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Presented by: Mareya Ibrahim, Founder and CEO

EAT CLEANER® and Grow Green Industries, Inc.

TOTAL RECALL:

Managing Food Safety Protocol and Avoiding Crisis

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According to Centers for Disease Control and Prevention, 76 million Americans are impacted by food-related issues each year, with 325,000 hospitalizations and 5,000 deaths from foodborne illnesses.

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The State of Food SafetyCost to human safety and the bottom line

• Product recalls have more than doubled since 1999; salmonella and undeclared allergens risk

• From 2007 to 2008 alone, food and beverage recalls increased by 60 percent

Microbial contamination primary cause of recalls

Only about 1% of all imports are inspected according to the USDA

Shifting demographics and changing consumption patterns reinforce the need for food safety awareness.

Consumption of raw products is increasing very rapidly; fresh spinach consumption grew 180 percent between 1992 and 2005.

The U.S. population is becoming more susceptible to foodborne illness — 20 to 25 percent of the population is comprised of the elderly, children and pregnant women — the highest risk categories.

By 2015, it is estimated that one in five Americans will be over the age of 60 and, therefore, more susceptible to certain types of infections.

As more Americans live longer with chronic illnesses, including cancer and diabetes, vulnerability will only increase.

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Food Safety Vulnerability IncreasingMore risks on the horizon

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The FDA definition: Recalls are actions taken by a firm to remove a product from the marketplace. Recalls may be conductedon a firm’s own initiative, by FDA request, or by FDA order under statutory authority.

• Class I recall: A situation in which there is a reasonable probability that the use of or exposure to an identified product will cause serious adverse health consequences or death. For example, salmonella in peanuts.

• Class II recall: 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, allergic reactions due to undeclared ingredients.

• Class III recall: A situation in which use of or exposure to a violative product is not likely to cause adverse health consequences.

Definition of a RecallIdentifying the root and the severity

Selected Recall Reasons:• Microbial contamination• Misbranding (e.g., undeclared allergens)• Foreign material contamination• HACCP plan failure• Chemical contamination• Illegal pesticide or drug residues• Packaging defects• Worker illness or disease• Intentional contamination

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Main reasons for product recalls

Common Recall Triggers• Detection of a pathogen• pH value change on retained samples• Micro testing of in-line product• Micro testing of finished goods• Misinformation and labeling• Positive Listeria monocytogenes• Harmful substance levels, e.g., pesticide, melamine• Product tampering or sabotage

Recall RationaleReasons and Triggers

Headline-Making Recalls

2011• Jennie-O recalled almost 55,000 pounds of turkey burgers due to drug-resistant salmonella

• Nearly 3,000 cases of Dole brand salad bags were recalled after a random test found the bacteria listeria

2010• More than 500 million eggs were recalled after dangerous levels of salmonella were detected in the eggs of Wright County Egg and Hillendale Farm in fourteen U.S. states. Nearly 2,000 illnesses were reported.

2009• Salmonellosis in peanut butter from Peanut Corporation of America became "one of the nation’s worst known outbreaks of food-borne disease" in recent years. Nine dead, estimated 22,500 sickened.

•Nestlé recalled its Toll House refrigerated cookie dough products after the FDA reported there was a possibility that the E. coli O157:H7 outbreak; sickened at least 66 people in 28 states.

2008• At least 1442 cases of salmonellosis food poisoning in 43 states were reported from suspected ingredients found in fresh salsa, such as raw tomato, fresh jalapeño pepper, fresh serrano pepper, and fresh cilantro.

2007• ConAgra asked stores to pull its Banquet and generic brand chicken and turkey pot pies due to 152 cases of salmonella poisoning in 31 states linked to ConAgra pot pies, with 20 people hospitalized.

2006• E. coli O157:H7 in bagged spinach packaged by Natural Selection Foods and likely supplied by Earthbound Farm. 3 dead, and 198 people reported sickened by the outbreak across 25 States. 7

In the last 5 years

The World’s Largest Outbreak

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E.coli outbreak in Germany, 2011

World’s largest outbreak, 50 dead and thousands sickened to organ failure

Lettuce, tomatoes and cucumbers suspected and blacklisted; finger pointing led to reputation misstep and cost

Germany under fire for taking so long to identify the source of lethal E.coli

Failure to provide the public with clear information complicated matters further

The bottom line…3 weeks after the initial outbreak and hundreds of millions of dollars in losses for farmers across the European Union sparked a war of words between leaders. Citing safety concerns, Russia and Saudi Arabia blocked all imports of produce from the EU.

A disaster on all fronts

• Average cost of a recall to companies is $10 million

• Imposed federal investigations and time-consuming paper trail identification

• Stock price declines of up to 22 percent within two weeks after a recall announcement

• Potential brand damage, category impact and long term lost sales

The Importance of Food Safety ProtocolFiscal and relationship ramifications

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• Recalls happen every week and largely go unnoticed when handled efficiently and competently

• A great food scare can make headlines and sell newspapers and the bigger the brand, the bigger the coverage

• Speed of action and communication are vital, but it is equally important for manufacturers to take a little time to ensure that information is accurate.

• Bungled recalls are those where there is no clear process or decision-making, delays in admitting the problem, or worse, ignored or even covered up, only to come to light later.

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Anatomy of a RecallMedia love them, everyone else hates them

A Tale of Two Recalls

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Same company, two different outcomes

2002 Recall 2007 Recall

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Source: Deloitte Study - Recall Execution Effectiveness: Collaborative Approaches to Improving

Consumer Safety and Confidence 2010

Identification and timely escalation of issues are critical in preventing delays throughout the entire recall process.

•Manufacturers typically take from 0.5 to 72 hours to complete the identification process

• Smaller organizations with fewer facilities complete the identification process in between 0.5 and 17 hours.

• Larger organizations take 32 hours on average; more decision makers, products, facilities and distribution channels to trace

Timely Response is CriticalTiming is everything

13Source: Deloitte Study - Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer

Safety and Confidence 2010

Prevention: Inhibits food safety issues through quality assurance processes

Issue Detection: Starts from the time food safety issue is reported until aninvestigation is launched.

Investigation: Determines the severity and scope through laboratory tests. Technology is used to locate the product.

Recall Decision: Completes the identification process by reaching an internal decision that a recall should take place.

Governance: Helps ensure that crisis teams are involved from issue detection to investigation.

Total Recall ManagementFrom Prevention to Governance

Proactive Measures

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A comprehensive HACCP program is employed by leading companies using:

• Integrated technology systems rather than paper-based or spreadsheet systems

• Extends beyond the company’s facilities and goes all the way back to the raw material source, including farmers for agricultural products

• Communication around potential issues on a near real-time basis • E.g. Sensor would detect the temperature change, set off an alarm / alert and shut off the production line automatically

Programs like Rapid Recall Exchange ensure prompt and accurate product recall and withdrawal notification communications for retailers, wholesalers and suppliers through a web-based service, 24/7.

Integrated technology, real time communication

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Source: Deloitte Study - Recall Execution Effectiveness: Collaborative Approaches to Improving

Consumer Safety and Confidence 2010

Crisis Management PlanningIssue Identification-Feedback

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Communication is KeyInternal and external planning

Proactive Internal Communication:

• Assemble a task force team and appoint lead crisis management person

• Identify an official spokesperson for internal communication

• Put together a list of emergency names and contact numbers

• Create instructions on communicating with your employees; provide them with information on their role in the situation and dealing with the media

• Test out the plan by running a simulation

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Communication is KeyInternal and external planning

Proactive PR:

• Develop a list of questions and answers for the media

• Draft press release with basic company information

• Assemble a list of local media contacts to proactively approach or organize for a press conference or briefing when necessary

•Be sure your spokesperson is truthful, professional and media trained; develop a list of do's and don'ts on dealing with the media.

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Communication is KeyInternal and external planning

Proactive Retailer Communication:

• Identify a single point of contact to support recalls at stores

• Use automated systems for transmission of information to stores

• Run 24/7 recall operations; have plans for recall during the weekend

• Require stores to send a confirmation of receipt

Proactive Consumer Communication:

• On websites, in retail stores and in the national press

• Text message campaign

• Social media via P2P platforms such as Twitter and Facebook and blogs

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Crisis Management PlanningTraining and Implementation

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“Failure to Plan is Planning for Failure”Being proactive is critical

• Identify key risks and mitigate them as much as possible

• Adhere to stringent internal process and accountability procedures

• Formulate internal and external communication plans and practice them

• Act swiftly but efficiently

• Notify stakeholders and communicate openly

Y UThank

For more information, contact:

Mareya IbrahimT: 888-284-2435 xt. 702

mareya@eatcleaner.com