Organically Grown Company 2016 Sustainability Report

Organically Grown Company

2016 Sustainability Report

Promoting health through organic agriculture as a leading sustainable organization

Founded in 1978, our employee and grower-owned company is the largest organic produce distributor in the Pacific Northwest. From locations in Oregon and Washington, we work with more than 300 growers and vendors to market and distribute produce to over 500 retail, wholesale and restaurant customers throughout the greater Pacific Northwest and beyond. Our mission is to promote health through organic agriculture as a leading sustainable organization.

Sustainability at OGC is a holistic endeavor.

Environmentally, it’s about taking care of the planet. Socially, it means trying to ensure those communities we touch are just and livable. And economically, it means we turn a profit so we can continue to get food to the public while supporting growers who are doing it right.

We are committed to working with our growers, customers and other trade partners to bring about a transition toward a more sustainable food system. This commitment informs our science-based decision framework, which we apply to all aspects of our decision making, planning processes and conduct of our

business. Our 2016 report is organized by each of our five sustainability goals, which give us targets to strive for as we move towards a better food system for people and the planet.

1• Achieve carbon neutrality and eliminate fossil fuel use

2• Eliminate solid waste and toxic substances on farm sustainability and 3• Achieve small/medium farm viability

4• Foster a healthy and fulfilling workplace • Build customer and broader community

5 awareness and support for a healthy and sustainable food system

Organic farming is a holistic approach that replenishes soil fertility and promotes ecological and biological diversity, while avoiding the use of synthetic chemicals and genetically modified organisms. It all comes down to sustainability.

Bringing organic produce to the people We have been certified by Oregon Tilth as a handler of organic produce since 1998.

Conventionally grown fruits and vegetables use on average 3-88 lbs of fungicides, herbicides, insecticides, soil fumigants, and desiccants per acre, depending on the crop—potatoes, apples, and tomatoes are some of the most heavily sprayed. In 2016, the organic produce we sourced avoided approximately 605,000 pounds of toxic chemicals from polluting earth.* * Calculations provided by WSU’s Center for Sustaining Agriculture and Natural Resources.

+% of the food 95 we distribute is certified organic.

17K ORGANIC

ACRES FARMED

70,500 TONS

ORGANIC PRODUCE DELIVERED

The remainder of the food we distribute is wild harvested, like chanterelle mushrooms, transitional product to support our growers, and select non-organic specialty items requested by customers.

GOAL 1

Achieve carbon neutrality and eliminate fossil fuel use Whenever possible, we seek fossil fuel alternatives fleet efficiencies, alternative transportation methods and energy efficiencies.

Our Fleet is Clean Air Certified & We Use Renewable Fuel We source renewable fuel from Sequential Biofuels, who derive 95% of their biodiesel from cooking oil waste that is transformed into clean, non-polluting fuel. Our average fuel blend was B80, 20% biodiesel and 80% ultra-low sulfur diesel. This represents a 15.83% decrease (down from 35.83%) in biodiesel use from 2015 due in part to

Our Fleet

40 Trailers • 30 Tractors • 6 Box Trucks • 4 Cargo Vans

6 2 0 AVG MPG

An incremental decrease from 6.51 MPG in 2015.

continued expansion into regions where biodiesel is not readily available and additionally due to a decision to limit our biodiesel rate to B80 for the long-term efficiency of our fleet.

Fuel Efficiency Fuel efficiency measures in our fleet include manual automatics, driver training and engagement, and on board technology that captures data on mpgs, over-rpms, overspeed, and idle time.

Driving Fuller Trucks Our average cases shipped per mile dropped from 3.02 in 2015 to 2.79 in 2016, a drop we offset by increasing backhauls.

Since 2014, our fleet is 100% Clean-Air Certified under the Federal Diesel Emissions Reduction Act.

Carbon Footprint: 2016

3,469

metric tons CO2

16.7% increase over 2015

Backhaul Cases

Increase in carbon footprint and decrease in mpg are due in part to expansion of regional routes and establishment of new routes.

772,162

867,353

Fuller Trucks Backhauls, or cargo carried on return trips to better leverage fuel/energy use, grew in 2016.

2015 2016

In 2016, B-line delivered

373 tons

of produce for OGC to downtown, northwest and southeast Portland by cargo trike, avoiding driving 4,212 miles with our trucks, eliminating 12,699 lbs of CO2 emissions.

GOAL 1 | Achieve carbon neutrality and eliminate fossil fuel use

New Energy Efficiency Initiatives Our 2016 energy saving initiatives included the LEED Gold equivalency build out of our Des Moines, Washington facility, and participation in Energy Trust of Oregon’s Core Strategic Energy Management (SEM) program. During the CoreSEM program, we monitored and analyzed our current energy use practices and set goals and measures to improve them. Cross-departmentally, we undertook small projects, behavioral changes, and operations and maintenance improvements. For our Portland facility, we saved 1.76% of energy over the previous year, met all of the milestones of the program, and learned a great deal about our operations in the process.

100 % of our energy

use is either renewable or is offset by Renewable Energy Credits.

SMART Commute Program and Commuter Cars To reduce the “carbon footprint� of daily commuting, coworkers are reimbursed for utilizing alternative transport to work. In 2016, we also purchased two fuel-efficient (41.2 mpg) commuter cars for travel between our Portland and Eugene facilities to reduce fuel consumption and mileage reimbursements costs, as well as further encouraging coworker carpooling between facilities.

Wind farms like this one along the Columbia River are supported by OGC through our purchase of Renewable Energy Credits to offset our carbon footprint.

Energy Use/Case in BTUs: (BTUs) units of electricity, diesel, biodiesel, and natural gas consumption.

10,054

9,337

9,229

8,727 7,674

2007

2008

2009

2010

7,485

2011

6,774

2012

7,572

2013

8,364

8,430

2014

2015

3,790 SMART

Commute trips,

totaling 42,812 miles, saving 30,869 lbs

of CO2 from entering the atmosphere.

2016

GOAL 2

Eliminate solid waste and toxic substances 500,000

In our daily operations, we strive to reduce our environmental impact and 500,000 eliminate solid waste and toxic substances in our facilities.

400,000 Our efforts towards zero waste go well 300,000 beyond extensive recycling, composting and sorting. We are always looking for ways to

reduce packaging and find more sustainable 400,000 alternatives in our warehouses, trucks and office spaces, and we prioritize relationships 300,000 with vendors and companies that share our sustainability values.

200,000

200,000

100,000

100,000

Environmentally Responsible Packaging: 2010-2016 2010

2013 (RPCs)

2011

2012

2013

(RPCs) Reusable Produce Containers (RPCs) 2014 Produce 2015Containers 2016

2014

2015

2016

Wax Alternative Boxes

500,000 400,000

Wax Alternative Boxes Boxes

300,000 200,000 100,000

2010

2011

2012

2013

2014

2015

2016

Reusable Produce Containers (RPCs)options Wax Boxesmandate.

We prioritize “green� packaging asAlternative part of our

Our LADYBUG and ORGANICALLY GROWN brand plastic clamshells are derived from 75% post-consumer recycled polyethylene terephthalate (PET), and our corrugated boxes are manufactured by Sustainable Forestry Initiative certified producers.

Waste Diversion A cross-functional Zero Waste Committee explores opportunities for continually engaging coworkers in waste reduction and incorporating zero waste training into the coworker onboarding process. Some zero waste efforts include: • Conducting warehouse-wide waste audits • Donating pallets of unsalable but edible organic fruits and vegetable to six food banks, including the Oregon Food Bank and Food for Lane County • Collaborating with companies who process and reclaim materials like plastics, lithium and metals from batteries, temperature recorders and circuit boards

1041 tons Food Banks

464 tons Recycle

312 tons Compost

87 tons Landfill

95% of the waste OGC

generated avoided landfills.

• Turning recyclables into a profit-center by baling and selling the valuable materials • Donating outdated technology and computer equipment to Free Geek including peripheral devices, cables, printers, laptops, desktops, monitors, headsets, various power adapters, and cell phones

GOAL 2 | Eliminate solid waste and toxic substances

Sustainable Office Supplies and Practices We prioritize the purchase of sustainable office supplies. For example, the majority of paper we consumed was Tree Frog copy paper from TreeZero. It’s tree free, biodegradable and elemental chlorine free. In addition, we purchased 36 reams of a combination of Forest Stewardship Council certified, Sustainable Forestry Initiative certified, or recycled legal paper.

sustainable workplaces. For example, new office spaces in Eugene included EcoWorx carpets, Zero Emissions/Zero VOC paints and LED lighting.

An example of a 2016 initiative to improve sustainable practices in our offices was to replace all disposable beverage containers with reusable ones.

In all of our new facilities, we use LEED Gold as an environmental standard for creating

We used 21 less reams of office paper in 2016.

Organic produce, by its very nature, is all about stewardship and sustainability. We thank each of our coworkers for helping us in our ongoing mission to promote health through organic agriculture as a leading sustainable organization!

GOAL 3

Achieve on farm sustainability and small/medium farm viability Farmers and farmworkers are truly the backbone of our business. Our work with over 340 organic farms (small, medium and large) growing the best quality organic produce is what makes us a successful distributor and change agent in the larger organic trade. We are proud to partner with an amazing network of growers and support them through a diversity of grower services.

We offer our customers transparency to sourcing information by featuring grower

30% of our total

volume of purchases came from growers in Oregon, Washington, Idaho, and British Columbia.

names on our price sheets. We work closely with growers to coordinate crops in an effort to help them better plan, thereby mitigating the risk of over/under production—increasing local farm economic stability.

LADYBUG Brand Our LADYBUG Brand represents farms that are certified organic, independently owned and operated, located in the Pacific Northwest (Oregon, Washington, British Columbia, and Idaho) and certified Salmon-Safe. Salmon-Safe is a non-profit organization dedicated to protecting watersheds and natural biodiversity by working with farmers, vineyards and land developers to promote a healthy habitat on their lands so that salmon and other native species can thrive.

All 30 LADYBUG farms are Salmon-Safe Certified.

OGC covers the cost of certification.

Fair Trade Produce We are proud to work with fair trade certified growers and to promote the positive impact that programs like Fair for Life, Fairtrade International, and Fair Trade USA have on farmworkers and their communities. Fair trade certification guarantees that producers comply with strict environmental, economic and social sustainability criteria; fair trade premiums provide development funds directly controlled by the farmworkers that go to educational, health, and social service programs.

We are an active Domestic Fair Trade Association member. The primary goal of the DFTA is to support family-scale farming, to reinforce farmer-led initiatives such as farmer cooperatives, and to bring these groups together with mission-based traders, retailers and concerned consumers to contribute to the movement for sustainable agriculture in North America.

FAIRTRADE

In 2016, Fair Trade Certified items from 16 producers in Mexico, Ecuador, Peru, Argentina, Chile, and New Zealand made up 4% of our sales.

GOAL 3 | Achieve on farm sustainability and small/medium farm viability

GROW Bananas We purchase the majority of our bananas from Organics Unlimited, which operates the “Giving Resources and Opportunities to Workers” (GROW) program. Through retailer support, $0.60 of every case of bananas sold goes towards the GROW program resulting in vital community development and health-related activities in the banana growing communities in Mexico and Ecuador.

$1,178,123 donated to

GROW since 2005.

Each year, OGC coworkers and customers participate in volunteer trips to Organics Unlimited’s banana growing region near Colima, Mexico and help out with GROW fund sponsored community development projects.

GOAL 4

Foster a healthy and fulfilling workplace Those employed by OGC are known as coworkers, because we work together, handin-hand to build a successful company.

Building Organizational Vitality To maintain our success and customer service capacity, we invest in the safety, health and future of our teams. As a mission-based organization, our sustainability goals are fostered from our cultural vision which includes five core behaviors and attitudes.

Training and Career Development In 2016, we invested over 3,082 hours in coworker education and training for technical and professional skills, warehouse safety and procedures, CPR/First Aid, ammonia refrigeration and produce & leadership education. Funds are also available for our coworkers seeking work-related certifications or higher education.

Core Behaviors and Attitudes

We are passionate about produce and sustainability

We provide exceptional customer service

We share ownership and leadership

We act with joy and gratitude

We inspire trust in everything we do

GOAL 4 | Foster a healthy and fulfilling workplace

Health Insurance

fund options and performance, and the program has 95.2% participation among We offer health plans that provide medical, eligible coworkers. The 401(k) contributions dental and alternative care. We pay 75-95% of Less than 5 years 5-9 years 20+ yrs.

10-19 years were made in addition to contributions made health insurance premiums for coworkers, to the ESOP, an additional retirement plan.

50% of dependent premiums for all fulltime coworkers, and provide benefits to part-time coworkers.

184

Employee and Grower-Owned We are independently owned by 19 farmers, 23 current and legacy-coworker shareholders, and the Employee Stock Ownership Plan (ESOP). Our ESOP was established in 2008, and grew to 42.98% ownership by 2016 with 229 qualified coworker participants.

Retirement Matching In 2016, we offered “socially responsible” investment options through Paychex, and coworker’s 401(k) contributions were matched up to $5000 per year or 6.5%.

A coworker-led 401(k) committee reviews

53

48

10

Coworker Retention

Total coworkers in 2016 = 295.

0-5 years

184

5-9 years

53

10-19 years

48

20+ years

10

12.79% annualized average

turnover rate, down 1.57% from 2015.

Coworker Wellness We have an active committee dedicated to promoting health and wellness at OGC. Some of the committee’s 2016 activities included: • Hosting biometric screenings where 240 participants received info to find, treat or prevent potential health issues • Sponsoring team runs • Providing bike maintenance supplies and bike maintenance days where 42 participants got on-site bike tune-ups • Launching a fitness reimbursement program • Supporting coworkers in taking on the Kick Butt Quit Smoking challenge

Our company founders were organic farmers, and many of our coworkers are so passionate about produce they are avid backyard gardeners and farmers.

The 2016 Health & Wellness Fair was one of many events and opportunities to learn more about our benefits and initiatives to improve coworker health.

GOAL 4 | Foster a healthy and fulfilling workplace

Provisions for Organic Produce and Meals

Recognizing Each Other’s Contributions

We share our passion for organic produce and foods by making produce available to our coworkers at a reduced cost, offering samples and tastings daily and giving out a Passion for Produce Award to a coworker every other year.

We also maintain a database of mission-aligned food vendors to help guide coworkers’ choices for meals and snacks.

One of our core attitudes and beliefs at OGC is to act with joy and gratitude. We implemented an Employee Recognition Card program to help facilitate this core attitude by enabling coworkers to easily submit and share positive feedback with one another.

ERCs, Employee

Recognition Cards, grew from an average of 36 per month in 2015 to 60 per month, with a total of 714 for the year!

To maintain our high food safety standards, we regularly train coworkers regarding the proper use of equipment, monitor our programs, and continue food safety and compliance education.

Food Safety and Safe Facilities Operating in sanitary, safe facilities is not only a requirement but also a top priority. We are proud to consistently achieve high ratings in our facility GMP (Good Manufacturing Practices) audits under the PrimusGFS standard, a Global Food Safety Initiative (GFSI) benchmarked standard. The scope of this audit covers everything from purchasing to sales, receiving to delivery, maintenance, sanitation, pest control, operations to administration and information technology. Our Safety Committees work to improve our operational functionality and prevent accidents through training and communication.

Prioritizing Driver Safety In 2016, our drivers logged 2.3 million miles and had 3 reportable accidents, giving us a standard of 1.3 which is below the industry benchmark of 1.5 accidents per million miles.

8

TH

OGC ranked in the 100–449 employees category for the 2016 Portland Business Journal’s Healthiest Employers of Oregon.

GOAL 5

Build customer and broader community awareness and support for a healthy and sustainable food system In our ongoing effort to raise support and awareness for a just, healthy and sustainable food system, OGC representatives often dedicate their time volunteering with various non-profit boards, presenting at public speaking engagements, and attending educational and networking events. We seek partnership with mission-aligned organizations, who are helping grow the organic trade in different sectors.

Building Connections Each year, we aspire to educate our community and build stronger connections through events, farm tours and participation with organizations dedicated to organic agriculture and sustainable food systems.

Highlights of our 2016 efforts: • Organized and hosted two series of grower educational forums for OGC coworkers and customers where Wholesum Harvest presented on their fair trade programs, and Organics Unlimited presented on their GROW bananas and projects. • Sponsored a trip to Colima, Mexico where OGC coworkers and customers volunteered at a Project Amigo site providing educational and health services for banana workers and their families. • Hosted our annual educational farm tour in March for coworkers and customers.

This was our first OGC-sponsored farm and vendor tour of Mexico, with 9 of our coworkers and 16 customers visiting 7 packing sheds in Nogales, Arizona and 3 fair trade certified farms in Northern Sonora, Mexico.

Community Contributions We donate at least 2.5% of profits (in-kind produce and cash donations) each year to mission-aligned non-profit trade and community organizations, including funding for farmland preservation, new and emerging grower education and organic research.

We also offer coworkers 8 hours of paid time each year to volunteer for a cause of their choice, and we host optional volunteer events related to our mission.

2.5%

Our combined donations in 2016 helped to improve

+ $

8hr.

200+

community organizations and schools.

$61,000 raised for

Farm to School programs.

Farm to School Apple Program We partner with regional Farm to School programs, schools, apple producers and 34 retailers to sell Farm to School bagged apples.

At least 70% of the retail profit generated is given directly to non-profit programs and schools to improve access to local and organic produce and provide farm-to-school education to K-12 students.

GOAL 5 | Build customer and broader community awareness and support for a healthy and sustainable food system National and Regional Organic Advocacy National Organic Advocacy OGC representatives attended the Organic Trade Association (April) and National Organic Coalition’s (June) annual meetings and lobby days in Washington D.C., to meet with representatives of the USDA National Organic Program and multiple senators and representatives to strategize and advocate for organic priorities. Some advocacy topics included certification cost share, GMO contamination and regulation, proportional dollars for organic research & education, funding for expanded organic plant breeding, and highlighted the need to regulate the use of “Natural” on product labeling.

We continue to lead and organize efforts on behalf of the Organic Produce Wholesalers Coalition (OPWC), which includes the country’s largest independent distributors of organic produce. The OPWC collectively

presented comments to National Organic Standards Board regarding hydroponic and greenhouse container production, use of sanitizers in organic handling, usage of seven crops and handling materials, changes to the policy and procedures manual and the National List Sunset review process.

We advocated for several USDA research priorities, including the prevention of GMO contamination, organic no-till production, biodegradable mulch, and for the National Organic Program to review inert ingredients in allowed organic materials.

GMO Regulation OGC representatives delivered public testimony at a hearing for Oregon House Bill 4122 that would give back to all local governments in Oregon the right to protect farmers from contamination by genetically engineered crops. We were also active on the National Stabenow Roberts GMO labeling compromise bill. Subsequently, after the bill unfortunately

Mike Dill, Natalie Reitman-White, Lynn Coody and Stacy Kraker attended the National Organic Coalition’s Capitol Hill lobby days.

passed and was signed into law, we participated in the “GMO Summit” that brought together top “clean food” advocacy groups to strategize next steps.

Oregon Advocacy On our local front, we continue to take a lead role on the board for the non-profit trade support organization the Oregon Organic Coalition (OOC). We lead promotional efforts for Organically Grown in Oregon Week, host the annual OOC Awards for Excellence Luncheon and provide support for policy work that impacts Oregon’s organic community and trade.

OGC and the OOC also collaborated with other organic wholesale distributors in Oregon, to lead efforts to gather data on the economic impact of the organic trade in the state.

Visit organicgrown.com/sustainability/ our-partners to learn more about our partnerships, memberships and sponsorships.

Thank You! Many thanks to all those at OGC who contributed information and content to this report.

For further information on our Sustainability Report and initiatives please contact Kimberlee Chambers, Supply Chain and Sustainability Program Manager, kchambers@organicgrown.com.

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Eugene Office 1800B Prairie Road Eugene, OR 97402 Phone: 541-689-5320

Portland Office 20078 N.E. Sandy Blvd.

Portland, OR 97230 Phone: 503-907-3600

www.organicgrown.com

Delivering the organic experience since 1978.