December is a special time because of all the reasons to celebrate, and because it’s a rare moment where we collectively reflect and look ahead.
Many articles, recounting what happened in 2023 and what’s possible in 2024, will be published in the last weeks of the year. With rare exceptions, the “look-back” pieces discuss what the previous round of “looking ahead” pieces got right or wrong.
Predictions are a fool’s errand in an industry as dynamic as ours. So, instead of forecasting anything about what 2024 may hold for produce businesses, here are the four topics I’ll be paying close attention to in the coming year.
FOOD SERVICE MODERNIZATION ACT (FSMA) RULE 204
What is it? FSMA was signed into law in 2011 to transform the nation’s food safety system from response to prevention.
In November 2022, the Food and Drug Administration (FDA) issued the Final Rule 204 on Requirements for Additional Traceability Records for Certain Foods. The date of compliance with the FSMA final rule on food traceability is currently set for Jan. 20, 2026.
What’s the impact for produce businesses? The Key Data Elements (KDEs) span the food supply chain from harvesting, cooling and initial packing to shipping, receiving and distribution. The level of specificity and detail for KDE record-keeping renders outdated data capture and storage obsolete and non-compliant.
That means, FSMA ultimately requires technology implementation or digital transformation. The good news on this front is many technology publishers, manufacturers and solution providers are putting an emphasis on industry-specific solutions.
FRESH FRUITS AND VEGETABLES PROGRAM (FFVP)
What is it? The FFVP is a federally aided program for eligible schools to provide fresh fruits and vegetables to students during the school day.
The program requirements for FFVP stipulate that eligible elementary schools must apply to be part of the program.
The FFVP program reports that students at participating schools consume as much as one-third cup more fruit and vegetables every day. The long-term impact of increased consumption of fresh produce is difficult to accurately track, but health and education leaders agree early, frequent exposure to a variety of fruits and vegetables is likely to confer a health benefit.
What’s the impact for produce businesses? The FFVP is an annual program, which means schools need to go through the application process every year to participate.
In May 2023, the USDA announced the allocation of funds for 2024 at $252.6 million for FFVP. Whether that amount will be available is another matter altogether, because FFVP funding is determined by the outcome of the farm bill. Cuts and amendments to the bill and all the programs included in it naturally change the game for participating schools and suppliers.
In an ideal world, universal funding would be present for all our elementary school students nationwide. While that will most likely never happen, advocating for expanded funding to offer FFVP to more students is a vital way to prevent childhood obesity and unhealthy eating habits.
CLIMATE CHANGE AND WATER REGULATION
What is it? Climate change significantly impacts agricultural outputs, affecting produce quality and availability.
What’s the impact?
Climate change leads to unpredictable weather events, directly influencing crop yields. Rain and flooding can ruin entire crops. For distributors, the result is the need to pivot and manage inconsistent supply and potential price fluctuations.
EMERGING TECHNOLOGIES: EVER READY FOR WHAT’S NEXT
What is it? The shift toward electric vehicles (EVs) and the integration of Artificial Intelligence (AI) in Enterprise Resource Planning (ERP) are significant technological trends that are impacting almost every industry.
EVs: By 2030, California plans to be an all-electric vehicle state. Metropolitan areas are establishing zero-emission delivery zones (ZEDZ). In cities like Santa Monica, CA, Portland, OR, and Seattle, WA, ZEDZs are being piloted based on models currently implemented in other countries.
AI: AI capabilities are being implemented across a wide array of technologies. As the functionality is integrated in ERP, procurement and sales software, wholesale produce distributors may uncover opportunities to enhance efficiency and customer value.
What’s the impact?
EVs: Roughly half of all produce grown in the United States comes from California. The goal of being an all-electric state by 2030 will ultimately touch every produce distributor working with a California grower, or receiving product through the LA market.
When it comes to ZEDZs, having a fleet that can deliver to kitchens and commissaries in low- or zero-emission zones isn’t a matter of adopting emerging technologies — it’s a matter of customer service.
AI: There’s endless conversation about what’s possible with AI. Currently, “productivity AI” is what most people are engaging in. In the areas outlined earlier in this article, it’s easy to see how AI could aid the effectiveness of FSMA implementation and responsiveness to program and contract changes. The bottom line is this technology will impact every business.
If being well-versed in legislation, regulation and transformation are on your resolution list for 2024, I raise my glass to you. To prosperity in your business next year. Cheers!
Billy Itule is in senior management at Willie Itule Produce, a multi-generation family business based in Phoenix, AZ. He is a member of the executive board at Produce Alliance, as well as a founding member of its Next Gen Committee.
