With offhanded candor, Craig Wilson from Costco speaks at the USDA-FDA traceability hearing on Dec. 9.  From the recently released transcript of the event:

Moderator: And, finally, at the far end of the dais is Craig Wilson, who is the Assistant Vice President for Food Safety and Quality Assurance at Costco.

 MR. WILSON: Hi. I'm Craig Wilson from Costco. How many people in here have a Costco card in their wallet? That's my introduction, and thank you for that. Next slide. I'll talk a little bit today really quickly about item traceback at Costco and how we work together. On the epi side, for the epidemiologists that talked this morning and Bill Keen whose chart that I think Ian used, we work very closely with epidemiologists across the country because we have something unique.

We know what a person bought, not what he could have bought or what he remembers he bought. We know what a person bought. So we'll have an epidemiologist from any state give us a call and say, Craig, can you help us? Well, sure we can. We've got some legal hoops to jump through. HIPAA's involved, but we're going to do everything we can from a public health perspective to help tie that knot tighter.

We've worked with Patty at CDC and just lots of different folks. Another thing that's unique about what we do is our vendor distribution information. In order to sell an item to Costco, you have to tell us where it came from. It's in our purchase specification. Not only do you have to tell us where it came from, but you've got to give us distribution information and lot information based on the PO.

So we can pull a PO up and get lot designation usually off our POs, and it happens very, very quickly within our system. And I think this is becoming normal. The next thing I want to talk about is the Costco vendor ingredient validation program. Everybody remember the peanuts? Nobody --cool. I remember the peanuts.

Up to date, I think there's over 4,000 individual recalls on the stupid peanut recall. Does that sound about right? I know there's some FDA folks here. Are you still here? Yeah. About 4,000 individual recalls. Is that right, Sherri?

: Yes.

: Okay. So nobody knew what was in their item, and I'm ashamed to say, I'm probably part of that party. I couldn't tell you what was in a Dr. Good Wrench peanut bar. I didn't know. So we started this program that we audit to now and we inspect called the Costco vendor ingredient validation program.

It's up to our vendors to know where their ingredients came from and were they produced under a qualified HACCP plan, and how do they know this? This goes one step forward and one step back. They've got to do the same thing I do with them. And it's working out quite well, I might add. Okay. All items within our system are scanned multiple times. They're scanned in. They're scanned out. They're scanned out again when you purchase it.

So we've got a pretty rock-solid record of what we receive at our depots, what flows through our depots, and another amazing thing about Costco is our depots don't hold any product overnight. Product comes in in the morning. In the afternoon, you've got 25 soccer fields that are under roof. It's empty. And it's an amazing thing to watch. So nothing is held there. It's all transferred through our buildings.

 One other thing that's been fascinating for us are these new electronic traceback tools that we've been using, everything from watermelons, tomatoes, grapes, furniture from China. I did a test with one of the folks that's going to speak later today on furniture from China for CPSC and CPSIA, where we could track and know where furniture is built, children's furniture, what plant in China, what lacquer did they use on it.

 It's amazing. By going in and using your iPhone and scanning the item, it pops right up for us. It's fascinating stuff. We also made that available to the CPSC, and they liked that a lot. So this can be done on the FDA side. Electronic data storage and data mining for us is a big deal. We have a whole electronic data warehousing group, and that's all they do is find data. They look for stuff for us. They can do it very quickly on many, many different topics, and the fun thing is it's realtime. You can run over to the Pentagon City or down to Fairfax and buy a thing of apples,

I call it a thing, because I don't know what else to call it. It's not a lug. It's this plastic deal with -okay.
You can buy a thing of apples, and if I need to know that information in the next 10 minutes, I can know that in Seattle. Not a problem. It's very, very easily done.

We don't keep a lot of paper records. Paper records, I don't know if I can say this in this audience, but they just suck. Nothing's worse than trying to go through a bunch of paper looking for information that these folks need to help them get their job done. It's horrible. On the converse side, it's really hard to get these folks to understand what are you going to do with a list of 45 million people? So, you know, there's some learning that goes on, and we share.

We're really open with records, and we'll share anything we've got with the appropriate agency, and for Bill's and somebody else's concern, that includes all of our grinding logs and records from anywhere you want them. They're there, and it's easy to get. Next slide. I'll talk a little bit about recalls at Costco. Our primary focus at Costco is to protect the member all the time, first and foremost. I don't care about cost. I don't care about anything else.

 All those Costco members that raised your hands, my job is to make sure that I do everything in my power to protect you. One step back, for each supplier in the chain. That goes back to our vendor validation program that I mentioned earlier. One step forward. We're a retailer. We're the last fence, the last defense before it gets there. So we contact our members. One step forward. We buy it from David's produce company, and we sell it to our Costco member.

We lead a pretty simple life. If I'm notified or I have feeling an item is going to be within a recall, I'll block the item across the globe from sale. I can do that from my desk, and the item cannot be sold, and it happened literally in one minute's time, shuts the registers down on that item. It can't go out the front door. It can't be key-flicked. It can't be overridden. There's a note that comes up with my name on it, and that building manager will run back to his computer and try to figure out what's going on, but he can't sell that item nor will he. We pull it off the floor very quickly, and all of this is often done before there's a public announcement. Nestle cookie dough, remember that one?

We were off I think three or four days before there was a public announcement. We had a members notified, hey, there's a problem with this stuff. Let's get it back to us so we can deal with it. We can contact about 870,000 folks an hour by telephone, and this is a human phone call. It's a recorded human phone call, and it's terrific. How many people in here's got a phone call or a letter from Costco? Oh, really. Good. Good. Did it work? Did it scare you? No, it didn't, did it? Okay. Good.

And then we always follow up with a letter to our members to explain the details. We never ever wait, no matter what. Sometimes our colleagues will say, Craig, you've got to wait for a day or two. Boy. That's a tough one for me. It's really hard. Next slide, please. We get great recall support from certainly the USDA FSIS and the FDA. I personally think they're great. These guys don't get enough credit when the world's hard, and they're doing a pretty good job. We deal with the state environmental health departments, county health, and city health, and sometimes you get even divided within cities.

You have so many different folks that are EPA, OSHA, all kinds of stuff gets involved when there's a food recall. On any given recall, and this is no kidding, we can have up to 23 different agencies that will have an interest in a recall coming into our buildings or trying to get in touch with me. Next slide, please. So what do we need? The first thing, and foremost, I always want to know who's sick. And what's the reason for the recall?

Why are we doing this? We need product identity. You've heard all this before. Item number, name, flavor, size, UPC, code, lot number, sell by/use by, whatever they have as an identifying mark, I want it, and I want it quickly. And then I want the vendor contacts. Who's the recall coordinator for the vendor? What's the media and the member contact numbers that we can give to our member? I need all the item distribution information Johnny on the spot, and I have a group that gets this stuff for me, and it works great. And here's something else.

We recall 100 million pounds of beef. Okay. We're all good with that. We just recalled 200 million pounds worth of beef, and now we have the general public bringing it back to Costco. What the hell are we going to do with it? So you have to have a valid disposition plan. If you don't have a disposition plan going up front, you're in big trouble. You've got problems like you don't understand. Okay. For us, it's keep it as simple as you can, and keep it quick. Communicating to our buildings. I get a short, very concise note out to our buildings the minute I know anything.

That item is pulled, disposition instructions are there. We give a very simple recall explanation with vendor contact numbers for our membership desk. So when our members come in, our consumer comes in, when you go to Costco and say, hey, this water's been recalled, they'll know exactly what you're talking about. And then we have a big call center also that we also communicate with so they have the information, and I also throw it up on our internet site. So it's there for you also. Please. So keeping excellent records. You heard Bill talk about it. You heard Ellen talk about it. Everybody talks about excellent records, and I still don't get it, why people can't do that. It's one of our big audit points. When we go out to a food manufacturer, we ask them, why can't you keep excellent records? And we ask them sometimes in that tone unfortunately. How many Costco vendors are here?

So you guys get it, right? Okay. It's so important because we're protecting the public. We also need to know how much was returned. How much was destroyed? Has the building manager confirmed all of this? We've got 575 buildings globally. Have they confirmed all of this is done for their world, for their building? Because remember, each of the 23 agencies that we talked about earlier are going to come and visit for an effectiveness check.

 One more slide, and I'm out of here. Improvements. A single recall information system that's electronic would be awesome. If the agencies can get together and say, hey, here's what we need, we can do that for you and transmit it to you or put it up somewhere where you can get to it right away, have it available. Quicker information flow we talked about.

 Timely regulatory communications. Announcing a recall two months after the fact is not a good practice, and I hate to be the bearer of bad tidings, but that's really poor. We want to do it once. We don't want to wait until a Friday evening if we don't have to, and we really like to get some help with accurate media representation. And with that, thank you. (Applause.)