Pepsi Co recently settled $9m out of court regarding their Naked juices - as the labels were misleading. But with food labelling regulations set to become ever more complex and specific, is your company’s ERP system equipped to cope with major changes in the pipeline?
The cost of misleading labels
The trouble with Naked juices, Pepsi Co found, was that labelling "100% juice", "non-GMO" and "all natural" was factually incorrect - as many of the vitamins and fibres added were variants derived from natural products. From a food science perspective, this can make the origin of an ingredient particularly difficult to trace: while a natural derivative, an ingredient may not necessarily be then classed as 'of the earth' foodstuff due to the amount of processing involved.
One of the key problems demonstrated by the Pepsi Co case is how the definition of 'natural' differs between continents and even states in the US - the case was brought to attention in California, under claims of breaking false advertising law. Regulation from state to state differs, let alone outside of the United States - EU regulation requires a maximum 0.9% GMO in any ingredient in order for a product to classify as non-GMO. Keeping abreast of different regulations in different regions is essential to food manufacturers if they are to avoid costly mistakes as seen by Pepsi Co.
The future of food labelling
But it's not just current regulations food manufacturers need to be aware of, proposed changes in a draft bill by DEFRA planned for 2014 suggest increasing Country Of Origin Labelling (COOL) across EU member states to increase the traceability of origin for meat products. This is in no small part due to the well-known ‘Horsegate’ furore earlier this year, which heightened the consumer demand for meat traceability. While it may seem to have blown over, as one writer recently found, misuse of the Red Tractor label was discovered after the supposedly British pork chop was, in fact, Danish.
The confusing array of information on food labels in the UK at the moment - Red Tractor, organic, traffic light nutrition, Soil Association approval, low-fat, all natural - are under the microscope. The DEFRA draft bill aims to reduce confusion of EU product origin in meat products, to deliver greater clarity over origins in a more standardised format. But the constant changes seen in food labelling regulation can be a nightmare for food manufacturers to keep on top of. Food manufacturers are under increasing pressure, not only just to be compliant, but also to satisfy consumer demand for greater visibility.
New ERP software provides a comprehensive overview of each product journey, from farm to store, giving consumers what they so desperate want: traceability. Keeping up with ever-changing demands of food labelling in order to provide detailed product origin information requires an agile system that is integrated at all points of the supply chain.
Automating processes using ERP software means label printing can be altered at short notice, to adhere to new requirements or remove confusing elements as regulation sees fit. Tracing products through an ERP system is easy, too, with full visibility of the product journey from manufacturer to retailer - enabling fast recalls wherever required. Acting quickly to changes in consumer demand or regulation can make or break a brand, so having an effective ERP system is essential to keep ahead of labelling changes.
Choosing an ERP software system for food and drink manufacturers can be daunting, though – with so many options out there, how can you be sure you won’t invest in an unsupportive system? This is why we've put together our free guide on Food and drink ERP software to help with the research process – download it today, and tell us what you think.