How Regulations Are Changing Food Manufacturing And What That Means For Industrial Properties

Food and beverage manufacturers are experiencing big changes as the new Food Safety Modernization Act regulations take effect, and Cushman & Wakefield's Jason Tolliver said the new rules will likely have two direct impacts on commercial real estate.

The sweeping law—originally enacted in 2011, though it was finalized this year—will challenge everyone involved in the food supply chain in their efforts to avoid food safety problems, according to a recent Cushman & Wakefield report. 

“The law fundamentally shifts the food safety paradign from reacting to adulterated food after it reaches the marketplace, to preventing contaminated food from reaching consumers in the first place,” Jason tells us. “This affects every link in the food supply chain, from farm to fork and requires a lot of documentation that heretofore hasn’t been required.”

C&W head of industrial research in the Americas Jason tells Bisnow these new regulations will the industry in several ways. 1) Food manufacturers will likely ramp up their use of supply optimization software to manage new record-keeping processes, and 2) We will see more manufacturers partnering with third-party logistics (3PLs) to help them navigate the new law. 

“If you think about how onerous that record-keeping could be, having to source every supplier and aspect of the business, I think you’ll see manufacturers embrace that [technology],” Jason tells us. “I thnk we will also see an increase in the use of 3PLs by firms seeking assistance meeting the transportation requirements of the law. In some cases it is going to be cheaper and easier to outsource."

In addition, the report outlines several changes in property design manufacturers can implement to better adhere to the new regulations, including: 

• designing infrastructure and the floors, walls, ceilings, etc., to prevent water from accumulating, keeping the facility dry during operations
• constructing and securing all building openings, including doors, fans and louvers, to keep out pests and foreign bodies
• designing all site elements with food saftey in mind, including security, vehicle management, site lighting, etc.
• constructing easy-to-clean floors that allow for improved sanitation and build easy-to-clean concrete masonry walls.

"Incorporating the food safety measures may require additional costs," Jason says. "In the long term, however, the up-front cost to ensure compliance will be less expensive than non-compliance."