HACCP: A Necessity for the Packaging Industry June 26, 2007

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1 HACCP: A Necessity for the Packaging Industry June 26, 2007

2 PAC Who are we? Founded in 1949, not-for-profit corporation in PAC represents more than 75 per cent of Canadian packaging manufacturers, designers, raw material suppliers, machinery suppliers, fillers, brand owners, and major retail organizations. 1,100 corporate and associate members directly employ about 130,000. About 40 per cent of the $15-billion a year Canadian industry is derived from exports -- primarily to the United States. Approx 60% of all consumer packaging is sold to the food and pharmaceutical sectors.

3 Government Sponsorship Agriculture Canada - The Canadian Food Safety and Quality Program (CFSQP) Canadian Food and Inspection Agency Canadian Food Safety Adaptation Program (CFSAP) and Food Safety Enhancement Program (FSEP) Influencing and encouraging our industry partners to develop and implement national systems Supporting an integrated approach for the development and achievement of these systems Effectively branding Canada

4 PAC Project Food Safety Initiative for Packaging Materials that have Direct or Incidental Contact with Foods Think Inside the Box

5 PAC Project Vision A Canadian Food Safety Program that includes packaging materials that have been manufactured to a recognized voluntary standard based on HACCP principles Industry wide usage of the standard, both domestic and imports Recognized Canadian audit and certification capabilities High industry and public awareness of the need for a recognized standard

6 PAC Project History 2002 PAC Enabling Committee - Evaluate potential benefits of program 2003 Industry Kickoff Meeting Gets Ball Rolling 2003 Develop draft Prerequisite Program and HACCP standards for Flexible Plastic Packaging 2004 Pilot program to validate standards development Develop and Pilot draft HACCP standards for Rigid Plastic and Paper based packaging

7 PAC Project in Release the standards to industry and public. 2. Develop and conduct a series of 1½ day HACCP training seminars providing solid introduction to Food Safety principles and the PAC HACCP standards. 3. Development of a PAC HACCP standard for Glass and Metal based packaging materials.

8 Why is HACCP a Priority? Customer Focus The food industry is our customer. HACCP is a recognized food safety system. Value Proposition Program can help you grow your business and take cost out of your business. Canada is a large exporter of foods We need to ensure food exported from Canada is of the highest quality and international accepted. Canada is a large importer of foods We need to protect the integrity of food in Canada and ensure a level playing field.

9 What is HACCP? Hazard Analysis and Critical Control Point HACCP is a systematic and preventative approach to food safety that addresses biological, chemical and physical hazards through preventative action rather than by finished product inspection. The Food & Agriculture Organization (FAO) and the World Health Organization (WHO) established the Codex Alimentarius Commission. In 1991, Codex developed guidelines for HACCP application. This is getting wide international acceptance.

10 What does HACCP do? HACCP ensures that preventative food safety controls, based on science, will be applied in a systematic and consistent manner

11 The 7 Principles of HACCP 1. Conduct a hazard analysis. 2. Determine the Critical Control Points (CCPs). 3. Establish target levels/critical limits. 4. Establish monitoring procedures. 5. Establish corrective action. 6. Establish verification methods. 7. Establish documentation systems.

12 Customer Driven "Kraft Foods requires that all primary packaging, labels, and labeled packaging suppliers have HACCP programs in place. SQE and HACCP requirements are included in purchasing contracts. Suppliers need to look at their packaging material as food contact. This may be a new concept for them. Risk analysis needs to be performed based on risks to the consumer that will eat the packaged food. Canada is among the leaders globally for HACCP initiatives for Packaging Suppliers. Special thanks to the PAC group for leading this effort." Debra Krug-Reyes Global Procurement Quality Department KRAFT FOODS GLOBAL, INC.

13 Customer Driven "In combination with prerequisite programs such as GMP, HACCP is the most effective tool to prevent the occurrence of food borne illnesses and to avoid consumer injuries linked to the consumption of our products. Nestlé Management is strongly committed to applying the Codex Alimentarius HACCP Principles. In keeping with this approach to food safety, vendors to Nestlé are required to have an effective HACCP system implemented. "The importance of our packaging vendors in ensuring endpoint food safety of our products must not be underestimated. Packaging is an integral part of the product purchased by the consumer. It is important to protect the product, helping to ensure its safety, integrity and shelf-life. It is also the carrier of key consumer information such as ingredient composition, allergen content, nutrition information, and preparation instructions. As such, packaging vendors implementation of HACCP is as important as any other vendor within the food supply chain. Sandra Howe, Corporate Quality Systems Manager, NESTLÉ CANADA INC.

14 Customer Driven "In the food safety food production chain, you're only as strong as the weakest link. There are a lot of links from farm to fork. So you need to build on the weak links, strengthen them, so in the future the chain doesn't break. Packaging is one of those links....if you have a system in place like the PAC standard, then that shortens the amount of time we need to spend with you during our audit....it's a paradigm change. Where you were used to doing things a certain way, we now need to move to more of a food safety focus. You can't resist it. You need to embrace it, or we'll fall behind. Lorne Hietala, Manager, Packaging Services, PARMALAT CANADA

15 Customer Driven "From day one, Natrel has been committed to working with PAC and the federal government on the food safety standards for packaging based on HACCP principles, investing time and resources in developing the new packaging-specific standards so converters can more readily become HACCP compliant. Each of our 20 facilities across Canada is already compliant from a processing standpoint, so if we can extend this level of risk management to encompass the packaging that enters our plants, then we have made significant progress towards safer consumer products on retail shelves. Jean-Paul Clément, Manager: Environment & Packaging, NATREL DIVISION OF AGROPUR COOPERATIVE

16 Value Proposition How will it grow my business? Improved customer satisfaction Program will lead to improved manufacturing processes which should improve overall quality and customer satisfaction. Food producers are insisting on it growing numbers of food producers are requiring their packaging suppliers to have recognized food safety systems and be HACCP compliant (e.g. Kraft, Parmalat, Nestle). Increased exporting opportunities HACCP is an international recognized food safety process and international food customers will recognize the program. Ability to standardize process across multiple plant locations.

17 Value Proposition How will it take cost out of my business? Reduction in waste or scrap Program will lead to improved manufacturing processes which should reduce waste Reduction in employee absenteeism Focus on employee hygiene can contribute to reduced sick time Business risk reduction Limit extent of recalls if faces with a food safety situation Reduction in risks associated with food packaging. Some can be significant (e.g. allergen labeling issues, material compatibility, glass or metal contamination) Due diligence others are doing it, why not you? Acting now will reduce cost of implementation Process will identify other continuous improvement opportunities

18 Example of HACCP Benefits Chart represents relative improvements in reduction of complaints after implementation of HACCP by a food processor % Red'n The chart to the left shows reduction in number of complaints from 2003 to In total, number of complaints have reduced by over 30%. Major Customer satisfaction in the form of greater confidence in our capability.

19 Example of HACCP Benefits Positive feedback from one of the Pilot sites Plants have implemented the use of hand sanitizers in the plant. This has been positively received by the employees. Plant manager believes this has also led to significantly noticeable reduction in absenteeism due to illness which has been an issue in the past.

20 Who Have Been Involved? Food Industry Fillers, Brand Owners, and Retail Organizations They use and specify the materials Packaging Suppliers Converters, Manufacturers, Importers, Brokers, Designers, Machinery Suppliers Raw Material Suppliers Resin, metals, glass, paper, inks Government Stakeholders

21 Multistakeholder Participation Acorn Packaging Agriculture and Agrifood Canada Agropur Division Natrel Alcan Packaging Alte-Rego Atlantic Packaging Ball Packaging Products Bericap Bothwell Cheese Brewers Association of Canada Bright Cheese House, The Cadbury Adams Canada Canadian Corrugated Case Association Canadian Council of Grocery Distributors Canadian Food Inspection Agency Canadian General Standards Board Canadian Plastics Industry Association CanAmera Foods Canbra Foods Limited Central Graphics Chantler Packaging Ciom/Novacote Coca-Cola Cousins Currie Crown Packaging Dainty Foods Dare Foods Ellis Packaging FoodCon GayLea Foods General Mills Canada Graham Packaging Graphic Packaging Guelph Food Technology Centre Health Canada High Liner Foods Ian Britt and Associates JM Smucker Jones Packaging Kraft Canada Kraft Foods Global Labelad Langen Packaging Loblaw Brands Maple Leaf Consumer Foods Maple Lodge Farms McCain Foods MultiPak Minute Maid Company Canada, The Nestle Canada Norampac Owens-Illinois Glass Containers Old Dutch Foods Ontario Ministry of Agriculture and Food Packaging Association of Canada Packall Parmalat Canada Peel Plastics Products Plasticap Polytainers Primex Packaging Services R.A. Miller & Co. Reinhart Foods Richards Packaging Robinhood Multifoods Ropak Sandler Consulting Saputo Bakery Division Saxco Canada Scott Paper Limited Silgan Plastics Smucker Foods of Canada Smurfit MBI Sobeys Sonoco Specialty Paper Tetra Pak Canada The Packaging Group TWD Technologies W.G. Pro Manufacturing WC Parchment WG Corporate WinPak Technologies

22 PAC HACCP Standard PAC HACCP TOOLKIT made up of 2 key elements: 1. Prerequisite Program Common Good Manufacturing Practices (GMPs) for the converting industries. 2. HACCP Standards for Specific Conversion Processes. Flexible & Rigid Plastic Paper Metal & Glass (under development) Standards include workbooks to assist users with implementation.

23 PAC Prerequisite Program Before HACCP a good Prerequisite Program should address the majority of food safety concerns Premises Building exterior Building interior (design, construction, maintenance, lighting, ventilation, waste disposal, employee & sanitation facilities, water, steam, ice Transportation and Storage Carriers quality, temperature controls, storage Equipment Appropriateness of design Sanitation and Pest Control Good housekeeping Personnel Training Hygiene and health requirements Recall and Traceability

24 PAC HACCP Standard The following sequence of 12 steps is the recommended approach for the development of a HACCP program: 1. Assemble HACCP team 2. Describe product 3. Identify intended use 4. Construct process Flow Diagram and Plant Schematic 5. Conduct on-site verification of Flow Diagram and Plant Schematic 6. Identify hazards. List preventative measures to control (HACCP principle 1) 7. Determine Critical Control Points - (HACCP principle 2) 8. Establish limits at each Critical Control Point - (principle 3) 9. Establish procedures to monitor Critical Control Points - (principle 4) 10. Establish corrective action to take in case of a deviation - (principle 5) 11. Establish procedures to verify systems are working correctly - (principle 6) 12. Establish effective record keeping - (principle 7)

25 PAC HACCP Plan Program

26 PAC HACCP Plan Program HACCP Plan development involves analysis and filling out of the following set of forms: Form 1: Product Description Form 2: List of Product Ingredients and Incoming Materials Form 3: Process Flow Diagram Form 4: Plant Schematic Form 5: Biological Hazard Identification and Control Form 6: Chemical Hazard Identification and Control Form 7: Physical Hazard Identification and Control Form 8: Critical Control Point Determination Form 9: Hazards Not Controlled by Operator Form 10: HACCP Plan

27 Standard Development Working committees established for each specific conversion process Over 40 companies participated Cross functional stakeholder representation including Fillers, Brand Owners, Retailers and Distributors Packaging Converters Government Stakeholders HACCP and Packaging Industry Experts Series of development meetings Validation of standards with pilot testing program

28 Pilot Program Sites Chantler Packaging Flexible Plastic Cousins-Currie (2 sites) Rigid Plastics (blow molding) Graphic Packaging Paperboard & Film (Laminating) Jones Packaging (2 sites) Paper (paperboard cartons) Norampac Paper (corrugate boxes) Plasticap Rigid Plastics (injection) Sonoco Flexible Plastic

29 Pilot Program Objectives Establish a team and train the employees Implement the standard and provide the following feedback to the working committees: is it workable? Is it clear? Is it simple? Is it user friendly? Is it complete? Is it effective? Is it cost-efficient? Are you still interested in implementing HACCP? National and international applicability? Ongoing care and maintenance of the standard? Any employee specific feedback?

30 ISO PAC HACCP Interface ISO Based on Codex Principles Lays the groundwork for the prerequisites does not offer details or specifics Details management roles, internal and external communications, resource management, planning, infrastructure PAC HACCP Based on Codex Principles Specific to the package conversion processes Very detailed and based on FSEP Provides shop-floor guidance Developed by the packaging community

31 Responding to Change Good Corporate Stress Bad Anticipating Reacting Crisis COST Time $$$$$

32 Conclusion HACCP requirements can be intimidating to the initial viewer. If implemented appropriately a good HACCP program can improve the overall effectiveness of your operation Are you focused on your final customer? Do you really have a safe food mindset? PAC can help

33 Questions and Discussion

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