Building World Class Microbiological Food Safety Systems ... · 2013. 2014. USDA Recalls 2005 - 2014 Average: 69 19 . Average Cost of a Recall – ... Blue Bell Creameries Recalls

Advice - Support - Response

Building World Class Microbiological Food Safety Systems

for the Coming Storm

Crisis Services Presentation

Susan Quint, Senior Risk Manager – The Americas

March 22, 2017

Test Your Recall Knowledge….


• What day are most recalls announced in the media ?

• Fridays

• What are the top 2 reasons for product recalls ?

• Allergens and Pathogens

• What types of products are recalled most often?

• Prepared Foods

• Which retail store leads in the number of recalls (branded foods)?

• Whole Foods

• How much food (%) is typically recovered in a food recall?

• 40%

Recall Loss Perception VS. Realty

0% 5% 10% 15% 20% 25% 30% 35%

Retailer Charges

Public Relations

Business Interruption

"Soft" Costs

Loss/Replacement of Stock

Logistics

Effect on Brand/Reputation

ActualPerceived

Source: Sterling Reed, LTD - UK

Presentation Outline


• About red24assist

• How red24 works with insurance companies

• Recall Statistics & Costs

• Top Reasons for Recalls

• red24assist Pre-Incident Services

• red24assist Incident Response

• How do you access red24 at your company?

About red24assist • red24 is a leading risk and crisis management specialist with

operating experience in over 120 countries

• Expertise in providing crisis management solutions pre-incident, during and post incident

• Regional operations in London, South Africa, USA, Singapore, Mexico, and Australia

• Food (manufacturing and restaurant industries) and non food expertise to assist clients with their recall preparations, plans and training as well as providing immediate assistance in the event of a recall

• Available 24/7/365


About red24assist


• In December 2016, iJET announced the acquisition of red24®.

• iJET will leverage red24’s extensive expertise in the insurance market by adding to iJET’s core services: kidnap, ransom and extortion; product safety and recall, corporate investigations and background screening. • Clients will be supported by a 24/7 regional integrated operations center in South Africa, providing broader and deeper intelligence coverage and enhanced global operations and response services

Why red24assist • We can provide a “one stop shop” crisis assistance

• Worldwide crisis expertise and support

• Retained by recall insurance companies for over 15 years

• Allianz, Swiss re, CV Starr, Hiscox, Liberty Mutual, Berkley,

Chubb, Pembroke-approximately 80% of all policies written

• Annually responds to over 1200 crises globally

• Consultants in over 70 countries

• Experienced senior North American team 300+ years

• Multilingual support

• 24/7 global crisis support

red24assist Consultants

• Over 85 specialists in sectors including:

• Public Relations

• Micro-Biologist, Chemical, Medical, Infectious Disease

• Lab Testing-Food Forensics

• Technical Product Support (Food & Non-Food)

• Malicious Product Tampering

• Legal Support-local FDA

• Global coverage to include The Americas, Europe, Asia Pacific

Red24assist Expert Response

• Responded to over 1200 cases in the last 12 months • Involvement in high profile cases as well as large publicized and

unpublicized cases • Vegetables with Listeria monocytogenes • Sunflower seeds – Listeria contamination • Peanut cross contamination in flour (undeclared allergen)

Fall Out Effect

• Number of people in the US each year that get sick

• Number of people in the US each year that are hospitalized

• Number of people in the US each year that DIE!

48 Million 1in 6 Americans

128,000

3,000

http://www.cdc.gov/foodborneburden/index.html

11

Foodborne Illness Statistics - US

Factors Increasing Risk of Recall

• More Complex Products • Products Introduced Faster • Maintenance of Plant Infrastructure • Global Supply Chain Sourcing • More Laws/Regulations-FSMA • Improved Testing Methods and Technology • Diverse Customers and Consumers • More Aware/Educated/Concerned Consumers • Internet/Communications/Social Media

• e e e e e e Advice - Support - Response e e e e e e •

Factors increasing risk of a recall

• More complex products • Products introduced faster • Global supply chain sourcing



• Maintenance and aging of plant infrastructure • More Laws/Regulations (FSMA for example) • Improved Testing Methods and Technology • Diverse Customers and Consumers • More Aware/Educated/Concerned Consumers • Internet/Communications/Social Media:


Recall Statistics

Summary of Recall Cases in Calendar Year 2014 – FDA - 273

16%

12% 10%

9% 7% 6% 6%

5% 5%

0%2%4%6%8%

10%12%14%16%18%

Percent by Food Category

47%

43%

Percent by Reason

Allergen Pathogen

90% - Class I

47%

47%

3% 3%

Percent by Pathogen

Listeria monocytogenes Salmonella Clostridium botulinum E.coli

30%

22% 18%

13%

8%

4% 4%

Percent by Allergen

Milk Peanuts Multiple Egg Tree Nuts Soy Fish/Shellfish

16

Summary of Recall Cases in Calendar Year 2015 – FDA - 370 88% - Class I

47%

41%

Percent by Reason

Allergens Pathogens

48% 32%

14%

Percent by Pathogen

Salmonella Listeria monocytogenes Clostridium botulinum

273

370

0 50 100 150 200 250 300 350 400

2014

2015

Total FDA Food Recalls Per Year

17

46%

24%

7%

6%

5% 4% 4% 2%

Recalls by Reason

Undeclared Allergen Other** Listeria monocytogenes

Extraneous Materia STEC* Salmonela

Processing Defect Undeclared Substance

67%

24%

9%

Recalls by Class

Class I Class II Class III

Summary of Recall Cases in Calendar Year 2014 - USDA

18.7 Million Pounds of Meat and Poultry Recalled in 2014 – 94 Recalls

34%

25%

24%

15%

1%

Recalls by Species

Poultry* Pork Beef Mixed Ovine

* "STEC" includes recalls due to Shiga toxin-producing E. coli (STEC). STEC organisms include E. coli O157:H7, E. coli O26, E. coli O45, E. coli O103, E. coli O111, E. coli O121, and E. coli O145. **"Other includes producing without inspection, failure to present for import inspection, and labeling issues, among others. ***Poultry includes egg products.

18

Summary of Recall Cases in Calendar Year 2014 - USDA

53

34

58 54

69 70

103

82

75

94

0

20

40

60

80

100

120

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

USDA Recalls 2005 - 2014

Average: 69

19

Average Cost of a Recall – May 2010

• Not counting brand damage and lost sales – Source: Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer Safety and

Confidence, Deloitte Development LLC in association with the Grocery Manufacturers Association (GMA), May 2010, p 9].

• Summary of Recalls: – FDA – 322 (2014-15) – USDA – 94 (2014)

$10 Million

Main Causes: Undeclared

Allergens and

Pathogens 20

E. coli - 1992. Hundreds sick and and four children died. $160 million in sales and 30 percent of its stock market value. Tens of millions in individual and class-action suits.

http://money.howstuffworks.com/10-food-recalls1.htm

E. coli - 1996. Many sick and one 16 month old died. Stock plummeted; cost the company > $12 million; This isn't including lost sales, lawsuits and a federal fine of $1.5 million.

E. Coli – 1997. Largest meat recall at the time (25 million lbs.). At least 16 people ill, no deaths. The most crippling effect was not direct recall costs, but the loss of Hudson's best customer, fast-food giant Burger King, on Aug. 23. Sold company to Tyson Foods for a loss.

Listeria Monocytogenes – 1998. One of the largest meat recalls in history (35 million pounds of deli products and hot dogs. 21 deaths and > illnesses. Recall costs - $76 million, millions in lawsuits, $25 million to renovate the Bil Mar plant.

E. Coli – 2006. 3 deaths and > 100 illnesses. Recall costs and estimated sales losses - $350 million

21

Salmonella – 2007. 100-percent recall of the product. 600 cases of salmonella, no deaths. ConAgra spent around $78 million on the recall. $55 million of lost sales. $15 to $20 million plant renovating.

Melamine – 2007. Recall of about 60 million cans and packages of pet food. Thousands of animal sicknesses and deaths Menu Foods spent $42 million dollars on the recall. $24-million settlement. $8 million paid out to affected consumers. Mistreatment of

animals/cows too sick to walk before slaughter (no inspection) - 2008. Largest meat recall in U.S. history (143 million lbs.). $117 million. Company closure.

Salmonella – 2008. 100s of hospitalizations and a few deaths Costs of recalls and lost sales - $250 million for the industry as a whole.

Salmonella – 2009. Nine deaths and >600 illnesses. Innocent companies bore initial costs. Kellogg reported losing $70 million, and other smaller companies are struggling to survive. Manufacturer filed for Chapter 11 bankruptcy.

22



PATHOGENS AND UNDECLARED ALLERGENS

Top 2 Causes of Food Recalls

• A pathogen or infectious agent is a biological agent that causes disease or illness to its host

• Most Common Pathogens Causing Food Recalls: – Salmonella – Listeria monocytogenes – Clostridium botulinum – E.coli

• People at Highest Risk: – Pregnant women – Young children – Older adults – People whose immune systems are compromised – People who have decreased stomach acidity

Cause very serious short term and long term illness and/or

death

Pathogens

Food Allergies and Allergens • An allergy is a reaction that triggers the release of antibodies that results

in immediate symptom onset. – A true food allergy causes an immune response that can affect multiple organs

and, in some cases, be severe or even life threatening. – Food sensitivity symptoms are delayed and are typically limited to digestive problems,

but they can lead to chronic inflammatory health issues.

• Impact of Allergens in the US: – 15 million Americans (2.5% of the US population) have food allergies. – Children are more likely to experience food allergies.

• 1 in every 13 children in the United States lives with food allergies.

– People with asthma are at higher risk. • Most Common Allergens Causing Food Recalls:

1. Peanuts (peanut allergy is the main cause of anaphylaxis in children)

2. Tree nuts (such as walnuts, pecans and cashews)

3. Shellfish (such as shrimp and lobster—the main cause of anaphylaxis in adults)

4. Fish

5. Cow’s milk 6. Eggs 7. Wheat 8. Soy

Cause mild to severe reactions,

including anaphylactic shock

and death.

Usually self-diagnosable: • Digestive problems, pain in the abdomen, hives, or

swollen airways. Severe reactions can be life-threatening - anaphylaxis.

Gastrointestinal: • Diarrhea, indigestion, nausea, vomiting, or

flatulence Skin: • Hives or rashes Also common: • Baby colic, cramping, flushing, itching, or tingling

lips Other reactions: • Increased heart rate, stronger or irregular

heartbeat, sweating, nausea or vomiting, difficulty breathing, paleness, dizziness, weakness, shakiness, headache, apprehension, nervousness or anxiety

27

Case Studies

Global Pizza Chain

Global Pizza Chain – Crisis Averted

• Consumer claims to have found and bitten into a condom he found in a pizza he ordered

• Consumer concern for HIV, hepatitis or other diseases • Threatens law suit and contacting the local TV station

• Following strict COC, remaining pizza and condom sent to lab for testing

• Lab mimicked chain pizza and cooking instructions to see if condom would degrade at such a high temperature - inconclusive

• Condom was tested for bite marks and saliva/DNA – none found

• Background check done on claimant to find he was recently released from prison

• Claimed bankruptcy, high in debt

• Facts presented to claimant, case dropped, crisis averted (extortion and malicious product tampering)

10 people hospitalized,

3 died

April 20, 2015 –

1 recall in 108 years.

st

Blue Bell Creameries Recalls All Products After 2 Ice Cream Samples Test Positive For Listeria

Producing Products – November 18, 2015 Re-enter limited markets

August 31

Blue Bell Creameries – Listeria

• March 13: Removed the affected ice cream products from the market by picking it up directly from the retailers and hospital settings it serves and shut down the production line where the products were made

• March 23: Issued a second recall • April 3: Voluntarily suspended operations at its Broken Arrow OK plant • April 4: Began working with retail outlets to remove all products produced

in Broken Arrow, Ok from their service areas • April 7: Expanded the recall of products manufactured in Broken Arrow,

OK plant • April 20: Expanded the recall to all products currently on the market • April 27: Shut down additional Plants. Announced it would carry out an

intensive cleaning and training program at all of its production facilities • May 14 and June 1: Entered into voluntary agreements with federal,

state, local, territorial and tribal agencies

Blue Bell Creameries Recall – 2015 Listeria


• Laid off 1,450 employees, more than a third of its workforce, and furloughed 1,400 others since the listeria outbreak.

• Analysts estimate the shutdown has cost the company more than $200 million; recall and shutdown cost Blue Bell $130 million (reported by FOX23 News, http://www.fox23.com/news/local/blue-bell-ice-cream-will-be- sale-tulsa-monday/26885665)

• No production or sales for 4 months • Lawsuits and legal fees-pending

http://www.chicagotribune.com/business/ct-blue-bell-ice-cream-20150717-story.htmlmonths

Blue Bell Creameries Recall – 2015 Listeria

0

5

10

15

20

25

red24 Crisis Responses 2016

red24 – 2016 Recall Activity

0

2

4

6

8

10

12

14

16

18

red24 Crisis Responses 2016

red24 – 2016 Recall Activity

Pre-Incident Services

red24assist Services

• Pre-incident Support red24assist’s team is available to support crisis preparatory work.

Utilizing the skills of the team, we can help clients to better prepare themselves for a potential crisis.

Example’s include:

Documentation review and

development

Crisis scenario training-Workshops/Simulations

and Webinars

Online GAP Assessment

Tool

On site audits/ assessments

red24assist Risk Mitigating Services

• Crisis Management • Recall Management • Food Defense/Site Security • Supplier Management • FSMA • PCQI Training • HACCP/HARPC • Business Continuity • Consumer Complaint Management • Social Responsibility • Custom Consulting and Services

• Audits and Assessments/Training • Food Safety Quality Systems • Supplier • Packaging Supplier • Warehousing/Distribution • Foreign Matter • Fresh Produce • Good Agricultural Practices • Food Defense/Site Security • Social Responsibility (Ethical) • GAT • Microbial Risk Assessment • Custom Audits/Assessments

Incident Response

The Crisis Response Center


• Manned 24/7 by Customer Service,

Analyst Editorial IT Crisis Team Security

• Approximately 75 staff

• Multilingual capabilities

• Responds to over 150 calls monthly

CRM

Operational Procedure–Incident Response

1. Insured or broker contacts red24assist via a dedicated 24/7 hot line for actual or potential outbreak and foodborne illness issues

2. Recall pro-forma is completed by the team and escalated to red24 consultant team member on call

3. Consultant contacts insured to provide expertise, advice and support

4. Consultants can work on-site with the insured to assist in determining the source of the issue, contamination or outbreak.

5. Work with the insured to develop a response strategy and vital communications. Advice - Support - Response

red24assist Response Services

• Response / Post-incident services In a crisis scenario red24assist will contact the client within the hour

of when initial contact has been made by the insured. The main purpose of this support is to assist the client with a number of specialists who can assist in identifying the initial cause of the crisis, the potential impact of the issue and the necessary actions to be taken to ensure the issue is dealt in a fast and effective manner.

Product Testing and Expert Testimony

Regulatory Liaison -

Product experts to discuss & investigate

the issue, identify risks, and make

recommendations

Communications expertise

• Does your company have a recall plan?

• Does your company routinely or annually test their recall readiness?

• Does your company have a trained recall team?

• Do you personally know your role in a recall?

• Does your company have a working relationship with the

FDA/USDA?

• Does your company know their regulatory requirements?

• Does your company know how to navigate and execute a recall?

• Can your company financially survive a recall?

Why Use red24 Services

How to access red24 Services?

Is your company insured with any of the below?

Allianz, Hiscox, Swiss-re, Berkley, Liberty Mutual, Tokyo Marine Kiln,

CV Starr, AWAC, Pembroke Speak with your company CFO or Risk Manger

Allocations from 5-10% of insurance premium is available to you for pre-incident services.

THANK YOU

Documents

Building World Class Microbiological Food Safety Systems ... · 2013. 2014. USDA Recalls 2005 - 2014 Average: 69 19 . Average Cost of a Recall – ... Blue Bell Creameries Recalls