Warehouse Distribution

28.9 Q: [Added June 2006] Warehouse distribution facilities typically receive various food products on pallets, break down the incoming pallets, and prepare outgoing pallets comprised of various food products to meet customers' orders. For example, a warehouse may receive 5 pallets from separate sources, each containing 100 cases of only one food product and compile a new pallet for shipment to a customer that contains 20 cases of each of the 5 food products. Are warehouse distribution facilities required to track the lot or code numbers or other identifiers when establishing and maintaining records of the immediate previous sources and immediate subsequent recipients for this scenario?
A: FDA generally considers a warehouse distribution facility that simply breaks down a pallet of food and reconstitutes a new pallet to meet a customer's order to be engaged in a typical distribution activity. Therefore, for purposes of the lot code requirement, FDA intends to consider exercising enforcement discretion in this circumstance. This question underscores the differences between "packaging" [when used as a noun], "packaging" [when used as a verb], and "packing."

• Section 1.328 of the Recordkeeping Final Rule defines "packaging" [noun] as "the outer packaging of food that bears the label and does not contact the food. Packaging does not include food contact substances as they are defined in section 409(h)(6) of the act (21 U.S.C. 348(H)(6))."
• Similar to the definition of "packaging" [verb] in the Registration of Food Facilities Final Rule, 21 CFR 1.227(b)(8), FDA considers "packaging," when used as a verb for purposes of the recordkeeping rule, to be "placing food into a container that directly contacts the food and that the consumer receives[,]" which is a manufacturing/processing activity. See e.g., 21 CFR 1.227(b)(6).
• Also, similar to the definition of "packing" in the Registration of Food Facilities Final Rule, 21 CFR 1.227(b)(9), FDA considers "packing" for purposes of the recordkeeping rule to be "placing food in a container other than packaging the food" - i.e., placing the food into a container other than the finished container that directly contacts the food and is received by the consumer. However, for purposes of the lot code requirement in 21 CFR 1.337(a)(4) and 1.345(a)(4), FDA intends to consider exercising enforcement discretion in certain circumstances during which food is placed in containers that do not contact the food and that are not received by consumers.

For example, a manufacturer typically places cereal into a plastic liner, which then is placed by the manufacturer or another person into a cardboard box that has the label information on it. In this instance, the manufacturer's placement of the cereal into the plastic liner is a "packaging" [verb] activity; the liner is considered a food contact substance under the act. The placement of the plastic liner into the cardboard box is a "packing" activity; the cardboard box with the label is considered the cereal's "packaging" [noun]. If the individual cereal boxes are placed into a larger box for sale to consumers (e.g., 24 single serving boxes sold together in a larger box at a warehouse club), placing the single boxes into the larger box also is considered "packing," and the lot number requirements apply. If, however, the individual cereal boxes are placed into a larger box for ease of shipment, and upon receipt by the retailer, are removed from the larger box before sale to the consumer, FDA will consider exercising enforcement discretion regarding the lot code requirement because FDA considers placing the food into the larger box a part of the transportation and distribution process. Similarly, FDA would consider exercising enforcement discretion regarding the lot code requirement if the cereal boxes were placed on a pallet as this is part of the transportation and distribution process.
As explained above in 28.8A, if a wholesaler or distributor packs or repacks food products, that entity is also a packer (it is engaged in mixed activities) and it must establish and maintain records that include the lot or code number or other identifier if that information exists. For example, if the warehouse distribution facility receives cupcakes wrapped by pairs in plastic, with 10 pairs to a box (the packaging [noun]) that typically is placed on retail store shelves for purchase by consumers, and the distributor removes the plastic containers of paired cupcakes from the boxes to place with other products into different containers (e.g., a food gift basket), then this activity would constitute repacking and establishing and maintaining records of the lot or code numbers or other identifiers, to the extent that they exist, would be required. Similarly, if the warehouse distributor receives a pallet containing 100 cases of wine to be sold to consumers by the case, and the warehouse distributor replaces a broken bottle in one case with a new bottle before shipment to a customer, the distributor is engaged in packing (repacking). (Under the final rule, businesses are not considered consumers; see e.g., 21 CFR 1.327(d) and 1.327(e).) If, however, the wine is sold to a retail store that unpacks the cases and sells the wine individually to consumers, then FDA will consider exercising enforcement discretion regarding the lot code requirement, because in this circumstance the distributor's action of replacing a broken bottle is part of the distribution and transportation process.

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