The Food Industry in 2019: Donning Our Soothsayer Hats
Expecting it to be another interesting, stimulating year for the food industry, we have compiled our predictions into six topic areas:
1. Food Safety Regulation
With small businesses having to be in compliance with the Produce Safety Rule (PSR) by January 28, 2019 and very small businesses by January 27, 2020, more farmers will be falling under the requirements of the rule – or preparing to do so. Additionally FDA has stated its intentions to begin routine PSR inspections in the spring. But with the currently proposed agricultural water compliance dates not beginning until January 26, 2022, for the largest farms; January 26, 2023, for small farms; and January 26, 2024, for very small farms, if irrigation-related outbreaks continue after inspections begin, there will be continued criticism of the regulatory agencies and effectiveness of produce inspections overall.
With that, it would be encouraging to see FDA reopen the dialogue on the portion of the proposed rule that would extend the agricultural water compliance dates. Otherwise, it would be reasonable to see a repeat of new and large widespread recalls involving leafy greens and other produce if testing of the agricultural water source is pushed so far out. While water testing is only a “snapshot in time,” with results potentially varying from one day to the next depending on the type of water source and other testing variabilities, it can be another tool to prevent unintentional contamination. Excellent traceback is needed, but it doesn’t reduce the potential of releasing contaminated produce. Traceback is reactive; but the whole purpose of FSMA is prevention, not reaction. The leafy green industry, and the produce industry as a whole, has made great strides in preventing contaminated produce from entering the market. Unfortunately for consumers, covered produce will continue to be treated as a reactive commodity until water testing, and potentially other preventive measures, goes into effect.
With implementation of Food Defense Plans as part of compliance with the Intentional Adulteration rule and initial inspections by FDA of larger facilities (not very small or small) starting in July 2019, we can expect that the initial FDA inspection will not dig too deeply into the substantive changes that some facilities and companies may need to adopt in the long term, but this respite may not last long.
We may see the animal food industry (especially the raw pet food industry) struggle as Animal Food Preventive Control inspections start to occur in 2019 for larger facilities (not very small or small). This industry just recently had to comply with GMP requirements and the move to Preventive Controls may be challenging for some. Further, FDA appears to be on a mission to focus on risks from raw meats for pets, so that will be a major focus going forward.
In Canada – 2019 will be the first year of implementation of the new Safe Foods for Canadians Regulations, so the Canadian food industry – and companies in the U.S. that export to Canada – will see massive change. Mandatory preventive controls, licensing, and traceability for all food manufacturers, exporters, importers, and retailers will be in place on January 15. Although it is to be phased in over two years, many food businesses will have to be ready by January 15. For larger segments of the food industry, especially importers, this will be a new requirement and many may not be aware of or prepared for these requirements. It will be a year of scrambling to implement for both industry and the Canadian Food Inspection Agency.
2. FOOD TRENDS
Consumer Trends are driving changes in the food industry as millennials demand safe, healthy food choices that are “clean” with regard to preservatives, and we expect to continue to see this evolve in 2019. From the perspective of what is good for the body is good for the planet, millennials expect companies to make a difference not just make products and money, thus there is an increased demand for “healthier,” “cleaner” foods (real, minimally processed, organic, closer to “natural”). We also expect a continuation of the increased vigilance among consumers to use diet and nutrition facts to evaluate food safety, especially in regard to the new nutrition facts panel and added sugars. Consumer vigilance will likely lead to increased litigation around claims such as “natural” and “healthy,” while manufacturers are asserting their rights in battles against California’s Proposition 65 listings (e.g., glyphosate).
The U.S. has also been seeing a significant change in dining trends with the increases in home delivery of restaurant meals, fast foods, and meal kits. The new year will likely ring in numerous implications and ramifications on packaging, delivery services, temperature sensors, etc., for the entire food industry.
As announced in mid-November, USDA and FDA will be jointly overseeing the production of “clean meat.” That is, cell-cultured food products derived from livestock and poultry – it’s an exciting and much-anticipated “Regulatory Path Forward.” FDA will oversee cell collection, cell banks, and cell growth and differentiation; USDA oversight will extend from cell harvest to production and labeling of the food products. The agencies are “actively refining” the technical details of the framework, and believe they have sufficient statutory authority without the need for additional legislation. With food companies worldwide developing alternative protein food products, the USDA-FDA plan clears the way for U.S. companies to play a role and become leaders in this burgeoning industry.
Going the other direction, plant-based alternatives – including meats, milk, and seafood – are becoming a booming business. Retail sales of plant-based foods that directly replace animal products have grown 17% in the past year to over $3.7 billion. With the addition of retail sales data from SPINS on plant-based alternatives in the natural channel, the total plant-based retail market is worth over $4.1 billion. As more households across the country purchase plant-based options, the market for these products will rapidly expand well beyond vegetarian and vegan consumers.
We can expect to see the use of blockchain technology be increasingly advocated to improve food traceability. This comes in light of the recent Romaine outbreaks (among others) and the appointment of former Walmart Food Safety Vice President Frank Yiannas to FDA deputy commissioner of food policy and response. Yiannas was the driver of a blockchain produce traceability initiative for Walmart suppliers and is likely to bring this passion with him. Time will tell if blockchain is going to be a solution; it may be part of the solution, but as we have said before it will require good data entry to work.
Along with this is certain to be increased digitization – use of IoT, digital sensors, and digital checklists throughout the food supply chain for transactional documentation and record keeping. Worldwide, food companies and retailers – and everyone in between – are moving away from conventional pen and paper systems and increasing their efficiency through digital records and monitoring.
We also can expect to see a focus on supply chain controls, especially in regard to the FSVP and imported ingredients as brokers and importers become more familiar with the regulations and as FDA ramps up inspections.
4. FOOD SAFETY ISSUES & INTERVENTIONS
With each of the too-many produce recalls and outbreaks of 2018 – including the largest E. coli outbreak in more than a decade – the public has lost confidence in produce, making it a challenge for the produce industry to change perceptions. An expected trend for 2019 is the focus and development of produce safety programs to strengthen businesses through training that ensures latest best practices are understood and applied. There also will be continued focus on development and optimization of effective food safety interventions and technologies in the fields, during processing, transport, handling, and storage of produce.
Food Safety Testing is expected to see continued growth as regulations evolve. Import and export testing, residue limits, and labeling restrictions all force food laboratories to come up with new and improved testing methods to keep up with ever-changing laws. Other opportunities for growth are stemming from the continued implementation of the Food Safety Modernization Act, along with new food safety plans coming into effect in China.
There has been a spike this year in regionally based Hepatitis A outbreaks. The infection is so easily spread from food service workers – and so preventable at the same time, so it would be reasonable to see more food service industries offering free Hepatitis A immunizations to their employees in order to protect their brand name.
It’s been an ongoing issue and we’re unlikely to see any sudden end in 2019: that is, the continuation of undeclared allergens as a major cause of food recalls, both from uncontrolled supply chains for ingredients, and items mispackaged in house.
We would prefer to be wrong on this one, but, unfortunately, we do expect to see an increase in food fraud cases, including those considered to be economically motivated adulterations (EMA) as defined by FSMA, that are food safety issues.
With its issuance of draft regulation on December 21, 2018, the Government of Canada also will be following up on the legalization of recreational cannabis with new regulations for edibles. Predictions are that this will be a very contentious issue for politicians and the public, as concerns about children having access to THC-infused candies, chocolate, and beverages are heightened. Labelling and child-proof packaging requirements will be rigorous. For this reason, licensed cannabis companies are gearing up to have product ready for the October 2019 implementation.
We also see 2019 as the year of change around the world in cannabis legalization and use. Many countries in Europe and Asia, as well as Australia are now opening up for medical use of cannabis. Likewise, more and more U.S. states are legalizing medical and recreational use. This global business will explode in 2019. Companies who are getting into these markets early are positioned to expand rapidly. Edibles will be a huge part of this trend and the safety of these products will be under scrutiny, especially if there are food safety or dosage issues with these products.
As such, we sincerely expect and hope for there to be continued growth in the literacy and understanding of food safety in the marijuana edibles markets. We see this as especially applicable to CBD and other cannabinoids (CBG and CBC, etc.) now that the 2018 Farm Bill has delisted industrial hemp and its cannabinoid derivatives from the Controlled Substances Act.
From that, we foresee FDA clarifying the legality of hemp-derived CBD foods to address the already massive and expanding market of candies, gummies, chocolates, soda, coffee, beer, etc. There also is the possibility that, for the first time, a state legislature may pass an adult-use cannabis law without a voter initiative/proposition.
Time will tell how close we’ve come to reality in our predictions. But whether or not these come to pass, we are sure 2019 will bring its share of unforeseen events as well. And TAG will continue to keep you informed – and provide expert advice – throughout the year.
About The Acheson Group (TAG)
Led by Former FDA Associate Commissioner for Foods Dr. David Acheson, TAG is a food safety consulting group that provides guidance and expertise worldwide for companies throughout the food supply chain. With in-depth industry knowledge combined with real-world experience, TAG's team of food safety experts help companies more effectively mitigate risk, improve operational efficiencies, and ensure regulatory and standards compliance. www.AchesonGroup.com