Reverse Supply Chain Improvement Project Recalled Products Work Group “Do it once, right and fast”

1. Reverse Supply Chain Improvement Project Recalled Products Work Group “Do it once, right and fast” Speakers: Cathy LeRoux, Kellogg Company Gary Spinazze, Nash Finch Company Amy Fanale, GS1 US

2. Recalled Products Work Group Gary Spinazze (Lead), Nash Finch Company Leon Elcock, Campbell Soup Company Pete Bannochie, General Mills, Inc. Jeff Pepperworth, Inmar Ellen Harvath, Kellogg Company Dave Jones, Kellogg Company Daniel Triot, Procter & Gamble Mike Rozenbajgier, Stericycle Laura Trappe, Unilever US Steve Henig, Wakefern Food Corp. Becky Bly, Walgreen Company

3. Definitions of Recalls Class I: A situation in which there is a reasonable probability that the use of or exposure to a violative product will cause serious adverse health consequences or death. For example, salmonella in peanuts. Class II: A situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote. For example, foreign material found in food products. Class III: A situation in which use of or exposure to a violative product is not likely to cause adverse health consequences. For example, minor labeling violations. Source: Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer Safety and Confidence, 2010 Deloitte

4. Recall Mania Source: Rtlr/Wlsr B

5. The Five Stages of a Recall

6. Communications Multiplicity Communications need to follow the same path as products Ingredient/ Packaging Supplier Customer DCs Manufacturers Stores “Growers” Plant A Retailer B Plant Wholesaler C Wholesaler Recalled Good 6 6

7. Communications Multiplicity Communications need to follow the same path as products Ingredient/ Packaging Supplier Customer DCs Manufacturers Stores “Growers” Plant A Retailer B Plant Wholesaler C Wholesaler Recalled 7 7

8. Background Recalled Products Work Group recognizes that every company has a documented process – protocol – to follow for a recall/withdrawal event. Goal: Increase speed and accuracy of recall communication and product removal from supply chain. Suggestion: Read “Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer Safety and Confidence,” 2010, GMA, FMI, GS1 and Deloitte* Thought for Today: Simplify *Available for download at: http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Consumer%20Business/US_CP_Joint%20Industry%20Recall%20Execution%20Effectiveness%20Report_052810.pdf

9. Protocol Example Potential Issue is Identified One Manufacturer’s Protocol • Supplier • Plant • Consumer • Customer • Govt. Regulatory Status Letter Issued PRODUCT RECALL / RECOVERY FLOW Convene Recall Crisis Management Team Close Out Recall with Regulatory Agency Yes Recall Follow-up / Effectiveness Check Initiate Recall Recall • Authorization • CEO & VP QRO • Recall Coordinator • QRO • Inform Senior Leadership • Customer Communication • Sales • Media/Consumer Communication • Corporate Communications • Rapid Recall Exchange Portal is also used to Communicate to Customers • Sales • Customer Information • Returns • Replenishment • QRO • Collects and maintains documents • 3rd Party • Used to Visit Retail Stores for Recall Effectiveness Checks No • Required: • QRO-Business/Regulatory • Sales • Legal • Finance • Corporate Communications • Supply Chain • Marketing • Situation Dependent • Health & Safety • Investor Relations • QRO * • ICS Reports / Tracking • Collects supporting materials • Issues letter • Maintains Master Recall File • Retains records for 7 years • Review with Legal Manage As Market Withdrawal or Locally • Customer Communication by ICS • Returns • Replenishment 9

10. Protocol Example One Wholesaler’s Protocol

11. Protocol Example One Retailer’s Protocol

12. Major Issue #1 Determining the problem and whether a recall is warranted by the manufacturer. • Recommendations for manufacturers • Focus on identifying products and batches affected. • Assemble all relevant data. • Set a reasonable goal for notification and work to it.

13. Major Issue #2 Multiple notices over multiple days for same recall. • Recommendations for manufacturers • Include the maximum number of products in first notification. • Communicate all information in first notification including: • All UPCs, sizes/pack counts, lot codes, expiration dates. • Concise disposition instructions. • Include important system data such as: • PO# (or copy of full PO) • PO date, ship to/from locations Best Practice

14. Major Issue #3 Not knowing where all of the recalled product has gone in the supply chain. • Recommendations for supply chain • Communicate to customers who did not buy the recalled product: • Just in case they acquired it elsewhere. • So they know which lots and SKUs are not recalled. • Wholesalers who carry the item in their DC and are not sure which customers purchased recalled product, send recall notification to all. Best Practice

15. Major Issue #4 Stores must accurately and quickly prevent consumer purchases. • Recommendations • Involve key store personnel in the recall process/protocol: • Store manager – first line of audit. • POS coordinator – block the item in scanning systems. • Service desk personnel – prevent restocking of consumer returns. • Lock out the recalled product UPC in the POS system as soon as possible to disable scanning.

16. Major Issue #5 Efficiently handling returned product and closing the recall. • Recommendations • Verify DCs have stopped shipping, stores have removed product. Then start replenishment. • Contract with service providers to: • Remove recalled product. • Audit for compliance. • Involve corporate auditors to check compliance. Best Practice

17. A Little Help Boiler plate communications templates from the Recalled Products Work Group: • Press release • Letter to customers who received recalled product • Letter to customers who did not receive product • Frequently Asked Questions

18. Conclusion “Do it once, right and fast” • Over-communication helps if you are unsure of product locations. • Over-communication hurts if you are making up for incomplete or inaccurate information. • Publish as soon as accurate and complete information is available.

19. Amy Fanale GS 1 US • PRESENTATION FROM GS1

20. Food Safety Modernization Act • Signed into Law on January 4, 2011 • Implementation phased in over 3 years – we are only half way there! • The focus is on Prevention • Prevention controls requirements • Expanded records access • New expectations in records maintenance • Increased inspections • FDA Mandatory recall authority • Traceability

21. Prevention and Documentation Prevention Controls Requirements HACCP (Hazard Analysis and Critical Control Points) required for all foods* Recall plans* *MUST BE IN WRITING Expanded Records Access to FDA FDA access to all records related to manufacturing, processing, packing, transportation, distribution, of any food for which there is a reasonable probability that exposure will cause serious adverse health consequences or death AND all records relating any food that is likely to be affected in a similar manner MUST BE PROVIDED UPON REQUEST

22. Be Prepared to Act Quickly New expectations in records maintenance Then: FDA could only access records related to the food product believed to be adulterated Now: FDA can request access to records related to other food handled by the facility, including consumer complaint records The FSMA requires companies to report to the FDA using the Safety Reporting Portal within 24 hours of confirming they have a reportable food Increased inspections Be prepared. FDA inspections likely to focus on high risk products and ingredients

23. One Step Forward and One Step Back FDA Mandatory Recall Authority “History will be made when FDA changes its approach to inspection to take full advantage of the preventive controls framework and enhance our public health focus.  This means conducting more inspections …. that better target the key elements of a company’s food safety plan and are effective and efficient in determining whether the company is meeting its prevention duty.” Michael R. Taylor Deputy Commissioner for Foods Food and Drug AdministrationFDLI Food Safety Conference January 27, 2011 Traceability Record Keeping – Are Supplier, Manufacturer, Distributor, Wholesaler and Retail Customer records matching up? The FSMA requires companies to track and trace product back from where it was received and forward to where it was shipped

24. “Do it once, right and fast” • Let’s talk about it!