Industry Leaders to Assess COOL Rollout

Country-of-origin labeling requirements are set to take effect next week, on Sept. 30, but there is still some confusion in the marketplace. And to help clear up any lingering questions, suppliers, retailers and government officials will discuss COOL implementation at the Produce Marketing Association's Fresh Summit during a Friday afternoon seminar at the Orange County Convention Center in Orlando,

Country-of-origin labeling requirements are set to take effect next week, on Sept. 30, but there is still some confusion in the marketplace. And to help clear up any lingering questions, suppliers, retailers and government officials will discuss COOL implementation at the Produce Marketing Association's Fresh Summit during a Friday afternoon seminar at the Orange County Convention Center in Orlando, Fla., on Oct. 24.

“There have been some isolated requests by retailers for third-party verification. They think they need it,” says Matt McInerney, executive vice president of Western Growers Association, Irvine, Calif.

In reality, additional third-party audit verification from produce suppliers is not required under COOL. Some retailers may be thinking of old recommendations in the 2002 Farm Bill, which referenced an audit trail, according to McInerney.

Lloyd Day, administrator of the U.S. Department of Agriculture's Agricultural Marketing Service, confirmed to SN that the COOL law will not require an additional audit. “The produce sector is overburdened anyway. If everyone has a different audit, it becomes a real pain for doing business,” he said.

Mike O'Brien, vice president of produce and floral for Schnuck Markets and a member of the PMA-WGA COOL task force, urged retailers not to put extra burdens on suppliers. “We all know that rising energy costs, increased fertilizer costs, labor issues, food safety costs, etc., have put inflationary pressures on our retailers. And higher gas prices mean that there is less discretionary income available for produce purchases. We must not exacerbate this situation by making unnecessary or inefficient demands on our suppliers regarding COOL,” O'Brien told SN.

Instead, the USDA and produce organizations are working together to implement COOL requirements in the most cost-effective and least burdensome manner. Still, Day acknowledged to SN that “it is going to take some time for people to figure out how to comply, and it is going to cost money.”

In addition, there are still issues that need to be clarified and understood during the six-month implementation period that the USDA is granting after Sept. 30.

“What percent of [price-lookup] stickers on a bulk display of apples or bananas is sufficient for the future audits? I would like that to be defined, so that I am not at the mercy of various subjective interpretations of the different auditors,” O'Brien said. In addition, processed foods are currently exempt from the law, so the industry needs guidance on how to handle processed products.

All parties involved agree that retailers, suppliers and others need to continue educational efforts on COOL regulations. “It all comes down to communication. We need to make sure we understand the law and guidelines, and that we share our knowledge with our supply partners,” O'Brien says.

One fact that is clear is that country-of-origin labeling is already required at the retail level on produce, so there should not be much additional labeling required at the store, except making sure there is clear signage on bulk bins.

“A significant portion of produce, probably up to 70%, has a label mechanism, such as a rubber band or twist tie, on it already,” McInerney says. However, in the case of green beans in a bulk display, the retailer has to ensure there is country-of-origin signage over the display bin.

“If the item can't be tagged [such as bulk green beans], it's our responsibility to sign that product with COOL using our various sign programs,” O'Brien said.

To simplify compliance, the goal is to label products as close to the first shipping point as possible, according to Tom Deardorff, president of Deardorff Jackson Family Farms in Oxnard, Calif., and a member of the PMA-WGA COOL task force. Growers and distributors should use existing labels for COOL information, including PLU stickers, bands, clamshells, bags and wraps.

However, as suppliers add additional stickers and labels denoting the country or region of origin, it may aid marketing of regional products.

“It allows for great options for retailers and flexibility on the regional side. It allows for state commodity-specific applications, such as [labeling on] Washington apples,” McInerney says.

“Since state designations apply, I think there is an opportunity for using COOL labeling as a marketing tool to sell more produce. Especially when it comes to local produce, we have seen an increased demand from customers who want homegrown produce,” O'Brien said.

Also, while the produce industry already has country-of-origin labeling and stickers on most produce, it will need to get some of its computer and database systems up-to-date. Suppliers will need to print country-of-origin designations on bill-of-lading documents, and some may choose to print the country of origin on invoices and other documents.

“The industry has these systems already. It is just a matter of updating systems,” Deardorff said.

While the COOL law does not mandate that country-of-origin labeling be included specifically on bill-of-lading documents, the PMA recommended it as the best document to show country of origin, since it travels with produce shipments.

“Through WGA and PMA, we chose bill of lading because that is the one method that transfers directly to the distribution centers and retailers. Bill of lading was the minimum requirement, we decided,” Deardorff said.

“It could be any business document that they could be utilizing in their marketing chain. It may cost something in the beginning [to update systems],” Day said.

Some retailers will also want country-of-origin designation printed on invoices, and possibly on other documents.

“The information probably will appear on most documents so everyone is satisfied. Hopefully, once things shake out, people will see the simpler system is the best in the long run,” Deardorff said.