Guest Column: RFID Adoption For Perishable Foods Will Be Driven By Benefits, Not Government

By Reik Read, Managing Director and Senior Analyst, Robert W. Baird & Co.

Fresh food represents a strong potential RFID market, but the adoption will come from true business value, not FDA regulation or congressional action. We expect RFID benefit will be generated from improving retailer and distributor revenue, while also lowering cost. Key components to adoption will be the development of a uniform set of data standards, a standard communication mechanism, and the ability to improve visibility of merchandise and data about the merchandise, particularly temperature.

Government Legislation Not Helpful Recent scares of contamination in peanut butter, spinach and dog food have led the U.S. House of Representatives to produce the Food Safety Enhancement Act of 2009 (the legislation passed the House on July 29, 2009 and is now being considered in the Senate – status), which will impose a fee on food facilities so that the FDA can require safety plans, improve its company registry and conduct more on site inspections. Also included is a requirement to establish food traceability, including a full pedigree. Part of the legislation directs the Secretary of Health and Human Services (HHS) to "identify technologies for tracing and the distribution history of (a) food..." While some hope this will (should) drive RFID adoption, we view this bill as having limited impact on driving longer-term RFID acceptance given the following.