The recent announcement by Walmart that its produce suppliers have to be compliant with the Produce Traceability Initiative by the end of the year should give the concept the impetus it needs to become the industry standard sooner rather than later. At least that is the view of several industry observers who are well versed on the subject.

“This is a tremendous step forward for the industry,” said Dan Vaché, vice president of supply chain management for United Fresh Produce Association. “When you have a major retailer taking this position, it moves us that much closer [to whole chain traceability].”

The Produce Traceability Initiative was launched a half-dozen years ago following the 2006 E. coli outbreak associated with fresh spinach, which caused the virtual collapse of that item in the marketplace.

In a relatively short timeframe, the industry came together and determined that there has to be a way to trace product from the field to the fork in an effort to identify, pinpoint and limit future food-safety issues without eliminating an entire commodity from the grocery shelf.

This was essentially the same process the meat industry went through years earlier when food-safety issues also resulted in total product disruption. Today meat recalls still occur, but they are surgical in nature and rarely cause much of a ripple.

PTI was developed with input up and down the supply chain, and a relatively quick timeline was established for compliance with various milestones along the way. Though the effort was always voluntary, the cloud of government mandates loomed overhead, especially with congressional debate about food safety and the eventual passage of the Food Safety Modernization Act.

The milestone came and went with progressive shippers moving forward with pilot programs to label every carton with an identifying barcode complete with the necessary information. Many shippers did move forward but many others sat on the sidelines waiting to see what would happen.

Several years ago, the approaching milestones outlining action on the receiving end seemed to cause activity to slow to a crawl. The first of those milestones asked retailers to invest in technology to be able to record and store the data from those inbound cartons. The second milestone asked retailers to be able to record, store and access that same information as those cartons left the distribution center and headed to the individual stores.

Ed Treacy, vice president of supply chain efficiencies for the Produce Marketing Association, told The Produce News that today many shippers are in compliance. In fact, he said a survey of retailers has revealed that as much as 50 percent of the product they receive is labeled with the appropriate GTIN barcode.

And, in fact, some retailers have already moved forward with PTI.

United Supermarkets, a 51-store chain based in Lubbock, TX, is the latest retailer to ask all of its produce suppliers to be PTI-compliant.

Tommy Wilkins, director of produce procurement for United Supermarkets, said July 8 that he believes all of his suppliers “except for two local guys who have not yet completed full certification” made the company’s July 1 deadline and are case labeling their produce, with the vast majority of them using the FoodLink technology system.

At this point in time, United Supermarkets is recording and storing the traceability numbers as the product enters the distribution center. Wilkins said that adding the technology to complete the task by recording the information as it goes outbound “is above my pay grade.”

Wilkins said the regional chain store has upgraded its computer system recently and he believes accomplishing the outbound task “is one of the next steps” that will be attempted by the company’s IT department.

The retailer does believe that the PTI system is already paying dividends, but he can’t quantify that.

“We have noticed fresher dates [on the product being brought into the distribution center],” he said. “It may be simply a case of people doing a better job now that they are being watched.”

In any event, he said the data being captured are giving United Supermarkets information that it did not have before.

Kevin Brooks, chief marketing officer of FoodLink, which is based in Los Gatos, CA, believes traceability offers advantages up and down the supply chain. Of course, his company is a technology provider in that space, but he said the return on investment is real and many of the firm’s customers report a tangible return.

For example, Brooks said shippers have a much better handle on the product as it comes in from the field and out to buyers. He illustrated one situation where that type of information can be very important. By scanning the product when it is packed in the field and picked up by the truck for delivery to the cold-storage facility, Brooks said the sales department has real-time information on what’s for sale that day. If yield from a field is up or down, they can adjust immediately and not have to wait until the day is over.

He said it is also extremely helpful to know when a product is headed into the cooler since an outbound truck might be waiting for that product and the knowledge might prevent that truck from taking off early.

Brooks added that warehouse management procedures with this added information truly allow for a first-picked, first-shipped system.

In its letter to its suppliers dated May 29, Walmart acknowledged the progressive efforts of many in the industry and stated that it “is now the time for us to move [PTI] to the norm.”

As such, the nation’s largest retailer said that by Nov. 1, 2013, “all fresh commodity produce delivered to a Walmart Distribution Center will be required to have standardized case labels, consistent with the PTI standards.” And effective Jan. 1, 2014, “product out of compliance will be rejected as out of spec.”

The letter does state that an “active exception” can be “issued by the buyer prior to delivery,” but the company has indicated to its suppliers that they need to be PTI-compliant by that date or at the very least, in the final stages of implementation.

Vaché of United Fresh believes this edict by Walmart will move the ball forward — and quickly. He estimated that a large percentage of the industry would be compliant by 2015.

PMA’s Treacy estimated a wider range but placed it at one to three years before use of PTI is universal, or at least nearly universal.

Both men said that the vast majority of shippers are either already in compliance, have launched pilot programs or can be compliant within less than six months.

Vaché said the technology providers have already “figured out the recipes” that work for the various segments of the industry and even a shipper who has done nothing can be up and running in a relatively short time period.

Brooks of FoodLink said that even the largest companies in the industry are looking at an implementation cost in the range of $200,000 to $300,000.

Treacy said that a figure that high would only be for the very largest shippers, while a smaller shipper of 100,000 packages per year could have a cost as little as $5,000. He added that while earlier estimates put the label cost at as much as 10 cents per carton, a more realistic figure appears to be in the one- to two-cent range.

Of course not everyone reacted to the Walmart letter positively.

One large shipper who asked not to be identified said that his company has not been advised of any action by Walmart to make the investment necessary to be able to scan each and every barcode that comes into the DC.

“We are making the investment on our end, but we are hearing they are not going to be ready to invest the money and labor to scan in each carton at their end,” he said. “And what about the local guys doing [direct store delivery] for Walmart? They don’t have to do this.”

Vaché said he does not know exactly how Walmart will record, store and access that information, but he knows the retailer is investing significant dollars into the project and believes it will be ready to receive the information within its announced timetable to shippers.

He added that Walmart and other retailers may not use scan technology for the capture of that information inbound or outbound. Instead he said the use of advanced shipping notices for inbound data, and a system involving the voice pick program that most large retailers use for outbound might be what is used by many retailers to become PTI compliant.

He noted that the PTI milestones called for the exchange of the appropriate information along the supply chain, but he did not specify how that information needed to be transferred.

“PTI is a work in progress,” Vaché said. “When the milestones were developed it was with the best technology that existed back then, which was 2007. This has evolved and it will continue to evolve as best practices change.”