Barcodes and Labeling for the Food Industry

1. Barcodes and Labeling for the Food Industry UPC Barcodes Nutrition Facts Product Labels

2. What is a UPC barcode? “UPC” stands for Universal Product Code. UPCs originate with a company called the Uniform Code Council (UCC). You apply to the UCC for permission to enter the UPC system. In return, the UCC issues you a six-digit manufacturer ID number. The UPC consists of three parts. The first six digits are your manufacturer code (what you are identified as in the stores POS system). The next five digits are the item number. You assign these to your individual products. For example 00001 is pimento cheese dip, 00002 is jalapeno cheese dip etc… The last digit is the check digit. It is a numerical equation to ensure you typed the numbers in correctly without having to look at every number. BARCODE FACT: On June 26, 1974, a 10-pack of Wrigley's chewing gum was passed across a scanner at a Marsh Supermarket in Troy, Ohio. Today there are about 5 billion scans everyday.

3. Where do I get a barcode? The official way of obtaining a UPC bar code for your product is to apply for membership and receive a company prefix from GS1. Your company prefix is a unique string of digits assigned to your company, identifying you as the manufacturer throughout the entire product supply-chain. Their website is: www.gs1us.org/joinpc The customer support number for GS1 is (937) 435-3870 Here you will fill out a form that will determine what your membership fee and annual dues will be.

4. Example of costs associated with GS1 membership XYZ company $100,000.00 in gross annual sales 1 employee 100 products I was quoted a membership fee of $750.00 with annual dues of $158.00 For this price I would be given a company prefix, be entered into the GS1 (UCC) database and be able to create barcodes for up to 100 different products. I was informed that this is the minimum cost associated with registering. Prices range from $750.00 to $53,500.00 depending on gross sales, employees and products needed to barcode.

5. 3rd Party Barcode Providers Last summer GS1 ran a test program selling individual barcode numbers for $75.00 each. I was advised that this test program is no longer active. Aside from that test project, you would need to go through the previous process to get registered. If you go to the web and search for barcodes you will see hundreds of companies selling individual codes or small blocks of codes for similar prices. I strongly encourage you to research the limitations of exactly what they're offering, and how they match with your business goals. Some of the companies are actually reselling GS1 codes. They register under their company name get a prefix with a large number of available item numbers. They then resell groups of item numbers to you at a discount. This can save you money initially but that barcode is now registered under their company name not yours. Some retailers will not accept 3rd party barcodes and it can cause other supply chain shipping problems.

6. 3rd Party Barcode Sources I pulled this disclaimer from a 3rd party UPC code distributers website: “The bar codes will not be able to be used at either Wal-Mart or Kroger's. This is due to their application process and not to the actual functionality of the bar codes. In the application process for these 2 stores only, they require a copy of your GS1/UCC certificate with your own company's name on it. Unfortunately neither we, nor any other reseller of bar codes, can provide you with this document. If you intend to sell your product at either Wal-Mart or Kroger's, you must purchase your bar codes directly from GS1/UCC to get this document. The bar codes will work at any other stores in the world but these 2 stores.” I question the statement that Wal-Mart and Kroger’s are the only 2 that require you to purchase direct from GS1. When speaking to the GS1 rep, she mentioned Target as one of the other retailers that do not accept 3rd party barcodes.

7. What type of labeling should I use? Other than the quality of your product, one of the main factors that determines if it will sell is the design and type of packaging you use. I have listed a few of the ways to label your products. We will start with equipment you have and work up to having it printed off site. Labeling in-house with office equipment you have (inkjet, laser, copier etc…). Labeling in-house with specific labeling equipment (inkjet label printer, thermal label printer). Combination of preprinted and in-house equipment. Pre printed labels (digital and flexographic).

8. Labeling in-house with office equipment you have • Pros • Equipment you already have, there are no additional costs other than supplies. • You have complete control of the label and can make changes as needed. • Cons • Water resistance may be a problem. • Limited label sizes available. • Labels usually come on a sheet. • Hand application only. • Time it takes to produce the labels.

9. Labeling in-house with specific labeling equipment • Pros • You will have complete control over changes and will not have to wait for labels to be made off site. • Many types of materials and sizes available. • Cost per label is generally less than with traditional laser or ink jet. • Labels come on a roll and can be rewound for use in automatic applicators (found in most bottling facilities). • Labeling software that comes with the systems is great for designing barcodes, nutrition facts etc… • Cons • The initial cost of the equipment. • Very large volumes require more labor on your part than preprinting. • Cost per label in high volumes can be more than having the entire label produced with traditional methods.

10. Examples of In-house Labeling Equipment Traditional Thermal Transfer. Water resistant ink jet. Full color water resistant printing, looks like you sent off to press. Many different sizes and shapes. The labels come on a roll. Cost per label is dependant on ink coverage and size of the label. Speed can be an issue depending on quality settings and size of label. High speed printing of 4 to 12 seconds per label. Many different sizes and shapes. The labels come on a roll. Can be used in conjunction with preprinted labels. Many different materials available (plastic, high gloss, clear etc…). Only prints one color at a time.

11. Combination of preprinted and in-house equipment. This method uses a combination of a traditional preprinted label that you then run through a thermal printer for ingredient/name/nutritional changes. It has a low cost per label and eliminates the need for plate charges for different products. • Pros • Control over information changes and quantities printed • Can eliminate additional plate charges. • You can use many different materials and sizes. • Professional look. • Lower cost per label • Cons • Equipment cost • Information that changes will be in one color. • You are doing some of the labeling. Preprinted label After it has been run through the printer

12. Pre printed labels flexographic (sent to press) Pros Lowest cost per label (can be as low as 1 cent per label depending on volume and colors) No equipment to buy or labels to run on your part The higher the quantity the lower the price Many sizes, shapes, materials and coatings (UV, gloss etc…) Cons Labels will initially require color separated artwork Plates will need to be made (each color has a plate) Any changes require plates to be made High quantity minimum orders 10,000 plus for each design

13. Preprinted labels using the digital press method. • Pros • Same advantages as the Flexographic: No equipment costs, many sizes, shapes and coatings. Very professional looking. • In addition you will not need plates with digital. • You do not need color separated artwork (still recommend using a graphic artist) • Lower minimums than Flexo (as few as 100 labels) • Cons • Higher cost than flexographic (can be $.15 to $1.50 depending on size and quantity. • Color matching is sometimes an issue.