PLM: A Key Enabler for Food Label Digitization (Part I)

Product lifecycle management (PLM) is a strategic approach that applies a consistent set of business solutions by supporting the creative collaboration, management, dissemination and the use of product definition information across the extended enterprise from the concept stage throughout its entire life span– integrating people, processes, business systems, and information.

PLM is more than a technology; it is the convergence of various technologies, methods, best practices and functions, including product data management (PDM), simulation and analysis (S&A), computer-aided design (CAD), digital manufacturing, predictive engineering analytics and manufacturing operations management (MOM). The ‘Product’ encompasses a wide variety of physical items, services and/or systems.

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Growth in the PLM software market has traditionally been driven by food and beverage, apparel, retail, finance and investment, and government. Utilities, construction, petrochemicals, and infrastructure are also key market drivers. CIMdata forecasts a compounded annual growth rate (CAGR) of the PLM market at 6.7% to $56.3 billion by 2021.

Benefits of PLM

PLM solutions provide a product information backbone that proactively supports the data requirements of processes, systems and people along the product lifecycle and across the organisation. The benefits of having a single system of record based on a collaborative framework are many. Broadly, the advantages of PLM solutions can be enumerated as follows:

  • Accelerated product development and time-to-market, improving sales prospects and lower innovation costs.
  • Deeper insights into key processes, improved design review, more efficient communication and less reworking, contributing to better resource utilization and job satisfaction.
  • Greater productivity, fewer errors, enhanced design efficiency and superior product quality, boosting brand competitiveness.
  • More efficient integration and communication with supply chain partners across multitiered networks.

PLM in the food and beverages industry

Companies in the food and beverage industry have distinct challenges to overcome, specifically those pertaining to increased regulatory requirements, informed consumers, complex supply chains and a high demand for innovation in a world of disruptors and continuous trends. A PLM solution integrating product data and processes into a single, cohesive product record can solve common problems on a number of fronts, including a lack of insight into product data and supply chains.

A robust PLM solution streamlines the fundamental processes of product management, enabling companies to optimize processes for quality and safety while also accelerating their pace on the innovation front. These key areas include: (a) project and portfolio management, (b) specification management, (c) formulation and bill of materials management, (d) packaging and label management, (e) compliance management and (f) supplier management. For the purposes of this article, we will understand how PLM can help food and beverage companies keep pace with evolving product labelling regulations.

Product labelling regulatory landscape

The packaging and labelling of foods and beverages is regulated in virtually all regions and jurisdictions. Companies are legally bound to report ingredients and nutritional facts in a transparent manner to enable consumers a clear understanding of what they are consuming. Over the years, governments of different countries have expanded and streamlined their food labelling regulations with a focus on public health and to address the demand by a more empowered consumer base for better product information.

For companies, particularly those selling in numerous international markets, adhering to country-specific laws is cumbersome and time-consuming. There are several aspects to monitor, including ingredients and basic nutrition; health claims and false advertising; food-handling materials; vegan and vegetarian certifications; farming practices; religious certifications; geographic origin; and safety information.

Food and beverage manufacturers have to spend countless hours conducting tedious and sometimes redundant research requests for the countries in which they plan to sell their product. Automating this process to make it replicable can save companies significant time and ensure that accurate labels are generated.

In the United States, the most recent changes to food, beverage and supplement labelling regulations – finalized in May 2016 – updated serving sizes, daily values and nutrition facts charts. Companies making annual food sales of $10 million or more have until January 1, 2020 to comply with these updates, while manufacturers earning less than $10 million have a slightly more lax compliance deadline of July 26, 2018. The Food and Drug Administration (FDA) advised companies to start implementing labelling changes early to avoid non-compliant surplus inventory.

Changes to the two-decade old labelling standards have been sanctioned upon consideration of the scientific evidence which provided the basis for the 2015-2020 Dietary Guidelines for Americans, as well as taking into account recommendations from expert groups such as the American Heart Association, World Health Organization, Institute of Medicine, and American Academy of Paediatrics.

Some updates reflect the overall population’s nutritional status as it exists today. For example, manufacturers no longer have to mention vitamins A and C on the nutrition facts label as these vitamin deficiencies among the general population have become less frequent as compared to the early 1990s, when more Americans were lacking both vitamins. However, manufacturers are now required to add the amount of vitamin D and potassium on the nutritional facts label in light of the fact that nationwide food consumption surveys found that a deficiency in these nutrients can increase the risk of chronic diseases.

These updates stipulate that some serving sizes will become larger, which at first glance seems strange given the country’s high levels of obesity. However, these new quantities intend to provide people with measures based on what they typically consume rather than how much they should consume.

Through its regulatory enforcement, the FDA is primarily targeting manufacturers of the following products: fresh produce; processed foods; nutritional or dietary supplements; infant formulas; carbonated drinks, fruit and vegetable juices, and functional beverages; bottled water; dairy products; seafood products; and food ingredients.

New EU legislation on food information (in force since December 2014) combines two directives on labelling, presentation and advertising of foodstuffs, and nutrition labels for foodstuffs into one piece of legislation. A major change enforced by the EU Food Information for Consumers Regulation (EU FIC) is the requirement to add highlighted allergen information on the label. The 14 allergens are eggs, milk, fish, crustaceans, molluscs, peanuts, tree nuts, sesame seeds, cereals containing gluten, soy, celery and celeriac, mustard, lupin, and sulphur dioxide and sulphites.

Manufacturers are required to put information related to allergens in one place, replacing the previously permissible voluntary practice of using allergy boxes to provide a shortcut to allergen ingredients information. Manufacturers can now list the allergens in bold, italics, underline or highlight it for quick identification.

Other key changes include mandatory origin information for fresh pork, poultry, sheep, and goat meat; specific information on the vegetable origin of refined oils and fats; a list of engineered nanomaterials in the ingredients; listing of substitute ingredient for ‘imitation’ foods; and clearly indicating ‘formed meat’, ‘formed fish’ and defrosted products.

EU FIC aims to make it easier for consumers to understand labels and invest in safer food choices when making their purchases. Non-compliant manufacturers may be issued with a Compliance Notice outlining the corrective action that must be taken and the deadline to meet such requirements. Manufacturers who do not comply with the notice and breach the established allergen rules will potentially be held criminally liable and are subject to prosecution.

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