 Good afternoon, everybody. I am Paige Jarvie. I am Global Marketing Assistant, sitting in for Ms. Paula Selbin. And I'd like to welcome you to today's presentation and webinar on brand protection and product traceability. Over the next hour you will listen to findings of the report by author Donna Ritzen with DDR communications where she will discuss what's new, or excuse me, what's now what's new and what's changing. President of DDR Communications, Donna, has founded the company 25 years ago. DDR's business is based on a direct response methodology that delivers market research, market, excuse me, business development, strategic alliance, and marketing intelligence to companies in virtually every business to business industry. DDR's experience is backed by over 25 years in marketing communication. A few housekeeping notes before I hand it on over to Donna. Everybody has entered the webinar muted. And if you have any questions throughout the presentation, please feel free to use the bottom left chat box. And you will be able to type your questions in there, and we will go ahead and have those answered by Donna at the end of the presentation. The presentation will last about 45 to 50 minutes. And again, Donna will be able to answer any questions at the end. So at this time I would like to hand the webinar over to Donna. Thank you so much, Paige. And thank you everyone for joining the PMMI webinar series today. As Paige had indicated, this is a presentation on brand protection and product traceability. We undertook this project a couple of months ago, and one of the significant outcomes of this conversation that we had is that the war against fraudulent products is certainly going to be conquered if possible, but certainly fought with technology. And if we look at everything that's occurring in manufacturing today, integration and robotics, optics, data interpretation, these all play a very significant role in marking and coding and tracking products throughout the entire supply chain. So that's what I'll focus on this morning is certainly what's happening with recalls, counterfeiting products, fraud, tampering that's going on, diversion, which is leading products into the gray market. And as Paige had indicated, if you do have any questions as we go along, type them in and we can discuss them at the end. So as we all look at the news, it's significant. And I pulled this information from just a couple of weeks of news that was passing across my desk. And it's really amazing. It's theft is occurring with cargo theft. Recalls are absolutely significant and continuing to increase. If there's contamination or impurities in the products, it's causing recalls, mislabeling is causing recalls. And really the FDA has come out and said that it's certainly one of the most challenging things that they're being faced with in the history of the FDA is really providing a framework and the regulatory depth needed to really attack these problems. So it's something that we're seeing every day in our news. We are the consumers of a lot of these products. So it's certainly affecting us both from a standpoint of professionally and from the standpoint of personally being the consumers that are involved in these recalls and the different problems that are happening in the marketplace. So this morning I'll really talk about three different sections. What impact does this have on our global economy? What advances are taking place in the technology to be able to track products through the entire supply chain? And which of those technologies will really endure and last and which ones are emerging and being adapted? And then what equipment needs are behind this? What are companies still looking for? What help are they looking for from their suppliers? Certainly counterfeiting is becoming a worldwide epidemic and it's really affecting the production and foods and beverages and medicines and tracking these products up the supply chain and then all the way through the supply chain is what this research project undertook. So we'll look at that aspect completely. If we look first at how is this impacting the global economy? You would think that counterfeiting, when we think of counterfeiting or we think of fraud, it really was more in the personal products of handbags or shoes or different types of products that were easily counterfeited. But now it's really entering into producing fake foods and beverages and pharmaceuticals even to the point where packaging looks authentic. There's coding and marking on the product so it's really becoming much more difficult to determine an authentic product from a counterfeit product. And it's three to seven percent of the world trade is counterfeit products. And it's costing the economy one and a half trillion dollars in terms of the cost which involves many different costs of absconding these products, getting rid of these products, regulating these products, monitoring these products, tracking the products, coding the products. It's an enormous cost that's occurring. And it's growing at a rate two to three times faster than food beverage or pharmaceutical markets are even growing. It's moving at a kagar of 12 to 16 percent. And the reason there's such a big range there is because it's very difficult to get arms around this problem. Reporting from different ports is not always accurate. Sometimes it's not even occurring. So it's such a vast problem right now that it's very difficult for even experts predicting this to understand how big is the problem. And we are the greatest consumers of food and pharmaceuticals in the world. So 50 percent of the total growth in this market is really coming from North America. So we did study, as I've been saying, food, beverage, and pharmaceuticals. And since those markets are so completely different, let's just take a look here first at food and beverage and what's really happening in this market. And while it's really not intuitive to think of food and beverages being counterfeit or fraudulent, it really is a growing problem. 7 percent of the products in our grocery stores contain fraudulent ingredients. And it's a $10 to $15 billion industry in food fraud right now. And if you look at cargo theft, where is the majority of cargo theft coming? In fact, this was surprising finding the statistic. 24 percent of cargo theft is for food and beverages. And then after that it's electronics and home and garden products, which certainly seem more easy to counterfeit and then a whole host of other things that are attributed to cargo theft. But product recalls in this area, they're growing fourfold in the last four years. And as consumers, as I said earlier, we're seeing this significantly in our news, in our nightly news, the number of products that are being recalled. And 72 percent, 3 out of 4 recalls are related to food ingredients. And the cost of food recalls, what it's costing a company if they have a recall, is $10 million and that's probably low depending on the severity and the widespread recall that could be occurring. And 58 percent of the companies that we spoke with had been affected by a recall. And we recently gave this presentation at the PMMI annual meeting last week. And we asked the audience how many had been involved in a recall in terms of how many of their customers had either been involved in a recall or a victim of counterfeit or fraud. And it was over 90 percent of the audience that was listening in on this presentation. So the problem is certainly growing and escalating at an exponential rate. And if we look specifically now at pharma, which is a bit different in terms of how it's counterfeited and getting into the gray market, but it's counterfeiting and diversion is rampant in this industry. 40 percent of the drugs that we take are imported. 80 percent of the active ingredients that we take in our drugs in this country come from an offshore location. And this widening supply chain is what's causing the problems in terms of opening the opportunities for the whole counterfeit market. And it's certainly an opportunity for criminals to get into this market. And a lot of the sale of fraudulent medicines coming from Africa and South Pacific, it's at a tune of $5 billion and $75 billion revenue that's being derived from the counterfeit market. So the gray market is when it's an actual product that has been manufactured, and it goes out into the supply chain. So for instance, a pill could be manufactured in one country and then end up being shipped to a second country. And then it could end up being packaged maybe in Mexico and then end up in our pharmacies here in the U.S. so it transfers many different hands. And that's where product can be diverted and moved out of the market and disappear into the gray market. And then oftentimes those drugs are sold at a much higher rate. But with the serialization occurring by the late 2018, which is just two years from now, 75% of the world's prescription medications will be regulated and traveling through a supply chain that is regulated and tracked. So when we look at what's really driving some of this, certainly as I'd mentioned already, the globalization is really creating an increasingly complex supply chain. The cold supply chain is growing. We have regulations now, and I'm sure you're all familiar with FISMA that's driving the food and beverage towards more track and trace. I won't get into the details here, but PMMI did release a report earlier this year specifically addressing FISMA and the changing regulations and what's in place now. And then certainly serialization, which is also a regulation that's growing in the pharma industry and the medical device industry with their unique device identification. It will become more uniform. Tracking will become more serialized, both for pharma and medical device. And there's a PMMI has a report right now being undertaken in the pharma industry that is getting into this subject much more specifically in terms of serialization as well and finding out where companies are at in the process. So if we take a look now at who participated in the research report that these findings are being presented for, we talked, had 75 direct conversations and about 100 references and resources that are throughout this report that help substantiate the findings that we heard during our conversations. And we talked to the entire supply chain. We talked to suppliers of ingredients and materials and how are they tracking those products coming into a manufacturing plant. We talked to processing and packaging and transport as a product moves through the manufacturing process. How do they maintain that tracking integrity? And then when they ship it out to the warehouse and it goes to a retailer, what kind of coding and marking is taking place at each of those locations and where some of the weak links are? And we talked to a very good representation, obviously larger companies with the bigger majority, they're leading the way in a lot of the regulations of fisma and serialization, but also had a very good representation from medium-sized companies and small companies to find out what they're dealing with and what they're challenged with. And as I had said, we've talked, this was a report on food, beverage, and pharma. So if we look at the entire supply chain, it definitely requires checks and balances along the whole entire supply chain. So what companies are looking for is a fully integrated solution. It's got to have layers of sophistication in terms of being able to track the product. It has to be fully integrated, so all of the marking, coding, printing, reading, technologies all have to integrate into the manufacturing process. And it's got to be flexible to certainly adapt to different types of products, different types of materials, different sizes. And it's got to have a centralized system to track this information that's certainly something that within their own organization is being tracked, but in a broader sense, tracking it through the entire supply chain so that at every stage, as the product transfers from one stage to the next, whoever takes ownership next of that product is able to continue on with the tracking pedigree of that product. In the event of a recall, that information has to be immediately retrievable. There's no longer a grace period of you have a week to retrieve and recall that information. Everything must be immediately available to companies so that they can recall those products off the shelf as soon as any incident is discovered. And it was a bit surprising when we talked about how many companies are performing mock recalls to assure that their process is working and they can recall information instantaneously. 92%, which I found that to be a very comforting high level of companies that do feel they are very prepared for this. Certainly, it's not 100% in terms of all the different stages of the supply chain, and we'll take a look at that here in the next slide. So in the full report, each one of these sections or moving through the supply chain is looked at very carefully in terms of what are they using, how are they marking in it, what types of marking are they using. But here I've given you just a bit of an overview. Otherwise, we'd be here on the phone for quite a long time to go through each stage of the supply chain. But as I said, that is in detail in the full report. So if we look at this, in terms of there's two weak links that are occurring, and it's occurring when a product or an ingredient or a material is moving into the manufacturing process. So being able to verify the authenticity of those ingredients that there's been no contamination that's been occurring, that they're actually getting the product. This is something that the industry continues to work on. 1D barcodes are being used consistently throughout the entire supply chain. But there's also 2D barcode is significantly growing. It can hold more information. It can move the product through with a greater level of verification and authenticating a product. QR codes and smart labeling is certainly growing. Temperature sensors, as the cold chain expands even in our own country, but also offshore, temperature sensors are needed to make sure that those products are moving through and are staying at a consistent temperature. But if we look again at the end of the supply chain, so as products move out of the manufacturing process, then they're exposed again to having counterfeit fraud or even contamination entering into the process. So in the warehouse level, there's that link. Certainly the warehouse takes over with a lot of warehouse management systems. But communicating that information along the supply chain is the goal of the whole track and trace process. In the warehouse and in the retail chain now, wearable scanning devices is certainly growing and automated picking is growing to help eliminate some of the mistakes that could be made in terms of moving products through the supply chain as well. So it's really a very complex subject to look at. I've tried to simplify it here, but as I said, there's definitely more detail in the full report. So if we look at talking about what types of technology will be prevailing the years ahead, certainly barcodes will continue to anchor this technology. Smart technology will continue to grow. In fact, our smartphones will be something that we will rely on even more. Certainly with QR codes, we're able to authenticate a product, get more information on a product, and this would be with food and pharmaceuticals. So encrypted technologies will certainly be the leader in moving products through the supply chain for track and trace. 3D is emerging, which is really just a color-coded barcode or a color-coded matrix of a 2D code. And we did hear about invisible barcode technology or even more miniature barcoding, certainly as clear packaging grows in popularity and clean labeling growing in terms of having less ingredients in the product, but certainly more on a label. The need for smaller or invisible barcoding is a technology that we'll possibly see continue to grow. Smart labeling and tags is growing, particularly on perishable foods predicted in the next five years. That's going to grow at a pretty significant rate of 17% Kegar, very high growth. And the use of RFID, we studied RFID probably 20 years ago, and at that time it was predicted to grow significantly and it never really took off. In the next 10 years or in the past 10 years, it has found some niches in terms of being used for internal tracking assets, being used in the cold chain. Inc. now, the development of Smart Inc. is growing and embedding RFID with those Smart Inc. with an antenna. So RFID will continue to grow, not certainly as fast. In the next few years it's predicted to grow at about 5%. But we did hear that general use, both pharma food and beverage, all said that they predict it will have some kind of growth, but it's certainly not predicted to continue to grow at the rate that it has been predicted in the past. So if we look at what is being used in terms of the type of marking systems, Incjet prevails. It's been around for a long time. Laser though, we heard a significant amount of laser growing in this market just because of the technology that it offers. It certainly has the ability to be put on many different types of materials and thermal transfer as well. So if we look at which one will be more popular, that's a difficult prediction to make, because it depends on the material, the product, where is it going, how far is it being tracked, what's the value of the product, how much tracking does it actually need. And certainly human readable codes will always be around. We, as the consumers, will need to know what the expiration date is, where was it manufactured, if there's any type of coding on that that identifies that product, if it were in a recall, we would need to be able to read that information. So human readable is certainly going to continue. If we look at some of the new technologies, again I mentioned our smartphones, they're going to significantly play a role in some of these markings as we go forward. So we did some research in terms of what new technology is out there, what innovation is occurring. And covert or invisible watermarks, while none of these technologies are being overwhelmingly adopted, they are out there for a product that has high value and definitely needs to have more... Thank you. Please stand by.