By Susanne Moore, CEO of SMRTR, Inc.
The Food Safety Modernization Act (FSMA) Section 204(d) ruling originally carried a compliance deadline of January 20, 2026. Recently, the FDA agreed to extend that timeline by an additional 30 months, pushing it back to June 20, 2028, giving organizations more breathing room to satisfy food traceability requirements.
Don’t mistake this delay for a reprieve. FSMA 204 will materialize—and when it does, it will reshape food safety and traceability requirements across the entire supply chain.
The Real Target: Manufacturing, Not Distribution
While distributors are feeling the pressure of current compliance discussions, the real solution lies in manufacturing. Distributors—typically ranging from $50 million to multi-billion dollar companies—are seen to have more resources to respond to compliance requirements than the average $10-30 million manufacturer that makes up 80% of all manufacturers. Additionally, distributors serve small retailers and institutions that just do not have the capacity to manage the data requirements and are looking to their distributor partners for ways they can track this information on their behalf. But pointing to the entity with more resources doesn’t solve the core problem.
Food products start at the farm or ocean where initial lot codes are assigned and traceability begins. From there they could move to cooling, packing or straight to manufacturing, but almost everything hits a transformation step which is most often the manufacturing process. The manufacturing process is where multiple products come together and receive their final identity before reaching the consumer. It’s where universal product codes (UPC), sell by dates and final lot codes are assigned. It’s with the manufacturer that all the information exists to properly identify the product. Trying to solve traceability at the distribution level means you’re working backwards from where the real solution needs to start.
Beyond the Food Traceability List
My prediction is that FSMA 204 compliance will quickly expand beyond the current Food Traceability List (FTL) items like nut butters, leafy vegetables, and herbs. Major retailers are already requiring their suppliers to provide traceability on every product item, not just those covered under the FTL. This creates additional pressure and expense that the industry needs to address strategically.
The implications are staggering when you consider the downstream impact. A distributor ships a case to a restaurant, and the first thing that happens is they rip open those cases and stick individual items in their walk-in refrigeration system. That case is gone. The traceability lot code (TLC) information at the case level is gone. You need traceability at the individual packaging level to trace items back to their origin.
The QR Code Solution
The most practical path forward involves QR codes. Consumers already expect transparency—they want to scan a code and immediately see where their products have been at every step of the journey. This isn’t just about compliance; it’s about meeting evolving consumer expectations.
The challenge is cost-effectiveness and reasonable expectation for the level of detail that would need to be maintained. In pharmaceuticals, RFID tags work because you can justify the expense on a $50 prescription. You can’t put that same technology on an 89-cent orange. We need a cost-effective way of labeling at the individual item level that doesn’t break the economics of food production.
I keep coming back to encoding at the individual level with some sort of digital format—perhaps something visible under black light or another affordable detection method. The technology opportunity here is significant, and it needs to happen during the manufacturing process, not after.
The Labor and Cost Reality
Traceability costs money, and that cost is usually tied to labor. I recently worked through a business model with a distributor who calculated that at a penny per label and two cents per case in labor costs, implementing proper traceability would cost an additional $300,000 annually. When you consider the volume flowing through distribution centers, these small per-unit costs add up quickly.
This is precisely why the manufacturing industry must take the lead. The volume and economics work better when traceability is built into the production process rather than added later in the supply chain.
The Interoperability Imperative
Successful FSMA 204 compliance will require interoperability across the supply chain, but with important nuances. Distributors won’t want their restaurant customers to see who their suppliers are—that visibility could encourage restaurants to bypass distributors entirely.
The solution involves intelligent data anonymization. The FDA should be able to unlock complete supply chain visibility when needed, while consumers and other supply chain participants see only the information relevant to their needs. This creates different security levels for different stakeholders while maintaining the traceability chain.
An Unexpected Benefit: Waste Reduction
Proper traceability dramatically reduces waste during recalls. Currently, we rely on first-in, first-out principles to help determine what products to pull during a recall. This system breaks down when products move to restaurants or convenience stores where cases are opened and individual items are redistributed.
Without granular traceability, recalls result in massive waste because we can’t pinpoint exactly which products are affected, though this can be justified by the lives saved. As younger generations move into leadership roles in these industries, they’re already demanding less waste and more recycling. Better traceability directly addresses these concerns.
The EDI Standards Opportunity
FSMA 204 is reinforcing something greatly needed in the United States: actual EDI standards. Unlike the European Union, which has established EDI standards that everyone follows, the U.S. has traditionally operated without true standardization. This is why EDI integrators are critical to the transfer of data—everyone wants EDI, but everyone has different format requirements.
FSMA 204’s requirements for standardized Advanced Ship Notices (ASNs) could be the beginning of broader EDI standardization in the U.S. These ASNs will include GLNs, G10s, lot traceability codes, and other essential data in standardized formats. If this takes hold, we might see similar standardization spread to purchase orders, invoicing, and other EDI transactions.
Preparing for Implementation
Organizations that handle items on the FTL should start now, to learn more about what their requirements are and actions they need to take to be FSMA 204 compliant, extension or no extension. Focus on these priorities:
For Manufacturers: Invest in production-line technology that can cost-effectively encode traceability information at the case level and work towards the individual item level. This is your opportunity to lead rather than react.
For Distributors: Build relationships with technology partners who understand interoperability requirements and can help you manage the data complexity without disrupting existing supplier relationships.
For Everyone: Pay attention to the ASN standardization developments. This could reshape how we handle data exchange across the industry.
The 30-month extension gives us time to do this right. The technology opportunity here is tremendous because we’re essentially solving multiple problems at once—compliance, waste reduction, and the transparency demands of our evolving workforce.
But success requires focusing on the manufacturing process. That’s where the real solution lies, and that’s where the industry’s investment and attention need to be concentrated. You have to solve it at its core.
Published: Food Manufacturing December 2025