Advice - Support - Response

Transcription

1 Building World Class Microbiological Food Safety Systems for the Coming Storm Crisis Services Presentation Susan Quint, Senior Risk Manager The Americas March 22, 2017 Advice - Support - Response

2 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% Advice - Support - Response

3 Recall Loss Perception VS. Realty Actual Perceived Effect on Brand/Reputation Logistics Loss/Replacement of Stock "Soft" Costs Business Interruption Public Relations Retailer Charges Source: Sterling Reed, LTD - UK 0% 5% 10% 15% 20% 25% 30% 35%

4 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? Advice - Support - Response

5 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 Advice - Support - Response

6 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 Advice - Support - Response

7 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

8 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

9 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

10 Foodborne Illness Statistics - US Number of people in the US each year that get sick 48 Million 1in 6 Americans Number of people in the US each year that are hospitalized 128,000 Number of people in the US each year that DIE! 3,

11 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

12 Factors increasing risk of a recall More complex products Products introduced faster Global supply chain sourcing e e e e e e Advice - Support - Response e e e e e e

13 Factors increasing risk of a recall 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: e e e e e e Advice - Support - Response e e e e e e

14 Recall Statistics e e e e e e Advice - Support - Response e e e e e e

15 Summary of Recall Cases in Calendar Year 2014 FDA Percent by Reason 43% 47% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 16% 12% 90% - Class I Percent by Food Category 10% 9% 7% 6% 6% 5% 5% Allergen Pathogen Percent by Pathogen 3% 3% Percent by Allergen 4% 4% 47% 13% 8% 30% 47% 18% 22% Listeria monocytogenes Salmonella Clostridium botulinum E.coli Milk Peanuts Multiple Egg Tree Nuts Soy Fish/Shellfish 16

16 Summary of Recall Cases in Calendar Year 2015 FDA Percent by Reason 88% - Class I Percent by Pathogen 14% 41% 47% 32% 48% Allergens Pathogens Total FDA Food Recalls Per Year Salmonella Listeria monocytogenes Clostridium botulinum

17 Summary of Recall Cases in Calendar Year USDA 18.7 Million Pounds of Meat and Poultry Recalled in Recalls Recalls by Class 9% 4% 4% 2% 5% Recalls by Reason 24% 6% 7% 46% 67% 24% Class I Class II Class III Recalls by Species 1% Undeclared Allergen Other** Listeria monocytogenes Extraneous Materia STEC* Salmonela Processing Defect Undeclared Substance 24% 15% 25% 34% * "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. Poultry* Pork Beef Mixed Ovine 18

18 Summary of Recall Cases in Calendar Year USDA USDA Recalls Average:

19 Average Cost of a Recall May 2010 $10 Million 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 ( ) USDA 94 (2014) Main Causes: Undeclared Allergens and Pathogens 20

20 E. coli 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 classaction suits. E. coli 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 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, fastfood giant Burger King, on Aug. 23. Sold company to Tyson Foods for a loss. Listeria Monocytogenes 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 deaths and > 100 illnesses. Recall costs and estimated sales losses - $350 million 21

21 Salmonella 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. Mistreatment of animals/cows too sick to walk before slaughter (no inspection) Largest meat recall in U.S. history (143 million lbs.). $117 million. Company closure. Salmonella 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. Melamine 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. Salmonella s of hospitalizations and a few deaths Costs of recalls and lost sales - $250 million for the industry as a whole. 22

22 Factors increasing risk of a recall Advice - Support - Response

23 Top 2 Causes of Food Recalls PATHOGENS AND UNDECLARED ALLERGENS

24 Pathogens 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

25 Food Allergies and Allergens An allergy is a reaction that triggers the release of antibodies that results Usually self-diagnosable: in immediate symptom onset. A true food allergy causes an immune swollen response airways. that Severe can reactions affect multiple can be lifethreatening life threatening. - organs and, in some cases, be severe or even anaphylaxis. Impact of Allergens in the US: 15 million Americans (2.5% of the US population) have food allergies. Also common: Children are more likely to experience food allergies. Baby colic, cramping, flushing, itching, or tingling 1 in every 13 children in the United States lips lives with food allergies. Other reactions: Increased heart rate, stronger and or death. irregular heartbeat, sweating, nausea or vomiting, difficulty breathing, paleness, 5. Cow s dizziness, milk weakness, shakiness, headache, apprehension, nervousness or anxiety 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 Digestive problems, pain in the abdomen, hives, or Gastrointestinal: Food sensitivity symptoms are delayed and are typically limited to digestive problems, Diarrhea, indigestion, nausea, vomiting, or but they can lead to chronic inflammatory health issues. flatulence Skin: Hives or rashes Cause mild to severe reactions, including anaphylactic shock 6. Eggs 7. Wheat 8. Soy 27

26 Case Studies

27 Global Pizza Chain

28 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)

29 Blue Bell Creameries Listeria Blue Bell Creameries Recalls All Products After 2 Ice Cream Samples Test Positive For Listeria April 20, 2015 st 1 recall in 108 years. 10 people hospitalized, 3 died Producing Products November 18, 2015 Re-enter limited markets August 31

30 Blue Bell Creameries Recall 2015 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

31 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, No production or sales for 4 months Lawsuits and legal fees-pending e e e e e e Advice - Support - Response e e e e e e

32 red Recall Activity red24 Crisis Responses

33 red Recall Activity red24 Crisis Responses

34 Pre-Incident Services

35 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

36 red24assist Risk Mitigating Services Crisis Management Audits and Assessments/Training Recall Management Food Safety Quality Systems Food Defense/Site Security Supplier Supplier Management Packaging Supplier FSMA Warehousing/Distribution PCQI Training Foreign Matter HACCP/HARPC Fresh Produce Business Continuity Good Agricultural Practices Consumer Complaint Management Food Defense/Site Security Social Responsibility Social Responsibility (Ethical) Custom Consulting and Services GAT Microbial Risk Assessment Custom Audits/Assessments

37 Incident Response

38 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 Advice - Support - Response

39 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

40 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

41 Why Use red24 Services 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?

42 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.

43 THANK YOU