food safety, crisis management

FOOD SAFETY,

CRISIS MANAGEMENT &

CONSUMER COMMUNICATION

Cemlyn Martin,

General Manager,

Corporate Accounts, Asia-Pacific

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Has a crisis of confidencehit our industry?

Each of our Companies?Absolutely.

Has a crisis of confidencehit our industry?

Each of our Companies?Absolutely.




China CrisisChina Crisis

Melamine contamination

300,000 people developed kidney problems6 infants died

Melamine contamination

300,000 people developed kidney problems6 infants died




China Melamine CrisisChina Melamine CrisisChina Melamine Crisis

•Two condemned to death•Sanlu Chairwoman life in prison•Director of AQSIQ resigned•8 officials resigned or disciplined

•Two condemned to death•Sanlu Chairwoman life in prison•Director of AQSIQ resigned•8 officials resigned or disciplined




CHINA MARCH 2009

SWINE, GUANDONG PROVINCE

• 15 arrested in Guandong Province for selling swine fed

banned additives – ractopamine and clenbuterol

• Chemicals harmful or fatal to humans

• 70 people poisoned




CHINA 2008

• 437 (reported) food poisoning incidents

• 13,095 illnesses

• 154 deathsSource: Ministry of Health




• Sudan Red II dye added to laying duck feed to increase red

colour of yolk.

• Sudan Red is a phenolic, carcinogenic chemical.

• Hong Kong authorities detected Sudan Red in salted duck egg

and table eggs from China.

CHINA 2006 SALTED DUCK EGGS, SUDAN II DYE




•Random testing of swine at slaughterhouse detected high

levels of lead in livers.

•80 farms identified as involved.

•Contamination traced to zinc oxide used in feed either as feed

additive (source of zinc) or growth promoter (gut health modification).

• Feed removed from sale.

•Pork meat - safe for consumption

- livers and kidneys condemned

• Zinc oxide from Chinese supplier. Cross-contamination or faulty

separation suspected.

AUSTRALIA MAY 2008

SWINE, LEAD SCARE




EUROPE• Beef – Mad Cow Disease

• Dairy – Dioxin

• Animal Feed - Sludge




A Dioxin scare in Ireland……all pork meat destroyed

Beef – cattle on 6 farms destroyed

IRELAND 2008




CAUSES FOR CONCERN

• Antibiotic residues

• Growth promoters

• Heavy metals in feed trace

minerals

• Bacterial contamination

• Industrial chemicals

• Mycotoxins

• Pesticides

• Animal diseasesPDF created with pdfFactory trial version www.pdffactory.com



THE COMMON LINK?

ANIMAL FEED

- Raw materials

- Feed additives

- ContaminantsPDF created with pdfFactory trial version www.pdffactory.com



THE CHALLENGE – TO INCREASE TRUST IN FOOD AND FEED

THE CHALLENGE THE CHALLENGE –– TO INCREASE TRUST TO INCREASE TRUST IN FOOD AND FEEDIN FOOD AND FEED




FOOD SECURITY

• Safety

• Quantity

• Sustainability (Economic, Social, Environmental)

• Traceability & Transparency

• Social acceptability (Animal Welfare)

• Consumer Confidence (Trust)

• Human Nutrition

• Ethics




FOOD SECURITY: Our Job is to Feed the WorldA world in which food production has to double by 2050 to

meet demand.

FOOD SECURITY: Our Job is to Feed the WorldA world in which food production has to double by 2050 to

meet demand.




Charles DarwinCharles Darwin

• It’s not necessarily the strongest or fittest that survive – but those most adaptable to change

• It’s not necessarily the strongest or fittest that survive – but those most adaptable to change




Crisis Management or

Reputation Enhancement?

Crisis Management or

Reputation Enhancement?– In The Eyes of the Beholder




There are three types of companiesThere are three types of companies

• Those who do not have a crisis plan in place

• Those that say they do

• Those that have, and work to it




When is a Crisis a Crisis?When is a Crisis a Crisis?

Consumer Risk? Business Risk? Brand Risk?

• Risk to life

• Risk of injury

• Serious product contamination

• Financial

• Legal action

•Extortion

• Media coverage

• Negative positionversus competition

RECALL ??????




Basic Crisis Management Model - Product

Preparation& Planning- Avoidance

Early WarningSystem

- Identify the issue- Quantify the extent

Learning& communication

- Communicate control & confidence- Prevent recurrence

Crisis Response- Inform relevant people

- Control exposure- Limit risk

- Quarantine product

Crisis Closure- Replace supply chain





RISK ANALYSIS – FOUNDATION OF FOOD SAFETY POLICY

• Risk Assessment

• Risk Management

• Risk Communication




RISK ASSESSMENT

• Founded on good science

• Easy to understand & communicate

• Easily implemented




What poses the greatest risk and how to:

What poses the greatest risk and how to:

• Avoid• Identify• React• Respond• Assure• Prevent…..Risk assessment




Catastrophic8064483216Severe403224168

Major20161284Appreciable108642

Minor54321

VeryLikelyLikelyPossibleUnlikely

VeryUnlikely

LIKELIHOOD

Threat Assessment and Threat RatingThreat Rating Matrix





Basic Crisis Management Model - ProductPreparation& Planning- Avoidance

Early WarningSystem












To Manage a CrisisTo Manage a Crisis

• Identify key decision makers• Gather facts quickly to act• Keep target audiences in focus• Understand the media• Control information flow• Develop third party allies• Constantly monitor• Establish a crisis centre




In the Event of a Crisis:In the Event of a Crisis:

Act Now!

Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789

Group LeaderFinanceQualityMarketing/PRProductionResearchSalesLegalOperations




ResponseResponse

• Who is involved?• What happened?• When, date/time?• Where, location? Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789Phone # 123456789

Group LeaderFinanceQualityMarketing/PRProductionResearchSales

LegalOperations





Early WarningSystem












Crisis Management or Reputation Management

Crisis Management or Reputation Management

Confidence and Trust

Be prepared

Be available

Be credible




• Traceable forwards, backwards (+1/-1)• Comprehensive system encompassing

all materials/ingredients• Speed of response• Link traceability to management systems• Staff training – how to increase safety standards• Quality improvement teams work proactively on

continuous improvement• Ability to successfully recall

When is a Crisis a Crisis?When is a Crisis a Crisis?What standards should traceability systems adhere to?





Early WarningSystem












Communicate ConfidenceCommunicate Confidence

• At all times• To all people• In control• Trust• Prevention better than cure…

• At all times• To all people• In control• Trust• Prevention better than cure…

“If you tell the truth you don’t have to remember anything”

- Mark Twain




All three elements are related

Communication

External InterfaceInvestors, Customers, Suppliers, Communities, Government Bodies,Regulatory Groups, Legal Entities, Insurance Groups,Competitors

MediaPublic communication

Internal ResponseBusiness Recovery,Employee Communications

Your problem will not improve with age

Communication in a Crisis?Communication in a Crisis?




Communication in a Crisis?Communication in a Crisis?

Get it right, Get it quick, Get it out and Get it over

Communication• Consumer information is vital, don’t let the media become the

crisis- Prepare a holding statement, clear and simple- Wording is crucial – could cause/avoid panic- Target to the audience- Message must be true

• Don’t forget internal communication- Regular briefings to employees- They may be worried about their future- Ensure all are aware of your media communications policy




In a CrisisIn a Crisis

So?Be prepared!

• Events happen fast• Decisions made quickly• Media scrutiny intense• Media processes, rarely report• Victims drive story• Information not always accurate• Your message does not get out




Reputation Managementat Corporate level

Reputation Managementat Corporate level

Management used to shaping events, not events shaping management




Can you continue to run your business in a crisis?

Can you continue to run your business in a crisis?

• Ensure you develop a business continuity plan

• Ensure you can keep vital operations running

• Allow the crisis team to control the crisis

• Regular status communications from the team




RISK MANAGEMENT AND CONSUMER CONFIDENCE




RISK COMMUNICATION

• Transparency is a fundamental

requirement

• Consumer confidence requires

information to the public

• Clear relationship with media

• Managing the perception of risk




TRACEABILITY LABELLING

MANDATORY RECALL• Traceability must be established

at all stages of production,

processing and distribution

• It must link a unique batch of feed

with information

• Full labelling to facilitate

traceability

• Mandatory recall essential to

safety based on traceability and

labelling




‘MADE IN CHINA’WE CAN TRUST

GENE SCAN®




• Sustainable Supply System

• VP of Corporate Social Responsibility

• 3 E’s of Responsibility

- Ethical

- Environment

- Economics




• Launched 2000 in United Kingdom

• 78,000 farmers and growers members of the scheme

• Commitment to food safety and hygiene, animal

welfare and environmental protection

• Auditing of members by independent organisation

Assured Food Standards (AFS)

• Farmers, processors and packers are licensed to use logo

• Annual inspection and review covering animal health &

welfare, farm procedures and safety, salmonella, movement

and transport.

• Logo on thousands of products – beef, lamb, pork, chicken,

turkey, milk, cheese, cream, cereals, vegetables, sugar,

flour, fruits and salads in shops and supermarkets

• Swine – covered by Assured British Pigs (ABPigs)

The Red Tractor Scheme




Thank YouThank You

British Lion Code




• Standardized, comprehensive traceability framework covering farm production, processing, packaging, logistics, marketing.

• Star Farm quality security system combined with HACCP and Global Gap enhances production safety and product quality, strengthens brand image and provides the end consumer with safe and traceable food products.

• Collect and record specific information along supply chain.

• Customer log-in to website allowing search for product information, producer details – all of which are also on product label.

STAR FARM (METRO), CHINA




Where are we going?Where are we going?




CRISIS “The Chinese use two characters to write the word 'crisis.'

One stands for danger;the other for opportunity.




What can we do?

What can we do?

“The world we have created today has

problems which cannot be solved by thinking the way we thought

when we created them.”

-Albert Einstein

“The world we have created today has

problems which cannot be solved by thinking the way we thought

when we created them.”

-Albert Einstein




What are the pillars upon which we can rebuild our

industry?

What are the pillars upon which we can rebuild our

industry?




The 5 pillarsThe 5 pillars•Crisis management• Education• Innovation• Branding• Cause and Fun• Trust and Integrity

•Crisis management• Education• Innovation• Branding• Cause and Fun• Trust and Integrity




“Next week there can’t be any crisis, my

schedule is already full”

Henry Kissinger




David ByrneDavid ByrneFormer European Commissioner for

Health and Consumer Protection




Two types of organizationsTwo types of organizations

Those that have had a crisis

Those that will




We need a systemCrisis Management

We need a systemCrisis Management




“Someone is in charge, there is a plan, the plan is working”

-David Byrne, Former European Commissioner for Health and Consumer Protection

“Someone is in charge, there is a plan, the plan is working”

-David Byrne, Former European Commissioner for Health and Consumer Protection

The Key to Crisis Management




QuestionQuestion

Do you have a totally traceable quality control

system?

Do you audit your

suppliers?




“Every company, every institution, every industry needs a Crisis Management System”-David Byrne, Former European Commissioner for Health and Consumer Protection

“Every company, every institution, every industry needs a Crisis Management System”-David Byrne, Former European Commissioner for Health and Consumer Protection




The 5 pillarsThe 5 pillars• Crisis management•Education• Innovation• Branding• Trust and Integrity

• Crisis management•Education• Innovation• Branding• Trust and Integrity




We have to educate them or someone else will




The 5 pillarsThe 5 pillars• Crisis Management• Education

• Innovation• Branding• Trust and Integrity

• Crisis Management• Education

• Innovation• Branding• Trust and Integrity




Embracing InnovationEmbracing Innovation




Greenhouse gases

Carbon dioxide: 72%

Carbon dioxide: 72%

Methane: 18%

Methane: 18%

Nitrous oxide:

9%Nitrous oxide:

9%




Agriculture contributes emissions

of all three




Innovation: NutrigenomicsInnovation: Nutrigenomics

The gene chip never lies

The gene chip never lies




The 5 pillarsThe 5 pillars• Crisis Management• Education• Innovation

•Branding• Trust and Integrity

• Crisis Management• Education• Innovation

•Branding• Trust and Integrity




An agricultural brand that people:

- Recognize- Respect- Trust- Has core values- Endures- Stands out




The 5 pillars• Crisis Management• Education• Innovation• Branding• Trust and Integrity




Trust & Integrity: Partnerships

Trust & Integrity: Partnerships

We need true and meaningful

relationships along the food chain




The running of the pigs

The running of the pigs




So, do we have a future?

So, do we have a future?




CRISIS

Rahm Emanuel, Obama's new head of staff

"One should never waste the opportunity of a good crisis!"

"One should never waste the opportunity of a good crisis!"




Thailand • Dr. Yukol Limlamthong, Director-General of

the Department of Livestock Development at the Ministry of Agriculture and Cooperatives

“Apart from the effect of the economic downturn, the biggest change in demand patterns has to be that Thai people nowadays are more health conscious than in the past and they understand more about food safety. Consumer purchasing behaviour has changed from being based largely on price or quantity to a level where quality is also taken into consideration. They are especially willing to pay more for foods that are considered to be safer.”

Pig International magazine, March/April 2009, p.24

THAILAND




SAFETY AND QUALITY ARE THE PRIMARY DECISION MAKING DRIVERS FOR CHINESE CONSUMERS

80%

85%

83%

89%

92%

81%

8%

14%

6%

14%

7%

1%

6%

13%

6%

9%

3%

4%

7%

13%

79%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Packaged products

Fresh Produce

Fresh Meat & Fish

Toys

Electronics

Medications

Personal Care

Safety and Quality Environmental friendliness Source of product/product ingredients

Source: 2008 Chinese Consumer Survey, Institute for Business Value, China

n: 300 {60 from Beijing, Shanghai, Guangzhou, Wuhan, Chongqing}

What is your primary concern when purchasing the following consumer products: personal care,

medications, electronics, toys, fresh meat & fish, fresh produce, and packaged goods?




CONSUMERS ARE READY TO PAY MORE

65%

62%

26%

33%

29%

3%

2%

9%

71%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

W illingness to pay more fornon-food consumer products

that are safe

Willingness to pay more forenvironmentally sustainable

food

W illingness to pay more fornon-food consumer products

that are environmentallyfriendly

Increased Stayed the same Decreased


n: 300 {60 from Beijing, Shanghai, Guangzhou, Wuhan, Chongqing}

For each of the following statements, please tell us how you think each has changed over the last two

years.




PROVIDING CONSUMERS WITH DESIRED INFORMATION IS AN OPPORTUNITY

65%

60%

66%

57%

58%

59%

60%

61%

62%

63%

64%

65%

66%

67%

I would like more information aboutthe ingredients of the food

products I buy

I would like more information aboutthe source of the food product I

buy

I would like more information abouthow the food is processed and

manufactured


n: 300 {60 from Beijing, Shanghai, Guangzhou, Wuhan, Chongqing}. The chart shows the sum percentage of people who selected “strongly agree” and “very strongly agree”.

Please indicate your level of agreement with each of the statements about:




BENEFITS FOR THE PUBLIC

•• Confidence Confidence and certaintyand certainty

•• SafetySafety•• Good quality, safe, acceptably Good quality, safe, acceptably

priced, nutritious food available in priced, nutritious food available in the quantity desiredthe quantity desired




BENEFITS FOR INDUSTRY

Opportunity to capture economic advantage:Opportunity to capture economic advantage:–– premium pricingpremium pricing-- export market accessexport market access-- steady revenue and profit growthsteady revenue and profit growth-- consumer and brand loyalty and trustconsumer and brand loyalty and trust




“Food companies should reduce safety risks by better monitoring of the whole production and distribution

process from raw material to sales.

Although it requires a huge investment to establish an entire monitoring chain, it is good for a company in the long run.”

Mr. Liu Yonghao, Chairman, New Hope Group

Reported in Beijing Sci-Tech Report




International TradeInternational Trade

•• Safety and traceability is now central to the global trade inSafety and traceability is now central to the global trade in food.food.•• Importing countries demand and expect traceability.Importing countries demand and expect traceability.•• National incomes will be negatively affected by distrust in foNational incomes will be negatively affected by distrust in food safety.od safety.•• Governments play an important role in setting the right legal Governments play an important role in setting the right legal framework framework

for ensuring food safety, with appropriate penalties for nonfor ensuring food safety, with appropriate penalties for non--conformance.conformance.




Thank YouThank You




food safety, crisis management

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