Dennis Harrison is a senior vice president of GS1 US, leading the GS1 US foodservice industry engagement group. Harrison brings more than 35 years of industry experience in manufacturing, engineering and quality assurance to GS1 US. The Foodservice GS1 US Standards Initiative was launched in 2009 as an industrywide effort to streamline the supply chain, enhance product information and build a foundation for food safety and traceability.
SmartBrief interviewed Harrison on how this initiative is changing the foodservice industry, and how all industry partners can benefit from these changes.
What are the biggest changes that you have seen in the foodservice industry in recent years?
There are three major changes: One, the costs for food and operations are rising rapidly; two, consumers and governmental entities are increasingly demanding about food safety; and three, we’re seeing more consumers with allergies and food sensitivities, which restaurants need to address.
When it comes to the first change, fewer people are eating out, and this is a major concern for the food industry. In addition, food costs — poultry, beef and dairy in particular — are rising. As restaurants raise prices to cover these costs, consumers are less willing to pay for them. The foodservice supply chain knows they need to be more efficient and get their costs under control. If not, the supply chain will shrink. GS1 standards help create these much-needed operational efficiencies.
On the second point, people today have so many ways to access so much more information — including recalls — that the stakes have been raised to keep products off “bad” lists and out of the news. In addition, the government, via the Food Safety Modernization Act, has called upon the foodservice industry to establish better processes to trace food when an outbreak or recall occurs. All foodservice supply chain companies are under extreme pressure to produce and serve safer food.
Last, more restaurants are listing the nutritional values of their food, either because of menu-labeling legislation or because their customers are demanding this information due to allergies and sensitivities to certain foods, from peanuts to gluten. Restaurants need accurate product data more than ever; GS1 standards help with that.
What attitudes and events led to the creation of the Foodservice GS1 US Standards Initiative in 2009?
Industry leaders came together voluntarily to drive waste and costs out of the supply chain by reducing inefficiencies in their systems, learn more about what’s in food products (particularly when it comes to nutritionals and allergens), and establish a cost-effective platform for traceability.
The retail industry has been using GS1 standards (for instance, UPCs) for 40 years and it’s very efficient. Many of the manufacturers and founding members of the Foodservice GS1 US Standards Initiative were already using GS1 standards to identify and trace products for their retail grocery divisions, and they wanted the same efficiencies in retail for foodservice.
GS1 US, working with the foodservice industry, identified three GS1 standards to be used for foodservice: GTINs (Global Trade Item Numbers) for product identification; GLNs (Global Location Numbers) for traceability; and GDSN (Global Data Synchronization Network). The GDSN is an electronic data-sharing network where manufacturers can publish accurate product information according to GS1 standards, images, nutritionals, cooking instructions and more. This information, updated on a 24/7 basis and synchronized with all foodservice trading partners, can be used by distributors, sales reps, operators, dieticians, foodservice directors and other end-users for sales transactions, menu planning, nutritional analysis and product traceability.
The industry is more than halfway to accomplishing its goal of having 75% of industry players (measured by revenue) voluntarily adopting GS1 standards by 2015. What moves contributed to this success, and what challenges has the industry had to overcome to get this far?
The community has been working collaboratively for the past two years on this effort. There have been similar initiatives by other companies in the past, but the desired results were not obtained. For the first time, I’m finally hearing leading foodservice companies say they believe this is the initiative that will change the industry. Just a couple years ago, people kept asking, “Why do I need to adopt GS1 standards?” Now, the question is not “why?” but “How do I adopt the standards and when does it need to be done?”
I think part of the reason for this positive energy and shift in the industry has to do with the fact that leading companies are, in a sense, pressuring each other to adopt GS1 standards to improve efficiency. Operators like Yum! Brands and Darden are asking their suppliers to use GS1 standards to improve their operational processes. They want GTINs on their products, along with expiration dates, lot numbers, nutritionals and the rest of the enhanced product data that comes with these numbers. Also, there is a bit of healthy competition in the industry — nobody wants to be left out of the initiative if everyone else is on board.
How will the initiative help answer consumers’ call for more transparency in the foodservice industry?
Consumers these days want to know what is in their food. Many have health concerns or allergies, while others simply want to be more health-conscious or they want to feed their families healthier foods. The Foodservice GS1 US Standards Initiative has identified key identifiers required by the industry for product information, including nutritionals, specific ingredient lists, cooking and preparation instructions, storage recommendations, standardized imagery and more. Also, manufacturers can more easily update changes to their products electronically through the GDSN, rather than rely on outdated paper and online catalogs. If a manufacturer reduces the salt content on a product, or removes gluten from the product, for example, that information can immediately be shared with all partners.
When it comes to food safety, consumers want to be more confident in the industry and feel more comfortable dining out. When products are labeled with GTINs that come with specific manufacturer lot numbers as well as production and expiration dates, and locations are identified with GLNs, it will be much easier to keep track of products as they move through the supply chain — and pull products out in the case of a recall or foodborne illness outbreak.
How will this initiative benefit restaurant owners and managers?
With GS1 standards, restaurant owners and managers will be able to maintain more accurate, comprehensive records of their purchases, deliveries and inventories.
For one, this will help them react faster to recall and outbreak situations. If a recall occurs, restaurants can look back at their own systems to verify if they received the contaminated product or not. If not, they can share this information with their customers to keep them coming back.
Second, operators will also be able to access enhanced product information, including nutritionals, specific ingredients and cooking instructions to develop better recipes and menus. This will be particularly valuable for chains affected by the new menu-labeling legislation, as well as for other restaurants demanding more accurate information for their nutritional analysis.
In the future, we hope to see GS1 standards used for restaurant inventory management. No more clipboards and training a high-turnover staff; restaurants will be able to simply scan products during deliveries or in their store rooms to instantly receive expiration date alerts and other information. The distributor will have already scanned the products overnight at the restaurant’s back door, which will automatically populate their records as proof that the delivery was made, where and when. That’s how you begin to trace products from the restaurant level.
Why is the initiative important for all industry partners right now?
The foodservice industry’s margins are growing thinner by the day, and there is increasing pressure to reduce operational costs, especially as food, energy and real estate costs continue to rise. GS1 standards help industry members speak the same language, so all foodservice companies can evolve together, more efficiently.