continuing to invest in the future · for habitat for humanity. further, s&d’s annual holiday...
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2017 Sustainability Highlights
CONTINUING TO INVEST IN
THE FUTURE
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2017 Sustai nab i lity H i g h li g hts
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4 UPDATE from Our CEO
6 OUR SUSTAINABILITY VOICE
8 SUSTAINABILITY VISION STATEMENT
10 WORKPLACE RESPONSIBILITY
14 CORPORATE CITIZENSHIP
18 SOURCING WITH PURPOSE
20 POWER OF OUR PROGRAMS
24 TEA IN ARGENTINA
26 2017 PERFORMANCE DATA
28 ENVIRONMENTAL CONSERVATION
30 CONTINUING FORWARD
TABLE OF CONTENTS
El Cedro farm in the La Coipa district of Peru doubled productivity from its seven acres of coffee after just two years with S&D’s Raíz Sustainability® platform.Cover: Liliam del Socorro Cardona Garcia spreads beans to dry on a space-saving rooftop patio on Casa Blanca farm in Antioquia, Colombia.
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A commitment to sustainability requires investing in the future, a commitment we made
more than five years ago. We recognize that investments in both our operations and our
supply chain are critical for the continued growth of our business and, more broadly, that
the many facets of sustainability relate directly to stronger performance. While challenging
at times, we have learned that creating a culture of sustainability means embedding
sustainability throughout all aspects of the business.
Now, as a part of Cott and as we evolve our offering to become a broader beverage
solutions provider, we are compelled to elevate our strategies even further. We will continue
to assert leadership in coffee and tea and build even further as a global beverage supplier.
I’m proud to share the progress of our investments in coffee communities at origin and
those within our own communities here at home. We invite you to enjoy this highlights
edition covering the 2017 calendar year.
Together, we’re taking action and making bold commitments.
CAPTION
Ron Hinson
President & CEO
S&D Coffee & Tea
UPDATE FROM OURCEO
La Montanita farm in La Armenia Alta, Colombia has seen improvement in all three impact areas of S&D’s Raíz Sustainability®: social, environmental, economic.
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2017 Sustai nab i lity H i g h li g hts
6 7Olga Cuellar speaks at Raíz Connect, the first-ever gathering for Raíz Sustainability® partners in 2017.
Sustainability must go further than developing a well-structured supply chain.
At S&D, that is the foundation which then requires integrating core values and
principles into the company’s actions to create meaningful impact.
Investing in long-term sustainability is a critical risk management tool—and
more. It drives innovation. It delivers impact at the farm level. It opens new
business opportunities. And it is critical to the future of the industry.
GOING BEYOND THE NORM
Olga Cuellar, based in Colombia, manages S&D’s strategic sustainability
initiatives to ensure S&D is prepared to meet long-term challenges and
opportunities. A native of a small coffee-producing town, she earned her
master’s degree in the U.S. in Latin American studies with her thesis on the
role of women in coffee production. In addition to being tri-lingual and a
licensed Q-Grader, Cuellar brings a passion fueled by more than a decade
of advocacy in the coffee industry.
STRATEGIC LEADERSHIP
S&D is redefining the corporate climate
with models that create real value.
OUR SUSTAINABILITY VOICE
"�Since�2012,�our�
approach�has�been�
holistic,�tackling�key�
challenges�such�as�
climate�change�and�
economic�support�for�
farmers.�We�are�taking�
what�we�have�learned�
to�reach�for�even�more�
ambitious�impact."
—�olga�Cuellar,� � Sustainability�Strategy�Leader
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SUSTAINABILITYVISION STATEMENT
S&D is paving the way, continuing our growth as a sustainable business. We recognize how vital sustainable
practices are to our current operations and for future growth, and consider it our responsibility to be good
stewards of the planet and positive contributors to society. We have set ambitious goals, made significant
progress and continue to take action. Our sustainability work is aligned with the United Nations Sustainable
Development Goals: promoting development that meets the needs of the present without preventing future
generations from being able to meet their own needs.
OUR SUSTAINABILITY APPROACH
At S&D Coffee & Tea, we strive to be the leading beverage partner within the foodservice industry
with innovative sustainable solutions for all stakeholders.
Key Focus Areas:Workplace Responsibility: We are committed to the health, safety
and continued development of our employees.
Corporate Citizenship: We contribute to the growth of those who live
and do business in our communities—at home and at origin.
Sourcing with Purpose: We know that sustainable investments and
the proactive management of risks drive the success and profitability
of our business, creating shared value within our supply chain that
leads to long-term success at all levels.
Environmental Conservation: We operate in a way that conserves
environmental resources while minimizing costs and improving
efficiencies, all while offering consistent, quality beverage solutions
for our customers.
Hector Fabio Marin is a young farmer who is eager to learn new practices for soil health and water management to apply to his farm in Antioquia, Colombia.
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S&D maintains a safe and inclusive work environment, fostering a culture for
employees to realize their full potential while contributing to individual goals and
company success. We are committed to our employees because we recognize that
our people truly make the difference.
WORKPLACERESPONSIBILITY
Our first-ever employee opinion survey was conducted in September 2017. S&D partnered
with The Employers Association of Charlotte, N.C., to ensure anonymity and objectivity.
All S&D employees were invited to provide feedback through the survey and we received
an impressive 82% participation rate highlighting strengths in employee commitment,
supervisor management effectiveness and organizational practices. The overall measures
for our first survey are in line with national normative comparisons for manufacturing,
with the next survey planned for 2019. Results from the survey have been shared with all
employee teams at headquarters as well as with the sales field. Moving forward, an employee
survey action committee has been established to help identify and oversee the implementation
of potential actions that will continue to cultivate S&D as an employer of choice.
EMPLOYEE SURVEY
Itzel Zaldivar, commodities inventory & logistics coordinator, is part of the team responsible for the raw material requirements for all of S&D’s coffee and tea production.
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Natalie Clontz, S&D marketing manager, with other S&D employees learning about tea on the Charleston Tea Plantation
8
Jae Alexander, an inaugural recipient of one of S&D’s 2014 scholarship awards, graduates from the University of North Carolina at Asheville in 2018.
Helen Griffith, currently S&D’s vice president of marketing, was among the first employees to complete an internal training course
known today as the Leadership Enrichment & Achievement Program.
A total of $30,000 has been contributed toward higher education since S&D began a college scholarship program in 2014 for children
and grandchildren of employees. Employees from a number of departments, ranging from sales and manufacturing to fleet services and
order processing, were granted financial assistance toward studies in majors such as psychology, communications, finance and forensics.
A summer camp scholarship was added in December 2017 to enrich the lives of employees’ children and grandchildren by supporting the
cost of a safe and unique summer experience for children who would not otherwise be able to attend their chosen program.
Over the course of 2015 to 2017, S&D has invested approximately $500,000 in leadership development. This includes internal training
through S&D’s Leadership Enrichment & Achievement Program (LEAP), providing over 20 highly qualified participants with advanced
training and personal coaching toward long-term career growth with S&D. Further, S&D continues to support the advancement of
women in foodservice, driving growth for individuals and organizations through Women’s Foodservice Forum (WFF), sending both
male and female employees to WFF annual conferences, local workshops and leadership training.
S&D SCHOLARSHIP PROGRAMS PROFESSIONAL DEVELOPMENT
"�This�program�stretches�
you�in�so�many�ways�
both�personally�
and�professionally.�
Everything�you�learn,�
such�as�stronger�
prioritization�and�time�
management�skills,�you�
are�able�to�apply�during�
the�program�and�on�
the�job�for�continued�
development.�You�
leave�this�program�
much�stronger�than�
you�enter�it."
—�Natalie�Clontz,�marketing�manager� � and�2017�LEAP�participant
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CORPORATECITIZENSHIPWe are passionate about making a difference, both in our home
community around Concord, N.C., and in the global communities
where our raw materials are grown. We embrace the leadership
responsibility of giving back in a number of strategic ways.
We impact the communities where we live and work through
employee-supported efforts that contribute time and resources
to many regional causes.
HOME COMMUNITY
LOCAL CHARITABLE GIVING
S&D continues to partner annually with United Way of the Carolinas, contributing
nearly $53,000 in 2017 from employees, special events and company match,
with 71% of the funds coming directly from our generous employees.
Additionally, employees participate on teams during the United Way Week
of Caring each year. The teams volunteer, on company time, in a variety of
community projects such as delivering meals for Cabarrus Meals on Wheels,
visiting with participants at Coltrane L.I.F.E. Center adult care facility and construction
for Habitat for Humanity. Further, S&D’s annual holiday “Season of Giving” food
and toy drive collected 840 individual food items for Cooperative Christian
Ministry and 260 toys donated to the Concord Fire Department for distribution.
DISASTER RELIEF
In direct response to the 2017 natural disasters, nearly $150,000 was donated
in support of those affected. S&D donated over $70,000 in contributions and
coffee to the Red Cross and Houston Food Banks supporting the Hurricane
Harvey relief efforts. Additionally, as a subsidiary of Cott Corporation,
S&D employees contributed to a greater fundraising effort for employees
of Cott North America affected by Hurricanes Harvey and Irma as well as
the earthquake in Mexico. Just over $79,000 in donations from S&D were
distributed to fellow associates who suffered from these natural disasters
to assist them with basic life necessities.
J&W CULINARY CHALLENGE
2017 marked the 7th annual culinary
competition at Johnson & Wales
University in Charlotte, with $10,600
in student prizes plus $5,000 donated
to a charity selected by the winner’s
chef mentor (the National Multiple
Sclerosis Society). Over the years,
hundreds of students have submitted
original recipes and 120 students have
gained valuable experience and expert
feedback participating through the
semifinal competition round.
S&D employees volunteer each year during the United Way Week of Caring, assisting in the community with tasks such as preparing bagged lunches for those in need.
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RE:CO SYMPOSIUM FELLOWSHIP PROGRAM
The Re:co event, hosted by the Specialty Coffee Association,
delves into the world of specialty coffee, shining a light on
development through speakers and interactive experiences.
The Fellowship Program extends a scholarship opportunity
to future leaders who may otherwise lack the financial
resources to attend. We are proud to invest in providing
access to this important event for up-and-coming thought
leaders and have supported the attendance of over 100
future coffee professionals from 2015 to 2017.
COFFEE QUALITY INSTITUTE (CQI)
S&D recognizes the need to empower women in the
coffee industry with hands-on training and other
critical decision-making tools. In order to more
easily integrate gender equity into existing supply
chain programs, S&D began using methodology from
CQI’s Partnership for Gender Equity (PGE) in our field
projects in Colombia and Nicaragua. Beginning to track
indicators, such as the proportion of women making
key decisions and participating in specific training
programs, will contribute to a systematic approach to
improve gender equity at origin.
The complex sustainability challenges facing our industry can only be tackled through collaboration. We join forces
with leading like-minded organizations to proactively address relevant challenges on a global scale. “S&D is pushing
the envelope in sustainability through industry engagement initiatives that are aligned with the challenges of the
industry as a whole,” notes Saurin Nanavati, COSA Director of Global Partnerships.
GLOBAL
SUSTAINABLE COFFEE CHALLENGE
S&D joined Conservation International’s global
challenge as one of the first members in 2016,
dedicated to the common goal of making coffee
the world’s first sustainable agricultural product.
We strengthened our involvement in 2017 with
a public commitment to support the production
of 150 mill ion lbs. of sustainable coffee through
our sourcing platform Raíz Sustainability® and
our purchases of certified coffees, while directly
impacting the livelihoods of 10,000 farming families
by 2020. Our sustainability team members David Piza
and Olga Cuellar are on the advisory council and
David leads the sustainable sourcing action network.
An aerial view of healthy coffee plants on La Prosperidad, a 29-acre farm in the town of Benatia in the Antioquia region of Colombia.
"�The�attendees�at�the�Re:co�Symposium�
represent�such�a�spectrum�of�coffee—
from�microbiology�researchers�to�
producers—and�I �saw�that�in�the�
Fellows�as�well.�I 've�been�able�to�
reaffirm�that�what�I'm�interested�in�
is�really�relevant�and�there's�a�lot�
of�need�for�research�in�those�areas."
—�Aleida�Stone,�2017�Re:co�Fellow
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Natalie Clontz, S&D marketing manager, with other S&D employees learning about tea on the Charleston Tea Plantation
Advancing resilient supply chains means holding our partners accountable
for sustainable practices. We focus on commodities such as coffee and tea
where we can have the most impact.
Coffee and tea farmers are faced with growing demand, reduced farmable
land and decreased yield due to conditions such as unfavorable climate.
These issues deter younger generations from taking up the tradition, further
destabilizing the future of these crops. Sustainable practices are vital both to
our current operations and for our future growth. That’s why, six years ago,
we began pilot programs that led to the creation of Raíz Sustainability® in
2015, our sustainable sourcing platform for coffee and tea.
As a leader in guiding the foodservice industry toward more sustainable
practices, we take responsibility in educating our customers as well as our
peers. With a solution that provides transparency and traceability across a
complex supply chain, we help our customers understand the deep need for
sustainability. The foundation of our business relies on smallholder farmers
facing unique challenges that require access to resources and training not
otherwise available. One of our key initiatives is arming those in our supply
chain with the education and training to implement sustainable practices
that will effect change that makes significant impact.
SOURCINGWITH PURPOSE
RAÍZ SUSTAINABILITY® IS BUILT UPON THESE IMPACT PILLARS WITH SIX KEY FOCUS AREAS AS INDICATED:
SOCIALPromoting fair labor practices (1) such
as tracking workers’ hours, supplying
protective gear, providing first aid
supplies and ensuring no child labor.
ENVIRONMENTALEnsuring healthy soil (2) and clean
water (3) through proper analysis and
management techniques, plus training
on practices for forest conservation
(4) including using shade to slow
evaporation of water from the soil and
leaving natural growth to draw birds for
organic pest control.
ECONOMICIncreasing productivity (5) within
existing land areas through best
agricultural practices such as proper
pruning plus cost management (6)
through training including methods to
track expenses.
Maintaining efficient water management systems for coffee processing, such as the one on El Tríunfo farm in Nicaragua, is a key focus for the Raíz Sustainability® platform.
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POWER OF OUR PROGRAMS
Colombia (6)
Brazil (2)Peru (3)
Argentina (1)
Nicaragua (2)
6countries
12producingregions
15fully engagedprojects
4,900+farmersdirectlyimpacted
13,000+farmersindirectlyimpacted
COFFEE & TEA
Mexico (1)
Raíz Sustainability®, our sustainable sourcing platform
for coffee and tea, is rooted in impact. An inclusive
approach provides smallholder farmers with immediate
access to training and technical assistance to help adopt
best practices in agriculture and business management.
We work closely with our industry partners toward
measurable improvement in long-term solutions to
sustainability challenges.
In 2017, we continued to broaden our impact in both
coffee and tea, increasing the total number directly
impacted to over 4,900 farmers—an increase of nearly
10% from 2016. This represents more than 13,000
individuals when including family members who also
benefit from the Raíz platform. We expanded into Mexico
while completing the three-year program in Costa Rica.
Raíz had a significant impact in Costa Rica and we are
expecting to realize even greater impact in Mexico.
A worker picks ripe cherries on Los Cipreses farm in the Jaén province of Peru, where productivity has increased 33% as a part of Raíz Sustainability®.
JANUARY 2018
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RA Z CO N N ECT 2017The first-ever Raíz partners meeting was held in Medellin, Colombia, in July following the World Coffee Producers Forum.
Keynote speaker Kim Elena Ionescu, chief sustainability officer for the Specialty Coffee Association, shared thoughts on the future of
sustainability with nearly 50 attendees from Conservation International, Committee on Sustainability Assessment (COSA), SupplyShift and
nine local trading partners at origin whose direct relationships with farmers are critical to the success of Raíz Sustainability®. The event
included a workshop to brainstorm solutions around key challenges, generating ideas such as using pilot coffee farms to explore plant
diversity for increased production and increasing education and the use of technology to encourage youth to remain in the coffee business.
Julio Robledo, a Raíz Connect attendee with the FNC Antioquia Committee, believes that S&D is on the right path: “An important part of the
Raíz platform is caring for the farmers and their families. S&D is always planning for complete training at every farm.”
U PDATE-SO I L LA B In 2016, S&D contributed to the funding of a soil analysis lab for the de los Andes Cooperativa (a collective group of coffee
producers) in the Antioquia region of Colombia. The lab provides access for all 360 Raíz farmers in the region plus the
cooperative members, an estimated 3,500 farmers. In Colombia overall, only 5% of coffee growers utilize soil analysis practices
while a full 30% of farmers within this cluster—six times the country’s average—benefit from the services of the soil lab. Raíz
producers Ramón Alexander Acevedo and Mario Hernando Tamayo have both received significant benefit from the lab: Ramón
was able to reduce fertilizer costs by 16% and Mario was able to stop the use of unnecessary soil additives that had been used for
years without fully understanding the needs of his crops.
The first-ever gathering for Raíz Sustainability® brought together nearly 50 partners in Medellín, Colombia, to brainstorm solutions around key industry challenges.
Thousands of farmers in the Antioquia region of Colombia benefit from access to a state-of-the-art soil analysis lab
funded in part by S&D’s sustainabilty investments.
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Including both coffee and tea within Raíz Sustainability® was a key part of
the original planning and a priority for 2017 as we realized the initial stages of
this goal.
For our first sustainable tea project under the Raíz platform, S&D joined forces in
the Misiones region of Argentina with the Solidaridad Network and the Rainforest
Alliance. This region contains a unique subtropical forest ecosystem and, upon
completion of the project in 2019, producers will be able to certify their tea
production under the Rainforest Alliance’s Sustainable Agriculture Network (SAN)
standard as a first step toward a continuous improvement process. The project
supports 113 small-scale tea producers to improve production while reducing impact
on the environment, improving livelihoods and contributing to the preservation
of the ecosystem. An appropriate training program has been designed based on
initial assessments and five sessions were conducted in 2017, training farmers on
best agricultural practices beyond certification.
In May of 2017, S&D hosted the Landscape Level Risk Workshop in Oberá, Argentina,
in partnership with Tea2030 (a project led by nonprofit Forum for the Future)
and Finlays. This international workshop was the first of its kind for the Argentinian
tea sector, bringing over 60 competitive stakeholders together to openly discuss
best practices as well as shared risks such as climate change, deforestation and
regional infrastructure challenges. A steering committee was formed as a result
of the workshop to coordinate and lead future collective action ventures that will
mitigate risks mapped out during the session.
TEA INARGENTINA
The Nicolau family is among 113 producers partnering with S&D in the Misiones region of Argentina to improve production on their
family farm while reducing impact on the environment.
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SOCIAL
ECONOMIC
ENVIRONMENTAL
71%
70%
81%
28%
81%
3+
99%
86%
87%
100%
81%
99%
participate in social training with 76% practice adoption (worker health and
safety, worker housing conditions, labor rights, community responsibility).
of attendees in training are women, higher than the global average.
experience food security (access to sufficient nutritious food for all
household members).
participate in economic training with 70% practice adoption
(record keeping, land for renovation, tracking cost of production,
traceability standards).
report keeping business records.
report being very happy or happy with their current quality of life.
report that the benefits of coffee farming are very good or good.
report they are likely to continue in coffee farming.
Following three full years of Raíz implementation, a thorough
performance survey was designed by S&D together with the
Committee on Sustainability Assessment, and then conducted
by our local partners to evaluate program progress. We are
proud to highlight the following results.
participate in environmental training with 69% practice adoption
(reforestation, water resource protection, wildlife protection, soil
nutrient management, storage and use of agrochemicals, climate
change adaptation).
water and soil conservation practices have been adopted (water
catchments, irrigation, drainage, crop cover, mulching, shade trees,
live fences).
are now implementing best wastewater management practices.
are avoiding deforestation (not clearing natural land to add coffee area).
“Unlike similar interventions, the Raíz Sustainability® platform artfully addresses the sensitivities of the producers themselves, such as their aspirations and personal fulfillment, and enriches our own understanding.” —ECOM Brazil, trading partner
While women represent 60% of the agricultural workforce, only an estimated 10% have a legal land title. So they do not often have access to the commodities market or training services. —Food and Agriculture Organization of the United Nations
View across a coffee field near the office of Olam, one of our trading partners, in the Cajamarca region of Peru.
PERFORMANCE DATA FOR RAÍZ SUSTAINABILITY ®
PRODUCERS
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ENVIRONMENTAL CONSERVATIONWe are committed to conserving resources at our headquarters in Concord,
N.C., in order to reduce our environmental impact. Our three current areas
of focus are material management, operational efficiency to reduce water,
waste and electricity, and over-the-road fuel consumption.
Caption
PAPERLESS PAYROLL
Continually looking for additional ways to conserve, we made the decision in December
of 2017 to implement electronic pay stubs. With 1,200 pay stubs, an estimated 22,000
sheets of paper (more than 400 pounds) plus envelopes will be saved in 2018 alone.
HVAC SYSTEMS UPGRADE
A single custom air circulation fan in the main facility was replaced with multiple energy-
efficient modular fans with digital control features. These controls allow individual fan
speed to adjust based on the current airflow requirements, providing increased energy
efficiency by reducing electric consumption.
GREENHOUSE GAS EMISSIONS
We continue to look for opportunities to increase efficiencies and reduce the impact our
business has on the environment. Below you will find our Scope 1 and Scope 2 emissions
for our main facility. We will provide an in-depth look at our environmental progress in our
full Sustainability Report to be published in 2019.
Scope 1 Emissions: 21,488.27 metric tons CO2e
Scope 2 Emissions: 5,441.92 metric tons CO2e
OVER-THE-ROAD FUEL CONSUMPTION
We are proud to have realized a 7.67% reduction in fuel consumption (representing over 9,000
gallons) from 2016 to 2017, earning a 2017 High Performer achievement award from SmartWay®,
a program of the U.S. Environmental Protection Agency. Additionally, a new management system
planned for 2018 will utilize technology to further reduce fuel usage and make yard and dock
operations even more efficient.
Targeted management of the S&D fleet trucks led to S&D’s 7.67% reduction in over-the-road fuel consumption from 2016 to 2017.
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CONTINUING FORWARDOur vision for the future includes continuing to operate our
own business in the most sustainable way possible, as well as
working to provide solutions that allow our customers to meet
their specific sustainability objectives. As we leverage the value
of our significant investments to date, we will streamline our
processes and be more intentional in our engagement.
As we move forward, we will build upon our commitment
through strategic projects with an emphasis on environmental
performance, operational efficiency and an expanded sustainable
product portfolio. Long term, our vision includes reimagining
sustainability—challenging ourselves to go beyond—with a
diverse menu of sustainable beverage options that provide
innovative sustainable solutions for all of our partners.
Recognizing that the past 90 years have helped shape our
current business, we are thrilled to lead the way into a future
that will continue to inspire sustainable business practices for
us, our customers, our partners and for the industry as a whole.
Tradition balances with innovation on La Loma farm in the San Iganacio province of Peru, where productivity has increased through strategic investments.
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To learn more about our sustainability efforts, visit www.sdcoffeetea.com/about-us/corporate-social-responsibility-sustainabilitY© 2018 S&D Coffee, Inc.