Major new food safety
legislation is reshaping
the food industry, and
food companies need to
be prepared.
Sage ERP X3
What food manufacturers
need to know about the
Food Safety
Modernization
Act
1
Table of contents
Introduction 3
What is the Food Safety Modernization Act? 3
Purpose and impact 3
Timeline 4
Affected industries and producers 5
Very small businesses 5
Small businesses 5
Key statutes 6
Preventive controls 6
Foreign Supplier Verification Program 6
Traceability 6
Compliance for food manufacturers 7
How Sage ERP X3 can help 7
Sage ERP X3
What food manufacturers need to know about the Food Safety Modernization Act
2
Introduction
What is the Food Safety
Modernization Act?
In the aftermath of the September 11, 2001, terrorist attack, American national security
became a major priority—including food security. This led to the creation of the
Bioterrorism Act of 2002, which created a registration system for food companies
operating in the United States and implemented other controls intended to improve the
safety of the American food system. That system of controls has now been further
expanded by the Food Safety Modernization Act (FSMA), signed into law by President
Obama in 2011. The FSMA is the most expansive shift in regulation of the food
and beverage industry in many years. It greatly expands the powers of the Food and
Drug Administration (FDA) and greatly increases the regulatory burden on food and
beverage companies.
Purpose and impact
The FSMA’s primary purpose is to shift the FDA’s role in food safety from a reactive
role to a preventive one—from responding to outbreaks of foodborne disease to
preventing them. The act therefore greatly extends the powers and authority of the
FDA over the entirety of the food system, from farm to table. The burden of compliance
will be much higher, and the power of the FDA to enforce compliance will be much
greater. The act grants the FDA many new powers and responsibilities, including
mandatory recall authority, greater access to records, a much-expanded inspection
program, and a variety of mandatory controls and documentation programs.
For food companies, this means a much greater burden to prove that their entire
operations are running with proper food safety prior to going to market, rather
than merely becoming accountable after a safety violation. Companies will need
to invest in much-expanded testing, documentation, and auditing procedures. Failure
to comply brings the threat of mandatory recalls, enhanced inspections, severe
penalties from federal and other regulators, and even lawsuits. An automated
enterprise resource management solution like Sage ERP X3 can greatly relieve the
burden of these new requirements and allay the danger of negative consequences.
Failure to comply
brings the threat of
mandatory recalls,
enhanced inspections,
severe penalties from
federal and other
regulators, and even
lawsuits.
Sage ERP X3
What food manufacturers need to know about the Food Safety Modernization Act
3
Timeline
Although the FSMA was signed into law in January, 2011, implementation of the law is
still under way. The FDA has gradually rolled out new regulations through a process
that allowed for public and industry comment. In addition, the agency has only
gradually increased its own internal resources to take on its expanded role. As of 2014,
many statutes have been approved, but many have yet to be implemented or regulated
by the FDA. The registration system had been implemented, with some exceptions, by
2012, but the product-tracing aspect of the law has yet to be finalized in 2014.
Most importantly, the FDA’s increased inspection schedule has yet to be rolled out.
The agency is still seeking an increased budget to support the greatly expanded
inspection schedule called for by the FSMA, so food companies are not yet subject to
this enhanced inspection schedule. The FDA is seeking greatly increased funding over
the next few years to support these efforts.
All rules within FSMA are scheduled to be finalized by early 2016, with compliance
deadlines following by one to four years. Accordingly, all aspects of FSMA should be
implemented by 2020 at the latest. However, most will be implemented much
sooner, by 2016 or 2017. This is especially true for larger companies, which have the
shortest compliance windows.
FSMA implementation schedule
Rule Final rule deadline
Compliance:
non-small Compliance: small
Preventive control
human food 8/30/15 1 year 2 years
FSVP 10/31/15
6 months after
preventive control
rule becomes
effective
2 years after
preventive control
rule becomes
effective
Produce safety 10/31/15 2 years 3 years
Food defense 5/31/16 1 year 2 years
Sanitary transport 3/31/16 1 year 2 years
Third-party
accreditation 10/31/15 N/A N/A
Source: The Acheson Group
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What food manufacturers need to know about the Food Safety Modernization Act
4
Affected industries and
producers
No food company in the United States—or outside the United States and doing
business with domestic companies—is unaffected by the FSMA. Even producers of
alcoholic beverages, whose industry is not regulated by the FDA but by the Bureau of
Alcohol, Tobacco, Firearms and Explosives, have been affected by statutes regulating
whether farmers can purchase spent grain from them for animal feed. However, the
nature and size of a given company affect how the act applies to it—whether
directly or indirectly—and how stringent its compliance schedule will be.
Very small businesses
The smallest local food producers are largely exempted from FSMA regulation if their
revenue is under $500,000 a year and their sales are primarily local. This aspect of the
FSMA aims to preserve local food systems by keeping these producers within state
and local regulations. However, the act does mandate that these producers provide
evidence of state or local certification and display the name of the farm or producer
prominently on labels and other marketing materials.
Small businesses
Any food company with more than $500,000 in yearly revenue and/or a majority of
sales outside their local area must comply with the full force of the FSMA. However,
small businesses receive additional time to comply, generally a year or 18 months.
No food company in
the United States is
unaffected by the
FSMA.
Sage ERP X3
What food manufacturers need to know about the Food Safety Modernization Act
5
Key statutes
The FSMA can be divided into a few key sections affecting different areas of the food
system. Each area has its own deadline and is being rolled out on its own schedule.
The following highlights a few of the most important statutes for food manufacturers.
Preventive controls
Preventive controls are being implemented to mandate strong food safety plans
throughout the food industry. The preventive control rule begins with facility
registration, which has already been mandated throughout the industry. With
registration accomplished, the next element of preventive controls lies in hazard
analysis and the creation of a food safety plan. This statute will be finalized by the end
of 2015, and compliance will be mandated for many companies by the end of 2016.
Although some industries are exempt due to prior preventive controls (such as seafood
and juice, which are already required to employ rigorous hazard analysis), for many
companies this will require a substantial investment in hazard analysis and a
new or expanded food safety plan.
Foreign Supplier Verification Program
The Foreign Supplier Verification Program Proposed Rule (FSVP) is an element of the
act that requires more stringent checks on the quality and safety of imported products.
Although food manufacturers have always been required to verify that their suppliers
are not providing adulterated or misbranded food, the FSVP requires both greatly
expanded record keeping and more extensive verification that suppliers are
conducting themselves appropriately. Manufacturers will be required to keep a
current suppliers list, which may be required to be furnished to the FDA at any time
and must verify that suppliers are conducting hazard analysis, among numerous other
checks.
Traceability
No element of the FSMA will have more impact on food manufacturers than the
traceability requirements, which are included in the act under the category of “food
defense.” Although this element of the act has yet to be fully defined, the industry can
expect that existing product tracking requirements will be expanded. The current
requirement of tracing one step forward and one step back has yet to be modified, but
that situation is unlikely to hold true in years to come. Accordingly, food manufacturers
will need to invest in more efficient and accurate tracking along their supply chains in
order to comply with the transparency office.
No element of the
FSMA will have more
impact on food
manufacturers than
the traceability
requirements.
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What food manufacturers need to know about the Food Safety Modernization Act
6
Compliance for
food manufacturers
Ultimately, for food manufacturers the FSMA will mean a new focus on risk
assessment, food safety, record keeping, and transparency. Companies will need to
invest not just in training and education but also in an enhanced system for
tracking ingredients and processes, which often require additional human
resources to implement new safety regulations and provide support for changes to
operating procedures. The burden will be particularly heavy for companies not small
enough to be exempt but which lack the resources of a major multinational operator.
How Sage ERP X3 can help
Sage ERP X3 provides a resource planning and automation solution for small and
midsized food manufacturers, supporting record keeping, tracking, accounting, and a
host of other essential business functions. As the FSMA rolls out, Sage ERP X3
provides vital support to food manufacturers, often helping them avoid
increased overhead despite expanding their compliance and transparency
programs. With Sage ERP X3 you can track your suppliers, lots, and processes and
easily provide essential documentation to everyone who needs access.
For additional information about the FSMA, streamlining transparency in food
manufacturing, or resolving resource management challenges, visit our Sage ERP X3
Food Industry Resource Center at www.sageerpx3.us/foodandbeverage, or call
us at 1-866-530-7243.
For food
manufacturers, FSMA
will mean a new focus
on risk assessment,
food safety, and
transparency.
Sage ERP X3
What food manufacturers need to know about the Food Safety Modernization Act
7
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Are You Prepared For the Reshaping of the Food Industry Safety Legislation?
The act greatly extends the powers and authority of the FDA over the entirety of the food system, from farm to table. Companies need to invest in much-expanded testing, documentation, and auditing procedures. Failure to comply brings the threat of mandatory recalls, enhanced inspections, severe penalties from federal and other regulators, and even lawsuits. Learn everything you need to know before it's too late.