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Time Stamps:

- 0:00 Intro

- 2:46 Compliance with the New Walmart Guidelines

- 8:41 The California E-Pedigree Law Set a Precedent

- 11:23 "This One Seems Real"

- 12:55 How Will Walmart Enforce This?

- 15:03 Different Departments Need to Come Together

- 17:49 How to Start Getting Compliant

- 23:51 Sunrise 2027 & the Industry's Push to Standardize Around 2D Barcodes

- 28:21 Where You Can Find More Information


Zach Baierl: Welcome to Leave Your Mark - The Coding and Marking Podcast, sponsored by Domino with your host, Jon Ballard. Throughout this podcast series, we'll explore packaging and production, hot topics, challenges, and solutions. Get ready for expert interviews, real world case studies, and thought-provoking discussions that drive efficiency, compliance, and profitability for manufacturers of food, beverages, personal care and life science products. Let's make a lasting impression on the industry together.

Jon Ballard: Hello, and thank you for joining us. My name is Jon Ballard. I'm the host of the Leave Your Mark podcast, sponsored by Domino, and I'm really excited about today's first episode here. We're talking with Mark Shaffer and Paul Hammond from the Domino North American National Account Team, and they've got a lot of experience around the topic today. The topic is labeling compliance. We're going to talk about requirements of labeling and some of the changes in the industry. So let's dive right in. Mark, can you tell us a little bit about yourself?

Mark Shaffer: Yeah, sure, Jon. My name is Mark Shaffer. I've been with Domino, gosh, just about 22 years, and I manage the national account team here at Domino North America. And a lot of things we do, Jon, but one of the primary functions we have is to be a subject matter expert for our customers. That's how we bring value, not just being subject matter experts in our industry, but also in theirs, frankly. It's really important that we understand industry trends, market drivers, regulations, requirements, legislation, both current and future so that we can provide the guidance and insight on how they might impact their business, which they certainly will, and it's an ever-changing regulatory landscape out there. It's crazy. Things change from day to day to day, and it takes a lot of resource time and effort to stay on the bleeding edge, but that's the value we believe that we bring to our customers.

Jon Ballard: Thanks for the background, Mark. I'm really excited to be talking to you, Paul. Can you tell us a little bit about yourself and your background and what you do at Domino?

Paul Hammond: Yeah, absolutely. I can. I've been with Domino since about 2010, with a one-year sabbatical, I did with a company called Antares Vision in 2020, which is one of Domino's... Excuse me, 2019, which is one of Domino's serialization life sciences partners. I've run a couple different roles here ranging from product management when I started to now what I do, which is support national accounts about four Fortune 500 accounts. But prior to that, I did run Domino's Life Sciences organization, which meant I had to be responsible for understanding all of the regulatory and state and governmental guidances around the world for all of our pharmaceutical medical device, animal health customers that Domino has, of which there were many. The interesting thing is seems like there's a lot of commonalities we learned then that are starting to come into play now for other companies.

Jon Ballard: So thanks for the background guys. Clearly, you're working with a lot of different manufacturers out there. What are you seeing for pain points in the industry when it comes to this topic?

Paul Hammond: Well, I can kind of jump in with what I'm seeing with my customers because again, Mark oversees our whole group, of which there are four or five of us, maybe even six now. But the big thing that we've got right now that I see my customers struggling with is compliance with Walmart guidelines, Jon. And Mark, maybe you can say that's what the rest of our team is seeing as well?

Mark Shaffer: Absolutely.

Paul Hammond: So if you're not familiar with the Walmart guidelines, Jon, Walmart has set out a series of packaging guidelines that pertain mostly to secondary packaging, but also to pallet labeling. And it involves a functional change in how most manufacturers, and it's not just food or beverage, it affects lifestyle brands, it affects sporting goods. It really affects anybody that's trying to supply to Walmart. And the purpose of these changes is to make it easier for Walmart to accept product into their distribution centers and warehouse. The biggest change is now they're requiring every case to have two printed, we'll call them, labels on them. It can be direct case printing or it can be a label, but their new requirement is there's got to be one on the long side of a case and a second label or print on either the opposite long side or on an adjacent short side. And Jon, that's a big change to the industry.

Jon Ballard: So Walmart in the past has actually tried some initiatives like this from what I understand. Can you talk a little bit about the history of their past initiatives and is this the initiative that you think is going to stick around and get some legs and tell us a little bit about your thoughts on this?

Paul Hammond: Well, you're very right. They have done it in the past. And Mark, maybe you can share some of the historical, the RFID data and then the five side printing data, and I'll jump into whether I think this is going to stick around or not.

Mark Shaffer: Yeah, sure. I mean, there's a lot of gory details to it, but gosh, this goes back to my earliest days in this industry, well over 20 years ago, and I would imagine there's people that have seen it even prior to that, but there absolutely have been different requirements, different mandates that... Boy, whether it was RFID or how they did case printing or case labeling and things like that. And I did some things in a past life with the RFID tags that went inside of packages, and it seemed to be an always kind of an ever-changing target for the people that had to be compliant, which was always a challenge. And then sometimes if people simply couldn't get compliant, it would be paused, it wouldn't be canceled, it would simply be paused, or enforcement would be paused. It didn't mean the requirement went away, it just meant the enforcement went away. I absolutely think that is changing today.

Paul Hammond: Yeah, and I'd agree, Jon, and what Mark was talking about is back when I first started as an account manager, there were these RFID requirements for Walmart, which was that every secondary package had to have an RFID tag on it, again, for ease of acceptance into the distribution center, and there were a number of customers that scrambled to meet those requirements. Then to Mark's point, when those requirements kind of got paused or enforcement on those requirements got paused, they left some companies going, well, dang, we just went and spent this money and this time doing these upgrades and now we don't have to do them. That really stinks. Then about three years, four years later, Walmart had a requirement that, any case had to have all four sides of the case labeled, and then the top side of the case labeled. So that meant five total labels going on to a case, and that was one of those moments where industry said, hey, we can't do this. I think I had a brewery that I was selling to at the time say, well, I hope Walmart wants to make their own beer because I have no physical way of making this happen. I can't put five different labelers on a line. I don't have room on it. And then that requirement kind of got paused or enforcement got paused as well. So when these new requirements came out and they came out very quietly, the RFID was pretty loud and the five side was pretty loud. Mark, would you agree that was talked about?

Mark Shaffer: Absolutely. This is absolutely different.

Paul Hammond: Yeah. So it kind of was one of those things, Jon, that really snuck under the radar. It was percolating under the surface and people were talking about it, but there had been those two previous, I don't want to say false starts, but maybe those two previous instances where enforcement got paused that had companies saying, all right, well yeah, we've heard about this two label GS 1128 or ITF 14 barcode requirement, but do we really want to go through and do this if Walmart's not going to enforce it? And the expectation had always been that Walmart would be enforcing this around October 2022 when their fiscal year started. And I can remember attending the GS1 Connect conference that year out in San Diego. I have a great video of me eating tacos, Jon, if you want to go take a look at it. Where I spoke-

Jon Ballard: Put that in the show notes, so if you want to tune in, you guys can see the video of tacos.

Paul Hammond: Fantastic taco eating video, wholeheartedly recommend it. But at the conference, Jon, I was talking to someone from Walmart and I said, "Hey, are you guys really going to enforce these?" And she said, "Well, yeah, why wouldn't we?" So that was in July. October came and went, and lo and behold, Walmart started enforcing fines and they've continued enforcing fines. In fact, there's at least one company I'm aware of that's incurred nearly eight figures worth of fines from Walmart for this. So I fully expect this to be not just the norm for Walmart, but I expect this to be a bellwether for other major customers, like a Walmart, major distribution companies. Similarly to how in the life sciences, the California E-Pedigree law was the precursor to the drug Supply Chain Security Act legislation. I think what we might be on the cusp of here is one company saying, hey, we're going to give this regulation a shot, and if it works, I could certainly see other people piling on board.

Mark Shaffer: And Paul, that's what I was going to add to what you said there. I think they're great points, there's two things that I think make this different this time through and frankly make it real. Really three things. There's precedent in life sciences and a lot of this, while different, a lot of commonalities and what that implementation looks like. The other part of it is, it's not just Walmart. There are other companies looking to do these things. And lastly, I think that the difference today from prior mandates, and this is unscientific, but there have been past mandates that felt very much like the people that created the requirement did not take into consideration the ability to be compliant with it. And if it was even possible, and there seemed to be a big disconnect, it doesn't feel like that disconnect exists today. This is a better thought out regulation and absolutely is implementable. There are challenges related to it certainly, but it's doable. And I don't think this one ends up being paused or delayed. People are already well on their way. And I think the risk that a lot of people can run into, and frankly we remind them as often as we can, is while there have been false starts in the past and there have been things that have been paused and delayed, that's not a great strategy to hope that that is coming because if it doesn't and you plan for it, and we saw this in the earliest days of the life sciences regulations going back to 2010, 11, 12, when it was California E-Pedigree, there were constant delays and people would invest and then they would pause, they would invest, and then they would pause. It would change a little bit and they'd have to recalibrate. But the people that met the deadlines were the ones that just sort of took that on and said, well, it's the cost of compliance. We need to stay on this and we need to keep doing it. And the folks that sat back and said, I'm just going to let this thing play out, are the ones that were scrambling at the 11th hour, and some of them still are to get resourced and to get compliant. When you're in that desperation mode at the end, that can become stressful, to say the least.

Paul Hammond: And if I can add one more thing, Mark, onto that, you had mentioned that this one seems real, and one of the main reasons that I think this one seems real is we've actually seen Walmart themselves amend their requirement and go listen to the industry a little bit about their requirement. And what I mean by that is when this guidance first came out, it mandated that every barcode, linear barcode, either the GS 1128 or the ITF 14 scan is a gradable B and anybody in packaging, and I'm assuming if you're listening to this, you're in packaging, otherwise you really just must need a nap. But if you're in packaging, you would know that if you are directly printing onto a brown crate box, there is a 0% chance of you getting a B. So that requirement of a B is almost a death note of forcing you to move into print and apply. Well, people pushed back and Walmart listened to advisors in the industry saying, look, you can't require this B grade. You can if it's going to be on the label, but if you're going to allow people to directly print on cases, like your guidance says you will, you got to relax the grade to a C. And they did. So to your point, Mark, I don't think this is going away because I think Walmart really does see a benefit to them in uniform labeling coming into their warehouses, and they are, it seems, willing to work with their customers to say, okay, we heard you. You said B grades universally don't work and that you need C grades on direct case printing. Okay, you got it. You still need to be compliant with everything else.

Mark Shaffer: Exactly.

Jon Ballard: So guys, I wanted to revisit something you mentioned earlier. You mentioned that you talked to some customers that actually had incurred fines from Walmart. What's that look like? I mean, are they sending you a bill or do they withhold payment or how do they enforce this stuff?

Paul Hammond: That Jon is a question I still don't know the answer to. And again, I don't want to disclose the name of the customer. I imagine there are a whole bunch of them, in fact, if you think this is you, and maybe it is, but I don't know exactly how Walmart is enforcing it. I've seen kind of rolling lists of sites and dollar amounts assigned to those sites for non-compliance. And I do want to mention that non-compliance can take all shapes and forms. It's not simply, you don't have two labels. It could be maybe you have two labels, but they're on the wrong sides. Or maybe you have two labels, but it's the wrong barcode. Or if you make produce, you forgot to put your country of origin on it, or your human-readable isn't a half inch tall. I mean, there are so many requirements beyond two labels with the barcode on each label, Jon, that making the assumption that, "Okay, I spent some money, I bought two pieces of equipment, now I'm compliant" it's being shortsighted.

Mark Shaffer: And I can tell you to add to this, Jon, some of the things that we've heard from people, and I think this is an all the above scenario, that not only are there direct fines related to unreadable codes or incorrect codes, et cetera, it can also manifest in simply rejecting shipments. If they can't read those codes on automatic receiving, they may reject shipments. The other part, and we've certainly heard this from folks unscientifically, that there are situations out there where if they are unreadable barcodes, the distribution centers will relabel the packages and invoice them for the cost of relabeling the packages.

Jon Ballard: Wow.

Mark Shaffer: Yeah. So it can manifest itself in a lot of different ways.

Jon Ballard: So it sounds expensive regardless of the outcome.

Paul Hammond: And one thing I want to say too, Jon, is I can tell you firsthand that while the corporate entities are aware of these fines, the plants aren't. So it's not like these plants are the ones being charged back. It's going back to the ultimate parent company. I sat at one of the facilities that I am responsible for and I said, "Hey, in case you guys weren't aware, you're kind of in the top 10 in fines or chargebacks from Walmart." He said, "No, we're not." I said, "A hundred percent, yes you are." And they went and checked with corporate and he goes, we had no idea that this was even happening to us. We weren't aware. So if you're a multinational account and you're listening to this, please be aware, your plants may not even be aware they're not compliant, and they're probably sitting there thinking they've done everything they need to do while they're still incurring fines. This truly becomes a cross-functional problem that requires a lot of hands to solve it.

Mark Shaffer: Well, and Paul and I both have a lot of experience in life sciences spending a fair amount of our time here at Domino and Paul for a period of time outside of Domino dealing with just these things. And one of the things we learned in life sciences among a lot of things is, it brought together departments within our customers that traditionally didn't work together. In the old days, packaging, engineering and IT, they might as well be on different planets. They simply didn't engage with each other, they didn't need to. And serialization in life sciences drew these departments together, and by design, they had to work together. And it wasn't easy because again, they had completely different priorities. There were people in marketing and IT that had no idea what goes on a production floor and vice versa. So there was a lot of feeling out of each other. But I think similar things are happening here. Again, when it's a regulatory or it's a mandate, there's a lot of different departments that can have an impact on this. And as Paul said, corporate folks are looking at these numbers that are giving them heart palpitations and the sites aren't even aware of it because it hasn't trickled down there yet. The fix is typically going to be at the site level, at least part of it. So it's an interesting role for us because we like to try and bridge that gap, and it's critical to bridge that gap to make sure that the right measures are being taken.

Jon Ballard: So I'm sitting here thinking, I'm putting myself in the shoes of a corporate manufacturing company production guy. How do I get started in this? Is this something you guys can help with? Where is the best place to start making sure that we're compliant?

Mark Shaffer: Yeah, I mean, the short answer is, Jon, absolutely. And I think, again, we learned this in our life sciences days that it's certainly not our first rodeo. And it's really important that you find partners that understand what's going on in the marketplace. It's why we do the things we do, understand the regulations. If we don't, it's awful difficult to implement a solution for our customers if we don't know what those regulations are. And compliance, it's an interesting thing because if you're already compliant, then great, life is good. But if you're not, typically it's going to require some sort of change in what you do. It might be a simple procedural change, it might be a policy change, it could be a wholesale manufacturing change, equipment change. It could require a tremendous level of investment. And what you sort of need to look at with that is, how are you going to do that? How are you going to make this change without negatively impacting your business, whether it be profitability, revenue, efficiency, any number of things that change can impact and how do you fund it? Compliance doesn't typically have a measurable ROI, although with fines and things like that, it looks that way. And then how do you future-proof and how do you align with potentially competing regulations and requirements? As Paul said, there's this Walmart thing that we see out there, but there are other retailers that have similar regulations that may not be the exact same. So you can't put blinders on and say, okay, I'm going to be compliant with this one, when there's those others that are hiding right around the corner. So again, finding folks that understand all that and they can help you with that. You have to sort of look at that big picture. And I hate to use the word holistic, but it really is a holistic view of this because the devil is in the details. We talk a lot that it's not the challenges you know about and you've identified. It's the ones that you haven't identified. They're the ones that are going to get you. And sometimes they don't manifest themselves until they manifest themselves. And sometimes you're a ways down the process where you need to turn around and double back again. And finding partners that have been there and done it and understand how to pick it apart, hopefully helps mitigate some of those risks.

Paul Hammond: So to add onto that too, Jon, we can absolutely help understand those requirements. But the key is also understanding those requirements yourself as a manufacturer. And again, the majority of the conversation around Walmart regulations or Walmart compliance is centered around two labels with an ITF 14 or a GS 1128 barcode depending on what you manufacture on each label. But the reality is there's more to that. The barcodes on a label have to be a B or better. On direct case, they have to be a C or better. They have to be three-quarter inches tall and three inches long. They have to be located at least three quarters from the edge of the case and at least an inch and a quarter from the bottom of the case. The human-readable, so lock code in the best of use by date, have to be printed on at least one side, and that has to be a half inch tall or a 48 point font. So if you're not aware of all these regulations and you simply try to solve one, you're going to be scratching your head as to why you're still getting fined. And it could be because of all those other different items. And Mark brings up a good point that, this is going to be a negative impact. Becoming compliant isn't going to be without some sort of unexpected cost because prior to 2022, there was no requirement to do this, and we saw that with all the pharmaceutical companies during the dawn of the Drug Supply Chain Security Act. So you've got to go into that understanding at some point, something's going to have to change. So how can we make this change without interrupting production, without costing an absolute fortune, while still making the largest retailer in the world happy with what you're supplying to them?

Mark Shaffer: Paul, let me add on that, Jon. One of the things, again, referencing back to some of the activity in life sciences over the years is, as Paul said, there's a cost to this compliance to get there. But what companies learn there, and I suspect companies will learn here as well, is you need to implement these things. Whatever it's going to require to get you compliant in your particular situation that is requiring some change to your business, there's absolutely the potential that there are additional business cases there not related to compliance. For example, you may have to put in software or hardware or equipment, whatever the case may be, that might have some other positive unintended results. So if you enter into this early and with an open mind, there's the potential that you can build a business case on this and actually turn it into a potential return on investment, or at the very least, completely mitigate the cost or the majority of the cost. If you wait until the 11th hour to get compliant, you'll probably end up with the bare minimum result to get you there that may or may not get you over there, and certainly may or may not be a robust solution that is future-proof, and it can be penny wise-pound foolish.

Jon Ballard: Bring this conversation full circle, guys. Let's talk a little bit about Sunrise 2027 and the industry's push to standardize around 2D barcodes. Can you tell me a little bit about what's going on there?

Mark Shaffer: Yeah, I would say, and Paul can certainly add, but he referenced the GS1 Connect conference last year. In, gosh, a month ago, I guess we attended the same event in Denver and Sunrise 2027 absolutely was what this was about in every measure. And we could go on forever, but it's this transition to 2D codes on retail packages and all these things we talk about in the future-proofing and competing requirements. This is one of those things that you need to anticipate. And we like to say that compliance isn't sort of a one-time event. It's not a task, it's an ongoing thing because it's always changing, it's ever-changing, it's ever evolving and having a sort of a healthy, open perspective on what it's going to look like and keeping your finger on the pulse of where things are going. Paul made a comment earlier about folks pushing back, and I think the thing I've learned in my career at Domino dealing with our customers is a cliche, but knowledge is power. And if you understand what the requirements are and you understand what the mandates are, there are times where you can look at that and say, yeah, I understand what you're asking us to do, but it's not realistic to do it. Here's an alternative. So if you're educated on it, you're knowledgeable on it, it gives you some muscle to push back or affect change for the better. And I don't think you can overstate that.

Paul Hammond: What I'd like to add, Jon, is I brought up California E-Pedigree as being a precursor to the Drug Supply Chain Security Act before. And if we want to try and play compare and contrast, I view what Walmart is doing, and this is me personally, these are my opinions, and we all know the comment about opinions. Everybody's got one. But my thought on what Walmart is doing here is it's very much what California E-Pedigree was in the early stages of pharmaceutical serialization and California being one of the, what I think the seventh-largest country in the world economy-wise. So California was a very large part of the global pharmaceutical economy, much like Walmart is a large part of the overall economy. So when California put this legislation out that said, hey, you're going to start labeling packages a certain way, it was very much Walmart saying, hey, we're going to require you labeling packages a certain way. And then when E-Pedigree became put in law, everybody else sat back and said, that's not a bad idea. In fact, we need to standardize on this, which began the Drug Supply Chain Security Act around the entire United States and even other countries putting their own similar legislation in place. And that to me is what Sunrise 2027 is. It's that next step from E-Pedigree to the Drug Supply Chain Security Act. This is that next step from Walmart and Amazon compliance to a more nationally, if not globally dictated compliance. And the thing is, if you look at the title Drug Supply Chain Security Act, you assume it's about securing the supply chain that the realist in me says, yeah, it did that, kind of, sort of, I guess. But the real thing it did is it allowed all distributors to select product or to accept product rather in the same way because everybody was forced to package it the same way with the same data in the same area and the same 2D barcode. And I truly think this is going to be something that major distributors say, this is going to benefit us. Sorry guys. You want your stuff on our shelves? You're going to have to comply to this. Will it get to the point of government mandated legislation? I sure hope not, but it'll certainly be one of those things where the entire industry has said, hey, this Sunrise 2027, we're going to take this as our opportunity to say we want these cases, these pallets packaged a certain way, and you guys better start being compliant.

Jon Ballard: Guys, thank you so much for joining us, Paul and Mark, it's been a pleasure. You guys are full of information on this topic, and if you as a listener have questions about this topic, don't forget to head on over to There you can get Paul and Mark's contact information. They'd love to talk to you more and answer questions you might have that this podcast didn't. Don't forget to subscribe and like us, and tune in next time for another exciting episode. Thank you and have a great day.

Zach Baierl: Thank you for tuning in to another episode of Leave Your Mark: the Coding and Marking podcast sponsored by Domino. We hope you enjoyed our insightful discussion and gained valuable knowledge to enhance your operations. Remember, for more information on revolutionizing your coding and marking solutions, visit

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