Welcome. OnTrak with FSMA: A Webinar Series Hosted by: ReposiTrak and The Acheson Group
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1 Welcome OnTrak with FSMA: A Webinar Series Hosted by: ReposiTrak and The Acheson Group
2 The Wal-Mart Effect: The Jensen Farms Settlement - A Game Changer for Retailers Melanie Neumann, J.D, M.S. Vice President, CFO The Acheson Group, LLC September 16, 2014
3 3 What is the Game Plan for Today What really IS the Walmart Effect? What is the impact on retailers? What is the impact on others in the distribution chain? Distributors, wholesalers, auditors, etc. What are some preventive strategies that we can put in place so we don t find ourselves as a defendant in a lawsuit? What learnings can we add to our play book to up our game?
4 4 Jensen Farms - The Underlying Story September 2, 2011: Colorado Department of Public Health and the Environment (CDPHE) starts a public investigation of an outbreak of listeriosis. September 9, 2011: CDPHE determined that the likely source of the outbreak was cantaloupe. September 12, 2011: The cantaloupe was narrowed to have been grown in the Rocky Ford region of Colorado. September 14, 2011: in response to the multi-state outbreak, Jensen Farms recalled its cantaloupes. September 19, 2011: FDA announced findings of Listeria monocytogenes in samples of Jensen Farms cantaloupes and within those samples taken from equipment and cantaloupe in packing facility.
5 5 Cause and Effect Root Cause: The contamination occurred in the packinghouse due to dirty water on the floor and old equipment that was difficult to clean and previously used for potato farming. A Wal-Mart spokesman said that IMMEDIATE Action was taken through: Identifying the sourcing location Positive determination that cantaloupes were grown in Rocky Ford region Stores voluntarily pulled Rocky Ford melons from their shelves. Plaintiffs disputed the speed of Walmart s removal
6 6 The Verdict 2011 Listeriosis Outbreak affected 28 states, killed 33 (one miscarriage), and sickened 147 consumers 5 Listeria Monocytogenes outbreak strains 2014 Sentencing 5 years probation 6 months in-home detention 100 hours community service $150,000 in restitution Colorado US Attorney, John Walsh: No sentence of incarceration, restitution or financial penalty can undo the tragic damage done as a result of the contamination at Jensen Farms. [This] sentence serves as a powerful reminder of [the] legal and moral responsibility for ensuring their product is safe. Because of the Jensen Farms case and this prosecution, changes have been made regarding how fruit is processed and transported across the country."
7 7 The Domino Effect
8 8 On May Walmart announced it had settled 23 cases involved in the 2011 Listeria outbreak tied to cantaloupes from Jensen Farms In the 23 Jensen Farms cases that Walmart settled, a confidentiality agreement was part of the settlement and so the dollar amounts of the settlements were not revealed.
9 9 The Lawsuit The Plaintiffs: Marler Clark represented plaintiffs or family members/representatives who became sick and/or died as a result of consuming the contaminated cantaloupes. 46 total plaintiffs/>30 died The Defendants: Jensen Farms the direct manufacturer of the cantaloupes AND all parties who participated in the manufacture, distribution, and/or sale of the contaminated cantaloupe that caused injury: Walmart-Retailer Kroger-Retailer Dillon Companies (aka King Soopers)-Retailer Aldi-Retailer Price Cutter-Retailer Primus Labs 3 rd Party Auditor Frontera Produce-Distributor Other distributors & wholesalers.
10 10 Increasing Rate of Change Litigation Global supply chain Mergers & acquisitions Advances in science More complex products Consumer expectations Competitive threats Media influence New threats Regulatory changes
11 11 Types of Risks Facing the Food Industry Upstream suppliers Receiving Processing/production Traceability Distribution Warehousing Transportation Cold Chain/TCS Labeling/Claims/Advertising Recall/Crisis Management Sanitation Quality/Food Safety /Food Defense
12 12 How Do I Manage all These Risks?
13 13 Answer? Recall/crisis preparation Enterprise risk management Technology
14 14 Question? How ready are you to handle a recall?
15 15 What Should a Recall Plan Contain? Mission / Purpose Leadership Buy-In Roles & Responsibilities Incident Evaluation & Escalation Process Additional Resources Identified & Contact Details (internal and external) Record Retention Communication Strategies Systems/ IT Review, Testing and Training Cycle Customer/Supplier Notification Process & Contact Details Recall Strategy Product Disposition / Replacement
16 16 Stages of Recall Execution Incident/Complaint Management Health Hazard Assessment, Class & Scope Determination Recall Recommendation & Strategy Recall Execution Recall Termination
17 17 Prepare a Toolkit in ADVANCE! Templates Press Releases FAQs Customer letters Shareholder letters Agency communications Checklists Recall Action Items Meeting Logs Contact Lists Internal External
18 18 Enterprise Risk Management: One Umbrella Covering Many Risks Quality Food Safety Environmental/Health HR Financial Operational External
19 19 One Key Tip: Document Everything! Documentation is required as proof you did what you said you would do Documentation takes away Plaintiff's thunder! In the eyes of the regulatory agencies, if it isn t documented it didn t happen. Helps you to connect the dots/have a good story to tell. TECHNOLOGY CAN HELP YOU DO THIS!
20 20 Technology as a Solution Data handling / document management is a key element to successful prevention Process controls Supply chain management Testing results Consumer complaints Product tracking Let technology do the work for you! Alert you to unusual trends Maintain all the records needed for regulatory compliance
21 21 Using Technology as a Risk Management Tool Effective complaint management systems are necessary to effectively manage risk Ideal if technology electronically & automatically tracks trends and automatically notifies stakeholders Increases objectivity Reduces human error Increases compliance
22 22 Traceability as a Risk Management Tool Effective traceability systems are necessary to effectively manage risks If you cannot trace back to where your ingredients came from, you cannot properly determine the correct scope of a recall or protect consumer health A wider net is necessary which increases Costs Media Exposure Liability Exposure Loss of customer and consumer confidence Greater brand damage
23 23 The ROI of Technology Your brand is your biggest asset and your greatest risk Prevention and early detection of problems are the best ways to protect your customer AND your brand Accurate data capture and auto-trending is the key to staying out in front Brand protection Reporting compliance
24 24 Takeaways from this Settlement The Rules are Changing The ENTIRE distribution chain must stay ahead of the curve Pay attention to bacteria and viruses even those that haven t posed a problem before Implement a process to identify and monitor emerging risks Leverage new technology Get ready for new regulations Focus on prevention
25 25 Sign up Now for Future Webinars All About Audits October 14 th Valerie Scheidt & Anne Sherod Understanding GFSI November 18 th Valerie Scheidt & Anne Sherod FDA: Food Safety Plan Requirements December 9 th Jennifer McEntire
26 26 Stay Current! Subscribe to the TAG Newsletter Text your to: or Sign up at Subscribe to OnTrak: ReposiTrak s Newsletter jscanlan@parkcitygroup.com to be added to the distribution list
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