. If all participants in the supply chain adopted technologies that enable electronic tracking of commodities, like bar coding, RFID tags and advance shipping notices (ASNs), numerous advantages would be realised for both food safety and efficiency:

• Aside from clear labelling at the time of purchase, consumers could use product serial numbers, lot numbers or other unique identifiers to find online data pertaining to product origin, its path to the retailer or to verify its authenticity.
• Capturing electronic data as close to the source as possible will streamline operations for ‘downstream’ processing. An ASN, for example, eliminates the need to manually open boxes to capture unit-level data before passing them along to the next stage in the supply chain.
• In the event of a recall, comprehensive electronic data tracking enables companies to be proactive and immediately accountable. Panicked and chaotic attempts to gather relevant information would be eliminated, health officials could be quickly furnished with relevant data for the entire length of the supply chain, and only specifically identified items would need to be pulled from store shelves. Affected lots could be quarantined or destroyed before ever leaving warehouses or processors, and even be held on in-transit vehicles before being unloaded.
• In the event of quality-control issues, manufacturers would be able to isolate and identify problem sources even in products containing commodities from multiple points of origin.

The improvements to operational efficiencies are obvious. The customer satisfaction of such capabilities related to product recall and quality control issues are nearly incalculable.

Software solutions help manage expectations

All the benefits noted are reasonable results of an electronic system that tracks product movement from pasture to plate, and then ensures that history is visible and easily accessible to all parties. Because of the challenges noted earlier, however, for many the
existing infrastructure is probably not yet capable of yielding all of those advantages.

There are steps that would leverage existing systems in highly beneficial ways, however. Thirdparty software solutions could track data collected by manufacturers and producers. Participants in a given supply chain would then be granted access to a central data repository on a subscription basis. Another approach would be proprietary solutions made available to suppliers and customers of large-scale wholesalers or processors.

COOL – an example to be followed or ignored?

While the US Department of Agriculture’s COOL programme has been met with mixed reviews and still has a number of issues to iron out, it cannot be argued that at the very least it is a step in the right direction. Subsequently, it will be interesting to see if the
US COOL programme will become the ‘poster child’ for other nations struggling to keep
abreast of this pertinent but complex issue.

Take New Zealand as an example: it currently does not have mandatory country of origin labelling. New Zealand law does not require a food manufacturer to identify the origin of the contents used in the bag, can or box their product comes in. This means food products
in shops do not need to have any identification on them to say where they are from. Understandably, New Zealand consumers are becoming increasingly concerned about the characteristics and qualities of the food products they are putting on the table for their
families.

These are some of the concerns being voiced by CoOL New Zealand, (see www.cool.org.nz), a coalition of more than 30 consumer groups, producer boards, community interest groups, unions and companies who all believe New Zealand must change its law to make CoOL mandatory on all food labelling.

COOL is just the beginning

Only time will tell if New Zealand will be given the opportunity to replicate the US COOL programme at a local level. What we can be sure of, however, is that the food industry is probably not the only segment that will face increased safeguards and monitoring.

American food supplies have recently faced numerous challenges: salmonella, E. coli, mercury in fish and seafood, Mad Cow disease, as well as concerns over trans-fatty
acids, high-fructose corn syrup, artificial growth hormones and genetically modified foods, and products from cloned animals. COOL is more than likely just the first step to address these and other issues.

We can almost be certain the food industry will not be alone in facing such dilemmas. Last year’s recall of Chinese-manufactured toys and other products may be an indicator of the benefits that can be achieved through improved accountability, information transparency and the ability to take proactive action in other markets as well.

Chris Stephenson is the managing director for Manhattan Associates in Australia and New Zealand, and has more than 25 years’ experience in supply chain operations management
and solutions; he can be contacted at cstephenson@manh.com