2015 Farm to Fork

Tending to What Matters Most SAFETY • QUALITY • RESPECT • INTEGRITY • INNOVATION

2015 Farm to Fork Report

Tending to What Matters Most SAFETY • QUALITY • RESPECT • INTEGRITY • INNOVATION

Our values—Safety, Quality, Respect, Integrity and Innovation—are more than just words. They are guiding principles that lead our decisions and behaviors, and are inherent in our 4Ps of social responsibility: People, Planet, Poultry and Progress.

The cover photo is a salad created by Roots for the Home Team®, a groundbreaking program that partners with youth garden programs in ethnically diverse areas of the Twin Cities and sponsored by Just BARE®.

CONTENTS ABOUT US

A Message From Our President In 2015, we made focusing on what matters most a top priority. And we did that by keeping our values of Safety, Quality, Respect, Integrity and Innovation at the forefront. To that end, we:

• Doubled-down on our food safety and quality efforts, adding new people and resources. See page 9.

• Bolstered our ability to develop game-changing

ideas and innovation that will help us stay ahead of consumer trends and push the boundaries of health, value and convenience. See pages 8-9.

• Repositioned our Human Resources team on

developing our people—dedicating resources and programs to improving safety and training.

See pages 5 and 11.

• Continued to explore new production methods

to eliminate phosphates (see page 9) and reduce our use of antibiotics.

• Kept Highly Pathogenic Avian Influenza (HPAI),

which devastated many poultry providers in the Upper Midwest, out of our operations through stringent, effective biosecurity controls.

• Managed through the growing pains that expansion often brings. See page 11.

Our success, in large part, is due to the continued dedication and commitment of our nearly 2,100 team members and family farm partners.

In 2016, we need to continue to:

• Foster a safety-first, people-centric culture.

• Attract and retain people with a passion for being part of the good food movement.

• Innovate to meet the needs of consumers who demand increasingly more attributes from their foods.

• Remain unwavering with respect to our animal welfare commitment and biosecurity practices.

As I look to 2020, I realize the importance of growing responsibly to achieve our vision of becoming “the FIRST choice nationally for fresh ideas in natural chicken.” We must continue to embrace change and strive for sustainability across the entire supply chain, all while keeping chicken affordable and accessible to a growing domestic and world population.

This is a great responsibility—one which we all should be truly proud to be a part of.

We’ll never stop tending to our values of Safety, Quality, Respect, Integrity and Innovation. They provide direction on how we act every day and thus keep our business successful and thriving into tomorrow.

To our partners, vendors, suppliers, and most importantly our team members and family farm partners, I want to send you a simple message: You all matter to GNP Company®. Immensely.

And I thank you for the difference you each make every day.

“We’ll never stop tending to our values of Safety, Quality, Respect, Integrity and Innovation. They provide direction on how we act every day and thus keep our business successful and thriving into tomorrow.”

- Steve Jurek, President

ABOUT US Our Operations & Business ............ 2 Our People ............................................ 3 OUR VALUES IN ACTION People ..................................................... 4 Planet ...................................................... 6

To health and happiness,

Poultry ....................................................8

Steve Jurek President

Progress ............................................... 10 GOOD NEWS ..........................................12 FOCUS FORWARD ................................13

1

2

GNP Company® is the Upper Midwest’s leading provider of premium branded and custom chicken products to retail, deli, foodservice, and industrial customers nationally.

ABOUT US

OUR OPERATIONS & BUSINESS Founded as St. Cloud Hatcheries in

Part of multi-protein

1926

2 vertically integrated

operations in Minnesota and Wisconsin Luverne include:

since 2013

2015 SALES: $470 MILLION DRESSED POUNDS

$500

500

$400

400

$300

300

$200

200

$100

100

value-added

processing plants

1995 2000 2005 2010 2015

SALES BREAKDOWN GNP Company brands are distributed in nearly all 50 states. This map shows our customer warehouse/distributor locations from where our products are shipped to grocery stores, grocery store delis, and restaurants nationally.

MN

Arcadia Independence

WI

411

(in MILLIONS)

... by distribution center

and

feed mills

independent, farmer-owned breeder and broiler barns

0

$0 (in MILLIONS)

St. Cloud Cold Spring Sauk Rapids

3primary and hatcheries 4

HISTORICAL GROWTH OF SALES AND DRESSED POUNDS SALES

Minnesota-based home office and distribution center support all GNP Company operations.

... by business segment INDUSTRIAL / SURPLUS RETAIL

FOODSERVICE RETAIL DELI

Chicken is the PREFERRED meat protein, predicted to lead in U.S. per capita consumption at 91.2 pounds per person in 2016.* *Source: USDA

We are dedicated to ensuring safety and quality at every step, from farm to fork—and beyond. As members of a global community, we strive to reduce the environmental footprint of our operations by focusing on the supply chain both upstream and downstream.

OUR PEOPLE

1700+

TEAM MEMBERS

4 of 10 people of color age generations represented

40% female

4

60% male

SOME of the LANGUAGES SPOKEN: English Spanish Somali Vietnamese Laotian Karen

OUR VALUES SAFETY our first priority...for our people and our products

QUALITY products and services that exceed expectations

RESPECT for all people, our animals, and the planet

INTEGRITY acting with strong ethical character...safely, responsibly, and humanely

INNOVATION Our senior leadership team of seven has more than

135 years of experience at GNP Company

More than 360 family farm partners

ABOUT US

40

CAREER + FIELDS

continually improving...finding new ways to learn, grow, and create

At GNP CompanyÂŽ, our approach to corporate social responsibility is simple: to thrive by living our values every day while balancing our economic Progress with the needs of our People, Planet and Poultry.

3

4

Our strong relationships with team members, family farm partners, customers, valued suppliers and our community members are at the heart of our business.

We are passionate about what we do and how we impact lives.

PEOPLE

Employee suggestions in action = $

185,500

in savings!

Each year, GNP Company® honors 10 individuals who demonstrate an extraordinary commitment to our values.

We know that our success as a company is directly tied to our people. And we believe that those who demonstrate outstanding performance deserve to be recognized as Leaders.

2015 Leadership Recognition winners: SAFETY:

Dan Myren, WI / Sandy Brunner, MN

QUALITY:

Sheri Daggett, WI / Maria Preciado, MN

RESPECT:

Jess Hanvold, WI / Paul Rosa, MN

INTEGRITY:

Darrel Pronschinske, WI / Lynn Holmvig, MN

INNOVATION:

Robert McCormick, WI / Nic Fuchs, MN

Team Member & Family Farm Partner Longevity

Team Member Safety & Wellness

32% 16% of team members have worked yrs

10+

59% 35%

•

of team members have worked yrs

of family farm partners of family farm partners

- GNP Company’s Health & Wellness Center in Arcadia: use is up!

20+

10+ 20+

- The Micro-Mart at our Luverne Plant: Sales of healthy alternatives to traditional vending selections continue to grow.

yrs yrs

Team Member & Family Farm Partner Engagement

49% of GNP Company’s team members are fully engaged, this is... better than 75% of all employees worldwide

89% of our family farm partners

“agreed” or “strongly agreed” that our performance/services met their expectations in the areas of Service Representative, Feed Mill, Hatchery, Breeder/Live Haul Crew, Contract, Parts Department, and Overall Company.

GNP Company team members participated in these sponsored health and wellness initiatives:

- Flu shots, biometric screenings and wellness challenges are being embraced.

•

The poultry industry showed a fourth consecutive year of decline in average illness/injury rates (4.3), based on 2014 U.S. Bureau of Labor Statistics.

•

After six years of meeting or beating the industry rate, GNP Company saw a rise this year (5.6). We continue to partner with the industry in making continuous improvement of our safety processes a focus in 2016 and beyond.

Processing Plant Injury/Illness Rate: GNP Company vs. Industry*

Team Member Training & Development # of Cold Spring team members graduating from:

17

11

Occupational English as a Second Language (ESL)

10

Advanced ESL

# of team members graduating from GNP Academy

Team members received training for on-the-job effectiveness

97%

96%

Have better understanding of skills required AND could apply learnings to their jobs as a result of training

$134K

Awarded in tuition reimbursement and other career-related educational programs Awarded by the Michael and Karel Helgeson Generations Scholarship Fund to 12 children of GNP Company team members and family farm partners

$24K

(now in its second year)

GOAL:

return to below industry average

5.0 5.8

3.7 4.9 3.65 4.5

2012 GNP Company

2013 Industry

2014

5.6 4.3 2015

2016

* According to the previous year data from the U.S. Bureau of Labor Statistics

Two NEW Safety Processes Improve Safety at Work, Behind the Wheel Our GNP Safety Way Journey: 2014-2018 GNP Safety Way—a pilot program started in our Luverne, MN operation in January 2014—is paying dividends. Its goal, according to GNP Company’s Corporate Health and Safety Manager Kari Waters, is to provide a system that actively engages team members in the safety process. “Engaged team members work more safely, and create a safer work environment,” explains Kari.

The GNP Safety Way is built around a standardized process that proactively provides key business indicators (KBI) to measure success. More importantly, it empowers team members to create cultural and system changes that build safety into day-to-day operations.

Kari is excited to see the process advance and participation numbers grow. “With 85-90% of Luverne team members participating and 100% participation at the Independence, WI Hatchery (launched in June 2014), team members are living our Safety value through a deep knowledge and commitment to make our processes more reliable, productive and safe,” she says.

The goal for full corporate-wide adoption of GNP Safety Way initiatives is 2018. Though the roll-out is aggressive, Kari is confident in the company’s ability to meet the timeline (as outlined below). “We’ve already reaped significant improvements from the process,” Kari adds, “I’m excited to see the impact when implemented company-wide.”

Luverne, MN - Plant

2014 Independence, WI - Hatchery

St. Cloud, MN - Live Haul

GNP SAFETY WAY TIMELINE

2015

2016

2017

Full adoption company-wide

2018

PEOPLE

“Our team members and their safety are critically important to us. By focusing on proactive measures like the GNP Safety Way and DriveCam® Safety Process, we have the best chance of identifying and making improvements before an injury or accident can occur.”

- Kari Waters, Corporate Health & Safety Manager

Cold Spring, MN - Plant / St. Cloud, MN - Hatchery / Arcadia, WI - Breeder Dept.

Driving Down At-Risk Behavior by 20% In 2013, GNP Company® implemented DriveCam® Safety Processes in all of our commercial motor vehicles. DriveCam is a driver risk management program that identifies and helps to proactively address at-risk driving behaviors BEFORE an accident occurs. In doing so, it encourages safer driving.

Here’s how it works: DriveCam’s palm-sized, digital event recorder is mounted in a vehicle. It captures video and audio inside and outside the vehicle when triggered by abrupt actions (such as hard braking, sudden acceleration, swerving or a collision), and provides real-time feedback to the driver.

A cellular system uploads driving event data, which is then analyzed by experts and used by GNP Company leadership to help coach drivers toward changing at-risk behaviors.

"While DriveCam is the tool that identifies at-risk driving behaviors, it’s the coaches who have the power to use the information to help drivers improve their driving skills,” explains Kari.

The process also provides a means to enhance safe driver recognition when positive driving behaviors are identified.

Examples of at-risk driving behaviors identified with this process include: speed violations, rolling stops, excessive cornering speeds, driving too fast for road conditions, seatbelt violations and failing to leave an out.

Comparing FY 2015 to FY 2014, we achieved a 20% reduction in at-risk behaviors.

FOCUS FORWARD Creating cultural and values alignment Partner image

Family Farm ???

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6

PLANET

Life Cycle Thinking Drives Positive Change LCAs (short for life cycle assessments) in 2010 and 2012 on a select range of our Just BARE® products helped improve our understanding of the impact of our operations, and were the driving force behind our lifecycle thinking and 5-year Planet Goals in the areas of energy, water and waste.

We are dedicated to reducing our environmental footprint across our value chain.

Maintaining a healthy ecosystem is critical to our survival as a company–and as a global community! We’re committed to measuring and reducing environmental impacts within our own operations and across our supply chain.

THE LIFE CYCLE OF OUR PRODUCTS

37%

PROCESSING

PACKAGING

POULTRY GROWOUT

MATERIAL PROCESSING

Energy Use Intensity

Water Use Intensity

2017 GOAL = 20% Reduction vs. 2011 Baseline

2017 GOAL = 40% Reduction vs. 2011 Baseline

•

•

Water plays a vital role in our ability to deliver safe, wholesome products to market. As such, ongoing food safety intervention improvements challenge our ability to consistently hit our goal.

•

In 2015, we used 6.24 gallons of water per processed chicken—which, at 22.16%, fell short of our 26% reduction target from the 2011 baseline (still slightly lower than 2011 baseline level).

come from our own operations, including energy use and packaging materials.

DISTRIBUTION & RETAIL

CHICKEN LITTER

USER

RAW MATERIALS

DISPOSAL LANDFILL

NATURAL ENVIRONMENT

INCINERATION

35%

of our GHG (Green House Gas) emissions (also referred to as carbon emissions or CO2e) occur “upstream” and are related to growing corn and other feed ingredients.

Following is our progress against these goals and Carbon Emissions.

NOTE: many metrics are reported on “intensity,” not “absolute” numbers, to provide better yearover-year (YOY) comparability.

28%

result “downstream” from the distribution, retail sale, cooking and disposal of products.

ENERGY USE INTENSITY / per chicken processed Gap from FY FY FY 2013 2014 2015 FY2015 Goal Electric (KWH)

3.59% 12.08% 1.77% 611.06 499.42 572.34 16.54%

588.57 568.76 564.28

Gas (THERMS) 894.54 735.29 799.98 Diesel (GALLONS) 188.16 171.94 167.43 LP (GALLONS)

•

Source: 2012 LCA

Waste Reduction

Fell short of 2015 target (a 12% intensity reduction from 2011 baseline) for electric (KWH), gas (Therms), diesel (gallons) and LP (gallons). However, intensity was lower in all categories vs. the previous year.

Cross-functional power management teams continue to meet monthly to review and identify new ways to reduce our energy use.

6.26 gal 5.38 gal 6.24 gal

-26%

22.16%

WASTE HIERARCHY*

Arcadia Plant - Packaging Waste / Usage Variance Cold Spring Plant - Packaging Waste / Usage Variance

1 REDUCE

Changing our behavior

2 REUSE

Reusing material

2017 GOAL = ZERO Waste

3 RECYCLE

Recycling and reprocessing materials

•

4 RECOVER

Recovering energy

5 LANDFILL

Targeting ZERO landfill

We remain committed to becoming a ZERO-waste company, and are working to make improvements at every stage of the waste hierarchy.

Although it’s unlikely we will reach our 2017 ZERO-waste goal, it’s a target we continue to aspire to reach.

WATER USE INTENSITY / gallons per chicken processed Change vs. Gap from FY FY FY 2013 2014 2015 FY2011 FY2015 Goal

•

The waste metrics we currently track focus primarily on reducing and reusing.

•

We continue our search for innovative packaging that offers greater sustainability and still meets food safety standards and cost targets.

FY 2013

6.5% 2.9% 378.0 202.6

FY2015 WASTE METRICS FY2015 CHANGE FY FY 2014 2015 GOAL vs. FY2013

6.3% 2.0% 285.6 191.1

4.4% 1.5% 327.2 213.0

6.0% -32% 3.0% -48% 252.0 -13% 144.0 5%

Cold Spring Plant - Recycled Corrugated (tons) Cold Spring Plant - Compactor Pick-up (tons) NOTE: Luverne Plant not reported as metrics were incorrectly tracked

*www.epa.gov/homeland-security-waste/waste-management-hierarchy-and-homeland-security-incidents

Respecting and Protecting the Environment Through Off-setting Since 2010, GNP Company® has partnered with Renewable Choice Energy to support the development of more sustainable energy by buying renewable energy certificates, or RECs (also called renewable energy credits). RECs are produced when a renewable energy facility generates electricity.

Renewable Choice Energy then invests those dollars to develop clean energy facilities. Paul Helgeson, Sustainability Manager believes purchasing RECs is a great way to support ground-breaking innovation in the area of renewable, more sustainable energy. “But it’s not enough,” he says. “We must also continue to reduce our dependence on, and use of, fossil fuels for lasting climate change.”

Paul hopes to take the concept of off-setting even further— applying it to sustainable farming credits. Since 2012, he’s been working with the Environmental Initiative to create a similar system that will financially reward farmers for achieving a high level of water quality protection on their farms. This, in turn, will help companies improve sustainability across their commodity crop supply chains. This project has been funded by a grant from the McKnight Foundation and GNP Company.

PLANET

Here’s how off-setting works:

1 MEASURE

We measure the amount of electricity we use in our operations and the amount of carbon emissions generated during the production of our Just BARE® products.

Water Conservation & Reclamation

2 PURCHASE

We purchase RECs and VERs (verified emissions reductions) in the same amounts as measured in step 1. This is commonly referred to as off-setting.

3 CERTIFY

Renewable Choice RECs are tracked and certified by the leading national third-party REC auditing organization, Green-e Energy®, a program of the not-for-profit Center for Resource Solutions.

“GNP Company off-sets all of the energy used to produce our Just BARE® products by purchasing RECs equal to the amount of electricity it takes to produce these products.”

- Paul Helgeson, Sustainability Manager

Every day, our Cold Spring Processing Plant’s water treatment facility, using advanced membrane bioreactor technology, restores and reuses about a third of the plant’s total daily water usage.

400,000 TO 500,000 GALLONS/DAY ARE RECLAIMED POTABLE WATER TO PLANT

EFFLUENT WATER TO RIVER

2013

298,292,000

227,210,000

2014

285,844,060

258,630,000

2015

286,009,000

241,340,000

(gallons)

Carbon Emissions Intensity 6.09% reduction in absolute carbon emissions despite a 1.04% increase in the number of chickens processed.

•

7.06% reduction in total company-wide carbon emissions per processed chicken (scopes 1 & 2*) versus the previous year.

EMISSIONS (scope 1 & 2) / per chicken processed

KG of CO2e / Processed chicken

FY 2013

FY 2014

FY 2015

1.02

1.09

1.01

* Scope 1 - Direct greenhouse gas (GHG) emissions are emissions from sources that are owned or controlled by the company. For example, emissions from combustion in owned or controlled boilers, furnaces, and vehicles. * Scope 2 - Accounts for GHG emissions from the generation of purchased electricity by the company.

% CHANGE vs. PY

(gallons)

0.06% Potable = Water IN

-6.69% Effluent = Water OUT

FOCUS FORWARD 100% water reclamation

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POULTRY

We’re acutely aware that consumers entrust us with the health and well-being of their families. That awareness is what drives us to make no compromises when it comes to the care of our chickens and our promise of safe, quality and truthfully labeled products.

Animal Welfare Commitment & Vision Third-party and internal audits validate and/or recertify our adherence to the animal welfare standards of the American Humane Certified™ (AHC) Farm Program, the National Chicken Council (NCC), and the American Veterinarian Medical Association (AVMA) on an ongoing basis.

•

•

We drive accountability through rigorous ongoing training at the individual animal caretaker level; and monitoring through regular, systematic internal audits.

We strictly follow humane slaughter standards of the AHC and NCC, using methods established and approved by the AVMA.

Active Family Farm Partner Management Program – Our Animal Welfare Policy & Promise –

ZER TOLERANCE

Hatcheries Independence, WI St. Cloud, MN

100% 100%

Oversees and strengthens our family farm partnerships:

•

•

Through new proprietary technology integration, which automatically tracks and analyzes the health and vitality of our chickens; and

American Humane Certified™ Audit Results We continue to see improvement in our independent audit scores against the more than 200 rigorous standards of the respected American Humane Certified™ Farm Program.

With an overall total score of 85% needed to pass, we achieved an overall company high of 92% or better since first becoming certified in 2011.

Corrective action and continuous improvement in place for all sites not achieving 100%.

With weekly on-site evaluations and timesensitive inspections to ensure welfare and biosecurity measures are in place and working.

Family Farm Partners/Grow-out Barns Minnesota and Wisconsin

92% to 98%

7 Years GNP Company® has supported the Truthful Labeling Coalition and its efforts to ensure truthful labeling of “All Natural” chicken products.

All Natural = Nothing Added GNP Company does not label ANY of our enhanced/marinated products as “All Natural.”

We believe “All Natural” means “Nothing Added.”

Food Safety Performance & Programs

All Plants Global Food Safety Initiative (GFSI) Certified

When Recertified, All Facilities Scored Excellent Annually by Safe Quality Foods, Level 2 Program

100% of Products Produced in Certified Processing Facilities

Primary Processing Plants Cold Spring, MN Arcadia, WI

95%

Truthful & Transparent Labeling

98%

Food Safety, Quality & Regulatory: A Renewed Focus & Leadership This year was a year of renewal for our Quality Assurance department. Under its new leader, Sommer Mueller, DVM, Sr. Director Technical Services, the team worked to further define its roles and responsibilities, and renamed itself the Food Safety, Quality & Regulatory Team (FSQR), a name more indicative of the work the team does.

The team added new positions to lead technical, science-driven, data-based implementation and verification of Hazard Analysis Critical Control Point (HACCP) and Food Safety Programs, and to verify adherence to our FSQR supplier requirements.

These highly specialized, subject matter experts in food safety and quality proactively address new regulations—working collaboratively with the USDA Food Safety and Inspection Service and the National Chicken Council to focus on the science and technical requirements that ensure success.

Eliminating Phosphates: A Positive Step Toward a “Clean” Label and Lighter Footprint Sodium phosphate is a highly effective, commonly used FDA-approved food additive that helps deli chickens stay juicy for hours after cooking. Though safe to use, we removed this functional ingredient from our Gold’n Plump® deli rotisserie chicken offerings. This change was in response to increasing health concerns about its use and growing environmental regulation around its discharge through waste water systems.

New Product Launches!

“Food safety is a top value at GNP Company®, and we are fiercely committed to meet or exceed the high food safety and quality standards of today’s customers and consumers.

This requires that we actively be on the cutting-edge of food safety technology and regulatory compliance.”

- Sommer Mueller, DVM, Sr. Director Technical Services

In 2012, a cross-functional team set out to find a quality replacement: sodium carbonate– another FDA-approved food additive that helps maintain juiciness and flavor of rotisserie chickens but is considered more natural and better for the environment.

This is a testament of our commitment to quality and innovation at work.

The first shipment of sodiumphosphate-FREE Gold’n Plump deli rotisserie chickens shipped in late 2014.

Just BARE® expanded distribution nationwide of its new certified organic line.

Gold’n Plump added new Tex Mex option to its popular frozen chicken patties line that includes Original, Mushroom & Swiss, and Bacon & Cheddar.

POULTRY

FOCUS FORWARD

Insights Lead to Innovation

Game-changing processes, packaging and product innovations

Consumer Segmentation Study Updated our consumer segment research to help us better understand consumers’ meat-buying preferences; product and packaging needs; and shopping and buying behaviors.

“Clean” Ingredient Label Research Consumers have a growing appetite for foods with “clean” ingredient labels that are “simple-to-make.”

Through this research, we are developing a consumerdriven definition of “clean” along with an ingredient spectrum to help guide our product development.

Fueling Our Innovation Process & Team Added more product development resources and talent to focus on filling the pipeline with fresh ideas for the chicken category.

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PROGRESS

2015: About $470 million

When we succeed as a business, we share that prosperity with our team members, family farm and business partners, and communities. We gauge our Progress by our profitability; continuous improvement savings; business growth; brand strength; customer service excellence; and ability to invest in the economies where we live, work and distribute our products.

in sales

14% growth

rate over previous 3 years

7th

consecutive year

Company & Brand Donations

>$1.77 million 5 million meals

29 Years

in Local Corn Purchases

95% of the corn in our feed

was purchased from farmers within

75 miles of our feed mills,

plus small town elevators.

100% of our family farm partner payments were made to farms within

65 miles of our hatcheries and

processing plants.

81 % CHICKEN

PRODUCTS

•

St. Cloud Fireworks Fund (donated to Catholic Charities), St. Cloud-area YMCA Community Center Capital and Y Partners Campaigns, CentraCare Generations Capital Campaign, St. Cloud State University Hockey Center, Cold Spring Baseball Association and “Ashley for the Arts” event in Arcadia, WI (3rd year as sponsor)

GOLD’N PLUMP

JUST BARE

•

•

8 Community Gardens via the brand’s Goodness for Gardens Promotion

•

Continued support of Urban Roots, Roots for the Home Team™, and Renewable Choice Energy

6th Year of Poultry Prince & Princess Scholarship Program, Labels 2 Learn Program, United Way, Local and High School Sports Teams and Tournaments, Local Fire Departments, and Local Food Shelves like Second Harvest Heartland

St. Cloud and Cold Spring, MN Team Members: Donated $111,668 to the United Way via team member pledge cards and special events; $42,000 gifted by the company.

•

Arcadia and Independence, WI Team Members: Donated $3,396 to Community Chest via team member pledges and special events, and $2,000 gifted by the company.

•

Luverne, MN Team Members: Donated $4,746 to the Red Arrow via team member pledge cards, and $2,500 from the company.

Of being designated a Minnesota Keystone Company for donating 5% of our pre-tax profits to charitable causes

GNP COMPANY •

$166K in Donations

19 % FINANCIAL

worth of chicken donations

of profitability

$35 Million

Financial and product donations made in 2015 – a 10% increase over 2014

Team Member Giving

722LBS/ $479 Food and money generated by company-wide food drive in June

Investing in GNP Company® and Our People In 2015, GNP Company began a two-phase expansion plan for our Processing Plant in Cold Spring, MN. “This expansion underscores our continued commitment to investing in the growth of GNP Company’s business and people,” says GNP Company President Steve Jurek.

The first phase of the expansion started in March with the addition of a new building and state-of-the-art equipment in the plant’s First Processing area. The second expansion phase will be in Second Processing and is expected to start sometime in 2016.

The expansion will take about two years to complete, cost $80 million, and focus on increasing production capacity and automation. When done, Steve believes it will make the Cold Spring operation one of the most automated meat processing plants in North America. More specifically, it will:

• Increase annual plant production capacity by 33%, which

equates to about 88 million more processed pounds or 352 million meals; and,

• Help make continued improvements in the areas of safety, quality and innovation.

Additional changes and improvements were made to prepare for the Cold Spring expansion. This included:

• At the Cold Spring Plant: Expanding the distribution center

and outbound load staging area, adding a new entrance, increasing parking, and starting construction of an additional 28-degree-cooler storage space.

Brand Strength & Advocacy Our brands maintained or strengthened their performance against key brand measures.

In the brand’s core market of Minneapolis, Gold’n Plump® exceeded all main branded competitors in brand awareness, intent to buy and brand used most often; exceeded all but one competitor in brand loyalty and advocacy.

In the brand’s core markets of Minneapolis, MN; Madison, WI; St. Louis, MO; and Des Moines, IA, Just BARE® exceeded nearly all key branded competitors in brand awareness, intent to buy and brand used most often.

(Study size too small to make brand loyalty and advocacy comparisons.)

PROGRESS

• Purchasing a building for future hatchery growth and adding on to our truck shop for our St. Cloud Live Operations; and

$ 1.12 Million

• Outlining plans to add about 72 new barns in the St. Cloud area over the next three years.

in Company Savings from 2015 Continuous Improvement (CI) Efforts

The company concurrently made organizational changes that better aligned our systems and services AND added positions to our Human Resources team dedicated to developing our people and getting the right people with the right skills in the right jobs.

PLUS greater team member understanding of Quality and 65 CI initiatives.

Combined, Steve believes these organizational changes will help the company deliver against our long-term strategies.

“We’ve moved onto our next stage of growth,” Steve concludes. “Exciting times lie ahead.”

12-Plus-Year CI Journey Results Hundreds of team members trained and nearly $10 million in total company savings.

“This expansion helps gives GNP Company the ability to meet increasing sales demand, while supporting advances in our safety processes by reducing physical job demands and improving ergonomics.” - Steve Jurek, President 99.71% ORDER ENTRY ACCURACY

1,020 ideas

were submitted by team members as part of our ongoing

Employee Suggestion Program (ESP)–which shares savings generated by the adopted ideas with team members. In 2015, program ideas resulted in $185,500 in

savings and $28,700 was paid to team members.

99.51% 99.44% 98.12% 98.06%

WAREHOUSE PICK ACCURACY

ON TIME DELIVERY

CASE FILL RATE

ORDERS RECEIVED WITHOUT DAMAGE

99.67% 99.58% 98.92% 98.72% 98.66% Customer Service Excellence: Perfect Order Fulfillment

2014 2015

Exceeded goal Did not meet goal

Our ability to fulfill customer orders is assessed against 5 measures, calculated as a “Perfect Order” score, by multiplying results of the 5 scores together. Overall, we achieved a Perfect Order rating of 95.62% – which fell short of our goal and previous-year results.

FOCUS FORWARD Utilizing “big” data to guide responsible and profitable growth

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GOOD NEWS

We’re honored by what others have said about us and the way we do business.

425,000 LBS / 1.7 MILLION MEALS WORTH OF CHICKEN

Here are a few of the notable awards we received in 2015 and the community events and promotions of which we’re most proud.

HIGHEST SAFETY HONOR 3rd YEAR RUNNING

Second Harvest Heartland: GNP Company again named a “Partner in Recognizing Hunger Relief” for our ongoing, annual chicken donations; AND a 2015 Hunger Hero, for being THE largest community donor this year.

Already an industry leader in Safety initiatives, our Arcadia, WI Feed Mill operations achieved the highest honor from the Joint Poultry Industry Safety & Health Council – the Safety Award of Distinction recognition – for the 3rd consecutive year. And for the 4th time in 5 years, our Arcadia Feed Mill was nationally recognized for our team member safety and health programs.

Received 2015 Target® Partner Award of Excellence, recognizing GNP Company® as a select vendor partner for showing extraordinary passion for, and dedication to, the Target business and brand.

2015 Winners of Minnesota 4-H & Gold’n Plump® Poultry Prince & Princess Scholarships as painted by 2015 Minnesota State Fair Artist, Adam Turman

Named 2015 Friend of Youth by St. Cloud Morning and Central Minnesota Noon Optimist Clubs (Thanks, St. Cloud Boys & Girls Club, for the nomination!)

“Our success in large part is due to the continued dedication and commitment of our team members and family farm partners.”

- Steve Jurek, President

FOCUS FORWARD

FOCUS FORWARD

2016 People: Creating cultural and values alignment Planet: 100% water reclamation Poultry: Game-changing processes, packaging and product innovations Progress: Utilizing “big” data to guide responsible and profitable growth

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We invite you to learn more.

SALES & SERVICE p: 800-892-8569 (M-F, 8 am to 4:30 pm, CT) e: TradeCustomer@GNPCompany.com PR/MEDIA Lexann Reischl, GNP Company® p: 320-240-6290 e: lreischl@GNPCompany.com Julie Berling, GNP Company p: 320-240-6289 e: jberling@GNPCompany.com GNP Company P.O. Box 1106 St. Cloud, MN 56302-1106 p: 320-251-3570 w: GNPCompany.com

2015 Farm to Fork Report

Tending to What Matters Most

SAFETY • QUALITY • RESPECT • INTEGRITY • INNOVATION © 2015-2016 JFC LLC. All rights reserved. Published March 2016.