Nature's Path Sustainability Report 2012 by Nature's Path Foods

N AT U R E ’ S PAT H S U S TA I N A B I L I T Y R E P O RT - 2 0 11

R E P O RT O F F I S C A L 2 0 1 1 - 2 0 1 2 : M AY 2 0 1 2

Our Key Wins..... Our Goals Every year our team strives to make it further down the path to sustainability. To help us along our journey we signed the Sustainable Food Trade Association’s Declaration of Sustainability in 2008 and have been using their guidelines to chart our course ever since. Building on the momentum of previous years, in 2011 we managed to take pretty big steps leading us to achieve some great wins for both people and the planet. Some of the highlights include: •!

Diverting 92% of our waste from landfills;

•!

Reducing the use of electricity, paperboard, and CO2 per pound of product shipped;

•! !

Empowering employees to take ownership of sustainability and ! green initiatives through Self Directed Work Teams;

•! !

Launching our ‘Bite4Bite’ program with a $1 million annual ! donation to North American food banks;

•!

Donating $2 Million in cash and food to the hungry;

•!

Keeping 204,000 Lbs. of chemical pesticides out of the soil.

Together with the support of the SFTA and the encouraging voices of conscious consumers we’re excited to continue on this journey towards leaving the earth better than we found it. We invite you to read on and learn more about the sustainable initiatives and milestones we’ve reached in 2011. As always, we welcome your feedback and any ideas you have to help us cover even more ground in 2012.

All of our sustainability goals listed in this report are from the SFTA Declaration of Sustainability. We signed the Declaration of Sustainability in 2008 and have used the declaration to develop our strategies and goals as a company. The SFTA is a collaborative industry association that is driving the organic food industry towards a more sustainable future. For more information, or to obtain a full list of the reporting metrics please visit www.sustainablefoodtrade.org

Diverting 92% of our waste from landfills;

•!

Reducing the use of electricity, paperboard, and CO2 per pound of product shipped;

•! !

Empowering employees to take ownership of sustainability and ! green initiatives through Self Directed Work Teams;

•! !

Launching our ‘Bite4Bite’ program with a $1 million annual ! donation to North American food banks;

•!

Donating $2 Million in cash and food to the hungry;

•!

Keeping 204,000 Lbs. of chemical pesticides out of the soil.

Our journey at a glance Step 1. It starts with the Soil

2010

2011

Trend

Organic acreage supported1

40,910 acres

37,449 acres

Step 4 Products, Packaging   & Transportation

2010

2011

% shipped by rail (by weight)

51%

61%

Trees planted

1,793

1,603

Lbs. of CO2 per pound shipped

.215 Lbs.

.205 Lbs.

Trend

Distribution Percentage of products certified organic Lbs. of pesticide prevented

100% 222,855 Lbs.

100% 204,004 Lbs.

Lbs. of synthetic fertilizer saved from use

16,714,157 Lbs.

15,399,308 Lbs.

Step 2. Our Team

2010

2011

Percentage of full-time team members with access to benefits and 401K

100%

Cartons (paperboard) Lbs./lb produced

.15 Lbs.

.14 Lbs.

Percentage of Nature’s Path full-time team members earning a living wage2

100%

Film, Lbs. / lb produced

.02 Lbs.

Step 3. Making more with less

2010

2011

Corrugated board Lbs. / lb produced

.08 Lbs.

Energy (per unit of product)

2,003 BTU/lb

Total Efficiency of Packaging4

.26 Lbs./ per lb .24 Lbs./ per lb

Electricity (per lb of product produced)

.23 Kwh/lb

.22 Kwh/lb

Total Packaging lbs saved annually

389,882

121,220

Natural Gas (per lb of product produced)

.0013 Therm/lb

Step 5. Give Back

2010

2011

.15 Lbs. CO2/lb

Pounds of Food Donated

314,094 Lbs.

436,925 Lbs.

.12 Gal/lb

.11 Gal/lb

Value of Food and Money Given

$2,604,692

$2,895,810

Team Member Volunteer Hours

172

210

Direct Emissions   (per lb of product produced)

Water (gallons per pound produced)

Trend

Waste Diversion Rate Diverted from landfill

88%

92%

Disposed

12%

Waste and byproducts (per lb

No Change

Trend

1 Organic acreage calculation does not included acres needed for the production of rice syrup, soy oil, peanuts, cocoa, raisins, maple syrup, honey, grape juice and fruits. It does include acreage from summer fallow. 2 A living wage is a total hourly compensation that fully covers the costs of living of one person and one child in the region where they work. It includes hourly wage and employee benefits. 3 Non-Durable Good, Food Manufacturing female diversity rate as stated by the US Bureau of Labor statistics for 2010 is 35.8%.   4 Rounding errors accounts for .01 discrepancies between actual total Lbs. figure reported and total pounds achieved from adding the sums.

of products produced)

Improved

Packaging Materials

Needs Work

Our journey at a glance Step 1. It starts with the Soil

2010

2011

Trend

Organic acreage supported1

40,910 acres

37,449 acres

Step 4 Products, Packaging   & Transportation

2010

2011

% shipped by rail (by weight)

51%

61%

Trees planted

1,793

1,603

Lbs. of CO2 per pound shipped

.215 Lbs.

.205 Lbs.

Trend

Distribution Percentage of products certified organic Lbs. of pesticide prevented

100% 222,855 Lbs.

100% 204,004 Lbs.

Lbs. of synthetic fertilizer saved from use

16,714,157 Lbs.

15,399,308 Lbs.

Step 2. Our Team

2010

2011

Percentage of full-time team members with access to benefits and 401K

100%

Cartons (paperboard) Lbs./lb produced

.15 Lbs.

.14 Lbs.

Percentage of Nature’s Path full-time team members earning a living wage2

100%

Film, Lbs. / lb produced

.02 Lbs.

Step 3. Making more with less

2010

2011

Corrugated board Lbs. / lb produced

.08 Lbs.

Energy (per unit of product)

2,003 BTU/lb

Total Efficiency of Packaging4

.26 Lbs./ per lb .24 Lbs./ per lb

Electricity (per lb of product produced)

.23 Kwh/lb

.22 Kwh/lb

Total Packaging lbs saved annually

389,882

121,220

Natural Gas (per lb of product produced)

.0013 Therm/lb

Step 5. Give Back

2010

2011

.15 Lbs. CO2/lb

Pounds of Food Donated

314,094 Lbs.

436,925 Lbs.

.12 Gal/lb

.11 Gal/lb

Value of Food and Money Given

$2,604,692

$2,895,810

Team Member Volunteer Hours

172

210

Direct Emissions   (per lb of product produced)

Water (gallons per pound produced)

Trend

Waste Diversion Rate Diverted from landfill

88%

92%

Disposed

12%

Waste and byproducts (per lb

No Change

Trend

of products produced)

Improved

Packaging Materials

Needs Work

Organic agriculture is what we`re all about. In fact, more than anything else, we`re on a mission to increase organic acreage! Supporting the organic growers who supply us with the ingredients that go into our products is one of the main ways we`re able to help grow the industry, and by extension chemical-free agriculture. We also look to actively engage and educate consumers about the impact that organic food has on their health and on the health of the planet including the threat of genetically modiﬁed ingredients (GMOs) encroaching into our food system. We hope for a world where organic is the standard, not the exception.

Our Commitments: • We are committed to sourcing all agriculturally derived products that we use from farms and supply sources using organic methids • We are committed to independent third-party certiﬁcation as recognize its value as an assurance that organic methods are being followed • We will strive to increase the amount of acreage under organic management through purchasing organic ingredients, advocacy for the organic industry, supporting organic research, and through supporting the next generation of organic farmers • We will educate consumers about the importance of organic for the health of individuals, families, communities and the planet • We are committed to being non-GMO veriﬁed across our supply chain

Industry Leadership We believe that in order to successfully grow the organic movement, everyone needs to work together. So we`ve made it our business to get involved in many industry associations and working groups across North America. Below are some of the industry boards that we’re actively working with and some of the research institutions we support.

Organic Industry: Our Organic Program Manager serves on the following boards:

Nature’s Path Team Members in our Richmond Office in our organic office garden

Always Organic •! Nature’s Path has been making organic foods since it began in 1985. •!In 1990 we became North America`s first third-party certified organic cereal company. • 98% of all ingredients we purchased in 2011 were third-party certified organic. On average, these purchases ensure that roughly 15,281 hectares of land are kept under organic production every year. •!Our sustainable purchasing policy gives preference to company clothing and promotional goods that are ethically sourced and made from organic materials. •!Nature`s Path products have also earned the right to bear the Non-GMO Project Verified seal. In 2011, we supported and joined the California Right Know Genetically Engineered Foods Act steering committee to help further the efforts towards the mandatory labeling of GMO foods in the state of California.

• Canadian Organic Board, Member •!OTA Task Force, Member •!Non GMO Project, Secretary •!Non GMO Program Standards Revisions Committee, Member •!Organic Agriculture Centre of Canada, Chair •!Organic Advisory Council of the Canadian Health Food Association, Member •!Organic Value Chain Round Table, Government/Industry Round Table and voting Member •!GMO impacts on Organic Task Force, Chair •!Canadian General Standards Board, Organic Technical Committee, Voting Member • CGSB Permitted Substances List" Revisions Working Group, Chair

Our Director of Marketing and Communications serves on the following boards: • Non GMO Project Communication Committee •Your 2 Cents Advisory Council

Food System and Sustainability Our Manager of Sustainability serves on the following boards • Food Trade Sustainability Leadership Association Board Member

In Addition: Founder Arran Stephens serves on the following nonprofit boards: •!The Rodale Institute • The Richmond Food " Security Society • Your 2 Cents Board of Directors • Turning the Tide Board of Directors • California Right2Know Steering Committee

Organic Research Institutes Supported •!Rodale Institute •!The Organic Centre •!The Centre for Food Safety • Organic Agriculture Centre of Canada • Organic Seed Alliance

Organic Industry: Our Organic Program Manager serves on the following boards:

Nature’s Path Team Members in our Richmond Office in our organic office garden

Our Director of Marketing and Communications serves on the following boards: • Non GMO Project Communication Committee •Your 2 Cents Advisory Council

Food System and Sustainability Our Manager of Sustainability serves on the following boards • Food Trade Sustainability Leadership Association Board Member

Organic Research Institutes Supported •!Rodale Institute •!The Organic Centre •!The Centre for Food Safety • Organic Agriculture Centre of Canada • Organic Seed Alliance

Sustainable Supply Chain There’d be no tasty cereal in your bowl without the quality ! ingredients that we rely on from our suppliers to bring to ! ! the table. We’ve been working with many of them for ! ! decades and have formed some pretty strong partnerships ! when it comes to values-driven initiatives. In 2011 we ! ! decided to check in with our suppliers through a ! ! ! sustainable supply chain survey to learn more about their !! involvement in: • Fair labor and social programs • Environmental and biodiversity programs • Partnerships with non-profits and community groups • Point of origin and farmer relationships Not surprisingly, the results confirmed that many of our suppliers have strong internal environmental management programs while others are active in external programs like Rainforest Alliance, as well as Fair Trade and Verite social audits.

Ingredient Origins

20%

1% 38%

Canada South America

41%

OUR THIRD PARTY CERTIFICAT A IONS INCLUDE: AT Organic by QAI (Quality Assurance International, Certified USDA (United State Department of Agriculture) Organic , Non-GMO Project Verified, Kosher Certified, and Halal Certified

U.S. International

Ingredient Origins

20%

1% 38%

Canada South America

41%

U.S. International

STEP TWO

CULTIVATE OUR TEAM. // B E N E F I T S // F E E D B A C K P R O G R A M S , T R A I N I N G & E D U C AT I O N A L A S S I S TA N C E P R O G R A M S

Sustainability is not just a strategy for reducing the use of material resources and decreasing our impact on the planet, it’s about taking care of all our resources - including our valued team members. Through training, supportive policies, and open communication, we feel our role as an employer is one which should enable our team members’ individual journeys so that they can truly thrive and in turn be in a position to drive innovation and sustainability forward.

Our Goals: • We will work to ensure that all team members are given the opportunity to give feedback about their needs and wants. • We will develop and implement company policies, procedures, training and internal reporting structures to ensure commitment to good labor practices throughout our organization. •! We are committed to ensuring that we compensate our team members to enable them to meet at least their basic needs. •! We are committed to providing the opportunity to our team members to improve their skill and capability in order to raise their social and economic opportunities. •! We are committed to promoting equal opportunity for our team members at all levels of the company. •! We strive to provide a safe and healthy workplace.

Ray and Holly Peterson, Nature’s Path organic farmers in Thompkins Saskatchewan. The Peterson family grow organic Kamut®,! soft white wheat, peas and lentils.

STEP TWO

CULTIVATE OUR TEAM. // B E N E F I T S // F E E D B A C K P R O G R A M S , T R A I N I N G & E D U C AT I O N A L A S S I S TA N C E P R O G R A M S

Ray and Holly Peterson, Nature’s Path organic farmers in Thompkins Saskatchewan. The Peterson family grow organic Kamut®,! soft white wheat, peas and lentils.

Learn, grow, and move forward together Supporting our team members We’re happy to be in a position where we can provide above industry standard benefits including paid vacation, dental, vision, and medical care as well as incentive plans based on company profitability which rewards employees for both individual and shared success. Some of the more ‘out of the box’ offerings are listed below. • !Team members are encouraged to commute by bike, carpool, and public transportation with incentive programs that provide up to $500 for a bicycle from our Get Fit program and a $1000 employee grant toward the purchase of a hybrid vehicle. Note: Prime ‘rockstar’ parking is reserved for hybrid vehicles. • !A new health and wellness program was introduced to our Blaine facility in 2011, and will be expanding to Richmond and Sussex locations in 2012 to provide team members with the resources they need to achieve their wellness goals, be it physical health, mental wellness or workplace safety. • !Team members at our Blaine plant receive financial assistance for enrollment in smoking cessation programs. • !Team members in Richmond, Blaine and Sussex enjoy the use of " on-site organic gardens. • In addition to Nature’s Path’s annual volunteer days for Compassion Into Action, we encourage our team members to volunteer in their communities on their own time, and we support their efforts through matching donations of food or cash whenever possible.

Award-Winning Efforts

•" Thanks to all of our efforts, in 2009, 2010, 2011 and 2012 ! we were named one of Canada’s Top 50 Greenest ! Employers and in 2012 one of BC’s Top 50 Employers

Sustainability training workshops are made available to all team members to help deepen their understanding of what sustainability means at Nature’s Path and how their work affects the company’s overall sustainable performance. During the training, participants are challenged to identify projects aligned with our sustainability progress indicators and to be actively involved in development and implementation. All of this is linked to our Nature’s Path performance management process, where team members’ efforts in sustainability and social consciousness are pillars on which we are all equally measured. •!We created the PATHS management system (Performance Driven, Always improving, Team focused, Honorable and respectful and Sustainability and Socially Conscious) in 2010 and continued its development in 2011. •!Working with the Blanchard Certified group, we commenced a Management Development pilot program in 2011. We will measure the success of this program in 2012, with an aim of improving it and eventually rolling it out across the company. •!We developed the Self-Directed Work Team (SDWT) program in our Blaine location in 2010 for our bar line, and began expanding it to all of our manufacturing facilities in late 2011. When the SDWT was first put in place, one of the first challenges that were given to employees was to reduce waste on the line. In one year, they reduced waste by 7%.

•!Sustainability training is provided to 100% of team members. •!Over the next 3 years, we will be increasing our investment in team members training with the growth of the SDWT, PATHS, and Management Development programs. •!Our Sussex, Wisconsin facility continues to grow, in the past year alone we’ve hired 23 new team members. •!We developed location specific Sustainability Key Progress Indicators and asked team members to submit ideas to achieve these goals. Each location suggested programs and one project was chosen per site.

Award-Winning Efforts

•" Thanks to all of our efforts, in 2009, 2010, 2011 and 2012 ! we were named one of Canada’s Top 50 Greenest ! Employers and in 2012 one of BC’s Top 50 Employers

Blaine Team Members !

In 2011, we launched a new Health and Wellness program in Blaine. We will be expanding this program into all locations in 2012.

Blaine Team Members !

In 2011, we launched a new Health and Wellness program in Blaine. We will be expanding this program into all locations in 2012.

Our commitment to sustainability is about looking after people and the planet. It is important that the products we make respect the planet and its resources and also nourish the people who eat them. We want our products to enable our our retail partner, our consumers and their families to live healthier, happier lives - which includes helping them reduce their own impact on the planet. Our commitment is that we will strive to make living sustainably easier, healthier, and a whole lot tastier. After you’ve eaten all the cereal out of the box, here’s what’s left to feel good about:

STEP FOUR

CARE FOR OUR CUSTOMERS.

Our Commitments •! We are committed to being a trusted name for organic food in every home. •! We strive to offer products that taste great, are nutritionally balanced and are good for the planet. • We are committed to ensuring that our products remain non-GMO

•! We will strive to implement a zero-waste approach to packaging. •! We we actively participating in the development of packaging that is reusable, recyclable, and/or biodegradable for us customers. •! We will collaborate with buyers and suppliers on creative solutions which eliminate unsustainable packaging throughout the value chain, and educate our consumers on how to be sustainable in their won homes.

STEP FOUR

CARE FOR OUR CUSTOMERS.

Packaging 2011 was a big year for packaging. We launched a complete redesign of our packaging, including a new logo. With the change, we took the opportunity to shrink some of the our boxes, reducing paper use. We continued to expand our Eco-Pacs and introduced a whole new line of granola in a stand up re-sealable pouch. All the cardboard and paperboard we purchase must be FSC Certified, printed with soy based inks and be 100% recycled with a minimum of 60% post consumer content. The use of recycled cardboard reduces water use, energy use and prevents the cutting of virgin forests. All of our plastic is BPA-free, and we continue to strive towards innovation in the use of new materials in this area.

0.3

•!With the new packaging redesign, we were able to reduce the box size on our Optimum brands and Flax Plus Crunch boxes by 4%, resulting in overall savings of 23,000 Lbs. of paperboard per year. •!In 2011 we brought back Love Crunch Granola, expanding the line with 3 new flavors. In its re-launch, we decided to use a stand up pouch with no box saving approximately 98,000 Lbs. of paperboard. •!Through box size reduction and reducing the thickness of our cereal boxes, we continued to see a reduction in overall paperboard use by roughly 7%. •!Since 2009, our ratio of pounds of paperboard used per pound of product has continued to decline. We moved from 0.16 to 0.15 Lbs. per pound of product in 2010, and now to 0.14 Lbs. per pound of product in 2011. •!Our ratio of plastic films used per pound of product has stayed steady at .002 lbs. even though we created more Eco Pacs and stand-up resealable bags than previous years. •!In 2012, we will continue to focus on reducing the amount of cardboard we use to ship our products and display them in store. This means working with our retail customers on shipping and putting more of our products in display ready cardboard boxes. If we can make more multi-purpose shipping boxes, we’ll help reduce overall paper use through the system!

0.225 0.15 0.075 0

2009 Corregate

2010 Film

2011 Paperboard Our new look...

Love Crunch Granola

0.3

0.225 0.15 0.075 0

2009 Corregate

2010 Film

2011 Paperboard Our new look...

Love Crunch Granola

As a food manufacturer, we inevitably use resources in every step of our production process. We use electricity to run our plants and offices, and natural gas to fuel our ovens. Water is used extensively to both make our products, and to keep our equipment clean. That said, we strive to use these resources as thoughtfully as possible. With resource use comes waste but also an opportunity to reduce, reuse and recycle. Our goal is to turn food production into an enterprise that regenerates and gives back to the Earth.

STEP THREE

Our Commitments

PRODUCE THOUGHTFULLY.

• We will strive in everything we do to use energy resources in the most

// C O N S U M E R H E A LT H & N U T R I T I O N // PA C K AG I N G // D I S T R I B U T I O N — P R O D U C T S TO M A R K E T

•! We will manage our water resources with the awareness that water is an increasingly scarce resource.

resourceful means possible with energy efficiency best management practices. •! We will utilize the most environmentally responsible renewable energy opportunities whenever possible such as solar, wind, hydro, and geothermal. •! We will strive to reduce greenhouse gas emissions that contribute to climate change. •! We will measure the carbon footprint of our operations and strive for carbon-neutrality in all of our business practices by 2020. •! We will strive to optimize our water use so that it is as efficient as possible, and reduce it as much as possible.

•! Through reusing, donating, recycling, and composting, we will divert 99% of our waste from landfills by 2015. •! We will continually redesign our operations so that “waste” will eventually be eliminated because all material will become the raw material for new products and uses. •! We will strive to produce, pack, transport, and distribute products from field to market using the most efficient means possible with the most environmentally responsible renewable fuel sources. •! We will systematically improve our energy efficiency, reduce our energy consumption, and reduce food-miles whenever possible.

STEP THREE

Our Commitments

PRODUCE THOUGHTFULLY.

• We will strive in everything we do to use energy resources in the most

// C O N S U M E R H E A LT H & N U T R I T I O N // PA C K AG I N G // D I S T R I B U T I O N — P R O D U C T S TO M A R K E T

•! We will manage our water resources with the awareness that water is an increasingly scarce resource.

Energy and Climate Change Our manufacturing facilities are responsible for the majority of our greenhouse gas emissions (GHG) as our processes are fueled by a combination of electrical power and natural gas. We currently purchase electricity from utility providers and buy Renewable Energy Certificates (RECS) that support green energy projects to offset our GHGs in the states and province where we operate. These REC’s continue to assist us in reaching our goal of being climate neutral by 2020. But that doesn’t mean that we’re leaving all the heavy lifting to the RECs. Quite the opposite, in fact, as we continue to drive innovation and improved operational efficiency to reduce the energy we use. This includes giving our team members more tools to directly impact our sustainability goals in their everyday work. Here are some examples of what they’ve managed to accomplish:

Regardless of all the wins, we are not without our challenges. Reductions in energy and gas use in Blaine continue to be offset by inefficiencies in Sussex as the new plant gets up and running with new production lines. There is light at the end of the tunnel (LED of course) as we expect to see this imbalance diminish in 2012.

Nature’s Path Annual Carbon Output (tons) 8000

7168

•!Introducing a new manufacturing operating system called CDC Factory Talk this year. In collaboration with our Self Directed Work Team program, this system will allow our team members to generate real time manufacturing information on the systems they are running including waste, throughput, and yield. This will grant the team the flexibility to make changes as things happen and ultimately facilitate the reduction of waste, electricity and natural gas consumption.

6000 Carbon per pound

•!Reducing our use of electricity (.22 KwH /lb), while remaining steady with natural gas use (0.0013 Therms/lb) and overall carbon output (0.15 Lbs. CO2/Lb).! • Completing a major lighting retrofit project in our Blaine facility in 2010, saving us over 400,000 Kwh per year. • Re-engaging with Bonnieville Power Authority in 2011 to conduct a full energy use audit and determine what other operational projects we can undertake over the next 5 years to reduce our energy use. The results of this audit will be used " in 2012.

4313

4000

3977 3437

2000

2008

2009

2010

2011

Nature’s Path Annual Carbon Output (tons) 8000

7168

6000 Carbon per pound

4313

4000

3977 3437

2000

2008

2009

2010

2011

Water There are many ways to promote the responsible use of water. Supporting organic agriculture is one way to ensure water resources are managed sustainably throughout our supply chain. We also look to address the challenge of reducing water use in our operations. Weâ&#x20AC;&#x2122;ve started measuring and reporting our location specific water use, and in 2011 included it as one of the key progress indicators in the team member sustainability training. Weâ&#x20AC;&#x2122;re pleased to report that our overall use of water per pound of product in 2011 was decreased as compared to previous years thanks in part to improved cleanup procedures in our Sussex facility.

Organic Farming Saves Water: Organic farming practices promote watershed protection and reduce water needed in growing crops. By purchasing and supporting organic farming we support positive practices.

While weâ&#x20AC;&#x2122;re committed to continue reducing water use in the long term, we anticipate that our intake will actually increase in 2012 due to the introduction of new equipment and new product lines. Most of the water we use goes into our food and our facility cleanup processes. With that in mind, we are developing plans for new cleaning routines and washing down equipment in our Blaine facility that will reduce water use and will look to implement these new plans at our other facilities in the future. Annual water use per pound of product produced Gallons of Water / lb of product

0.15

0.113

0.12

0.11

0.075 0.07 0.038

0 2009

2010

2011

0.15

0.113

0.12

0.11

0.075 0.07 0.038

0 2009

2010

2011

We improved our waste diversion ! by 4% across the company.

Waste We are well on our way to achieving our goal of 99% waste diversion by 2015. In 2008 we contracted MJ Waste Solutions to conduct a waste audit which provided us invaluable data on our waste diversion programs, and we have since committed to conducting full waste audits every 2 years. Following up on the insights gained in the 2010 audit, in 2011 we continued our aggressive waste reduction program, and improved our ongoing tracking of waste diversion. Here are some of the highlights:

Nature’s Path Waste Diversion Rates 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

27%

12% 88%

8% 92%

•!We implemented on-going data tracking systems for our waste reduction programs and incorporated waste reporting into monthly management team meetings. •!We began to measure our total weight of waste and waste produced per pound of production. •!Our Delta team has emerged as a waste leader in this area, achieving a 0.8% waste per pound produced. •!We used our sustainability training to engage all team members on “waste” as a key progress indicator for sustainability in an effort to empower all team members to recognize waste as an area where they can directly impact the company’s overall sustainability. As a result, our team members’ actions increase our waste diversion from 88% to 92%. Below are a few location specific examples of how this was achieved.

Location specific activites: •"Blaine: Focused on recycling of hard plastics and compostable materials from the cafeteria. New signage and education for team members was initiated, spearheaded by our sanitation team. •"Delta: Greatly improved tracking and introduction of new highly visible waste containers on the manufacturing floor. The new receptacles make it easier to recycle paper, plastic, scrap wood and metal. •"Richmond: Developed a Zero Office Waste program, improving our centralized waste collection system. In 2012, we plan to expand this program to all plant offices. •"Sussex: Improved waste diversion in our Sussex location by starting a cardboard and paper recycling program on the plant floor. Hard and soft plastics recycling will begin in 2012.

73%

Breakdown of diverted waste 2011

2008

2010

2011*

*2011 waste diversion rates are unaudited estimates. We conduct waste audits every 2 years

Landfill waste Reused, recycled or composted

5% 14%

Animal feed Cardboard Plastic Paper 80%

We improved our waste diversion ! by 4% across the company.

Nature’s Path Waste Diversion Rates 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

27%

12% 88%

8% 92%

73%

Breakdown of diverted waste 2011

2008

2010

2011*

*2011 waste diversion rates are unaudited estimates. We conduct waste audits every 2 years

Landfill waste Reused, recycled or composted

5% 14%

Animal feed Cardboard Plastic Paper 80%

Distributing our products to market Once the food is made, we need to get it out to the stores. That necessity makes distribution a core function of our business. Thankfully, our logistics team has been leading the way in sustainably focused transport options and best practices for quite some time. Here are a few of their biggest wins to date: Intermodal shipping: Our extensive use of intermodal transportation (train and truck) has not only reduced our CO₂ per pound shipped, but also saved us money. Working with CH Robinson, Interstate, and with key customers, we are continuing to grow the weight of shipments that we carry over the rails to 61% this year. Intermodal shipping has contributed to a 16% reduction in our ratio of Lbs. CO₂ vs. weight since 2009!

% of total weight shipped annually 100% 80% 60% 40% 20% 0%

Consolidation/ Optimization of loads: Logistics is all about planning, and that is what our logistics team does best. Optimizing shipping is more than just shipping full trucks (although that is part of it). It also means identifying opportunities for back hauling, ensuring pallet design is as efficient as possible, and working with customers to coordinate shipping routes. As production in our new Sussex plant continues to grow, we anticipate being able to be more regionally focused with our shipping and distribution. In 2012, we will be working to decrease our miles travelled per pound of product. Green Partnerships: Our team has worked extensively with CH Robinson to increase our use of SmartWay certified shipping partners. This U.S. EPA program invests in shipping companies that train their drivers to reduce fuel use and provides funding to support the use of up to date technology for increasing fuel efficiency. In 2011, over 23% of our shipments travelled by SmartWay partners. We also continue our tree planting program with CH Robinson whereby for each full shipment that we make, one tree is planted by Tree Canada. In 2011, we planted over 1,603 trees.

2008

2009

Rail (Intermodal) Refridgerated Transport

2010

2011 Truck Ship

On-time shipments: Our logistics team prides itself on delivering to our customers on time, every time. Over 99% of our shipments are on time, and not only does this make customers happy - it saves energy. Missed deliveries windows means increased idle times, increased miles travelled, and in some cases, the need to load and offload shipments. Data Tracking: Efficiency in distribution depends on great data. Nature’s Path’s logistics team created our first internal sustainability tracking report, and continues to drive innovation using this reporting.

% of total weight shipped annually 100% 80% 60% 40% 20% 0%

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2009

Rail (Intermodal) Refridgerated Transport

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2011 Truck Ship

STEP FIVE

GIVE BACK.

Natureâ&#x20AC;&#x2122;s Path is committed to giving back. It is a big part of who we are as a company, as families and as individuals. Since our inception in 1985, we have donated millions of dollars in organic products, a share of our profits, and time to worthy causes around the world. As a company, weâ&#x20AC;&#x2122;re committed to donating $2 million in food, cash and in-kind support each year. This year, we continued to support food banks and conservation efforts around the world through our charitable giving with a focus on communities in need as well as those where we live and work.

STEP FIVE

GIVE BACK.

SOLEFood Vancouver Gardens for Good receipent

We continued our partnership with Organic Gardening Magazine and the Rodale Institute, through the launch of our second annual Gardens for Good organic garden grant program which awarded $60,000 to deserving community garden projects in Hamilton ON, Minneapolis, MN, and Washington, DC. We are committed to support worthy causes around the world. Our total donation of cash to worthy causes around the world was $711,000 in 2011. In-kind donations of food to food banks and those in need totaled $2.1 million in retail value, and over 436,000 Lbs. in food.

In 2011 we continued to grow our Compassion Into Action food bank fundraiser by expanding to two events - one in Vancouver for our Richmond and Delta team members and another in Bellingham, WA for our Blaine team members. In total, Compassion Into Action 2011 raised over $200,000 in cash and food for local food banks. Since 2009, our team members have donated over 400 hours and helped raise over $500,000 in cash and food to feed the hungry. Compassion into Action Video :" Click here to watch.

SOLEFood Vancouver Gardens for Good receipent

In support of food banks, we introduced the “Bite for Bite” program tied to the relaunch of our Love Crunch premium granola in 2011. Inspiring conscious consumers to take action, for every bag of Love Crunch sold we commit to contributing the equivalent weight of organic product to North American Food Banks up to $1 million every year.

Why are we committed ! to food banks? It’s in our mission statement: “ To be a trusted name for organic foods in every home....” We believe organic food is better for people and the planet, and that it should be in everyone’s home - even if they can’t afford to buy food that day, that week, or that month. Food bank use in Canada and the US has increased dramatically since the economic downturn. People are in need, and food banks help people who are struggling - people who have the same right to enjoy healthy, great tasting organic food as anyone else.

Our video about the Love Crunch story

EnviroKidz™ Recipients Nature’s Path created the EnviroKidz Giving Back Program to empower children to learn and be able to change their present and future world. The way we’re able to do this is by setting aside 1% of EnviroKidz product sales to help fund non-profit organizations that support environmental conservation and education programs for kids. In addition to the fund, by featuring the programs on the back of our boxes, we’re able to help generate more awareness for their cause. To date, over $1.4 million has been given to EnviroKidz funded programs. Some of the projects that received funding in 2011 include: • The Amazon Conservation Team (www.amazonteam.org) Created several student workbooks for school ages children in the US to teach about the Amazon and the people who live there. • The Dian Fossey Gorilla Fund (www.gorillafund.org) Supported the foundation’s work in Africa protecting endangered gorilla populations. • The Australian Koala Foundation (www.savethekoala.com) Funded the Adopt-a-Koala foundation, helping to secure much needed land and untouched eucalyptus forests for koalas in Australia. • The Lemur Conservation Foundation (www.lemurreserve.org) Supported the construction of a school in Madagascar to educate local youth and promote environmental awareness. • Defenders of Wildlife (www.defenders.org ) Supported the efforts of the Wildlife Volunteer Corps Project to get youth into the field supporting conservation.