PLU codes capture retailer interest in China
In 2012, China released a five-year plan to upgrade its food safety regulations to address food safety concerns. As demand for safe produce continues to rise among consumers, China, as well as the global produce industry, is constantly seeking efficient tools to ensure food safety at every level of the supply chain. In the words of the Produce Marketing Association’s vice president of supply chain efficiencies, Ed Treacy, "growers and produce industry professionals want to do the 'right' thing."
At this year’s PMA Fresh Connections: China, Treacy was once again invited to present on global standards for produce, covering five topics, including trends in food safety, cold chain management, traceability, traceability requirements and PLU (Price Look Up) codes.
The topics were chosen based on feedback PMA received from the Shanghai event last year.
"They still wanted to hear what was going on in North America," Treacy told www.freshfruitportal.com.
More specifically, Treacy said PLU codes attracted the most attention from Chinese attendees.
"There’s a lot of interest from the produce industry here on what the PLU code means. Since last year, people want to know more about PLU because they see it on imported fruits. They will see a sticker on that and they do not understand. Or some people thought that they knew what it was [but they didn't],” he said.
First developed in 1987 by the PMA's Produce Electronic Identification Board, PLU codes were created to increase accuracy and speed at point-of-sale for loose produce of variable measure. The codes also offer additional information to retailers and consumers by indicating whether the produce is catagorized as organic, conventionally grown or GMO.
"There’s some misunderstanding of what some of the numbers meant on the PLU codes, how they are used, why they are used and what regulations are around that. So I think I was able to clarify that," he said.
"As I mentioned in the presentation, some people thought that if a 4-digit number began with a 4 means, it is GMO, but that is not true. A number beginning with a 3 or 4 is a conventionally grown product. And a 5-digit number beginning with 8 would identify it as GMO, though I’ve never seen one."
As far as the benefits of using PLU codes, Treacy said retailers were undercharging for products due to inaccuracies by cashiers, such as misidentifying different sizes, organic items, and premium varieties within commodities.
"The PLU code functions as the human readable number on the sticker should the barcode scan fail," he added.
However, Treacy admitted that there might still be a long way to go for the Chinese market to accept the method, as China has different retail practices.
"It's a different retail practice from what I witnessed in China. There's not a lot of weighing down at the point-of-sale or cashier register. The weighing and tagging is done in the produce section," he said.
"PLU-code usage on the stickers on the product will allow them and facilitate them to do weighing at the cashier. I'm not sure if the retailers want to change their model, because they do other things with the people in the produce section; I’ve seen some education and direct interactions with the consumers."
However, Mexico has set a successful precedent by switching over to the code system. Treacy was positive this could eventually bring changes for China.
"For almost 30 years, the U.S. and Canada have been using the PLU code and data bar quite extensively. But only this year have Mexican retailers gone through with it and realized 'you know what, we should do this as well because it will benefit not only us, but the suppliers,'" he said.
"I suspect that at some point one or two retailers will understand fully the benefits or using the PLU sticker with data bar, and then it will move the industry along."
The data bar encodes a GTIN-13 indentifier in a 14-digit format added to the PLU sticker. The idea of this Global Trade Item Number is to minimize labor at point of sale and to support category management by brand owners.
"It further reduces point-of-sale transaction time from four seconds to one second per item," Treacy explained.
"It enables retailers to determine purchased versus sold ratios by supplier. And suppliers of higher-quality products are able to be identified by the retailer."
However, Treacy believed there was no point implementing this method unless Chinese retailers could take advantage of it.
"They've got to come to the realization themselves that they are ready to implement it. Because we don’t want to sticker a product for the sake of stickering it. It will add cost if it doesn't add value to the supply chain," he said.
"We can't force it. What we can do is to educate people on what the benefits are."
PLU codes are used extensively in Australia, New Zealand, the United Kingdom, Norway, Canada and the USA. Currently, they are being considered for implementation in South Africa, Brazil and other South American countries, while the GS1 DataBar on PLU stickers is being implemented by retailers in the USA and Canada.