Foremost Farms USA’s 2011 Business & Social Responsibility Overview Our Approach to Busin t A Message from Foremost Farms USA’s President Foremost Farms USA’s Commitment to Business & Social Responsibility Foremost Farms USA is a manufacturing and marketing cooperative owned by What do we mean by business dairy farmers who are committed to producing quality milk that is made into dairy and social responsibility? products for customers around the world. Every day, we strive to deliver cheese, We believe that acting in an environmentally, whey ingredients, butter and bulk ﬂuid milk products that provide consistent socially and ﬁnancially responsible manner performance, taste, nutrition and value. At the same time, we’re ﬁnding better ways in our relations with our stakeholders and communities is good business sense. to be good stewards of our environment, keep employees safe and healthy, improve the communities we’re part of and drive economic gain for our farmer members. Our approach to business and social responsibility begins with our core values of In this overview, Foremost Farms outlines its philosophy and values and details conducting business with uncompromising honesty, integrity and respect. Successfully a wide range of initiatives that we plan to measure going forward in an effort to managing social, ethical and environmental track our progress. The initiatives fall under three categories called People, Planet issues is ongoing and involves everyone at and Proﬁt. Outlined here are several responsibility goals and our plans to meet Foremost Farms. them. These are areas that customers tell us matter to them including animal well-being, the environment and food safety. We know there is always room for improvement so we expect to continually evaluate each of these areas and reﬁne Our Business & Social Responsibility Steering Team them as needed going forward. We have a core corporate group that Acting in the best interests of our member-owners, our employees, our customers encompasses our business functions to oversee our business and social responsibility and the communities we’re part of is an evolving process. We encourage your strategies and actions. This team includes feedback which helps us understand how we’re doing and where we can do better. functions such as manufacturing, corporate Please let us know what you think. communications, logistics, corporate safety, quality assurance, engineering, cost Sincerely, accounting and procurement. Team Members: David E. Fuhrmann Vice President-Manufacturing: Provides President support and leadership for the overall business and social responsibility effort December 2010 at Foremost Farms. ness & Social Responsibility at Foremost Farms USA Coordinator: Schedules and leads • In 2010, we received • Reduced natural gas consumption by meetings and annual reviews. Acts a Well Workplace installing eight energy-efﬁcient boilers as a company representative to trade “Gold” Award at our Reedsburg, Appleton, Rothschild, associations. Coordinates collection of from the Wellness Plover, Marshﬁeld and Clayton, information. Shares support role with Council of America Wis., plants Communications or appropriate (WELCOA) for • Became an accredited SmartWay executive staff. fully embracing our partner/shipper because of measuring responsibility to promote employee and reducing emissions using an Milk Marketing and Member Services: health and well being. EPA-approved model and increasing Provides F.A.R.M. (Farmers Assuring Responsible Management) program • We have formalized employee and board the amount of freight shipped with representation and serves as liaison to leadership and development programs SmartWay approved carriers the Transportation function. aimed at building our talent from within • Added boiler stack economizers at and to meet our business goals for several plants Technology/Food Safety: Provides food succession planning, job performance safety and quality program support to the • Reduced electrical usage by eliminating over competency, new hire orientation and team and is the support for vendor program 30 computer servers and storage arrays used employee retention. to employees and customers. at our data centers and replacing them • Our Code of Business Conduct and with more efﬁcient technology Director of Operations: Provides resources Ethics sets out our values and expected to manage development of the program. • Implemented printer reduction through standards of behavior for conducting Assists coordinator with presentation of multi-functional network printers, dual business and interacting with members, program at plants. Engages plant personnel monitors and imaging vendors, customers, communities and in achievement of goals. governments. • Implemented web conferencing to conduct Business Process: Provides timely reports business meetings which has reduced for energy usage, greenhouse gas emissions • Annual cash and product donations allow employee travel time and fuel consumption and carbon consumption. us to give back to our industry and plant communities. Foremost Farms supports • Investigated the future use of digesters for Process Integration: Assists with data activities that beneﬁt our youth through treating plant wastewater and reducing collection, integration services and organizations such as 4-H and FFA, plant land application of waste materials coordination with Business Process. town community fund campaigns, • Developed new processing and livestock Communications: Develops and initiatives at land grant universities and applications for permeate, eliminating the implements a communication plan technical colleges that advance dairy need to dispose of these by-product solids aimed at sharing the program’s goals farming and food processing, dairy breakfasts and banquets, and plant Recycling efforts include: and results with the Foremost Farms executive staff, member-owners, town medical facilities and emergency • Introduction of a universal waste employees and customers. responders such as ambulance and ﬁre recycling program at all ofﬁces and plants departments. for recycling all consumer batteries used PEOPLE by employees at work and at home PLANET • Contract with a professional electronics With 1,000 employees and 18 manufacturing plants and ofﬁce locations As a farmer-owned cooperative, our recycler to recycle all computer and in Wisconsin, Minnesota, Michigan and commitment to protecting the environment electronic equipment Indiana, we are working to create a world is a fundamental part of our values. Being • Separate ofﬁce paper and aluminum from class safety, health and engagement culture. a good steward of our natural resources trash and send it to recycling centers is critical to our business and to future Foremost Farms USA’s generations. From reducing fuel, energy PROFIT Incident Rate and water usage to installing state-of-the- 16 art water treatment facilities at most of our Foremost Farms’ performance with regard 14 15.2 Number of Incidents plants, to environmentally-friendly farming to business and social responsibility is 12 10 practices, Foremost Farms continually directly linked to our long-term ﬁnancial 8 focuses on reducing its environmental success. Proﬁt allows us to make strategic 7.7 6 6.6 impact. investments that strengthen our business 4 4.4 by improving operational efﬁciencies 2 2.3 We have worked on the following efforts to 2.0 while manufacturing safe and wholesome 0 2005 2006 2007 2008 2009 2010 operate our ofﬁces and facilities in a more products, developing employees, retiring environmentally friendly manner: equities and growing with our members • Our company-wide focus on safety • Installed heat exchangers at our Plover, and customers. processes has resulted in a reduction in Rothschild and Sparta plants our incident rate from 15.2 in 2005 to 2.0 in 2010. Our Initiatives for 2011 PEOPLE Key Measure Target Incident rate (total incidents divided by total hours worked X 200,000) 1.5 Health and wellness rating (WELCOA) Gold Award Farms evaluated in Farmers Assuring Responsible Management 33% of farms program (F.A.R.M.) – assures the milk used in our products comes pre-evaluated from farms that meet established guidelines for sound animal care 25% of farms evaluated Participants in Cooperative Leaders Program (young farmers) 20 Scholarship dollars awarded to dependents of employees and members $40,000 Cash and product donations to approved community and * industry organizations Number of plants earning SQF certiﬁcation – protects conﬁdence 12 in the safety of our products PLANET Key Measure Target Greenhouse gas emissions reduction at manufacturing facilities 2%** Water usage reduction (gallons per 1,000 lb. of product) 2%** Energy demand intensity reduction (million BTU per 1,000 lb. of product) 5% Gallons of diesel fuel used per ton of milk hauled (Upper Midwest) 1.75 Interplant bulk ﬂuid payload size 51,000 lbs./load Use of SmartWay transportation carriers for dry and refrigerated freight to improve fuel efﬁciency 95% Pounds of waste recycled (batteries, computer equipment, ofﬁce paper) * Pounds of product using sustainable packaging * Pounds of solid waste * PROFIT Key Measure Target Meeting state dairy plant licensing requirements based on the ﬁnancial $1.25 to $1.00 strength of our balance sheet current ratio Meeting ﬁnancial obligations to past equity holders and implementing equity investment plan for active members on Jan. 1, 2011 * Foremost Farms will measure annually; no speciﬁc target. ** Our EPA Energy Star target is 2% per year for ﬁve years – for a 10% total reduction.
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