Are your trading partners prepared for FSMA Rule 204 amid industry shifts?

In a time when consumer demand for premium, “better for you” products is soaring and bird flu is driving up egg prices, posing potential risks for food companies, the food industry is facing significant changes. Major food makers are poised to accelerate mergers and acquisitions in 2024, with new product launches and ingredient innovations also dominating the market. All this is happening while the U.S. Food and Drug Administration’s Food Safety Modernization Act (FSMA) Rule 204 places increasing pressure on the food supply chain to meet traceability requirements.

FSMA Rule 204 calls for unprecedented collaboration among trading partners to share traceability data, which is testing the supply chain’s complex web of manufacturers, suppliers, distributors and retailers. With multiple hand-offs and frequent changes in the supply chain, isolated adjustments can trigger unintentional setbacks if not aligned with the rest of the network.

Collaborative communication: The key to FSMA 204 Compliance

To meet FSMA Rule 204 requirements by the deadline, January 20, 2026, it’s crucial that food companies start communicating now with their trading partners, said Amy Behm, Director of Community Engagement, with GS1 US, a not-for-profit global standards organization.

“In most cases you’re already regularly working with people who are one step up, one step down in the supply chain, but don’t assume that everything is just going to come together later,” said Behm. “Ask now: ‘What are you doing to prepare? Can you share anything from your traceability plan?’ Then make sure that you’re aligned.”

This kind of collaboration gets to the heart of FSMA Rule 204, which is intended to allow the FDA to do better, quicker investigations into a foodborne illness or react faster to recalls. Traceability among trading partners hinges on coordinated documenting of key data elements, such as the Traceability Lot Code (TLC) and Traceability Lot Code Source. 

“That's the big change that threw everybody for a loop,” Behm said. Although every organization has always had a way to identify the source and destination of items within their own walls, the challenge lies in identifying them the same way as their next-in-line trading partner. TLC and TLC source offer the identifiers that follow the product throughout the entire supply chain.”

The bird flu outbreak and its impact on egg prices underscores the importance of traceability. “It proves, in real time, that we need traceability,” said Behm. “Here's a current event example of why it's important to get all your identifiers in place and know exactly where the products are coming from.”

Currently during recalls, records may range from spreadsheets to handwritten records. “It can take the FDA months to connect the dots of all these records,” said Behm. “By using standardized identifiers, you're helping the FDA potentially cut those investigations down to only days.”

Standardized identifiers, such as those provided by GS1, allow for smooth exchange of key data elements across the supply chain, enabling faster and more accurate traceability. For example, although there is no mandated format for the Traceability Lot Code and the Traceability Lot Code Source (they just must remain consistent throughout), an industry-identified best practice suggests that the Global Trade Item Number^® (GTIN^®) can be used with batch/lot information and relevant date Application Identifier (AI) for the Traceability Lot Code, and the Global Location Number (GLN) can be used to identify the locations needed for the Traceability Lot Code Source. 

Companies are now challenged to be more granular with their location identifiers, moving beyond a single Global Location Number (GLN) for corporate headquarters. For instance, manufacturers with multiple production facilities or farmers with several fields can assign a unique GLN to each location. This allows for precise identification in case of an outbreak, and can limit the impact to specific areas rather than shutting down an entire operation. As a result, platforms such as GS1 US Data Hub | Location are playing a crucial role in enhancing traceability efforts, Behm said.

The platform enables companies to assign this detailed location information and grant access to their trading partners, facilitating viewing and validation of the data. This level of specificity and transparency is crucial for effective traceability in the food supply chain.

Grappling with FSMA 204 and industry demands

More industry shifts face food companies striving to balance the pressure for new product launches, demand for premium better-for-you products, price volatility and ingredient innovations with the need for robust traceability systems and implementation of FSMA Rule 204. Another concern is the climate of mergers and acquisitions in the food industry and potential disruption of traceability efforts.

These kinds of corporate changes should have minimal effect on traceability plans if GS1 Standards are in place, Behm said. The standards allow companies to essentially speak the same language in terms of product and location identification, making for smoother transitions during mergers and acquisitions, even as companies undergo significant structural changes.

“The key is not to overcomplicate the process,” Behm said. “The producing company should be able to identify up front whether or not a product falls on the FDA’s food traceability list. A lot of trading partners are going to start to look for master data systems to be upgraded to include this new information, so it’s helpful just to know if a product is subject to FSMA Rule 204, which requires manufacturers to keep additional records on those items.”

A path forward

As the food industry grapples with daunting demands, leveraging standardized identifiers and platforms like GS1 US Data Hub | Location offers a clear path forward for effective communication and collaboration among trading partners. “The most common mistake right now is the assumption that FSMA Rule 204 compliance is just too much or too hard, and not getting started on it now,” said Behm.

About GS1 US:

GS1 US^® enables companies to power their supply chains to deliver safe, consistent, authentic and trusted experiences. Best known as a source for UPC barcodes, GS1 is a not-for-profit global data standards organization that creates a common language for companies to identify, capture and share trusted data that links their physical and digital supply chains. Millions of businesses around the world power commerce with GS1 Standards. Learn more at www.gs1us.org.