1. Pesticide Monitoring/Analysis An Industry Perspective May 7, 2015

2. Agenda Overview Gallo’s Challenge and Response External and Internal Efforts Monitoring and Control Sampling and Analysis Response to Measurements Future Opportunities Possible Developments/Challenges Conclusions

3. Fact of Life—Pesticides in many Foods/Wines

4. Gallo’s Challenge No Surprises!! Gallo’s response Internal and External Efforts seeking to know it all!

5. External Approaches Early warning system on new pesticides, changing limits. Monitoring/commenting on WTO notifications. Monitoring pesticide databases Participation in external collaborative efforts APEC, WWTG, Tech Forum

6. Internal Efforts Different approaches for Self-Produced vs Other Products Self-Produced Need a quick review of US Regulatory Scene with respect to Pesticides Other Wine Purchases Imported products Discuss later in Analysis Section

7. US/States Regulatory Scene for Pesticides EPA Approves all pesticides for use in US Market Published in 40CFR Part 180 Approvals specific to crop type and in some cases to location Establishes maximum residue levels (MRL’s) Over 180 chemicals approved for use on grapes

8. US/States Regulatory Scene for Pesticides California California Department of Pesticide Regulation (DPR) (www.cpdr.ca.gov) DPR has strict controls in place Only licensed applicators can spray pesticides Requires grower to keep application records and to submit these records to DPR Washington Washington State Department of Agriculture (http://agr.wa.gov) Similar control procedures

9. Monitoring & Control EPA approved list and State requirements a good start Not totally sufficient for Gallo’s needs Difficult during growing season to predict where resultant wine may be sold—multiple international markets Many pesticides approved in US, but not approved or approved with lower MRL’s in other countries Uptick in new/novel chemicals gaining approval by EPA- no corresponding international MRL’s So what to do?

10. Internal Control Efforts Create positive or negative list? Yes!! Starting Point EPA List– 180 Chemicals Negative List Approach All chemicals assumed ok unless known issues exist Low/no MRL in other country Customer Request(s) Positive List Approach All chemicals guilty until proved innocent! Proof of Innocence Data on residual levels (Variable) Established MRL’s in key international markets (Database)

11. Internal Control Efforts Communication to/from Growers Longer-term contracts Inform growers of positive or negative list Growers query if new compounds become available Ability to monitor spray records through DPR Shorter-term contracts Communication with grower representatives prior to acceptance of fruit Spot-Purchases Review of spray records (if possible) Analysis (more detail later)

12. Monitoring/Sampling Gallo produced wines Samples collected after fermentation cycle Samples are preserved frozen until extracted 5 mL sample used for extraction All Samples Internally produced wines Spot purchases/bulk wine/acquisitions Import products Approx. 2,000 samples/year Turn around time (TAT) Rush - 48 hours Routine – 2 weeks

13. Pesticide Methodology Multi-residue Determination of Pesticides in Wine by Electrospray Ionization Liquid Chromatography Tandem Mass Spectrometry (LC/MS/MS) –62 compounds in scope Multi-residue Determination of Pesticides in Wine by GC/MS Triple quad (GC/MS/MS) –21 compounds in scope Limit of quantitation: 0.010 ppm (10 ppb) - considered the lowest worldwide standard for most agrochemical MRL’s Values <0.01 ppm considered non-detectable Includes fungicides, insecticides, aracnicides, and herbicides Lab values stored in LIMS database

14. Pesticide Analysis Flow Chart Sample + Surrogate standards C18 Solid Phase Extraction Pesticide Elution (EtAc ) Add Internal Standard Split Sample Solvent Exchange (30% MeOH/H2O) LCMSMS Ethyl Acetate GCMSMS

15. Response to Analyses Requirements No detectable levels of non-approved pesticides For approved pesticides, action level—50% of Lowest MRL What to do if results do not meet these requirements? Extremely Rare Self-Produced Quarantine product pending evaluation Other Option to Reject

16. Future Opportunities External Harmonization (chemicals, methods, MRLs) Continued collaboration APEC/WWTG Collaboration with chemical producers Internal New Methodology Testing of Grapes?

17. Possible Developments/Challenges Enhanced Analytical Technology Lower LOD’s Chasing Zero, Precautionary principle Processing factors New markets—experience in pesticide regulation? New chemicals More sustainable/green Use of biological actives Use of chemicals with no MRL’s specified New pest pressures Drift problems?

18. Conclusions This is a very active area Pressure/Influence from consumers, producers, chemical manufacturers, analytical equipment manufacturers, regulators Critical to collaborate, drive toward harmonization Monitoring/analysis/control needs will only grow Opportunities and threats need to be addressed We have made a good start…must continue!!