FOOD SAFETY CONCERNS WITH CHOCOLATE

“Keeping Your Sweets Safe”

1

Leading North American manufacturer

quality chocolate and non-chocolate confectionery

chocolate-related grocery products

leader in the gum and mint category

Global Manufacturing Operations

Manufacturing facilities in US, Canada, Mexico, Brazil, China, India and Malaysia

2

THE HERSHEY COMPANY

We use more than 1 BILLION pounds of milk a year

almost 2 pounds of milk to make one pound of milk chocolate

We make over 3.5 BILLION bars per year

We make 13.6 BILLION kisses per year across all our kiss shaped brands!

4 days of production would make enough Kisses to stretch from New York City to Los Angeles

1 day of Syrup production would make 12.2 million 8 oz glasses of chocolate milk

1 week of production would make enough snack size bars to completely cover 4 football fields

3

FUN FACTS

4

HERSHEY GLOBAL BRANDS

5

HERSHEY LOCAL JEWELS

Salmonella

Chocolate Products

• Cadbury 2006

• Nesquick Chocolate Powder 2012

• Chocolate Marshmallow Eggs 2013

Peanut Products

• Con Agra Peter Pan Peanut Butter 2007

• Peanut Corporation of America 2008

6

POTENTIAL FOOD SAFETY RISKS

Listeria

Dairy Ingredients

Allergen Concerns

Peanut, Almond, other Tree Nuts, Milk, Soy, Wheat

Foreign Material

Metal on Metal in processing equipment

7

POTENTIAL FOOD SAFETY RISKS

Consumer well being

Hershey is an $8 billion brand, and growing

Global Distribution

Our brand is our name

8

WHY IS FOOD SAFETY IMPORTANT

Everyone

Identify the “right” thing to do

Train people on the “right” thing

Practice the “right” thing

Empower employees to do the “right” thing

“Doing The Right Things Right Everyday”

9

WHO IS RESPONSIBLE FOR FOOD SAFETY

Global Manufacturing and Distribution

Standards differ

Infrastructure differs

Cultures differ

Food Safety is equal

Diverse product line presents different challenges

10

CHALLENGES TO FOOD SAFETY

Product Excellence Program

HACCP Based Approach

Food Safety

Food Quality

Regulatory Compliance

Assure Safe, High Quality Products Across the Supply Chain

Sets expectations, defines programs

11

GLOBAL FOOD SAFETY SYSTEM

Identify

Product quality and safety concerns

Control

Develop systems to control product quality / safety concerns

Monitor

The effectiveness of the controls

12

PRODUCT EXCELLENCE PROGRAM

13

PEP IS THE WAY WE OPERATE

INNOVATIO

N

SUPPLY CHAIN

GOVERNANCE

PEP

New manufacturing facility

New manufacturing process

New products

New market

New regulations

New technology

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DRIVERS OF INNOVATION

15

THE INNOVATION PROCESS

Overlays the innovation / commercialization process

Quality Design Review

New Material / New Product / New Process

Product Qualification

Commercialization

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DESIGN QUALITY IN

Product review

Recipe development

Regulatory review – where manufactured and where sold

Label review

Dietary concerns – Kosher, Halal

Key requirements identification

• Claims – Peanut Free, Sugar Free, Reduced Fat

• Certifications – Organic, Rain Forest Alliance

• Unique product attributes

• GMOs

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NEW MATERIAL / NEW PRODUCT

Process review

Process Controls

Product Attributes

Product Safety

Equipment review

Sanitary Design

Ability to clean effectively

Change over capability

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NEW PROCESS

19

PEP IS THE WAY WE OPERATE

INNOVATIO

N

SUPPLY CHAIN

GOVERNANCE

PEP

Ingredient

Packaging

Receiving

Manufacturing

Shipping

Warehouse

Distribution

Retail / Consumer

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SUPPLY CHAIN

Supplier Qualification

Supplier Approval Program

Ingredients

Packaging

• Food Contact Packaging - qualify as an ingredient

Equipment

Contract Services

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SUPPLIER QUALITY PROGRAM

Inbound Inspection Process

Load Conditions

Carrier Conditions

Ensure Correct Material, Approved Supplier

• Sampling, Certificate of Analysis

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RECEIVING

Prerequisite programs form the foundation

Premises

• Food Defense

Facility

• Structure

• Utilities – air, water, steam, lighting

• Chemical Compliance and Control

• Integrated pest management

• Waste management and disposal

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MANUFACTURING

Prerequisite programs form the foundation

Equipment

• Product protection – physical contamination control

• Cleaning and sanitation

• Calibration

• Allergen Control

People

• Dress and grooming

• Plant practices

• Training

24

MANUFACTURING

Master Control Plan

Food Safety

Food Quality

Regulatory Control

Key control points

Chemical, Biological, Physical, Regulatory

Monitoring, Corrective Action, Verification, Validation

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MANUFACTURING

Program modeled on the Sanitary Food Transportation Act of 2005

Sanitary Transportation

Controlled Shipping Conditions

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SHIPPING

Facility Design

Construction style and material

Appropriate Storage Conditions

Integrated Pest Management Program

Stock Rotation

Controlled Storage Conditions

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WAREHOUSE / DISTRIBUTION

Customers - Confection Protection at Retail

Warehousing and Storage

Environment

Pest Management

Stock Rotation

Customer and Consumer Feedback

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RETAIL / CONSUMER

29

PEP IS THE WAY WE OPERATE

INNOVATIO

N

SUPPLY CHAIN

GOVERNANCE

PEP

Program and Policy oversight

Shelf life

Product coding

Traceability

Incubation hold

Recall program management, mock recall activities

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GOVERNANCE

Assessment program

Internal manufacturing facilities

Compliance to GFSI certification requirements

Assessments across the supply chain

31

GOVERNANCE

32

PEP IS THE WAY WE OPERATE

INNOVATIO

N

SUPPLY CHAIN

GOVERNANCE

PEP

“Doing The Right Things Right Everyday”

Identify the “right” thing to do

Train people on the “right” thing

Practice the “right” thing

Empower employees to do the “right” thing

33

WHAT DOES FOOD SAFETY MEAN TO HERSHEY

QUESTIONS?