Traceability Food Policy Impact – UFPC Perspective

Who is UFPC, LLC?

Who is UFPC, LLC

• Unified Foodservice Purchasing Co op, LLC

• Largest purchasing cooperative in the QSR industry

• Exclusive supply chain management entity for Yum! Brands • KFC • Pizza Hut • Taco Bell • A&W • Long John Silver’s (LJS)

• Yum operates more than 35,100 locations in 110+ countries

• Support both domestic & international business

• Wholly owned by our Operators, both Corporate & Franchise

• Offices in Louisville, Ky - Irvine, CA - Dallas, TX - Wichita, KS - Deerfield Beach, FL -

Improving Traceability –

What’s Industry Doing?

Current Food-Related Initiatives

5

Foodservice GS1 US Industry Initiative

Industry Initiatives – Other Work

Industry Lead Traceability Task Group - Traceability Research Summits

- Held 2 – Philadelphia & Chicago - Weekly Calls

- Developing Guidance Materials - Glossary of terms & definitions

- Benefits matrix - Potential ROI/Business case scenarios - Potential Hurdles

GS1 Lead Work Group Exploring North

American Case Labeling Protocol - Still developing agreements around scope, intent, & verbiage

Improving Traceability –

What’s UFPC/Yum Brands Doing?

UFPC/Yum Bar Coding Project

Suppliers - UFPC & Yum Develop Specification

- Explore Bar Code Application Technology

- Require extended data bar codes on all consumable items in 2010

- Manage Compliance

Distributors - Explore Capability

- Determine Scan Points

- Manage Compliance

In-store - Explore Operator Needs for all Brands

- Determine Functionality

- Map Store Process

- Investigate Industry Capabilities

- Explore long term solutions using technology

2005 --------------------------------------------------------2012

2

Real Time Extended Data – all human consumable items

10

Production Facility

Lot Number

Production Date

Item Number

Now optional

Suppliers – Implement In-Production Printing

Distributors – Implement Bar Code Scanning

Order Picking

In Store Delivery

Supports Better Accuracy & Traceability

Receiving

In Store Technology Bar code scanning - foundation

On hand scheduled inventories - alerts “potential loss issue”

Order creation

Interface into BOH systems

Provide secure reporting Efficient in store process

Secure Above Store Visibility

Add to inventory at receipt alerts “shelf life risk” Deplete from inventory alerts “older inventory on hand”

Enabled Drivers

Enabled Drivers

Enabled Suppliers/Couriers

Non-enabled Drivers

Non-enabled Drivers

Non-enabled Suppliers/Couriers

Store Locations

Distribution Center

Yum! Operator/Corporate

Full Supply Chain Visibility

The Source

Industry Concerns

Confidentiality – not just ingredients & formulas

Supply network

- who we use

- how our products move

Volumes

- how much is moving

Velocity

- when are we moving it

Impact – not just cost

Production line speed

ERP/network integration

Process interruption

3rd party partnerships

Scalability – impact on small partners

Leverage – build on existing efforts & investments

Clear direction building on current initiatives

Collaboration is already happening

Systems/investments are being undertaken

Listen to the innovators, but also the final implementers

Approach from a position of trust – we ALL care about the public’s health & safety

Understand the real concerns

Is Progress Being Made?

Conclusion

YES……… The Train Has Left The Station Industry Must

Lead or be Left to Follow

Leverage All Learnings to Develop Flexible Platforms That Meet the Intent & Work for Us All

Industry Must Be Part of the Conversation – or Live with What is Developed

Contact

Brenda Lloyd Director – Purchasing & Distribution Systems

UFPC, LLC

Brenda_lloyd@ufpc.com

502 891-2781

Food Traceability:

We Need to do Better

Washington DC

December 1, 2011

23 CONFIDENTIAL

Today’s Dialogue

• What are some practical steps that need to be considered by industry and government to create a viable traceability system that will work “From Farm Gate to Dinner Plate”

• Food for thought . . .

24 CONFIDENTIAL

Is Food Safety the only need?

• Traceability is a tool used by numerous other industries

• They see the value and benefits . . . Why not agriculture & food?

25 CONFIDENTIAL

Some Benefits of Traceability • Lower Cost & Lower Risk:

More precise, faster recall management

• Increased Revenue

Market access/growth – Exports rely on verifiable information

• Stronger Margins

Deliver more of what the customer wants and will pay for

Reduction of working capital from lower inventories

• Public Health & Safety

Clearer chain of custody for traceback

Bioterrorism: The issue no one wants to discuss

• Animal Welfare: More reliable response to outbreaks

26 CONFIDENTIAL

Why is this so difficult?

• Getting bogged down in details before we agree on the destination – Vision is needed

• Trying to have all the answers before we even start

• Assuming that one solution will fit all

• Lack of understanding about the ‘art of the possible’

• The industry’s traditions and culture of rugged individualism and mistrust – Us vs. Them

27 CONFIDENTIAL

Are we focused on the wrong things?

• How do we want the world to see us?

• What’s the vision for the agri-food industry?

• The ‘answer’ is not traceability. . . . Traceability is a result of doing other things well

• It is about

A successful, vital, contributing industry The entire food system

More innovative product development

Safe, healthy, high quality food

Solving the problems of hunger, human health, environmental sustainability & economic strength

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How do we do it?

We need to be Better!

We choose to go to the moon in

this decade . . . not because it is

easy, but because it is hard,

because that goal will serve to

organize and measure the best

of our energies and skills . . .

29 CONFIDENTIAL

Canadian Approach

• Start with commitment to a unifying vision

• Recognize interests, not positions

• Consider the entire food chain – ‘Farm Gate to Dinner Plate’

• Consensus is not a 4-letter word

• Communicate, Communicate

30 CONFIDENTIAL

How can we become better?

• Success will depend on: Commitment – Collaboration – Confidence

• Building trust is still a major hurtle – Open a dialogue

• Farmers and food businesses need to think about more than themselves – Consider how they fit into the 'Food System’

Each stakeholder is a part of the solution – Not beggar thy neighbour

• Above all, a sense of URGENCY!

Public expectations for action will push regulators

31 CONFIDENTIAL

Policy Levers

• Leaders who are prepared to take the hard knocks – Promote the changes that will be needed

• Research on what works elsewhere, yes. Also what policies will encourage participation across the food system?

• Investment – Pilot projects and collaboration across boundaries

• Education is essential to understanding the value for business and for government – Public versus Private Good

• Regulation – others have shown that voluntary compliance will only go partway

32

Some will ask, why worry?

33 CONFIDENTIAL

We can (and must) do Better 1. Industry/government collaborate & articulate a vision / objectives at the

national level – Engage the “whole chain”

2. Identify and agree upon priorities and strategy where investments are most needed – Communicate, communicate, communicate

3. Develop sector roadmaps that are harmonized with the over-riding traceability vision – Include communications & education plans

4. Consolidate sector strategies into National roadmap & delivery times

5. Commit to support internal traceability; but also stimulate development of network (full chain) traceability

6. Integrate traceability into trade and market development policies

THANK YOU

www.ontrace.ca