FOOD SAFETY CONCERNS WITH CHOCOLATE

1. FOOD SAFETY CONCERNS WITH CHOCOLATE “Keeping Your Sweets Safe”

2. THE HERSHEY COMPANY • Leading North American manufacturer • quality chocolate and non-chocolate confectionery • chocolate-related grocery products • leader in the gum and mint category • Global Manufacturing Operations • Manufacturing facilities in US, Canada, Mexico, Brazil, China, India and Malaysia

3. FUN FACTS • We use more than 1 BILLION pounds of milk a year • almost 2 pounds of milk to make one pound of milk chocolate • We make over 3.5 BILLIONbars per year • We make 13.6 BILLIONkisses per year across all our kiss shaped brands! • 4 days of production would make enough Kisses to stretch from New York City to Los Angeles • 1 day of Syrup production would make 12.2 million 8 ozglasses of chocolate milk • 1 week of production would make enough snack size bars to completely cover 4 football fields

4. HERSHEY GLOBAL BRANDS

5. HERSHEY LOCAL JEWELS

6. POTENTIAL FOOD SAFETY RISKS • Salmonella • Chocolate Products • Cadbury 2006 • Nesquick Chocolate Powder 2012 • Chocolate Marshmallow Eggs 2013 • Peanut Products • Con Agra Peter Pan Peanut Butter 2007 • Peanut Corporation of America 2008

7. POTENTIAL FOOD SAFETY RISKS • Listeria • Dairy Ingredients • Allergen Concerns • Peanut, Almond, other Tree Nuts, Milk, Soy, Wheat • Foreign Material • Metal on Metal in processing equipment

8. WHY IS FOOD SAFETY IMPORTANT • Consumer well being • Hershey is an $8 billion brand, and growing • Global Distribution • Our brand is our name

9. WHO IS RESPONSIBLE FOR FOOD SAFETY • Everyone • Identify the “right” thing to do • Train people on the “right” thing • Practice the “right” thing • Empower employees to do the “right” thing • “Doing The Right Things Right Everyday”

10. CHALLENGES TO FOOD SAFETY • Global Manufacturing and Distribution • Standards differ • Infrastructure differs • Cultures differ • Food Safety is equal • Diverse product line presents different challenges

11. GLOBAL FOOD SAFETY SYSTEM • Product Excellence Program • HACCP Based Approach • Food Safety • Food Quality • Regulatory Compliance • Assure Safe, High Quality Products Across the Supply Chain • Sets expectations, defines programs

12. PRODUCT EXCELLENCE PROGRAM • Identify • Product quality and safety concerns • Control • Develop systems to control product quality / safety concerns • Monitor • The effectiveness of the controls

13. PEP IS THE WAY WE OPERATE PEP INNOVATION SUPPLY CHAIN GOVERNANCE

14. DRIVERS OF INNOVATION • New manufacturing facility • New manufacturing process • New products • New market • New regulations • New technology

15. THE INNOVATION PROCESS

16. DESIGN QUALITY IN • Overlays the innovation / commercialization process • Quality Design Review • New Material / New Product / New Process • Product Qualification • Commercialization

17. NEW MATERIAL / NEW PRODUCT • Product review • Recipe development • Regulatory review – where manufactured and where sold • Label review • Dietary concerns – Kosher, Halal • Key requirements identification • Claims – Peanut Free, Sugar Free, Reduced Fat • Certifications – Organic, Rain Forest Alliance • Unique product attributes • GMOs

18. NEW PROCESS • Process review • Process Controls • Product Attributes • Product Safety • Equipment review • Sanitary Design • Ability to clean effectively • Change over capability

19. PEP IS THE WAY WE OPERATE PEP INNOVATION SUPPLY CHAIN GOVERNANCE

20. SUPPLY CHAIN • Ingredient • Packaging • Receiving • Manufacturing • Shipping • Warehouse • Distribution • Retail / Consumer

21. SUPPLIER QUALITY PROGRAM • Supplier Qualification • Supplier Approval Program • Ingredients • Packaging • Food Contact Packaging - qualify as an ingredient • Equipment • Contract Services

22. RECEIVING • Inbound Inspection Process • Load Conditions • Carrier Conditions • Ensure Correct Material, Approved Supplier • Sampling, Certificate of Analysis

23. MANUFACTURING • Prerequisite programs form the foundation • Premises • Food Defense • Facility • Structure • Utilities – air, water, steam, lighting • Chemical Compliance and Control • Integrated pest management • Waste management and disposal

24. MANUFACTURING • Prerequisite programs form the foundation • Equipment • Product protection – physical contamination control • Cleaning and sanitation • Calibration • Allergen Control • People • Dress and grooming • Plant practices • Training

25. MANUFACTURING • Master Control Plan • Food Safety • Food Quality • Regulatory Control • Key control points • Chemical, Biological, Physical, Regulatory • Monitoring, Corrective Action, Verification, Validation

26. SHIPPING • Program modeled on the Sanitary Food Transportation Act of 2005 • Sanitary Transportation • Controlled Shipping Conditions

27. WAREHOUSE / DISTRIBUTION • Facility Design • Construction style and material • Appropriate Storage Conditions • Integrated Pest Management Program • Stock Rotation • Controlled Storage Conditions

28. RETAIL / CONSUMER • Customers - Confection Protection at Retail • Warehousing and Storage • Environment • Pest Management • Stock Rotation • Customer and Consumer Feedback

29. PEP IS THE WAY WE OPERATE PEP INNOVATION SUPPLY CHAIN GOVERNANCE

30. GOVERNANCE • Program and Policy oversight • Shelf life • Product coding • Traceability • Incubation hold • Recall program management, mock recall activities

31. GOVERNANCE • Assessment program • Internal manufacturing facilities • Compliance to GFSI certification requirements • Assessments across the supply chain

32. PEP IS THE WAY WE OPERATE PEP INNOVATION SUPPLY CHAIN GOVERNANCE

33. WHAT DOES FOOD SAFETY MEAN TO HERSHEY “Doing The Right Things Right Everyday” • Identify the “right” thing to do • Train people on the “right” thing • Practice the “right” thing • Empower employees to do the “right” thing

34. QUESTIONS?