topco supplier handbook - 4.1.2011

Topco Associates LLC. Supplier Handbook Page 1 of 44

Supplier Handbook

Version: 1.16 Effective March 31, 2011


Table of Contents

Introduction ........................................................................................................... 4 Benefits of Topco Business .................................................................................. 6 Supplier Expectations ........................................................................................... 9 Supplier Code of Conduct ................................................................................... 11

Conformity with Applicable Laws and Regulations .......................................... 12 Employment Practices ..................................................................................... 12

Supplier Diversity ................................................................................................ 14 NuVal .............................................................................................................. 15 Requirements for Suppliers ................................................................................ 16

Product Supplier Agreement (PSA) ................................................................. 16 Certificate of Insurance (COI) .......................................................................... 16

Quality Assurance ............................................................................................... 17

Product Approval ............................................................................................. 17 Product Testing ............................................................................................... 18 Coding and Lot Traceability Markings ............................................................. 18 Product Traceability ......................................................................................... 20 Shipping Case Markings ................................................................................. 20 Shipping Documents ....................................................................................... 21 Specialized Product Categories ...................................................................... 21 Package and Label Evaluation ........................................................................ 21 Plant Inspections ............................................................................................. 22

Product Availability .............................................................................................. 23

Recommended Quantities ............................................................................... 23 Product Delivery .............................................................................................. 23 Product Integrity .............................................................................................. 24 Pallet Requirements ........................................................................................ 24 Inspections ...................................................................................................... 24 Accepting of Product ....................................................................................... 25

Liquidation Policy ................................................................................................ 26 Product Updates ................................................................................................. 27 Product Recall or Withdrawal .............................................................................. 28


GTIN Global Trade Item Number ..................................................................... 29 What is a GTIN ................................................................................................ 29 Key Benefits of the GTIN ................................................................................. 29 GTIN Definitions .............................................................................................. 30 Case Code ...................................................................................................... 31 Assignment of GTINs to Packaging Levels ..................................................... 31 Supplier Responsibility .................................................................................... 32

Invoicing Requirements ...................................................................................... 33

Invoicing Accuracy .......................................................................................... 34 EDI Invoice Policy ........................................................................................... 34

Gifts and Gratuity Policy ..................................................................................... 36 Appendix ............................................................................................................. 37

Product Information Form ................................................................................ 37 Supplier Information Form ............................................................................... 38 Emergency Contact Information ...................................................................... 39 Case Labeling DOMESTIC PRODUCTS ..................................................... 40 Carton Markings IMPORT PRODUCTS ....................................................... 41 Carton Strength Requirements Import Products : ......................................... 43


Introduction

The principle of this Handbook is to introduce you to Topcos business values

and practices. This will direct and guide you through the processes and

requirements of our suppliers consistent with our approach of having a mutually

beneficial business relationship. Topco at times will amend or update this

Handbook as necessary.

Topcos vision is to be a multi-channel powerhouse in the grocery industry to

enable our Members to level the playing field against the national chains doing

the following:

drive product cost down

drive owned brands penetration up

maximize differentiation from large national chains

enable Topco Member-Owners to differentiate themselves by how we do

business

Topcos focus is to be a premier customer for our suppliers:

first choice for suppliers innovation and ideas

have a communication channel that will notify Topco first of any issues or

concerns

no one pays less than Topco on a comparable basis

Topco Associates LLC specializes in aggregating multi-billion dollar purchases of

its grocery industry Member-Owners in the procurement of a broad range of

products and services including owned brands, national brands, perishables,

equipment, and supplies. Excellent relationships with our Members, Suppliers,

and Topco Associates allow us to work efficiently and effectively to bring quality

and value to our Members and ultimately their consumers. Topco also serves as

a vehicle for its Members to achieve efficiencies of scale in key support areas

such as quality assurance, packaging, innovation, and logistics.


Many of the leading independent companies in the supermarket retail, wholesale,

and foodservice channels are Members of Topco, making it one of the largest

purchasing organizations in the grocery industry.

Topcos staff of experienced industry professionals collaborates with its Members

and suppliers to work toward the common goals of reducing product and

operating costs, and increasing owned brands penetration and product

differentiation.

Topco is a financially secure company that prides itself on our timely payment

policy.


Benefits of Topco Business

The Topco Supplier Handbook provides information on Topco guidelines,

requirements, and information to our suppliers. In conjunction with the signed

Product Supplier Agreement (PSA), this Handbook will serve as a source for the

information you will need to conduct business with Topco. In addition to the

requirements of the PSA between Topco and supplier, all Topco suppliers are

expected to adhere to the guidelines described in this Handbook. Adherence to

the PSA and guidelines are important factors in Topcos supplier selection

process.

Topcos desire is to create and maintain supplier relationships that are positive,

productive, and collaborative in providing product and service solutions for

Topcos Members. As a supplier, some of the benefits to working with Topco

include:

Aggregated Volume

With its large and growing Member base, Topcos purchasing volume is among

the largest in the grocery industry. By aggregating volume, suppliers can

increase buying power for raw materials and packaging and increase production

efficiencies to help ensure best supply arrangement.

Single Point of Contact

Topco acts as a single point of contact for our total spend, facilitating the

negotiating, ordering, strategizing solutions, and billing processes for suppliers

and Topco.

Category Knowledge

Topco has category expertise, leveraging resources worldwide to keep abreast of

consumer needs, governmental changes, competitive trends, and evaluating

solutions with our suppliers.


Quality Assurance

Topcos team of Quality Assurance Associates are dedicated to working with our

suppliers in maintaining strict quality standards established by Topco and its

Members.

Packaging Design Capability

Topcos team in Creative Services works with our Members and suppliers to

create attractive and high-impact packaging that drive sales.

Topco Label Management Program (TLMP)

The TLMP Department leverages the total Topco volume that spans across

multiple packers in order drive down the cost of the packaging material from our

packaging printers (such as Fort Dearborn, Poly Cello, and Hood). The objective

is to manage the purchase and inventory of paper labels, poly bags, pet food

bags, flour bags, etc. We then resell the packaging material to each packer. In

some cases, we are able to use common labels and bags across multiple

vendors, and the TLMP Department monitors the inventory and forecasts (with

the assistance of each members planning group) for all of the products to ensure

that we have an appropriate supply on hand.

The benefit of using our TLMP services is that it provides a seamless approach

to managing Member packaging inventories while holding costs down and

maximizes continuity of design by using a single printer by programs when

possible.

Merchandising Support

The Topco Program Management Team works hand-in-hand with our Members

providing assistance with category management, scan-data evaluation,

merchandising, space planning, promotions, and retail execution, all in the

interest of growing sales.


Common Goal Alignment

Topco works together with its Members and suppliers to reduce product and

operating costs and increase owned brand penetration. As a result, build

Members market share, drive sales, and profitability.


Supplier Expectations

Communication is a key success factor. Successful relationships are built on two-

way communication and a collaborative approach to business. Topcos goal is to

continue to delivering excellent customer service to our Members. An important

element of this commitment is the performance of our suppliers and supply chain.

We expect a high level of customer service from our suppliers. We are focused

on selecting suppliers who are highly motivated to increase sales through

product quality, low costs, product delivery, and innovation. Suppliers are

awarded business based on Topcos QCDI (Quality, Cost, Delivery, and

Innovation) approach to doing business.

The expectations of our suppliers and broad measures for success are:

Quality

Quality is determined by meeting Topcos specifications and standards, which is

continuously measured in several ways, including: Topcos QA Department

evaluation of product and packaging, plant audits, SQF certification, buying team

evaluation of product, and consumer and Members complaints and comments.

Cost

Our goal is to provide high quality owned brand products at the lowest total cost

of ownership for our Members. Cost is measured several ways, including: total

cost of goods, competitive cost when compared to other suppliers, economic

value, payment terms, volume incentives, and logistics cost. Suppliers are

required to sign Form 60 detailing the volume incentive agreement. Form 60 will

be initiated by Topco Procurement and signed by both Topco and the supplier.

Delivery

We are committed to delivering the right product, to the right location, at the

agreed to time. Deliveries are measured by on-time delivery to Topco or to Topco

Member, fill rates, quality of loads including product damage, load shifting, pallet

quality, production code quality, shelf life of product on delivery, and case

markings.


Innovation

It is important that we provide new and innovative products that meet the

changing needs of our Members and products and services that enable our

Members to differentiate themselves from their competition.

Innovation is measured by suppliers ability and level of activity in response to

Topcos ideas and suggestions, as well as to bring new product ideas, product

changes, and packaging improvements to Topco. In addition, innovation is

measured by supplier provided information on category and market trends,

speed to market with new products, process improvements, technical advances,

and a QCDI approach in suppliers business.


Supplier Code of Conduct

Topco is committed to the highest standards of ethical conduct in all of our

business dealings.

Topco believes that approved suppliers and all subcontractors of approved

suppliers should follow the same philosophy in both written policies and in

practice. Topco recognizes that its suppliers are independent businesses.

However, the actions of suppliers reflect on Topco, its Members and the

community in which we serve. Therefore, Topco expects suppliers to employ the

same level of business values, ethics, and practices as Topco.

For these reasons, Topco has established the following policy. Compliance is

required of all suppliers and it is the responsibility of each supplier to uphold

these requirements. Supplier shall make certain their subcontractors also meet

the terms of this policy. Failure to comply may result in withdrawing suppliers

approval standing.

Topco employees are prohibited from accepting gifts or gratuities from our

suppliers. While our rules do allow for limited exceptions for items of nominal

value, the offer or acceptance of gifts is inappropriate and discouraged.

Under no circumstances will our employees solicit any gift or gratuity. If at any

time, any person believes there has been a violation of the Code of Conduct or

any conduct that maybe considered unethical either by a supplier or Topco

employee, the person is expected to report the activity to senior Topco

personnel.


Conformity with Applicable Laws and Regulations

Topco believes that all employees deserve to be treated with dignity and respect.

Topco believes in the fair treatment of and fair wages for all employees, and that

no employee is discriminated based on race, color, religion, sex, age, physical

ability, national origin, or any other protected class. Topcos long-standing policy

is to comply with all local and national laws wherever conducting business and to

uphold a high standard of ethics.

Suppliers must conform to all pertinent local and national legal requirements,

customs, and published industry standards pertaining to employment and

manufacturing. If there is a conflict between legal requirements and published

industry standards, at minimum, suppliers must comply with the law that takes

precedence.

Employment Practices

Forced Labor: The use of or forced labor by a supplier is strictly prohibited. The

use of labor under any form of indentured servitude is prohibited, as is the use of

physical punishment, confinement, threats of violence, or other forms of physical,

sexual, psychological, or verbal harassment or abuse as a means of punishment

or control. Suppliers will not engage production facilities that force work to be

performed without pay or to force persons to work against their will. Nor will

suppliers contract for the manufacture of goods for Topco of subcontractors that

condone such behaviors.

Child Labor: The use of child labor by suppliers or a subcontractor of suppliers

is strictly prohibited. Child is defined for the purposes of employment as a person

who has not reached the age of 15 unless the local law allows for the minimum

age of 14. At no times is the supplier to allow individuals under the age of 14 to

be involved in the production or handling of Topcos product. In either situation,

the supplier will not permit individuals between the ages of 14 and 16 to work

during the hours in which the minors are by law required to attend school except


in situations where the minor is enrolled in a legally approved apprenticeship or

similar program.

Working Hours: Suppliers must guarantee that all individuals working on goods

supplied to Topco do so in conformity with national and local laws pertaining to

the number of hours and days worked.

Compensation: It is Topcos belief that all employees, including suppliers and

suppliers subcontracted employees be given fair wages and benefits, including

compensation for overtime pay, that comply with local and national regulations. If

local and national regulations do not support overtime pay, at minimum,

employees must be paid at regular pay for all hours worked.


Supplier Diversity

Topco recognizes the importance of differences. It is through differences that we

can grow and prosper. Topco is committed to develop mutually beneficial

relationships with minority and women-owned business. This commitment is part

of our procurement strategy. Topco continually looks for companies that offer

quality, service, low cost, and innovation. Minority and women-owned businesses

offer their own uniqueness and strengths.

Benefits of Supplier Diversity:

The minority population is the fastest growing sector in the United States.

We believe our supplier base should reflect the demographics of our

Members customer base.

Diverse suppliers bring new ideas and products to our business including

ideas and opportunities on how to reach the diverse markets and offers

unique insights to these emerging markets.

Topcos supplier diversity initiative will enhance our supply chain, create

wealth in the communities in which we serve, and better identify with

consumers.

It is good business sense.

Topco recognizes the following certifying agencies:

National Minority Supplier Development Council

Women's Business Enterprise National Council

Association for Service Disabled Veterans

Government Agencies (Federal, State, City or County)

Other certifications may be accepted. Requests can be submitted to Topco.

Topco defines minority and women-owned businesses that are at least 51

percent owned, managed and controlled by one or more members of the

following groups: African Americans, Hispanic Americans, Native Americans,

Asian Pacific Americans, Asian Indian Americans, and Non-Minority Women.


NuVal

Topco entered into a partnership with Griffin Hospitals in Derby, CT to introduce

the NuVal Nutritional Scoring System. Dr. David Katzs of Griffin lead a team of a

dozen internationally recognized nutritional experts to develop a universal system

for rating nutritional quality across all food and beverage categories. This

algorithm takes nutrient and ingredient information and computes a 1-100 point

nutritional score, with higher scores representing higher nutritional quality. The

goal of the scoring system is to provide consumers with easy to understand

nutritional information to make healthful decisions when purchasing food

products.

The first step in this process is to obtain the required nutritional data from our

suppliers that will allow us to score all of the food and beverage products

procured by Topco. To collect the nutritional and ingredient information, Topco is

utilizing a central web-based product specification database through a service

provided by Marketing Management, Inc. (MMI) called Product Master.

Prior to shipping, suppliers are expected register product into Product Master and

submit nutritional information on all skus procured by Topco and all skus being

considered for commercialization. To begin the process, supplier must send an

e-mail address, name, and phone number of the person at your company who

will manage this initiative to [email protected]. Supplier contact is

typically someone in QA or R&D. MMI will then provide details to supplier on how

to register.

Our goal is to be, at minimum, nutritionally aligned with national brand

equivalents. Topco QA will work with suppliers to address significant nutritional

disparities that require reformulation.

If you are interested in learning more about the NuVal Nutritional Scoring System

visit www.nuval.com.


Requirements for Suppliers

Product Supplier Agreement (PSA)

Suppliers are required to have a signed PSA on file with Topco prior to shipping

products. This is a legal binding agreement detailing terms and conditions of

conducting business with Topco. The Topco Buyer issues PSAs. Following is a

summary of major PSA provisions. Suppliers need to refer to their PSA for

compliance requirements.

Certificate of Insurance (COI)

A certificate of insurance naming Topco as an additional insured is required prior

to shipping products. This certificate must be updated annually prior to the

expiration of the COI. Failure to provide a current COI will result in payment

being withheld until received. The PSA details minimum insurance requirements

as well as additional insurance matters.


Quality Assurance

Topco is synonymous with quality. Quality products do not occur by chance. It is

through stringent processes and practices, attention to detail, quality of raw

materials, and collaborative efforts of Topco and our suppliers that Topco can

deliver the best quality products at the lowest price.

Product Approval

Quality approval process begins with establishing a target and developing a

written product specification for every product we offer. Topcos brand standard

philosophy is to provide products that meet or exceed the quality performance

standards and nutritional profile of the target product, which is the brand with the

highest consumer recognition.

Supplier must submit at least two samples of product to Topco QA for initial

approval along with the written finished product quality specification for the

product. All submitted samples must meet all specification requirements in order

for the item to gain initial approval. Following is information that must accompany

the initial set of samples:

Finished product specification (organoleptic, grading criteria, performance

standards, physical, chemical and microbiological limits)

Product shelf life

Minimum shelf life upon receipt of goods by Topco or Topco Member

Code interpretation (full description, all characters) for the lot code portion

of the code

Copy of the most recent (within the preceding 12 months) Global Food

Safety Initiative (GFSI) certification to one of the benchmarked schemes

(food facilities) or second party audit report (non-foods facilities).

Technical label copy: product name, nutrition facts, ingredient statement,

allergen statement, net contents, country of origin, preparation

instructions, storage instructions, warning statement, health or nutrition

claims and supporting information


Documentation in support of vendor compliance with the FDA Bioterrorism

Act of 2002

Valid certifications related to the product and packing facilities (organic,

kosher, etc.)

Change to an approved product formulation specification or label is

prohibited without prior approval by Topco QA. Additional information,

requirements regarding product testing, and approval can be found in the

Topco Supplier Quality and Food Safety Expectation Guide.

Product Monitoring

Product testing is required for all private label products purchased by

Topco. The testing program is designed and administered by Topco QA

via a risk-based product monitoring protocol and varies by product

category as well as by prevalent industry issues.

Supplier Quality/Safety scorecards are issued every six months. They

report each suppliers overall performance during the latest six-month

timeframe and communicate recommendations to improve scores as well

as required sampling frequency.

Coding and Lot Traceability Markings

All retail units are expected to have markings that clearly identify the specific

packing plant within the producing country along with any additional characters to

identify the container contents, packaging line, etc. The additional markings are

for traceability purposes. In addition, all products with an expiration date are

expected to have a use-by date marked directly on the retail container (can end,

glass jar or metal lid, etc. [not on the label, neckband, or some other removable

part of the packaging]). All coding and lot traceability markings that appear on the

retail unit are also expected to be present on the shipping case. Topco QA

expects to have on file, at all times, the current full code interpretation guidelines

for all of a suppliers products. Products that are represented by an importer or

that are sourced from a plant used by multiple suppliers or importers to Topco

are also expected to reflect the 3-character importer/supplier identifier code at


the end of the USE BY or BEST BY date line. Topco QA assigns this code. All

code markings must be fully legible and must not interfere with or overlap other

markings on the container.


Product Traceability Product traceability is a critical element in the establishment of safe quality food.

In the event of a recall, product withdraws, or questions our customers may have

concerning the products we sell, it is important that we are able to respond

quickly and accurately. Accordingly, we expect our suppliers to be able, at any

time, to identify and provide the sources of the ingredients used in the finished

products that they supply Topco or Topco Members. Documentation should be

available by finished product and by (lot) production code printed on the item.

Information is expected to be provided within 48 hours of the inquiry.

Shipping Case Markings

The following elements are Topcos minimum expectations for shipping case

markings. At a minimum, two adjacent sides of the shipping case should clearly

display:

Product name

Product Style, Flavor, etc.

Brand

Pack Size, Type, and Count

UPC numeric (GTIN)

Scannable UPC

Product traceability information

Use by date

Samples of shipping case label requirements are shown in the Appendix section

on pages 38 - 40 of this document.

Other markings as designated by government of importing or exporting country

may be required (i.e., CIQ number and seals for Chinese plants). Printed

markings should be fully legible and must not interfere with or overlap other

preprinted markings on the shipping case.


Shelf Life: Products are expected to have a minimum of 80% of their total shelf

life upon receipt by Topco or Topco Member. In the case of seasonal packed

product (i.e. canned fruits and vegetables), supplier is expected to closely

monitor negotiated quantities versus actual product movement so that Topco can

start receiving new pack product once it is available.

Shipping Documents

Shipping details should accompany all product shipments and must arrive at the

warehouse along with the product. The contents of each delivered load should

accurately reflect all required lot and code date information, by product. If a

shipment is comprised of multiple code dates of any one item, the breakdown of

quantity by code should be reflected in the shipping documents. All shipments

should be made in compliance with the FDA Bioterrorism Act of 2002.

Specialized Product Categories

Fresh meat, produce, and other perishable products have different quality control

requirements. Topco has experts in the field, including produce inspectors on the

east and west coasts as well as meat selectors and auditors monitoring

production across the country, who provide expertise in highly sensitive product

lines.

Package and Label Evaluation

QA also evaluates package label information. In addition to the labeling

requirements described in the PSA, it is the responsibility of the supplier to

ensure accurate nutritional labeling, ingredient labeling, allergen warnings, and

that all labeling elements are in compliance with all local, state and federal

requirements.


Plant Inspections

As provided in the PSA, in addition to formal inspections conducted through the

certification process, Topcos QA staff or designated second party company may

also inspect facilities. These plant inspections are for investigative purposes and

to assess that agreed-upon corrective actions have been addressed related to

product quality or safety issues.

If additional non-conformances are identified via this inspection process, the

vendor is expected to submit a written corrective action plan for each identified

non-conformance. Corrective action plans must include timeliness to completion.


Product Availability

It is the responsibility of the supplier to track the movement of their product(s) to

ensure appropriate label and finished goods inventory is adequate to meet Topco

Members demands. Supplier are expected to work with their Topco Buyer to

determine appropriate inventory levels and production runs to ensure meeting

service level commitments to our Members.

Recommended Quantities

Inventory quantity for finished goods should be generally two weeks and quantity

for labels and packaging should be three months. This is dependent on product

category and final direction of Topco Buyer. Refer to PSA for specific category

information.

Product Delivery

Products must be shipped and delivered in adherence with the requirements

detailed in the Topco PSA or as communicated by the Topco Buyer. The

purchase order states actual ship-to location. In addition, supplier must ensure

that shipments and deliveries adhere to each individual Members requirements.

When shipping or delivery requirements differ between Topco and the Member,

the supplier will follow the Members requirements and notify the appropriate

Topco Buyer of the change.

As with Good Manufacturing Practices, suppliers are expected to have Good

Food Handling Practices established to protect the integrity of the food by

ensuring properly maintained temperatures, proper identification and segregation

of damaged, dated, rejected or product on hold, assurance that no raw products

or packaged products are cross contaminated, and trailer conditions are sanitary

and well maintained.


Product Integrity

Supplier is expected to ensure that product is shipped in a method to maintain

the physical integrity and quality of the product, shipping case, and pallet

configuration.

Pallet Requirements

Supplier must use CHEP pallet rental system unless otherwise authorized by

Topco or Topco Member.

Topco and Topco Members reserve the right to inspect all incoming pallets and

to reject any pallets that are damaged or not in compliance with specifications.

The driver who delivered the rejected pallets will be required to unload and the

restack the product on acceptable pallet(s).

Inspections

All deliveries are subject to examination for damage and infestation before being

received. Constructive placement on the dock must be done in such a way to

allow sufficient space for a thorough inspection. Pallets may be visually checked

with a flashlight. If there is evidence of possible infestation found all products will

be black-lighted. If loads have any evidence, whatsoever, of infestation the entire

shipment will be returned to the suppliers point of distribution. In such instances,

transportation charges and reprocessing charges will be the responsibility of the

supplier.


Accepting of Product

Topco and Topco Members will receive products subject to inspection and

approval of its inspectors within a reasonable time after receipt of order.

Payment for products does not constitute approval. If the products or tender of

delivery are defective or do not conform to samples, descriptions and

specifications included on purchase order or otherwise provided to supplier,

Topco or Topco Member may reject all of the products, or accept any quantity of

commercial units and reject the remaining. Supplier will reimburse Topco or

Topco Member in full for products rejected and returned and supplier will assume

all cost of handling. Handling charges include, but not limited to, transportation

costs both ways, employees handling costs, and the difference in cost of

replacement product if cost of replacement product is greater than agreed upon

cost with supplier. Refer to the PSA for further details.


Liquidation Policy

Topco understands that at times product may need to be liquidated. Suppliers must adhere to the following policy to ensure proper handling of Topco or Topco Members label. At no time will product liquidation be authorized that pose a potential health risk, quality issue, or expired product. Consideration will be given only if product can be liquidated outside of Topco or Topco Members market and Supplier must ensure product will not make its way back to Topco or Topco Members market area. Topco Labeled Product: Prior to product liquidation supplier contacts appropriate buyer with product description, label name, production code, UPC code, expiration code, inventory in cases and units of effected product, and reason for disposition of product. Supplier should provide a recommended solution of liquidation. Topco will have final authority over product distribution. Member Labeled Product: Prior to product liquidation supplier contacts appropriate buyer at Topco and at Topco Member with product description, label name, production code, expiration code, inventory in cases and units of effected product, and reason for disposition of product. Supplier should provide a recommended solution of liquidation. Topco along with Topco Member will have final authority over product distribution.


Product Updates

Suppliers are expected to contact the appropriate Topco Buyer concerning

opportunities, discussions, questions, and issues. In the event the Buyer is not

available, the supplier can contact the Category Director followed by the Vice

President.

Topco expects our suppliers to provide us with accurate and timely information.

This includes information regarding unit pricing, bracket pricing, promotions,

damage allowance, freight, discounts, quantities, delivery status, and logistic

information including pallet quantity, cases clearly marked with UPC, case

description, pack and size, case length, width, and height, supplier contact

information including customer service, and ship and pickup information.

Information on file must be accurate at the time the order is placed.

When product information changes Topco requires 10 business days to process

changes. This is the minimum amount of time necessary to ensure good flow of

information to our Members.

We understand that at times the information may not be available; however

under no circumstances should receipt of information be subsequent to receipt,

or lack thereof, of product delivery. It is critical suppliers notify Topco prior to a

scheduled delivery of any changes to order, (i.e. order quantity, product cost, or

requested ship/delivery date). Supplier must communicate to the appropriate

Topco Associate so Members can be advised and given options to remedy the

situation.

To ensure accurate information supplier must communicate changes to product

or supplier information via the Product Information Form (PIF) and/or the Supplier

Information Form (SIF). PIF and SIF forms are found on pages 37 and 38 in the

Appendix section of this Handbook. Only fields with changes are to be

completed. In the event of a change to suppliers remit address change must be

submitted on the suppliers letterhead.


Product Recall or Withdrawal

In the event that a government agency advises supplier that a product recall is

necessary or appropriate, if Topco or Topco Member, or supplier otherwise

determines that it is necessary or desirable to remove any product from sale or

distribution, the deciding party will promptly notify the effected party. Supplier

shall notify Topco of any recall or market withdrawal involving any product

produced at any facility producing Topco or Topco Member products even if a

Topco or Topco Member labeled product is not involved. Supplier shall fully

cooperate with Topco and Topco Members with respect to any recall or

withdrawal of product from sale or distribution, and all product recalls or

withdrawals shall be coordinated through Topcos Recall Coordinator.

Topco and Topco Members reserve the right to charge suppliers a fee for all

costs incurred in connection with a product recall or withdrawal. Costs may

include, but are not limited to, the value of the product, freight costs, handling

costs, loss of sales and profit, and difference in cost of replacement product if

cost of replacement product is greater than agreed upon cost with supplier.


GTIN Global Trade Item Number

The following is an explanation of GTIN, use of GTIN at Topco, and supplier

requirements.

GS1 has created the standard for use of GTINs. Topco will follow the standard

when ever possible. More information can be found on the GS1 web site:

barcodes.gs1us.org

What is a GTIN

GTINs provide distinctive product recognition worldwide. GTINs are encountered

most often at the point of sale and on cases and pallets of products in a

distribution/warehouse setting. GTINs can be programmed into various types of

GS1 bar codes and Electronic Product Codes (EPC) which are programmed

into Radio Frequency Identification (RFID) tags.

GTINs are generally used on purchase orders and delivery and payment

documents. If used properly, GTINs will distinctively identify our products as they

move through the global supply chain to the end user.

Key Benefits of the GTIN

Facilitates the global flow of trade items (products and services) and

associated information used in electronic commerce

Uniquely identifies trade items at all levels of packaging (item, case, and

pallet)

Allows accurate machine reading of trade items when placed in bar codes

Delivers trade item data in a consistent format and structure

Simplifies supply chain management

GTIN enable the use of GDSN for data synchronization.

(2006 GS1, 2006)


GTIN Definitions

The GTIN is the unique GS1 System Identification Number used for trade items.

The term trade item refers to any product or service upon which there is a need

to retrieve pre-defined information; this product or service may be priced,

ordered, or invoiced at any point in the supply chain. This includes individual

items as well as all of their different packaging configurations.

GTIN are 8, 12, 13, or 14 digits in length. GS1 recommends that a GTIN be represented in software applications as 14

digits by right justifying and zero filling left, as appropriate.

The four GTINs (8, 12, 13, and 14 digits) can be represented in a bar code. Each

code provides distinctive numbers when right justified and used in a 14-digit

database field:

GTIN 8 (used in EAN-8 bar codes)

Seven digits containing a GS1-8 Prefix and Item Reference

One digit representing the Check Digit

GTIN-12 (used in UPC-A Consumer Code and EPC-E bar codes)

Eleven digits containing a UPC Company Prefix and the Item

Reference assigned by your company


GTIN-13(used in EAN bar codes)

Twelve digits containing a GS1 Company Prefix and the Item

Reference assigned by your company



GTIN-14 (used in ITF-14, GS1-128 (formerly UCC/EAN-128), Reduced

Space Symbols, and Data Matrix bar codes, plus EPCs)

One digit representing the Indicator digit to indicate packaging level

Twelve digits the GS1 Company Prefix and the Item Reference

assigned by your company


A leading 0 represents the consumer-selling unit. This applies to

product that is scanned at checkout at any level in the hierarchy.

A leading digit between 1 and 8 can represent the product in various

forms such as case pack, shipper count, and pallet count.

A leading digit of 9 represents random weight product.

Case Code

The food industry standard for case identification is a 12 Digit Case Code.

This code is not a GTIN. At no time should additional digits be added to

the 12 Digit Case Code.

Samples of shipping case label requirements are shown in the Appendix section

on pages 35-37 of this document.

Assignment of GTINs to Packaging Levels

The company owning the manufacturer prefix should assign GTINs. Therefore,

for Topco owned brands Topco will assign the GTIN. For Member owned brands

the Member assigns GTINs and notifies Topco of the numbers for input in our

system. This will prevent any product receiving issues while providing data and

traceability of products.

The assignment of the 12-digit UPC Consumer Code (GTIN-12) and placement

on the consumer-selling unit does not change.


Supplier Responsibility

For Topco owned labels the supplier must contact Topco for assignment of

GTINs for individual product labels and product cases, shippers, and/or pallets.

For Member owned labels the supplier must contact the Member for assignment

of GTINs for individual product labels and product cases, shippers, and/or

pallets.

If supplier is requesting GTINs from a Member who is not assigning GTIN-14, the

supplier should contact Topco for further direction. The supplier should not

assign GTINs.


Invoicing Requirements

As provided in the PSA, direct billing to Topco is the standard method of

invoicing for all products purchased by Topco. Suppliers are expected to bill via

EDI directly to Topco. Should a supplier be unable to bill electronically, a fee may

be assessed against each purchase order to help offset the cost of manual

processing. As provided in the PSA, Suppliers shall provide monthly, a detailed

statement of account reflecting all outstanding charges and credits.

Following is the minimum information expected on all invoices:

Topco

Topco Member

Purchase Order Number

UPC Case Code

Topco Product Code

In some cases, for operational and other business reasons, a supplier may be

requested to direct bill a Member. This method of billing by supplier is only

acceptable with the expressed written approval by Topco, as set forth in the PSA.

In the rare situations where the supplier directly bills a Topco Member, the

supplier must provide Topco a monthly sales recap of all direct billings within

three (3) business days after the end of each month. The sales recap must

include for each item:

reporting period

UPC case code or Topco product code

complete item description

quantity

billing unit of measure

gross price

promotional allowances

miscellaneous charges

Under direct billing to Members Topco shall have no liability or responsibility for

payment and supplier shall look solely to the Topco Member for payment.


Invoicing Accuracy

It is the suppliers responsibility to review each purchase order received from

Topco to ensure compliance with all aspects of Topcos purchasing agreement

with supplier, (i.e., per unit pricing, bracket pricing, promotions, damage

allowance, freight, discounts, quantities, delivery requirements, shipping

requirements, etc.). If there is a discrepancy or question, it is the suppliers

responsibility to notify the Topco Buyer (via email, fax or by phone) before the

order is shipped.

EDI Invoice Policy

All suppliers doing business with Topco are expected to be able to transmit an

invoice and month end recap for Member direct billing electronically (via EDI).

Standards: Topco uses Electronic Data Interchange (EDI) as an integral

business tool to increase customer satisfaction. The data interchange standard

used by Topco is UCS. Topco uses value-added networks (VANS) and

occasionally may elect to communicate directly to a partner through other

communications protocols.

Acknowledgements: Transmission of supplier EDI invoices will be

acknowledged according to standard EDI guidelines. The 997 acknowledgement

will be used. It is the suppliers responsibility to verify Topco has acknowledged

transmissions and take appropriate action if the expected acknowledgements are

not received within 24 hours.


EDI Invoice Requirements: The following are conditions that apply to EDI

invoices:

Invoices must meet the requirements as defined by Topco listed in the

Topco EDI Invoice Mapping section.

Once in production mode, invoices will only be received via EDI. Paper

invoices will not be processed. The supplier may incur a non-compliance

assessment of $92 per paper invoice received by Topco.

Topcos purchase order number on the invoice and the purchase order

must match

Supplier must communicate to Topco any invoice DUNS number or

address change within 30 days of the change

Invalid EDI invoice data may result in an additional assessment

EDI Invoice and Order Mapping information can be found by following the vendor

tab at our website, www.topco.com.


Gifts and Gratuity Policy

The making or giving of payments, gifts, contributions or other inducements to

any Topco personnel is contrary to Topcos policy unless there is a business

purpose, the amounts expended are reasonable and not lavish, and the

entertainment occurs infrequently. Exceptions to this policy are for items of

nominal value such as memo pads, paperweights, desk calendars and other

similar items. At no times are cash or cash equivalent gifts, such as gift cards or

gift certificates, to be offered.

Please make sure that your salesperson or representative understands Topcos

policy on gifts and that you do not put our employees in the position of having to

refuse gifts, gratuities, or entertainment. Topco appreciates your support.


Appendix

Product Information Form

Item number:

Item Description

Case Case dimensions:

_____ Height _____ Width _____ Depth Case weight: ______ Pallet configurations: Cases per layer: ______ Layers per pallet: ______ Ship Location:

Street

City/State/Zip:

Phone:

Fax:

Contact Name:

Pickup Location:

Street

City/State/Zip:

Phone:

Fax:

Contact Name:

Can be combined with other products: _____ yes _____ no If yes, list item code and description:

Item Code Product Description


Supplier Information Form

Supplier Name:

Correspondence Address:

Contact Information: Name:

Contact Information: Address:

Contact Information: Phone/Fax:

Customer Service: Name:

Phone number:

(Remit address or information changes must be submitted on suppliers letterhead.)


Emergency Contact Information

An emergency is defined as a serious incident where the media or a government agency is involved; a health hazard exists involving your product, etc. Routine business matters, such as late shipments, order changes, etc., do not fall into this category. Supplier Information

Supplier Name:

Street Address:

City, State, Zip:

Telephone:

Fax:

Employee Information

President/General Manager

Name: Emergency #:

Home

Cell

VP Sales Home

Cell

VP Distribution Home

Cell

Private Label Manager Home

Cell


Case Labeling DOMESTIC PRODUCTS

Topco expects all cases to be labeled with the following information on Length and Width side: See graphic below. A. Package Size: Pack size must be located in the upper left-hand corner of two

panels. Numbers and letters should be the same size. B. Manufacturers UPC Case Code on top right hand corner on length and width

side of the box. C. Topco or retail members brand Food Club, TopCare... D. Product name and description. This must be the same as the name and

description on the consumer label. E. Expiration / Freshness Date:

Cartons requiring an expiration or freshness date must be stated with a MM/DD/YYYY on length and width sides of carton. The expiration date on the carton must match the inner retail unit.

MM/YYYY will be acceptable for HBC items F. Topco Purchase Order number G. 12 Digit Scannable UPC case code (Not UPC Consumer Code) Pallets must be marked as a Mixed Pallet if containing more than one lot, item, or expiration dates. Slip-sheet must be used to separate mixed lot, items, or expiration dates on a pallet.

A) # of inner pks/# of pcs per inner/pk size B) UPC Case Code

C) Insert Topco Brand Name Here

D) Insert Item Description Here

E) Insert EXPIRATION / FRESHNESS DATE: here (when applicable) F) Topco PO #:00000XXXXXXX

G) Scannable Bar UPC Case code (not consumer UPC code)


Carton Markings IMPORT PRODUCTS

A. Case markings must be printed (imprinted) B. GTIN bar code must be printed on carton, and scannable (stenciled bar

codes are NOT acceptable) C. Product labels are NOT acceptable D. Carton markings must be printed on ALL four side panels of the carton E. Use Black GCMI #90 ink F. Use Sans Serif font (typeface) ONLY G. Print ALL characters in UPPER CASE only H. Use the same size font for all numbers and letters I. NEW item carton markings MUST be approved by Topco Associates LLC

prior to printing* * Re-orders do NOT need to be approved

Pallets must be marked as a Mixed Pallet if containing more than one lot, item, or expiration dates. Slip-sheet must be used to separate mixed lot, items, or expiration dates on

a pallet.

CONTACT FOR IMPORT PRODUCT:

For questions regarding carton markings, contact Bella Levinson at (847) 329-3261 or e-mail [email protected]

# of inner pks/# of pcs per inner/pk size MFR I.D. #: XXXXX CASE ITEM #: XXXXX

Insert Topco Brand Name Here

Insert Item Description Here

Insert EXPIRATION / FRESHNESS DATE: here (when applicable)

Insert MFR LOT #: here (when applicable)

MADE IN (insert county of origin)

TOPCO PO #: 00000XXXXXXX

Insert G-TIN Case Bar Code Here


Carton Markings IMPORTS Examples: 1) Carton Marking Example:

2) Long and Narrow Carton Marking Example:

G-TIN BAR CODE

EXAMPLE:

Pack Number Item Check

Indicator System Number Digit

Indicator

Manufacturer

Identification

Number

8/12/4PK MFR I.D. #: 11225

CASE ITEM #: 04185

ELECTRIX

AA ALKALINE BATTERIES 4PKEXPIRATION DATE: 05/2015

MADE IN CHINA

TOPCO PO #: 000002956487

8/12/4PK MFR I.D. #: 11225 TOPCO PO #: 000002956487

CASE ITEM #: 04185

ELECTRIX

AA ALKALINE BATTERIES 4PK

EXPIRATION DATE: 05/2015

MADE IN CHINA


Carton Strength Requirements Import Products: There are two tests used throughout the corrugated industry to determine strength.

Bursting (Mullen) Test refers to the rough treatment and resilience of corrugated material. This test measures the force required to rupture or puncture the face of corrugated board and is measured by a Mullen Tester. It also is indirectly related to the cartons ability to resist external or internal forces and thus to contain and protect a product during shipment. This test is reported in pounds.

Edge Crush Test (ECT) is a newer standard that is a true performance test and is directly correlated to the stacking strength of a carton. ECT is a measure of the edgewise compressive strength or corrugated board. It is measured by compressing a small segment of board on edge between two rigid platens or plates perpendicular to the direction of the flutes until a peak load is established. This is measured in pounds per lineal inch of load bearing edge but is usually reported as an ECT value.

Topco requirements are as follows:

Corrugated Board Strength Equivalencies: Single Wall Corrugated

Bursting Test Minimum Edge Crush

Test

Maximum Suggested Loading Limit Per

Carton

125# 23 ECT 20 lbs.

150# 26 ECT 35 lbs.

175# 29 ECT 50 lbs.

200# 32 ECT 65 lbs.

275# 44 ECT 95 lbs.

350# 55 ECT 120 lbs.

Corrugated Board Strength Equivalencies:

Double Wall Corrugated

Bursting Test Minimum Edge Crush

Test

Maximum Suggested Loading Limit Per

Carton

200# 42 ECT 80 lbs.

275# 48 ECT 100 lbs.

350# 51 ECT 120 lbs.

400# 61 ECT 140 lbs.

500# 71 ECT 160 lbs.

600# 82 ECT 180 lbs.


The equivalent ECT values are given as a minimum value. Due to the various recipes corrugators use the makeup of each will vary slightly in overall strength. Cases that are subject to severe handling need to have a higher strength. The bursting test will provide a truer measure of rough handling. The supplier is responsible to ensure the case strength will withstand normal handling appropriate for the product.