Janice Neitzel

Principal & Founder

Sustainable Solutions Group

Janice@SustSolutions.com

Copyright 2013

NN

Nutritious & Humane Sourcing

Responsible Sourcing ► Demand for healthy, higher welfare food is greater

than is supply and companies need a plan.

► Consumers and NGOs are demanding transparency in sourcing.

► Companies are seeking guidance from us to:

1. Gain Competitive Advantage

2. Have Parity with Competitors

3. Avoid being an NGO target

Agenda

1. What Industry Says

2. Animal Welfare Issues / Regulations

3. Food Safety / Keeping Antibiotics Working

4. Investigations & NGO Actions

5. Consumer Demand / Nutrition

6. Investor Sentiment

7. What Companies are Doing

8. Our Services

What Industry Says

2007

“Consumers will expand recognition of and

commitment to social responsibilities,

including the humane treatment of

animals.” 1 The Supermarket Guru, Phil Lempert’s 2011

Food Trends

1 Source: http://supermarketnews.com/blog/six-new-food-trends-watch-2011

Animal Welfare / Regulations

Farm Animal Welfare ► Welfare can be poor in any farming system if

stockmanship is poor

► Systems vary in potential to provide good welfare

► Even with good stockmanship, welfare is likely to

be poor in farming systems that:

Severely restrict freedom of movement

Limit behavioral expression in barren overcrowded conditions

Compromise health

Stockman: owns or raises livestock

Pork: Breeding Pig Gestation Crates

“Gestation crates for pigs are a real problem ... I

mean basically you’re asking a sow to live in

an airline seat… The gestation stalls have

got to go.” Dr. Temple Grandin

Eggs: Battery Cages

1 Image Source: http://kunc.org/post/ex-foes-stage-coop-detat-egg-laying-chickens

1 Live Enriched Colony Cam: http://www.comfortcoopeggs.com/livecams_side.html

Enriched Colony

Cage-free

Battery Cages

1

Non-Battery Cages provide higher welfare

5.8

5.9

0.0 Battery Cage system

Barn system, no free range

Aviary system, semi-intensive, no free range

US Consumers Support UEP

Enriched Colony Federal Bill

► 2012 Bantam Group Survey

Respondents support the bill

4-to-1

► Transitions egg production

from the barren battery cages

to enriched colonies.

► Enriched colonies provide

more room per hen, perches,

nest boxes and scratch pads

2 Source: http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=30291

1 Image Source: http://kunc.org/post/ex-foes-stage-coop-detat-egg-laying-chickens

1 2

Crate and Cage Regulations (in Place or Soon)

► Gestation Crate Bans

– European Union (now)

– California, Florida, Arizona, Maine,

Oregon, Colorado, Michigan, Ohio,

Rhode Island

► Battery Cage Bans

– European Union (now)

– California (2015)

– Michigan

– Ohio (no new facilities)

Downer Dairy Cows Meatingplace Nov 2012

► “10% of the dairies are responsible for 90% of (downer cows).” They let (the cows) get too skinny. They let them get too sick. They just let their health deteriorate too much. Dr. Temple Grandin

► “There is certainly room for improvement in the way animals are cared for at various points to minimize…problems…” Chris Galen, Nat’l Milk Producers Federation

(NMPF)

► “The beef industry is…leaning on the dairy industry to do a better job of sending healthier cows (to prevent “downer” cows at slaughter)” Rita Jane Gabbett, Executive Editor,

Meatingplace

Source: Meatingplace,” Cull Cow Conundrum, “November 2012, pgs. 37-43

Downer Cow Regulation

► 2009: “Downer” Cows prohibited in food supply1

► Dairy Cows unable to stand up or walk still show up at slaughter

► Poor On-Farm Welfare increases likelihood of “Downer” Cows

► 2009: National Milk Producers Federation (NMPF)

Farmers Assuring Responsible Management

“What gets measured gets done”

1 Source: http://www.usda.gov/wps/portal/usda/usdahome?contentidonly=true&contentid=

2009/03/0060.xml

Poultry: Hybrid Breed

► Standard breed or Heritage Birds – traditional breeds

► Hybrid Birds: Bred for Fast Growth (40-47 days)

Problems with skeletal development1, heart and lung function1, and obesity2 due

to fast growth

“If a [person] grew as fast as a chicken, [he] would weigh 349 pounds at age 2.” 2

Hybrid birds cannot reproduce on their own

► Nutrition: Fast-growing hybrid chickens provide more calories from

fat than from protein3

► Animal Welfare Approved certification limits to breeds with a

maximum daily growth

1 Source: J.C. McKay, N.F. Barton, A.N.M. Koerhuis, and J. McAdam (2000). The Challenge of

Genetic Change in the Broiler Chicken. BSAS Occasional Publication: 1-7. 2 Source: University of Arkansas Division of Agriculture, Cooperative Extension Service 3 Source: Y. Wang et al. (2009). Modern Organic and Broiler Chickens Sold for Human

Consumption Provide More Energy from Fat Than Protein. Public Health Nutrition 13(3).

Poultry Slaughter: Controlled Atmosphere Stunning

(CAS) or Low Atmospheric Pressure (LAPS)

► No Dumping

► No Live Hanging of Birds

► No Live Throat Slitting

► No Scalding Alive

► Increased Meat Yield

► Improved Meat Quality

► Decreased Contamination

Poultry excluded from US Humane Slaughter Act

(if Dr. Grandin approved)

Food Safety -

Keeping Antibiotics Working

Why do people need Antibiotics?

1 Source: http://www.who.int/mediacentre/news/statements/2011/whd_20110407/en/index.html 2 Source: http://www.cnn.com/2012/09/19/politics/antibiotic-use/index.html

“The world is on the brink of losing these miracle cures. In the absence of urgent corrective and protective actions, the world is heading towards a post-antibiotic era in which many common infections will no longer have a cure and, once again, kill unabated” 1 Dr. Margaret Chan, Director-General, World Health Organization

► 100,000+ Americans die from bacterial infections acquired in hospitals

► 70% of the infections are resistant to drugs commonly used to treat them2

U.S. Antibiotic use in Healthy Animals

Source: http://www.pewhealth.org/reports-analysis/data-visualizations/record-high-antibiotic-sales-

for-meat-and-poultry-production-85899449165

► Antibiotics and

antimicrobials (non-

therapeutic) given to

healthy farm animals is

on the rise in the U.S.

► Healthy livestock receive

70% of antimicrobials in

the U.S.

Antibiotic-resistant Bacteria in Meat

► ~50% of U.S. supermarket meat (26 stores in 5 US cities)

contaminated with drug-resistant Staph bacteria 2

Oxford Journals, April 2011

► Organic chicken has less Salmonella and less

antibiotic resistance than conventional 3

Foodborne Pathogens and Disease Journal, Nov 2010

1 Source: http://www.fda.gov/animalveterinary/newsevents/cvmupdates/ucm335102.htm 2 Source: http://cid.oxfordjournals.org/content/early/2011/04/14/cid.cir181.full 3 Source: http://online.liebertpub.com/doi/abs/10.1089/fpd.2010.0566

► Antibiotic-resistant salmonella, e coli, and campylobacter bacteria found in

81% of ground turkey

69% of pork chops

55% of ground beef

39% of chicken1 2011 NARMS Retail Meat Report

European Actions

► 1990’s: Denmark bans non-therapeutic antibiotics

Brief spike in therapeutic antibiotics for pigs

1992-2008: pig farmers increased production by 40% and

decreased antibiotic use per pig by 50% 2

► “It is possible to cut antibiotic use on farms

without triggering financial disaster.” 3 Scientific American

1 Source: Cogliani, Carol, et al. “Restricting Antimicrobial Use in food Animals: Lessons from Europe.”

Microbe Vol 6, iss. 6 2011 2 Source: Aestrup, Frank, et al. “Changes in the use of antimicrobials and the effects on productivity of

swine farms in Denmark.” American Journal of Veterinary Research. Vol 71 iss 7.July 2010 3 Source: http://www.scientificamerican.com/article.cfm?id=our-big-pig-problem

► 1986: Sweden bans antibiotics for growth promotion

Immediate increase in livestock disease

Gov funds research and farmer assistance finds no decrease

in production 1

U.S. Initiatives

► Delivering Antibiotic Transparency in Animals

(DATA) Act in Congress: mandated data collection

on how many animals are given how much

► Preservation of Antibiotics for Medical Treatment

Act (PAMTA) introduced in Congress (again)

1 Source: http://www.cnn.com/2013/04/15/health/meat-drugs/index.html

► FDA recommends use of "medically important

antimicrobial drugs" in food-producing animals be

restricted to situations where necessary to ensure

animal health and under veterinary supervision. 1

Investigations & NGO Actions

NGO High Profile Investigations

► In recent years, NGO’s have video showing animal cruelty at suppliers with low or no auditable welfare criteria of nearly every species

► Covered by international media:

– The Associated Press, ABC News, CNN, etc.

NGO Actions (since 2000)

► NGO’s have been targeting food companies: – Cage-free eggs and Crate-free pork – Humanely slaughtered poultry – Downer Cows – No antimicrobials given to healthy animals

► Using: – Shareholder Resolutions – Action Alerts – Online Petitions – Demonstrations – Social Media

Consumer Demand / Nutrition

Demand for Grass-fed / Organic

2011 AMI/FMI Joint Study 2

Shows US consumer demand driving increased

sales of organic and all-natural meat and poultry

citing:

44% better health

37% better animal treatment 33% better nutrition, taste & freshness

2012 Hartman Group Report 1

Cites grass-fed meat, cage-free eggs, and heirloom marbled pork as growing US trends.

1 Source: http://www.foodnavigator-usa.com/On-your-radar/Sodium-reduction/Butter-portion-

control-tart-cherries-and-stevia.-Welcome-to-2012

2 Source: http://www.progressivegrocer.com/inprint/article/id2274/ground-rules/

How Americans See Modern Agriculture

1Source:http://www.feedstuffsfoodlink.com/ME2/dirmod.asp?sid=&nm=&type=news&mod=Ne

ws&mid=9A02E3B96F2A415ABC72CB5F516B4C10&tier=3&nid=175440CE192047159190C

24583EED5B7 2Source: http://feedstuffs.com/story-survey-finds-support-open-housing-sows-45-95856

► 2011 US Farmers & Ranchers Alliance Study

mass production,

subsidies,

chemicals,

factory farming,

and animal cruelty 1

► Facts are in 2012:

92% of US hens in battery cages

70% of US sows in gestation crates

53% of pork producers have crate-free or plans to switch 2

Demand to Ensure High Welfare

2010 Demeter Communications Food Production Study 1

70% of US respondents want to know how producers are ensuring farmed animal care

1 Source: http://www.dairyherd.com/dairy-news/latest/research-outlines-consumer-perceptions-of-

food-production-113996864.html

2 Source: http://contextmarketing.com/sources/feb28-2010/ethicalfoodreport.pdf

2010 Context Marketing Study 2

70% of US consumers are willing to

pay more for “ethical” foods and 91% include animal welfare

Demand for Animal Welfare Labels

2011 Kansas University Study 1

Consumers will pay up to 20% more for

meat / eggs with a mandatory welfare label

consumers don't like gestation crates or hen battery cages.

1 Source: http://www.agmanager.info/livestock/marketing/AnimalWelfare/AW-

Labeling_FactSheet_07-19-11.pdf

2 Source: http://www.abc.net.au/news/2011-01-03/labelling-sees-free-range-egg-sales-soar/1892582

2010 Australia 2

After mandatory egg labeling of caged or un-caged

cage free eggs sales increased 90%

Battery-caged eggs sales fell 50%

Nutritional Benefits of Higher Welfare Foods

Source: Nutritional Benefits of Higher Welfare Foods, Compassion in World Farming, July

2012

Investor Sentiment

Investor Sentiment

Source: http://www.fool.com/investing/general/2011/02/08/seeking-more-humane-profits.aspx

Seeking More Humane Profits “In their search for truly ethical

companies, socially responsible

investors highly rank businesses

that work to eradicate cruelty

from their operations.” Motley Fool 2011

Investor Sentiment

Source: http://www.foodnavigator.com/Financial-Industry/Animal-welfare-concerns-grow-for-food-

industry-investors/?utm_source=newsletter_weekly&utm_medium=email&utm_campaign=

Newsletter%2BWeekly&c=3ReafH9inCoAL22leqA9Uw%3D%3D

“Investors are seeing animal welfare as a meaningful indication of a company’s ability to manage risk. Investors will see animal welfare as a risk issue and use their influence to encourage companies to manage the issue better” Rory Sullivan, Ethical Investment Consultant 2013

US Animal Welfare Market Leaders

► 2010 Stock up 157%

“Food with Integrity”

► 2010 Stock up 72%

Global Animal Partnership

5-step Program

What Companies are Doing

Grocery & Food companies

Requiring (future) Crate-Free

Smithfield and Hormel committed to 100% Crate-Free

for company-owned farms

Cargill has widely adopted group housing

► *Whole Foods ► Costco ► Kroger ► Target ► Supervalu ► Safeway ► Harris Teeter

► Oscar Meyer ► Campbell Soup ► Heinz ► ConAgra ► General Mills ► Williams Sausage ► Bob Evans ► …and more

Source: http://www.humanesociety.org/issues/confinement_farm/timelines/timeline_farm_animal

_protection.html

Restaurant & Foodservice companies

Requiring (future) Crate-Free ► *Chipotle ► Bon Appetit (2015) ► McDonald’s ► Burger King ► Wendy’s ► Dunkin’ Brands ► Denny’s ► Arby’s ► Subway ► Sonic ► Cracker Barrel ► Wendy’s

► Wendy’s ► Chili’s ► Applebee’s ► Compass Group ► Aramark ► Sodexo ► Sysco ► Carnival Cruise ► Royal Carribean ► Marriott ► and more…

Source: http://www.humanesociety.org/issues/confinement_farm/timelines/timeline_farm_animal

_protection.html

Commitments to 100% Non-Battery

Caged Eggs

Subway and

Burger King are

committed to 100%

non-battery caged

eggs. Subway has

already done so in

the UK

Costco and

Trader Joe’s are

committed now to

100% non-battery

caged private

label eggs

Whole Foods is committed to only non-battery caged eggs now

throughout its stores

Compass Group,

Unilever,

Aramark, and

Sodexo are all

committed to 100%

non-battery caged

eggs

Source: http://www.humanesociety.org/issues/confinement_farm/timelines/timeline_farm_animal

_protection.html

Hyatt, Marriott, and Omni Hotels are committed to only non-

battery caged whole eggs

SustSolutions Services

Sust Solutions Guides Food Companies

Level 3 Planning even with

supply lacking

Level 1 Business as Usual

Level 2 Taking Some Steps

Level 4 Leaders with

Comprehensive

Approach

Team

Dr. Temple Grandin, Advisor World-renowned expert on animal behavior and Professor of Animal Science at Colorado State University. 2010 Time Magazine’s 100 most influential people.

Alma Triplett, Principal 26 years experience at McDonald’s Corporation managing global multi-cultural organizational change.

Janice Neitzel, MBA, Principal & Founder Guides top food industry decision-makers to plan and implement responsible sourcing animal welfare improvements and CSR messaging.

Steve Weiffenbach, M.S., Principal & Advisor Animal Welfare and Food Safety expert with solid record of achievement and globally recognized results. 20+ years at Burger King and Hardee’s.

Jen Boyton, MBA, Principal Certified Trainer in the Global Reporting Initiative's (GRI) sustainability reporting methodology and experienced sustainability consultant to Fortune 500.

Sust Solutions Client Wins Award

Progressive Grocer awards 2012 Retailer of the Year to

our client $4B mid-Atlantic grocery chain

Source: http://www.progressivegrocer.com/top-stories/headlines/industry-

intelligence/id36070/pg-names-harris-teeter-as-2012-retailer-of-the-year/

Testimonials

Harris Teeter, Brad Graham,

GVP Purchasing

“Janice is a true professional! She has

provided timely detailed direction and is

a results driven expert that consistently

delivers a high level of detailed

knowledge on tough industry issues. “

Sonic Corp., Nancy Robertson,

SVP, Franchise HR Development

“Your working with us has been so

thought-provoking and helpful. Your help

in facilitating discussion on these

(animal welfare ) issues at Sonic has

been huge.”

McDonald’s, Kyle Schott,

Corporate Citizenship Manager

“Thanks for helping us to focus attention

on a much needed area. We have been

very tuned into how to communicate

social responsibility. The results you

provided added value to our CSR

reporting process.”

Unilever, Tina Seppalainen,

Sr. Systems Consultant

“Janice is an experienced facilitator

who is skillful at eliciting responses.

She works in a structured, logical

manner and has a broad management

skill set to drive each project to

success.”

Responsible

Leadership Training

Animal Welfare Policy

& Communication

Dairy Farm 3rd Party

Assessment

Meat, Dairy & Egg

Sourcing Assessment

NGO Relationship

Management

Services

Animal Welfare Policy & Communication

We guide you to develop

reasonable positions and

policies.

► We understand Complex Animal Welfare Issues

► We guide you regarding Limited Supply and High Demand

► We coach you to Decide: If – What – When - How to Communicate

Customers

Staff

Investors

Meat, Dairy & Egg Sourcing Assessment

We measure widely-accepted animal

welfare criteria and deliver

recommendations that become your

Responsible Sourcing Roadmap.

Copyright Sustainable Solutions Group 2013

► Criteria and Certifications must be Transparent

► Approved by Dr. Temple Grandin

► Widely-accepted by Farm & Animal Welfare NGO’s

Responsible Sourcing Roadmap

Copyright Sustainable Solutions Group 2013

NGO Relationship Management

We coach you to

communicate with NGO’s to

minimize being a target. We

advise you on actions and

communication content,

timing, and delivery to

minimize risk.

Responsible Leadership Training We build awareness with exposure to prominent

industry leaders and a series of books, articles,

and videos.

Participant-led discussion combines leadership

components and topics of farm animal welfare,

food safety, antibiotic use, farmer impact,

certifications & product quality.

Dairy Farm 3rd Party Assessment

The National Milk Producers Federation

(NMPF) has developed a widely-used

dairy animal welfare evaluation called

the FARM Program.

Our service supports farmers in

ensuring What Gets Measured Gets

Done

Milk Audit = FARM Evaluation + Sust Solutions 3rd Party Assessment

Questions??

Janice Neitzel

Principal & Founder

Sustainable Solutions Group

Janice@SustSolutions.com

708-926-5569