Deborah White Svp And Clo, Fmi

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Presentation regarding Produce Traceability as presented to FDA & FSIS on December 9 & 10, 2009 in Washington, D.C.

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Deborah White Svp And Clo, Fmi

  1. 1. Leveraging & Harnessing Existing Systems and Enabling Technology Deborah White SVP & CLO Food Marketing Institute December 9-10, 2009 dwhite@fmi.org
  2. 2. Food Safety Priorities • Prevention – Preventing adulteration at point of production should be highest priority – Only safe food should enter the food supply • Response – Retail and distribution sectors utilize effective systems to remove adulterated food from the distribution system quickly once the food has been identified
  3. 3. Tracking Food • Recent prolonged outbreak investigations highlight need to id tif t identify and find adulterated food that has entered th d fi d d lt t d f d th t h t d the food chain more quickly • Retail and food distribution industry complies with Bioterrorism Act “one up/one down” requirements • New programs: – Maximize existing information – Pilot projects first – Interoperable – Consider all options for better identifying adulterated food in the supply chain, not just new recordkeeping requirements – Improve public health
  4. 4. Today s Today’s Distribution System • Today’s distribution center (DC) is highly efficient* – Hundreds of suppliers send millions of cases that are repackaged into thousands of shipments to hundreds of stores • Median DC size: 583,655 ft2 – Range: 60,000 ft2 5,800,000 ft2 • Avg Deliveries to DC: 500 per week – Range: 248 874 • Median # cases received by DC: 510,000 per week – Range: 176,731 975,000 • Median # cases shipped f from DC C store: 2,200,000 per 4 weeks – Range: 120,000 13,804,000 • Median # deliveries from DC store: 1,972 per 4 weeks – Range: 54 12,783 • Median pounds of food shipped: 47,500,000 lbs per 4 weeks *FMI, “Distribution Center Benchmarks,” 2007
  5. 5. Today s Today’s Distribution System • Simple Process: In-Bound (Records) In Bound – Wholesaler orders from vendor (Purchase Order) – Vendor ships order to DC (Shipping docs, manifest) • Vendor bills DC (Invoice) – DC receives pallet from vendor ( p (“License Plate”)
  6. 6. Today s Today’s Distribution System • Simple Process: Outbound (Records) – Store places order with warehouse (store order) – Selectors travel thru warehouse to pick individual p cases to complete order • 65% of DC’s use voice-directed order selection systems – Store order of hundreds of cases palletized – Order shipped to store (store invoice) – Order received by store • Median: 42 cases stocked on shelf per hour
  7. 7. Today s Today’s Distribution System • Performance – Avg Cost To Handle Each Case • Median: $0.39 per case (inbound + outbound) – Time To Handle Each Case • 20.57 seconds per case (outbound) • Additional distribution mechanisms – Cross-docking • 94% of warehouses cross-dock product – Brokers • Combined orders for lower volume items – Direct store delivery • 30% of retail sales f t il l
  8. 8. Today s Today’s Consumer • Recession and economic woes are REAL • Price of food is critical – Recession has impacted grocery shopping (70%) • Shoppers “trading down,” substituting and eliminating to save money on groceries (Trends 2009) (Trends, – Low price is the single most important factor to consumers selecting a primary store (Trends, 2009) – 36M Americans receiving federal food assistance ( g (NYT, , 11/29/09) • 20,000 people added per day • Consumers still time-starved (Trends, 2009) • Nutrition important (Trends, 2009) – 89% of consumers very/somewhat concerned about nutrition – 92% of consumers believe home-cooked meals more nutritious
  9. 9. Important To Get It Right • Increased distribution efficiencies have kept food p prices low and supply abundant – Reducing efficiency increases cost and reduces abundance – Food retail/distribution system profits: $0.01 per dollar • No choice but to pass costs through the chain • Consumers are struggling – do not increase costs unless clear benefit to public health • Any changes that will impact distribution system y g p y must improve public health and reduce burden of foodborne illness
  10. 10. Therefore… Therefore • FMI supports improved ability to identify and locate contaminated food – Maximize existing information g – Any new systems must be fully interoperable – Start with pilot p j p projects involving all g stakeholders – Look at all options • Private sector/government collaboration & transparency is essential

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