1. 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. 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. 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. 4 Recall Mania Real Examples Class III, III & WDInfoRxTotal Rtlr/Wlsr A 2010 total177547181320 Rtlr/Wlsr A 1/1/11 – 5/18/116321492144 PerishNon-PerishGM/HBCRxTotal Rtlr/Wlsr B 2010 total1362146043453 Source: Rtlr/Wlsr B

5. 5 The Five Stages of a Recall Pre- notification Manufacturer Notifies Customer Customer DCs Notify Stores Returns and Disposal Regulatory Close out/ Reconciliation

6. 66 Communications Multiplicity “Growers” PlantRetailer Wholesaler Ingredient/ Packaging Supplier Manufacturers Customer DCs Stores A B C Wholesaler Plant Communications need to follow the same path as products Recalled Good

7. 77 Communications Multiplicity “Growers” PlantRetailer Wholesaler Ingredient/ Packaging Supplier Manufacturers Customer DCs Stores A B C Wholesaler Plant Communications need to follow the same path as products Recalled

8. 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%20Rec all%20Execution%20Effectiveness%20Report_052810.pdfhttp://www.deloitte.com/assets/Dcom- UnitedStates/Local%20Assets/Documents/Consumer%20Business/US_CP_Joint%20Industry%20Rec all%20Execution%20Effectiveness%20Report_052810.pdf

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

10. 10 Protocol Example One Wholesaler’s Protocol

11. 11 Protocol Example One Retailer’s Protocol

12. 12 Major Issue #1 Recommendations for manufacturers 1.Focus on identifying products and batches affected. 2.Assemble all relevant data. 3.Set a reasonable goal for notification and work to it. Determining the problem and whether a recall is warranted by the manufacturer.

13. 13 Major Issue #2 Multiple notices over multiple days for same recall. Recommendations for manufacturers 1.Include the maximum number of products in first notification. 2.Communicate all information in first notification including: All UPCs, sizes/pack counts, lot codes, expiration dates. Concise disposition instructions. 3.Include important system data such as: PO# (or copy of full PO) PO date, ship to/from locations Best Practice

14. 14 Major Issue #3 Not knowing where all of the recalled product has gone in the supply chain. Recommendations for supply chain 1.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. 2.Wholesalers who carry the item in their DC and are not sure which customers purchased recalled product, send recall notification to all.

15. Recommendations 1.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. 2.Lock out the recalled product UPC in the POS system as soon as possible to disable scanning. 15 Major Issue #4 Stores must accurately and quickly prevent consumer purchases.

16. Recommendations 1.Verify DCs have stopped shipping, stores have removed product. Then start replenishment. 2.Contract with service providers to: Remove recalled product. Audit for compliance. 3.Involve corporate auditors to check compliance. 16 Major Issue #5 Efficiently handling returned product and closing the recall. Best Practice

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

18. 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 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 Prevention and Documentation

22. 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 Be Prepared to Act Quickly

23. 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 Administration FDLI 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 One Step Forward and One Step Back

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