GFSI Standards in Warehousing & Transportation AFDO

1. GFSI Standards in Warehousing & TransportationAFDO June 10, 2013

2. Agenda US Foods Food Safety Risks in Storage and Distribution GFSI GFSI in Storage & Distribution US Foods Experience with GFSI Questions

3. U.S. Foods • One of the largest foodservice distributors in the United States • Headquartered in Rosemont, IL • Annualized revenue of US>$21B • One of the largest private refrigerated transport fleets • 7,000 tractor trailers and 25,000 employees—best jobs in the industry • Sell > 300,000 food & non-food products • Private Label from >1200 facilities in ~10 Countries • To more than 250,000 customers in US 2

4. The Headlines: NY Times Peanut Butter Recall Affects Thousands WTHR- Channel 13 INDIANAPOLIS - If you think state police are just looking for speeders, think again. All across Indiana, state troopers are now cracking down on a dangerous problem that impacts local grocery stores and restaurants, and it can make you and your family very sick. 13 Investigates shows you the threat rolling into town every day, and why police say it's "totally disgusting." The Washington Post FDA: Hepatitis A Outbreak ….. LA Times Salmonella and Campylobacter frequently detected NY Times Dancer Paralyzed by E.coli sues *** for $100 Million 12.03.2009. Stephanie Smith, the twenty-two year old Minnesota dance instructor left paralyzed by a burger tainted with E. coli filed suit today Salmonella Linked to Central Illinois Distributor October 22, 2010 (WLS) -- State health officials say they have traced a widespread salmonella outbreak at some Chicago-area restaurants to a food distributor based in central Illinois Chicago Tribune Food poisoning at Chain Restaurants in 22 Counties Wall Street Journal Results show meat products contaminated with Salmonella

5. Importance of food safety 76% Americans are at least somewhat concerned about food safety and food recalls* * Deloitte 2010 Survey

6. Storage & Distribution?

7. Producers Processors Supplier/ Distributor Operators Food Safety Risks RISK RISK RISK RISK ? 6

8. Food Safety Risks In Distribution?

9. Food Safety Risks in Distribution & Logistics • Industry fragmentation • Infrastructure • Food Safety Issues: • Food Safety Knowledge • Cold Chain Management • Traceability/ Labeling • Cross-Contamination • Club Wholesalers/ Farmers Markets *2007 Interstate Food Transportation Assessment Project – Michigan State University/ Michigan Department of Agriculture in MI, IL, WI, IN, OH Indiana Food Transportation Assessment Project- 2007-2012

10. INTERSTATE ASSESSMENT CONCLUSION reformat “Food transportation practices provide opportunities for threats to the safety and defense of our food supply”

11. Compete reformat Risk Management… “There is a need to look at the old model of food safety evaluations and inspections, close the gaps and build on their value” …Evolution Not Revolution

12. The Global Food Safety Initiative An organization of the world's leading food safety experts from retailers, manufacturers and food service companies united by a goal to improve safety in the delivery of safe food to consumers worldwide” 11

13. Who is in the Global Food Safety Initiative 12

14. The Global Food Safety Initiative 13

15. The Global Food Safety Initiative Governance and Structure • Board: Retailers, Manufacturers & Foodservice • Advisory Council: Academia, non-government organizations and government • Technical Working Groups: Retailers, foodservice operators, manufacturers, distributors, standard owners, certification bodies, accreditation bodies, industry associations and other technical experts. 14

16. GFSI Board Advisory Council Stakeholders GFSI Technical Working Groups Packaging Global Markets Manufacturing Primary Production Global Regulatory Affairs Animal Handling Auditor Competence Feed Guidance Document Transportation & Distribution GFSI Governance

17. The Global Food Safety Initiative • 1. Identification of key food safety criteria in a Standard • 2. Common procedures to verify implementation of Scheme by 3rd parties (accreditation & certification) • Benchmark & Recognition= Equivalence • Provides framework for the recognition of food safety schemes • Schemes successfully benchmarked and recognized have a common foundation of requirements, which should provide consistent results when applied • Carried out in an independent, unbiased technically proficient and transparent manner through an internationally recognized process • Benchmarked schemes are NOT identical because they differ in terms of level of prescription and specifics 16

18. GFSI Recognized Standards* *Not all inclusive

19. Key Elements for Guidance Document GFSI Scopes of Recognition

20. 26 food safety professionals from 10 Countries and 3 Continents (USA, Europe & Asia). 11 of them are food distribution companies or companies that have food distribution CHAIRS: Jorge Hernandez- US FOODS, USA & Rena Pierami- SILLIKER, USA WORKING GROUP MEMBERS BRC, UK NSF-CMi, UK ALCHEMY, US LOBLAWS Canada COCA-COLA BOTTLING, USA MCDONALD’S, USA AEON, JAPAN IFS, Germany JM SWANK, USA SYSCO,USA ALLIED FOODS, Ireland DNV, USA SUBWAY, USA GLOBALGAP, Germany AFSI, USA YUM ! BRANDS, USA ROYAL AHOLD, The Netherlands DARDEN, USA AIB INTERNATIONAL, USA SQF, USA LLOYD'S REGISTER, The Netherlands S&D Working Group

21. Work of Storage & Distribution Work Key Elements: Define key elements for Scope J- Transport and Distribution (Perishable & Ambient) Key elements under three sections: Food Safety Management Requirements Good Agricultural / Good Manufacturing/ Good Distribution Practices HACCP

22. Important Considerations: • WG did NOT write a ‘standard’ but identified the key elements/best practices and acceptance criteria for S&D • WG members represented an industry sector not their organisations or their own interests • The criteria are “best practice” • Wherever possible WG used existing format and previous GFSI work • WG also considered issues that impact the sector and provided recommendations to the GFSI Board: • Quality • Auditor competence • Multisite certification S&D Working Group

23. WG Finalized Key Elements for Storage & Distribution • Key Scope Elements was put for public comment globally • WG considered comments and finalized AFTER review of all comments • Key Elements for S&D was approved by the GFSI Board • Publish in 2013 • Standards Benchmarking in Fall S&D Work

24. A Distributors’ Perspective • Why important? • GFSI Certification is the best recognition that a food company meets best food safety practices • US Foods requirement for Private Label since 07 (>1200 facilities in ~ Countries) • Customers are requiring certification • Governments are recognizing its value • Results • U of Rostock in Germany, U of Arkansas in US and others validated certification value* including: • 17 % reduction in food recalls vs. non certified • 27% reduction in FS & QA complaints • 51% reduction in regulatory findings • 40 % reduction in product error/defect rates

25. US Foods Experience with GFSI Certification “An Improvement on the Management of Food Safety, Quality and Regulatory Compliance and bottom line Risk Reduction”

26. Compete reformat MANAGING RISKS Set a path for Certificationfor all US FoodsDistribution Centers & Processing Facilities

27. Questions

28. Closing Thoughts jorge.hernandez@usfoods.com

29. Thank-you For more information on GFSI: www.mygfsi.com