FOOD SAFETY CONCERNS WITH CHOCOLATE Keeping Your Sweets

FOOD SAFETY CONCERNS WITH CHOCOLATE “Keeping Your Sweets Safe”

THE HERSHEY COMPANY n Leading North American manufacturer �quality chocolate and non-chocolate confectionery �chocolate-related grocery products �leader in the gum and mint category n Global Manufacturing Operations �Manufacturing facilities in US, Canada, Mexico, Brazil, China, India and Malaysia 2

FUN FACTS n We use more than 1 BILLION pounds of milk a year �almost 2 pounds of milk to make one pound of milk chocolate n We make over 3. 5 BILLION bars per year n 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 n 1 day of Syrup production would make 12. 2 million 8 oz glasses of chocolate milk n 1 week of production would make enough snack size bars to completely cover 4 football fields 3

HERSHEY GLOBAL BRANDS 4

HERSHEY LOCAL JEWELS 5

POTENTIAL FOOD SAFETY RISKS n 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 n Listeria �Dairy Ingredients n Allergen Concerns �Peanut, Almond, other Tree Nuts, Milk, Soy, Wheat n Foreign Material �Metal on Metal in processing equipment 7

WHY IS FOOD SAFETY IMPORTANT n Consumer well being n Hershey is an $8 billion brand, and growing n Global Distribution n Our brand is our name 8

WHO IS RESPONSIBLE FOR FOOD SAFETY n Everyone �Identify the “right” thing to do �Train people on the “right” thing �Practice the “right” thing �Empower employees to do the “right” thing n “Doing The Right Things Right Everyday” 9

CHALLENGES TO FOOD SAFETY n Global Manufacturing and Distribution �Standards differ �Infrastructure differs �Cultures differ �Food Safety is equal n Diverse product line presents different challenges 10

GLOBAL FOOD SAFETY SYSTEM n Product Excellence Program n HACCP Based Approach �Food Safety �Food Quality �Regulatory Compliance n Assure Safe, High Quality Products Across the Supply Chain �Sets expectations, defines programs 11

PRODUCT EXCELLENCE PROGRAM n Identify �Product quality and safety concerns n Control �Develop systems to control product quality / safety concerns n Monitor �The effectiveness of the controls 12

PEP IS THE WAY WE OPERATE I T A V PEP N AI CH IN O N LY PP SU N O GOVERNANCE 13

DRIVERS OF INNOVATION n New manufacturing facility n New manufacturing process n New products n New market n New regulations n New technology 14

THE INNOVATION PROCESS 15

DESIGN QUALITY IN n Overlays the innovation / commercialization process n Quality Design Review n New Material / New Product / New Process n Product Qualification n Commercialization 16

NEW MATERIAL / NEW PRODUCT n 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 17

NEW PROCESS n Process review �Process Controls �Product Attributes �Product Safety n Equipment review �Sanitary Design �Ability to clean effectively �Change over capability 18

PEP IS THE WAY WE OPERATE I T A V PEP N AI CH IN O N LY PP SU N O GOVERNANCE 19

SUPPLY CHAIN n Ingredient n Packaging n Receiving n Manufacturing n Shipping n Warehouse n Distribution n Retail / Consumer 20

SUPPLIER QUALITY PROGRAM n Supplier Qualification �Supplier Approval Program �Ingredients �Packaging • Food Contact Packaging - qualify as an ingredient �Equipment �Contract Services 21

RECEIVING n Inbound Inspection Process �Load Conditions �Carrier Conditions �Ensure Correct Material, Approved Supplier • Sampling, Certificate of Analysis 22

MANUFACTURING n 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 23

MANUFACTURING n 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 n Master Control Plan �Food Safety �Food Quality �Regulatory Control n Key control points �Chemical, Biological, Physical, Regulatory �Monitoring, Corrective Action, Verification, Validation 25

SHIPPING n Program modeled on the Sanitary Food Transportation Act of 2005 n Sanitary Transportation n Controlled Shipping Conditions 26

WAREHOUSE / DISTRIBUTION n Facility Design �Construction style and material �Appropriate Storage Conditions n Integrated Pest Management Program n Stock Rotation n Controlled Storage Conditions 27

RETAIL / CONSUMER n Customers - Confection Protection at Retail �Warehousing and Storage �Environment �Pest Management �Stock Rotation n Customer and Consumer Feedback 28

PEP IS THE WAY WE OPERATE I T A V PEP N AI CH IN O N LY PP SU N O GOVERNANCE 29

GOVERNANCE n Program and Policy oversight �Shelf life �Product coding �Traceability �Incubation hold �Recall program management, mock recall activities 30

GOVERNANCE n Assessment program �Internal manufacturing facilities �Compliance to GFSI certification requirements �Assessments across the supply chain 31

PEP IS THE WAY WE OPERATE I T A V PEP N AI CH IN O N LY PP SU N O GOVERNANCE 32

WHAT DOES FOOD SAFETY MEAN TO HERSHEY “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

QUESTIONS?