2018 CORPORATE RESPONSIBILITY REPORT About 4 Smucker Workplace Culture 8 22 Marketplace Responsible Sourcing 32 Environmental 46 Impact Community 56 Helping to bring families together to share memorable meals and moments.
OUR We have always defined success by more than financial performance. We believe how we do things is as important PURPOSE as what we do. Our Purpose aims to articulate why we are in business and the impact we aspire to have on society. Being together with the ones we love isn’t just a pleasant way to spend time — it’s vital to a healthy, happy, fulfilling life. In fact, the more family and friends spend time with each other, the richer their lives become. We believe we can help strengthen families through the memorable meals and moments they share, and we can help make every day a little more special by nurturing the bonds that bring people together, as well as people and their pets closer together. And the stronger families are today, the stronger our society will be tomorrow. Quite simply, life tastes better together.
2018 CORPORATE RESPONSIBILITY REPORT 1 Our Message Dear Friends
We are pleased to share The J. M. Smucker Company’s 2018 Corporate Responsibility Report. This report allows us to share our most significant accomplishments as we follow our Sustainability Strategy to create a better tomorrow. Our Strategy focuses on:
• Preserving our culture; • Ensuring our long-term Economic viability; • Driving positive Environmental impact; and • Being Socially responsible.
While our sustainability goals are forward-thinking, their inspiration is rooted in our history. For more than and beverage market, and with the recent acquisition 120 years, The J. M. Smucker Company has succeeded of Ainsworth Pet Nutrition, LLC, it has also become by doing the right things and doing things right. That the largest segment of Smucker’s business. With this mindset informs how we treat our customers, employees, acquisition, we have reinforced our leadership in a suppliers, communities, and shareholders. With our category that will enable our entire business to grow. Basic Beliefs (see pages 12-13) and Our Purpose to guide us, we will make a meaningful difference for the ENVIRONMENT environment, as well as the people and communities Success in Smucker’s earliest days depended on we serve. wholesome, high-quality fruit from the farm. So it’s no surprise that environmental responsibility is a matter ECONOMIC close to our hearts and central to our decision-making. To realize our corporate responsibility priorities, we We weigh environmental considerations in how we first need an economically viable business. Our strong operate our facilities, develop new products, and source financial foundation ensures we have the resources ingredients and other materials. not only to grow our Company, but also to reinvest in people, communities, and environmental initiatives. Our Company continues to make progress toward our 2020 Our brands and products can be found in 92 percent goals for waste diversion, water use, and greenhouse gas of U.S. households, and we aim to remain consumers’ (“GHG”) emissions. Through robust reuse and recycling brand of choice. To remain relevant amid a time of programs, we diverted 92 percent of our operational rapidly changing consumer preferences, we are adapting waste from landfills in 2017, putting us within reach many of our most popular products and introducing of our goal of 95 percent by 2020. Since 2014, our water new products to meet emerging demands. For example, use intensity has decreased by 7.2 percent, while GHG we have increased the number of non-GMO offerings in emissions intensity has been reduced by 7.0 percent. This our portfolio and are offering more products than ever represents meaningful progress toward our 2020 goals of that are natural, organic, gluten-free, whole grain, and reducing water use intensity by 15 percent and GHG reduced sugar or sugar-free. emissions intensity by 10 percent. A new active energy management program is helping us to drive continuous We also aim to offer the brands of choice to the two-thirds improvement, as is a new renewable energy agreement. of U.S. households that are home to a family pet. Pet food We have entered into a long-term power purchase is the largest center-of-store category in the U.S. food agreement with Lincoln Clean Energy for 60 megawatts
2 THE J. M. SMUCKER COMPANY of the utility scale Plum Creek Wind project. Starting in As a good corporate citizen, we have always believed 2020, the wind energy produced from this project will in our responsibility to support organizations, address approximately 50 percent of Smucker’s total projects, and programs that contribute to the well- electricity use. being of our communities.
Today, we have grown well beyond our roots of selling jams and jellies to offering coffee, peanut butter, snack “Our strong financial foundation mixes, fruit juices, pet foods and snacks, and more. This ensures we have the resources to means that while our supply chain still begins on the not only grow our Company, but also farm, our sourcing network is global and increasingly to reinvest in people, communities, complex. We are dedicated to ensuring that our supply and environmental initiatives.” chains operate in a manner consistent with our Basic Beliefs and ethical standards while providing transparency to consumers who are more socially It is in the best business interest of the Company and our and environmentally conscious than ever before. shareholders, employees, and customers that we contribute to the long-term development and improvement of these This includes maintaining a pledge to source 10 percent communities, organizations, projects, and programs. of our total retail coffee from certified green coffee sources. Our on-the-ground projects have supported more With the recent addition of Rachael Ray® Nutrish® to our than 16,500 smallholder coffee growers and facilitated portfolio of pet brands, we will continue to donate a $3.6 million in loans to farmers. We have funded coffee portion of Nutrish sales to The Rachael Ray Foundation™. supply chain projects in four countries to help address The Foundation helps animals in need with food, medical gender equality, climate change adaptation, farm supplies, treatments, and more. management, and capacity building, among other issues. As our impact grows, we are applying lessons learned Also, in 2017 we strengthened our partnership with from our coffee supply chain to other commodities the American Red Cross by becoming a Disaster such as quinoa, specialty corn, and black pepper. Responder partner, providing monetary support and product donations while continuing to match the donations made by our employees.
OUR COMMITMENT As we adapt to a rapidly changing marketplace, we will maintain our unyielding commitment to Economic, Environmental, and Social sustainability. Our Basic Beliefs, the values that have guided us for more than a century, will continue to support our business while allowing us to make progress toward our corporate responsibility objectives.
Achieving these aims takes every one of us, and we are grateful to all of our employees and constituents for their contributions and belief that together we can SOCIAL make a difference. We look forward to keeping you Among the qualities that make Smucker unique is a updated on our progress and appreciate your continued common Purpose of helping to bring families together support of and interest in The J. M. Smucker Company. to share memorable meals and moments. Our Company unites families, friends, and pets through our products — and we also do so through support of organizations and projects that uplift people in our communities. Richard Smucker Mark Smucker
2018 CORPORATE RESPONSIBILITY REPORT 3 ABOUT SMUCKER Smucker At-a-Glance
For more than 120 years, The J. M. Smucker Company has brought families together to share memorable meals and moments. Guided by a vision to engage, 7,000 delight, and inspire consumers through trusted food EMPLOYEES and beverage brands that bring joy throughout their lives, Smucker has grown to be a well-respected North American marketer and manufacturer with a balanced portfolio of leading and emerging on-trend brands.
ADJUSTED EARNINGS PER SHARE — ASSUMING DILUTION(A)
FINANCIAL HIGHLIGHTS $. $. $. Year ended April 30 $ . $.
NET SALES ’ ’ ’ ’ ’ (Dollars in billions)
$. $. $. $ . $ .
CAPITAL ’ ’ ’ ’ ’ EXPENDITURES (Dollars in millions)
$ . $ . $ . $ . $ .
’ ’ ’ ’ ’
(A) We use non-GAAP financial measures to evaluate our performance. Refer to “Non-GAAP Measures” on page 66 for a reconciliation to the comparable GAAP financial measure.
4 THE J. M. SMUCKER COMPANY LOCATIONS
Corporate Headquarters Manufacturing Facilities Coffee Memphis, Tennessee Orrville, Ohio Pet Foods New Orleans, Louisiana (3) New Bethlehem, Pennsylvania Bloomsburg, Pennsylvania Suffolk, Virginia Orrville, Ohio Pet Offices Buffalo, New York Oxnard, California Burbank, California Decatur, Alabama Consumer Foods Ripon, Wisconsin Meadville, Pennsylvania* Frontenac, Kansas* Chico, California Scottsville, Kentucky San Francisco, California Lawrence, Kansas Cincinnati, Ohio Seattle, Washington Meadville, Pennsylvania* Grandview, Washington Sherbrooke, Quebec, Canada Canadian Headquarters Topeka, Kansas Havre de Grace, Maryland Toledo, Ohio Markham, Ontario, Canada Lexington, Kentucky Longmont, Colorado**
*Added fiscal year 2019 **Under construction
TARGETS BRANDS
Folgers® Crisco® Smucker’s® Kibbles ‘n Bits® 95% Rachael Ray® Nutrish®* Pup-Peroni® TARGET: Divert 95 percent of waste from Jif® Café Bustelo® landfills to alternative uses by 2020. Dunkin Donuts® Nature’s Recipe® For more information see page 52. Meow Mix® Milk-Bone® Natural Balance® 15% *Not all brands are listed TARGET: Reduce water use intensity by 15 percent by 2020. For more information see page 53. REPORTABLE SEGMENTS
• U.S. Retail Pet Foods • U.S. Retail Coffee 10% • U.S. Retail Consumer Foods TARGET: Reduce greenhouse gas emissions • International and Away From Home intensity by 10 percent by 2020. For more information see page 54.
100% TARGET: Develop a fully sustainable palm oil supply chain that ensures 100 percent of our direct palm oil purchases are from responsible and certified sustainable sources. Achieved and maintained since 2015.
10% TARGET: Purchase 10 percent of total retail coffee from certified green coffee sources. Achieved and maintained since 2016.
2018 CORPORATE RESPONSIBILITY REPORT 5 HE J. HE 6 ABOUT SMUCKER T Brands quality products that help families products bring togetherquality . to sharememorable mealsandmoments For more 120years, than The J.
M. SMUCKER COMPANY SMUCKER M.
M . Smucker Company offering to consumers beencommitted has ® Learn more about CSR Governance at Smucker
Corporate Governance
The J. M. Smucker Company is a publicly traded company background, and age, in determining whether an whose shares are listed on the New York Stock Exchange individual is qualified to serve as a Director of the (“NYSE”). A diverse, 13-member Board of Directors Company. While the Board does not maintain a formal governs the Company on behalf of our shareholders. policy regarding diversity, it does consider the diversity of the Board when considering Director nominees. The majority of our Directors are independent under the Diversity is important because a variety of points of view rules of the NYSE and the U.S. Securities and Exchange contributes to a more effective decision-making process. Commission (“SEC”). The role of the Board is outlined in Currently, five women sit on our 13-member Board. the Company’s Corporate Governance Guidelines, which are designed to confirm the Board’s independence from Additional information about the Board is included in management and its role of aligning management and the Company’s most recent Proxy Statement, which is Board interests with the interests of our shareholders. available on our Company’s website. The Board has three committees — Audit; Executive Compensation; and Nominating, Governance and ENTERPRISE RISK Corporate Responsibility — all of which operate under Our enterprise risk program is managed within our written charters and all of whose members are Legal department. This program is directed by the independent under the rules of the NYSE and the SEC. Enterprise Risk Committee, which is primarily staffed The Corporate Governance Guidelines and committee by the executive leadership team. The Enterprise Risk charters are available on our Company’s website. Committee helps identify, assess, and prioritize risks that face our Company and ensures that the Board is The Nominating, Governance, and Corporate Responsibility aware and informed of these risks and the actions we Committee of the Board considers a diverse group of are taking to close any gaps in managing them. Risks experiences, characteristics, attributes, and skills, are assessed across all facets of the business, including including diversity in gender, ethnicity, race, cultural strategic, financial, operational, and compliance areas.
2018 CORPORATE RESPONSIBILITY REPORT 7 WORKPLACE CULTURE
8 THE J. M. SMUCKER COMPANY IN THIS SECTION: The strong values on which our Company was founded provide the standards for how we treat one another. We cultivate 10 a workplace where people are treated like family, empowered to reach their full Our Culture potential, and inspired to make a difference. 11 Our Commitment to Each Other
12 Our Basic Beliefs
14 Engagement
16 Careers
18 Employee Well-Being
20 Workplace Environment
21 Ethics
2018 CORPORATE RESPONSIBILITY REPORT 9 HE J. HE 10
WORKPLACE CULTURE T Our Culture
M. SMUCKER COMPANY SMUCKER M. Where every person makes person adifference.Where every ofsharing inajobwellA family-sense done ... AcultureVision... ofappreciation. communicationClear andcollaboration ... A culture that encourages each other to commitment ... Why for level decisionsatGuideposts every ... A culture deeply rooted inourBasic Beliefs ... oursuccess to are instrumental ... that we principles recognize the possibilities, ofunlimited we future the lookto As Our Commitment to Each Other. To ourcustomers. andto ourconsumers It’s aresult ourBasic Beliefs ofliving ... It’s whowe are. It’s because ofwhowe are. acompany. andas —individual A culture ofgrowth Of doing right the A culture ofdotting i’s the andcrossing t’s the ... WHY WE ARE WHO WE ARE we areare. whowe things anddoing things right ... Our Commitment to Each Other
Comments by Paul Smucker written in the 1980s.
“ As Smucker’s experiences growth in the ’80s, we need to ensure that we retain one of Smucker’s most cherished goals — the mutual respect of our fellow employees and an atmosphere that makes people proud to work here. This same commitment can be enlarged to include our customers, suppliers, and shareholders.”
Paul Smucker (1917–1998)
Here are a few basic thoughts, when put into our everyday lives, that can help:
THANK YOU FOR A JOB This small recognition shows that we notice and appreciate WELL DONE the efforts of our fellow employees.
LISTENING WITH YOUR By giving our undivided attention, we are showing that FULL ATTENTION there is nothing more important at that moment than what is being said.
LOOKING FOR THE By seeing the good in others, we are demonstrating our GOOD IN OTHERS respect and confidence in their intentions to do what is right, and we are developing an atmosphere where we can grow and learn.
SENSE OF HUMOR Our work efforts are important — that is how we set the example and take the lead. Our sense of humor is also important, for that is how we maintain our perspective to our work. Humor, not at the expense of others, but as a brief relief from difficult tasks, can make our working atmosphere more pleasant and enjoyable.
By keeping these few thoughts in our minds every day, we can build a bridge of understanding that will nourish the atmosphere in which we work and our mutual respect for each other. I ask for your commitment to these thoughts; I ask for your commitment to each other.
2018 CORPORATE RESPONSIBILITY REPORT 11 HE J. HE 12
WORKPLACE CULTURE T and shareholders. employees,customers, communities, suppliers, consumers, with making anddaily interactions for decision- guideposts bethe thinking, to business Weand principles. ofcurrent interpret interms them, values time-honored onthese presentbase practices operations business Smucker ofsuccessful tradition Today, Smucker we the nameandthe who inherit and followed Company the sound principles, prospered. solditat product, a fairprice, hemadeaquality Because J. forward-looking businessman, honest, In 1897, Smucker the Company formed by was adedicated, for strategy, basis the future andaccomplishments. plans, be foundation to continue andwill throughout ourhistory Growth, These Company’s ofthe and heritage founder. The Basic Beliefs are deeply rooted philosophy inthe that guideboth decisionsanddaily strategic behavior. Our Our Basic Beliefs
M. SMUCKER COMPANY SMUCKER M. Basic Beliefs are Company’s the andprinciples values Basic Beliefs regarding Quality, Ethics, People, and Independence astrong as have served
M . Smucker.
expect ouremployees beresponsible to for not only their Company, the within community, the and ourlives. We thatenvironment encourages responsibility personal We ouremployees are an fairwith andmaintain At Smucker, come first. to continue will quality andperformance. products superior improvements over that time, result will, inconsistently of life and well-being. We lookfor continuously daily markets. Wethat the quality only enhance offerproducts offered inour products highest-quality the respective as beknown The to Smuckercontinue family ofbrands will and ourrelationships. methods, ourmarketing,manufacturing ourpeople, our ourbrands andproducts, to applies Quality our constituents. foundation ofquality, of enduring earning trust the are success builtonaOur reputation andbusiness QUALITY PEOPLE individual jobs but for the Company as a whole. We seek Growing is reaching for that potential through: employees with integrity who are committed to preserving • Innovation leading to the development of new products and enhancing the values and principles inherent in our and new markets; Basic Beliefs and who share a passion for Our Purpose. • Discovery of new capabilities; We firmly believe that: • Acquisition of new brands and development of strategic • Every employee makes a difference. partnerships; and • An inclusive environment and diverse organization • Personal growth and development of our people and strengthens our Company and enables every employee their ideas. to reach their full potential. • The highest-quality people produce the highest-quality Growth also requires that we maintain a global perspective products and services. of the world in which we conduct business and a • The highest business ethics require the highest responsibility for our impact on the cultural, economic, personal ethics. environmental, and social fabric of our global community. • Responsible people produce exceptional results. We are committed to strong, balanced growth within prudent financial parameters. This balanced growth will enable us to meet the evolving needs of our consumers, ETHICS our customers, and our Company and provide a fair return The same strong ethical values on which our Company to our shareholders. We remain independent from was founded provide the standards by which we conduct short-term, external influences because we believe that our business as well as ourselves. These values include when we make decisions with a long-term perspective, honesty, respect, trust, responsibility, and fairness. growth will naturally follow.
We accept nothing less, regardless of the circumstances. Therefore, we maintain the highest standard of ethics INDEPENDENCE with our consumers, customers, employees, suppliers, We have a strong commitment to the stewardship of communities, and shareholders. the Smucker Company and owning our own destiny. We strive to be an example of a company that can achieve success while conducting business in accordance with GROWTH our Basic Beliefs. Along with managing the day-to-day business, we continuously look forward and embrace changes that We believe that the interests of all of our constituents — allow us to recognize the full potential of our Company. consumers, customers, employees, suppliers, communities, and shareholders — are best served by preserving the unique Smucker culture and maintaining our independence.
We strongly believe that our proven track record of creating long-term value has been built on the foundation of our culture and independence.
To us, value means bringing families together, building brands that are among the most trusted with consumers and customers, investing in our communities, developing our people, and ultimately delivering long-term returns to our shareholders.
2018 CORPORATE RESPONSIBILITY REPORT 13 HE J. HE 14
WORKPLACE CULTURE T Unique Culture Strengthening Our and Preserving Engagement inspires for passion andmakes ourbrands, people referring that an environment to engages our employees, priority. aboutourculture, When we we talk are strategic preserving andstrengthening Smucker the culture isa Therefore, results. business foundation ofourlong-term We strongly believe that ourunique culture isthe . and moments familiesto bring together to sharememorable meals treat each other, andultimately why we are helping here: help to our organization definewho we are, how we inherent family permeate to andtraits positive values ourculture throughand preserved generations. The our Company. shaped has ofleadership This consistency generationfoundinghave ofits fifth family leading the andtoday business beenafamily-led isfortunate to has Since ourfounding more 120years than ago, Smucker bementioned. wordand the inevitably will “family” aSmuckerAsk employee ourunique culture describe to
M. SMUCKER COMPANY SMUCKER M. An inclusive anddiverse organization environment Highest quality peopleproduce Highest highest the quality quality strengthens ourCompany strengthens every andenables Highest business ethics require ethics Highest business highest the employee potential; reach to full their Every employeeEvery makes adifference; Responsible people produce OUR REMIND US THAT: products andservices; products personal ethics; and ethics; personal exceptional results. BASIC BELIEFS BASIC
their inputtheir work inthe andideas we doonadaily basis. —listening andconsidering andhistories perspectives, bringing different means ideas, peopletogether with Inclusiveness at perform best. they needto their growth direction, clarity, the encouragement, with and provided ourculture,nurture andensure allemployees are ourCompany, strengthen and incorporate inclusiveness to We of sources solicitemployee to useavariety feedback success. ourCompany’sto long-term remain to foundation continue the will that contributes yet norm, bethe to continue to ourculture andpeople marketplacethe inwhich we compete, we expectthis andtransformational change. ofgrowth period Given In recent years, Smucker beenthrough has asignificant makes adifference. proud work to here —anatmosphere where everyone ENGAGING ALL, INCLUDING EVERYONE As an example, during 2017 we conducted our first our people and for sharing information across any device, employee engagement survey. The survey results have anytime and anywhere. helped us establish a quantifiable baseline to create more targeted action plans, which further enhance our The variety of tools offered to our employees enhances employees’ experience at Smucker. our overall communication practices and is one of the many ways we can bring Our Purpose of helping to Additionally, in early 2018, an Appreciative Inquiry bring families together to share memorable meals and Summit brought together 260 employees representing moments to life while still meeting the needs of the every location and level of the organization. This business, our employees, and our constituents. employee-led gathering was a creative brainstorming session that focused on unleashing the potential of LEADING FROM WITHIN every employee to drive unprecedented results while The value we place on personal interaction is operating in an ever-changing world with industry- underscored in how we approach the relationships leading agility, yet also through a lens of between managers and employees — a significant inclusion, transparency, and high-trust part of every employee’s experience with decision-making across our teams. the Company and a key way we foster The summit wrapped up with engagement. We are a principles-based several key takeaways for organization, which means that consideration, and all who while formal policies have their attended were empowered to place, we empower our people to share their learnings and explore act and to share responsibility for other ideas to build on the everything around us. positive momentum with their respective team members. This begins with an open and transparent manager–employee Also, our Workplace Flexibility program relationship and effective and engaging was recently enhanced, providing flexible employee communication. In the spirit of work arrangements to help employees find the Paul Smucker’s legacy, we encourage our leaders to right balance between work and their personal lives. “manage by walking around” and act as role models of Flexible work arrangements are consistent with our our Basic Beliefs and Our Commitment to Each Other People Basic Belief because we believe in maintaining to nurture a culture that makes our employees proud to an environment of trust that supports flexibility while work here. We demonstrate this philosophy by locating encouraging personal responsibility. In return, we expect the offices of our senior leaders among their respective our employees to be responsible for their individual jobs teams rather than in a C-suite executive office space. and for the Company as a whole. We believe the high degree of trust we place in our employees creates an Creating a strong foundation of mutual respect and trust environment in which responsible people are positioned allows employees to approach managers with both positive to produce exceptional results. This enables a mindset ideas and concerns, if and when they arise. We challenge of openness to when, where, and how employees deliver our managers to know their employees as individuals; on their personal performance expectations. Our openness become invested in their development; and provide ongoing, to alternative work arrangements acknowledges that candid coaching and feedback that enables them to grow. different people can perform and successfully deliver results in different ways. We believe it is in the long-term best interests of our employees and the Company to work together directly. Lastly, by continuing to invest in our Information Services Nevertheless, we have always respected our employees’ capabilities by developing new social platforms and right to be represented by a third party. Today, fewer than utilizing state-of-the-art videoconferencing services, we half of our manufacturing facilities in North America are allow for a deeper connection and collaboration among covered by collective bargaining agreements.
2018 CORPORATE RESPONSIBILITY REPORT 15 HE J. HE 16
WORKPLACE CULTURE T Strong Relationships Building aCareer on are among common theme the all. them strong phases, eachthese of within relationships and challengesto address different opportunities, needs, andonboardingrecruitment retention to anddevelopment andthrough retirement. to Though there are through approachsupported ofanemployee’s aholistic phase focused onevery Smucker: career with from We have along-held philosophy ofhiring job. peoplefor This acareer —not philosophy anindividual is just Careers
M. SMUCKER COMPANY SMUCKER M. • • • well-proven channels: We through recruittalent multiple
for full-time positions. for full-time are encouragedcorporate functions, apply to and 100 across allplants than more number Int ourdoor. to talent andfaculty, bring awealth of students with we work across buildrelationships campuses to L mightthan befound through other channels. Smucker’s alignedbetter with unique culture apoolofcandidates inherently provide to candidates for which tends availablepositions, Smucker employees recommend to qualified Our Em ocal and regional partner universities, where universities, andregional partner ocal erns and co-op students, whoannually andco-op students, erns ployee Referral enables Program IDENTIFYING IDENTIFYING TALENT
• • • our Companythrough:culture and receives to introduction aconsistent employee New Hire ensures thatOrientation each new before through they even step door. the Our We help employees prepare for day first their
sector, Smucker andlocations. brands, consumer packaged ofthe goods an overview E A summar A c -learning modules on our core strategy and onourcore-learning modules strategy ompany overview andtour ompany overview y ofresources, andbenefits policies, WELCOMING TALENT
DEVELOPING TALENT
RETAINING TALENT
Professional development reflects ourGrowth Basic We’re proud of an employee retention rate that Belief of personal growth and development of our is well above the industry average and believe it people and their ideas. Programs develop our reflects our organization’s unique encouragement employees across multiple disciplines and immerse of employees to explore different functions across them in cross-functional environments, including: the Company. We facilitate this through: • Our Company: Why We Are Who We Are teaches • A promote-from-within mindset that is focused all new employees how to be successful within on career mobility; Smucker and how individual work relates to • Internal posting of available positions so that overall Company strategic initiatives. all employees have the ability to apply; and • Discovering the Art of Leadership introduces • Empowered employees who can take the the fundamentals of the Smucker approach to initiative to explore and build the necessary managing people, focusing on the importance relationships to learn about all functions and of leadership, Smucker People Manager options that interest them. processes, and key leadership concepts. • Mastering the Art of Leadership helps managers understand how to set the “climate” for their teams and focuses on more advanced leadership concepts in order to provide a deeper understanding of the leader role.
2018 CORPORATE RESPONSIBILITY REPORT 17 HE J. HE 18
WORKPLACE CULTURE T offeredto ouremployees.as options or provided involvement opportunities and community professional development, alternatives, workplace flexibility welfare retirement work benefits, benefits, environment, The compensation, encompasses program the and health emotional well-being ofourmore 7,000 than employees. Total financial, and physical, the Rewards supports approach well-being to andinourTotal Rewards program. This performance. philosophy isreflected inourholistic business performing at better translates into best their Happy andhealthy employeesnatural sense: business Not right the only isthis thing do, to butitalsomakes andwell-being ofhealth environment for employees. We believe ofinvesting inanoverall value inthe forCaring ouremployees ourculture. with isconsistent at —both atperform best their work andat home. Well-being peopleto itenables because is important somethingmeans it different and eachfor individual. happier living. Itisapath shapedby dailyand choices, It’s away oflife that more to leads balanced, healthier, well-beingPersonal isaboutmore health. physical than aWhole as Lives Employees’Supporting Well-Being Employee
M. SMUCKER COMPANY SMUCKER M. employees. 7,000 more than well-being of our and emotional physical,the financial, program supports The Total Rewards in the lives ofouremployees.in the our culture’s ofbalanceandrenewal inherent support salary, off, paidtime as andfinancialincentives, as well rewards, form the ofactual take These careers. such as employeessupport through lives and oftheir all stages thatinterconnected. We ofoptions variety offera emotional, and financial well-being —allofwhich are improve families and their physical, ormaintain We have developed Total Rewards help to employees what ourculture enrich andresult success. inmutual of family, relationships, are ultimately andcommunity flexibility, professional development,the support and areessential, work workplace environment, benefits ourbeliefreflects that while competitive pay and reinforcing Smucker the culture. It’s anapproach that Total Rewards inbuilding and part plays animportant • • • • • Totalincorporated into Rewards: Several coreacross are our businesses. philosophies beimplemented andfairmanner can inaconsistent the longand, importantly,for term financially sustainable competitive marketplace. inthe Itisanapproach that is and reward ouremployees, andensure that we remain motivate This framework talent, top attract usto enables
C A shar and inspires mindfulness, hope, andcompassion and inspires mindfulness, An en and enjoy away time from work for rest andrenewal alternatives —enabling employees live to OurPurpose andworkplace flexibility culture oftrust supportive throughprofessional needsandcommitments a A and belief employee that every makes adifference —recognizing andreinforcingindividuals spirit the of Company andperformance contributions andthe P overthe long term financially sustainable other large consumer packaged goods companies and Company for financial, andemotional physical, well-being erformance rewardederformance ofthe onboth success the ompensation and benefits thatompensation are andbenefits competitive with bility for employeesbility and personal their integrate to vironment of resonant leadership that nurtures ofresonant that leadership vironment nurtures ed responsibility between employeesed responsibility andthe
EMPLOYEE SAFETY AND SECURITY
We continue to focus on the health of our people and the safety of our workplace, with an overall Company goal to reduce our total incident rate and our incident losses to zero. We believe employee health and safety are everyone’s responsibility, and all of our employees have an opportunity to contribute to our goals. We continue to deliver best-in-class performance for employee safety across the Company.
2018 CORPORATE RESPONSIBILITY REPORT 19 HE J. HE 20
WORKPLACE CULTURE T Workplace Environment Workplace options facilitate this. options facilitate where peopleare proud gather, to work, from andlearn oneanother. Arange andflexible ofamenities work among employees.interaction asenseofcommunity designed Ourcorporate campus provide to isintentionally The create goal isto welcoming best. awarm, dotheir to that opencommunication and environment facilitates A motivating isoneinwhich ouremployees environment are encouraged work to inamannerthat them enables How We DoOurBest Working Where and
M. SMUCKER COMPANY SMUCKER M. at several locations support On-site health andwellness health On-site centers and fitness centers centers andfitness centers communication, enhance workplace flexibility, and resources foster effective strengthen relationshipsstrengthen FITNESS CENTER among spread teams employee well-being. telecommunication TECHNOLOGY around globe. the capabilities and capabilities Investments in Investments We ensure adequate room provided forprovided communal ON-SITE DINING OFFICEAREAS for space. personal meals and breaks. meals Dining areas are A child development center in Orrville provides on-site on-site provides in Orrville collaboration, relationship children aged sixweeks to building, andinteraction. Shared encourage spaces child care for employees’ OPEN AREAS prekindergarten. CHILD CARE Ethics Doing Things Right
As one of our Basic Beliefs, Ethics is the foundation specific policies that amplify the principles highlighted of successful, sustained business relationships with in our Code. Using a risk-based approach, we provide our consumers, customers, employees, suppliers, training to employees whose roles are relevant to communities, and shareholders. these policies.
Our Code of Business Conduct and Ethics is an extension At Smucker, we define ethics as a set of moral values of our long-standing principles and values. It is a resource that guide us in knowing the right thing to do and doing that guides daily conduct in the workplace. The Code things right. Compliance is following all applicable laws outlines our expectations across numerous areas and and Company policies. It is important for employees to situations in which ethical choices might be necessary, understand the difference, especially in the complex such as creating a positive work environment; engaging business environment in which we operate. During the with customers, suppliers, and competitors; handling past three years, we have strengthened our compliance confidential information; avoiding conflicts of interest; program to better support our employees in these areas. avoiding the exchange of gifts, meals, and entertainment; avoiding bribery and corruption; and avoiding insider Our Ethics and Compliance team is centralized within trading. Recently revised and refreshed in early 2018, our Legal department to create a more robust presence several important enhancements were made, including throughout the organization. The Ethics and Compliance adding provisions on workplace safety and health, team is focused on: workplace violence, advertising and product labeling, • Helping Our Employees by providing tools and human and workplace rights, international trade, and resources and encouraging a safe environment; environmental protection and sustainability. • Protecting Our Company by preventing criminal and unethical conduct, identifying operational efficiencies, Our Code of Conduct applies to our employees, officers, and mitigating risk; and Directors, and contingent workers, all of whom are required to receive, review, understand, acknowledge, • Maintaining the Respect and Trust of Our by demonstrating commitment to and adhere to the Code. Training is provided on the Constituents integrity and protecting our reputation and brand. principles set forth in the Code. In addition, we have
2018 CORPORATE RESPONSIBILITY REPORT 21 MARKETPLACE
22 THE J. M. SMUCKER COMPANY We have a deep understanding of consumer needs, a pulse on emerging trends, and an obsession with delighting our consumers. In a digitally powered, omnichannel world, this means delivering meaningful products and experiences, inspired design, and relevant communication at every touch point. This consumer centricity powers the growth of IN THIS SECTION: our portfolio of iconic brands and high- growth emerging brands, and guides innovation and acquisition of new brands. 24 Our Vision and Purpose
26 Choice and Innovation
28 Quality and Food Safety
29 Labeling and Product Information
30 Responsible Marketing and Engagement
2018 CORPORATE RESPONSIBILITY REPORT 23 HE J. HE 24
MARKETPLACE T stronger our society will betomorrow.stronger will our society strongerspecial. And the bondsare these today, the together, we help day can make more every alittle people together, well closer as pets peopleandtheir as bondsthat the bring By nurturing andmoments. meals through pets their bonds peoplehave memorable with and the friendships, we help families, can strengthen We pets. ofpeopleandtheir besaid believe can The same each other, with time spend lives become. their richer the happy, fulfillinglife.the more family andfriends Infact, ahealthy, to —it’s way time spend to vital a pleasant we peopleandpets love the Being isn’t together with just haveaspire to onsociety. why wearticulate impact are andthe we inbusiness what as weimportant aimsto do. OurPurpose Weperformance. believe how we dothings isas We have always by more definedsuccess than financial and moments. to sharememorable meals Helping families to bring together and Purpose Our Vision
M. SMUCKER COMPANY SMUCKER M. special to us. us. to special most those with and create bonds lasting traditions, meaningful relationships, build each other, nurture that we with connect is through times these lives. It oftheir stages celebrations, feed andto throughout pets all family friends, shared with of everyday snacks meals, part as products oftrusted brands andportfolio We are honored that choose consumers ouriconic pets. their that high-quality feed products peopleand andnurture our employees day every provide to —peoplewhostrive Achieving simply,Quite together. better life tastes iswhatOur Purpose motivates andinspires WITH EMERGING, ON-TREND LEADINGBRANDS BALANCED GROWTH. BALANCED BRANDS TO DRIVE THAT COMBINES A PORTFOLIO #1
Our Vision: Engage, delight, and inspire consumers through trusted food and beverage brands that bring joy throughout their lives.
2018 CORPORATE RESPONSIBILITY REPORT 25 HE J. HE 26
MARKETPLACE T Choice andInnovation and snack options for their dogs and cats. Toand snack options for andcats. dogs their meet preferences, pet are parents seeking food specialized afew.name just Similar trends to inconsumer food Kibbles includes Rachael Ray, Meow Nutrish Mix,Milk-Bone, households that include afamily pet. Ourportfolio ofU.S. two-thirds the broadens with ourconnection emotionalthe bondwe and consumers create with deepen usto Our pet enables foods business andsnacks family. ofthe members —cherished pets but alsotheir Our focus onproviding choice includes not only people certified. are facilities non-GMO nine ofourmanufacturing ourportfolio,within and offerings number ofnon-GMO the past year, offerings. In grain we havethe increased sugar-free and whole- options; gluten-free alternatives; reduced-sugar and products; andnon-GMO organic, flavorsmultiple andproduct options,as natural, such diverse needsandpreferences. includes This variety to meet consumers’ ofproducts variety offera our goal isto ourfamilyWithin ofconsumer food andbeverage brands, for pets. andtheir themselves, families, their food choices — aboutmaking wise educate consumers we continually have to America, North aresponsibility beverage and pet foodsin andpetproducts snacks aleading marketerAs andmanufacturer offood and
M. SMUCKER COMPANY SMUCKER M.
‘n , Bits Nature’s Recipe, andNatural Balance , to
ongoing focus oninnovation. showcasing ourCompany’sfurther and heritage while andother constituents ourcustomers with platform collaborate to andexpand ourrelationships The Smuckerand customers. Innovation isakey Center ourconsumers serve execution better to and in-store andpreferences, shopperbehaviors into retail solutions, help to usgain insights learning technology hands-on features presentations and headquarters, interactive facility, locatedat ourcorporate This state-of-the-art and buildonourstrong relationships. customer content, forward-thinking provide and opportunities, our Smucker generate Innovation to Center new ideas atWe retail partners collaborate to alsocontinue with wellness, across allofourproduct andvalue categories. convenience, meetto diverse their needsfor taste, choices additional with consumers innovation provide to We inproduct make to continue significant investments Farmer’s Medley and cat food We choices. dog alsointroduced Milk-Bone andhigh-protein grain-free, wholegrain, Diet (“LID”), preferences, Ingredient Limited of wevariety offera these of fillers, corn, artificial flavors, andpreservatives. artificial corn, of fillers, free ingredients, meatUSA-sourced andeasy-to-recognize PRODUCT INNOVATION ® — a line of dog treats made with treatsmadewith —alineofdog How We Align Innovation and Consumer Trends Demographic, lifestyle, and economic factors all play a role in influencing consumer food trends. Here’s how we’re innovating across our portfolio to meet the specific preferences of our consumers.
NATURAL BALANCE LID HIGH-PROTEIN FORMULA MEOW MIX BISTRO RECIPE Free from grains, potatoes, and fillers, these This new line features tasty ingredients formulas feature one animal protein source baked into crunchy kibble to bring out and two primary carbohydrate sources, delicious, natural flavors for cats. helping pets avoid ingredients commonly associated with food sensitivities.
NUTRITIOUS PREMIUMIZATION OPTIONS
1850TM AUTHENTIC Our new BRANDS SNACKING premium coffee platform, inspired SAHALE by Folgers SNACKS® heritage, features ORGANIC CONVENIENCE Carefully crafted fire-roasted and OFFERINGS nut mixes are steel-cut Arabica free of artificial beans for a bold, flavors and smooth flavor. preservatives, and are non-GMO Project Verified, and Certified Gluten-Free.
R.W. KNUDSEN FAMILY® JIF POWER UPSTM ORGANIC JUICE These grab-and-go snacks contain Nearly half of these juices feature 6 grams of protein per serving and USDA organic, Non-GMO Project™ are perfect for those looking for a Verified ingredients. delicious bite to eat on the run.
2018 CORPORATE RESPONSIBILITY REPORT 27 HE J. HE 28
MARKETPLACE T Food Safety and Quality are currently GFSI-certified. andfood AllSmucker standards. safety quality sites meetwhose auditing GFSI’s practices rigorous global or“auditing numberoforganizations, limited bodies,” a certified has goods GFSI retailers andmanufacturers. anindependentglobalForum, network for consumer managed by The Consumer Goods Initiative (“GFSI”) GlobalFoodWe inthe Safety andparticipate support across country. the consultants and third-party organizations, technical universities, trainingsafety with Additionally, many ofouremployees are engaged infood programs. assurance quality relevant andexternal internal all within that improvement identifies opportunities approach promotes afocused process andcontinuous of ourCompany’s program. This assurance quality are andsuppliersites akey sites, part manufacturing contract sites, manufacturing ofourinternal Audits At Smucker, come first. to continues quality all product requirements regulatory are met orexceeded. well ensuring that and as specifications product quality as incidents, zeroachieving product orquality defects we initiatives everything do. focusinto Ourquality on Excellence. We mindset andculture embedourquality that of iscomposed orCenters system of12Pillars, work andintegrated aninternal Pillars, (“SQMS”) System Beliefs Management butalsooneofourSmucker Quality isnotthat itisfitting only oneofourBasicSo Quality products. highest-quality the remains with associated of quality. Five generations later, Smucker the name crock guarantee hispersonal bore as seal ahand-signed from wagon, back the ofhishorse-drawn eachbutter When Jerome Monroe Smucker selling began apple
M. SMUCKER COMPANY SMUCKER M. to implement food plans. safety plants’ their training. This training equips key employees (“PCQI”) required Preventive Control Qualified Individual have undergone the FSMA personnel whosupport Additionally, managers andother allquality plant plants. all ofourmanufacturing implemented allrequired law ofthe provisions for a safe food supply for We allconsumers. have ensure to risk-basedon prevention, priorities with new The legislation amajor responsibilities. has focus food many companies which vests with Act (“FSMA”), Food the Modernization The Safety Company supports comes first. comes At Smucker, quality we everything do.into mindset and culture We embedourquality
Labeling and Product Information
The labeling of our products is an important element of in the food industry, through The Consumer Goods our consumer education, brand-building, and marketing Forum, to “provide transparent, fact-based information efforts. Transparency in labeling allows our consumers that will help consumers and shoppers make informed to make the most informed purchasing decisions based product choices.” on what is best for their families. We also continue our commitment to federal This commitment to transparency aligns with new bioengineered food labeling regulations. These regulatory changes in the way the Nutrition Facts label regulations will require labeling of foods that are discloses information. We support the new federal bioengineered, or that include bioengineered requirements for modernizing nutritional labeling ingredients. Disclosure must be through text, a symbol, information to reflect current and relevant nutrition or a scannable code, such as a SmartLabel™ QR code. science. The Nutrition Facts label will soon include both Once the government has fully developed the language the amount and the percentage of the Daily Value of and guidelines for labeling, Smucker will implement vitamin D, potassium, and added sugars. These changes these requirements across all products that contain also support a commitment we have made with others bioengineered ingredients.
IMPLEMENTING SMART LABELS
The SmartLabel™ program leverages Xiomara Beltrán de Cardona, of Jujutla, El Salvador, has worked hard to improve digital technology and smart devices the productivity of her 2.8-hectare coffee farm with support from BCHP. She to provide consumers with another joined the Project in 2015, and has not missed a single training module since, way to easily access detailed product learning how to improve her plot and, little by little, to increase her production. information, such as nutrition, After producing very little in previous years due to a coffee leaf rust outbreak, ingredients, descriptions, allergens, she renovated her plot during the 2016-2017 cycle and harvested 500 pounds certifications, and information about from only 0.35 hectares of productive plants. Xiomara now expects to harvest bioengineered ingredients, among 800 pounds of green coffee from the 0.35 hectares of productive plants in the many other product attributes. Our 2017-2018 harvest and much more in subsequent years since the remainder implementation of SmartLabel™ of her renovated farm is still only two years old. “The project training taught began in late 2017 through the me things I did not know ... I have changed the way I see my coffee plantation, addition of information on our brand I appreciate it and so does my husband and my children,” says Xiomara, who websites and by adding Quick hired two temporary workers to help plant and fertilize her farm this year. Response (“QR”) codes on some of our products.
For more information about SmartLabel™, visit Smartlabel.org.
2018 CORPORATE RESPONSIBILITY REPORT 29 HE J. HE 30
MARKETPLACE T and Engagement Responsible Marketing placements on sites based onconsumer preferences. based on sites placements advertising, product determine which algorithms to uses This includes programmaticenvironment. digital theonline to extend upon inanoffline environment highsame standards thatThe we have always insisted expenditures are environment. adigital directed to more as ofourmarketingprinciples andpromotion We guidelines stringent and same the to are committed audience. of the where nomore children one-quarter than constitute programming to placement limited andmedia outlets advertisement with adults, is directed to messaging our and packaging may entire the family, to appeal ageunder the Although of18. marketing programs audience. Ourguidelines prohibit marketing children to regarding andtarget content, placement, advertising marketing guidelines inplace andadvertising, with responsible to commitment Smucker along-standing has
M. SMUCKER COMPANY SMUCKER M.
more relevant ourconsumers. to We andother make to insights our messaging usethese resource gather to consumer andfeedback. insights a as alsoserve across interactions ourbrands. These through nearly andsocialmediaproperties 100digital andengage we to ourconsumers tools, listen with Usingat acombination ourheadquarters. ofmultimedia weconsumers, have MediaCommand aSocial Center our with dialogue acontinuous we maintain lookto evolving dynamic offood the to an experience. As as channelsof ourconsumer these outreach play because bekey to andsocialmediacontinue Digital components aboutourentire ofproducts. portfolio questions are well-equipped information provide to andanswer receiveat extensive training ourheadquarters, sothey representatives, These email interaction. who are based our Company through andconsumers daily phoneand linkbetween animportant as representatives whoserve with Consumer isstaffed Communications Center helpto guideourproduct development initiatives. Our research consumer preferences into andneedsinorder a priority. Ourmarketing include frequent practices We make openandongoing ourconsumers with dialogue CONNECTING WITH CONSUMERS
Communicating With Consumers by the Numbers
The Consumer Communications team handles approximately 350,000 350,000 consumer contacts annually across phone, email, web chat, and social media.
On average, representatives are able to effectively resolve 5 consumer phone calls in MINUTES roughly 5 minutes.
The top three brands consumers TOP contact us about are Smucker’s, 3 Folgers, and Jif.
Leveraging the Consumer Communications Command Center, the team tracks brand-specific social conversations and responds 10,000 to roughly 10,000 consumers each year on social media.
Consumer contacts often lead to online sales.
2018 CORPORATE RESPONSIBILITY REPORT 31 RESPONSIBLE SOURCING
32 THE J. M. SMUCKER COMPANY IN THIS SECTION:
34 Supplier Expectations Operating responsibly applies not only to how we run our own business but also to the actions of those who grow our raw ingredients, from 36 strawberries and peanuts to quinoa and Green Coffee coffee beans. Smucker has a comprehensive strategy for ensuring our food ingredients are safely, sustainably, and ethically produced. 40 Palm Oil
41 Seafood
41 Black Pepper
42 Quinoa
43 Specialty Corn
44 Fruit
45 Peanuts
2018 CORPORATE RESPONSIBILITY REPORT 33 HE J. HE 34
RESPONSIBLE SOURCING T and enhance our responsible sourcing activities. We enhance ourresponsible sourcing will activities. and Responsible Sourcing inorder consolidate to function creation the ofthe with corporate responsibility to commitment inits step afurther Smucker istaking for that environment the we ourown apply to business. high andregard ethics, standards ofhonesty, fairness, same the with business its conduct supplierto every across oursupply chain. We risks environmental expect inorder socialand minimize to and sustainably operate must Suppliers transparently, responsibly, delivery, andlocation. our operational excellence standards for quality, ourBasic Beliefs; andmeet andsupport and ethically are aligned culturally ourbusiness; with fit a strategic Toand customers. end, we this seek that suppliers have ofourconsumers expectations andperformance quality given meet they directly to product impact the ourability Relationships important, are suppliers particularly with acore competency for allconstituents Smucker.with We ofourrelationships andquality strength consider the Supplier Expectations
M. SMUCKER COMPANY SMUCKER M. green coffee sources coffee from certified retailof ourtotal purchase 10percent to Continue certified sustainable sources sustainable certified are from responsible and direct palmoilpurchases ensures 100percent ofour palm oilsupply chain that sustainable afully Maintain SUPPLY CHAIN COMMITMENTS
labor, orindentured orbondedlabor, participate orto agree contractually notto employ to children, prison The Code requires onhumanrights. directstance suppliers Our GlobalSupplierCodeemphasizes ourstrong ofConduct • • • • isto: Program Smucker ofthe The mission Responsible Sourcing yearend ofcalendar 2018. roll out ourglobal Responsible Sourcing by Program the
sourcing standards andexpectations. sothatour suppliers meet they can ourresponsible and proactive supply chain management risk systems; for byrisk implementing ourcustomers and effective Pr communities; intheir impacts management ofsocial, andenvironmental ethical, Em standards; laws andinaccordanceethically local and with Ensur Cr otect our business andbrand reputation, andmitigate ourbusiness otect eate competitive for by building advantage capacity power workers the the ofoursupply chain with e that allSmucker are produced products products consumer foods by 2020for our eggs cage-free Source 100percent in human trafficking. We also expect our suppliers to To this end, we are committed to supporting a maintain and enforce a safe working environment for supply chain that is always mindful of its Economic, their employees and one that meets or exceeds all Environmental, and Social impacts, and approach applicable industry and government safety standards. sourcing in a manner that is consistent with our Basic Beliefs of Quality, People, Ethics, Growth, and As part of our supply chain assessment, in addition to Independence. We strive to source our products with quality audits we perform scheduled social compliance a comprehensive view that accommodates both audits and look for any evidence of human rights responsible sourcing practices and marketplace violations in targeted supplier facilities. We continually business dynamics. evaluate these risks as our Company grows, and conduct training programs for supply chain personnel on how HUMAN RIGHTS to manage identified risks that could threaten our As part of our commitment to eliminate human rights commitment to our Basic Beliefs. issues in our supply chain, we are active in The Consumer Goods Forum’s social sustainability efforts, which focus SUSTAINING FARMERS on eradicating forced labor from the supply chains of As a leading manufacturer and marketer of food and their members. We have committed to supporting the beverage products, we purchase a wide array of raw following Priority Industry Principles: ingredients to manufacture our products. Where possible, • Every worker should have freedom of movement. we seek to source sustainably produced inputs and • No worker should pay for a job. invest in sustainable agriculture projects and initiatives, not only to help us maintain a reliable supply of these • No worker should be indebted or coerced to work. raw ingredients, but also to support the farmers who produce them and the environment in which they As a member organization, Smucker seeks to apply are grown. these principles across our supply chain to all workers, regardless of employment status, location, contractual arrangements, or role.
2018 CORPORATE RESPONSIBILITY REPORT 35 HE J. HE 36
RESPONSIBLE SOURCING T on page 37. our impact throughout fiveas outlined past the years, We are Efforts. proud of Environmental Integrated and around Responsible Sourcing, SmallholderSupport, built strategy three-pronged green coffee sustainability the nation.of coffee in Since 2012, we have a pursued Rainforest AllianceandUTZ. green coffeesources,coffee fromincluding certified Since 2016,we have sourced 10percent retail ofourtotal openandtransparent dialogue.each year maintain to coffee-producing to countries visits site conducts team this Inaddition, ofourefforts. integrity ensuring the to supplierrelationships, whichlong-standing are invaluable developed andhas experience many years ofindustry Vietnam, and has the in offices Brazil, U.S., with team, procedures. andsafety practices, Ourcoffee-trading environmental humanrights, to address laws pertaining Agreement andOperatingour Master Guidelines, which coffee suppliers, for example, sign must andabide by Our andcontrols ensureprocesses to commitment. this a responsible manner, and we have extensive internal purchasing to Smucker iscommitted green coffee in Pilon , Dunkin’our Folgers , Café Donuts Bustelo, andCafé amarketthrough As U.S.category inthe leader coffee Green Coffee RESPONSIBLE COFFEE SOURCING
M. SMUCKER COMPANY SMUCKER M. K-Cup available inbags and Alliance Certified™ coffee. Alliance Certified™ 30 percent Rainforest Dunkin’ Dark Our Dunkin’ Donuts ® brands, we brands, areannualpurchasers largest oneofthe ® SPOTLIGHT pods, contains contains pods, PRODUCT ® coffee, environment and promote good agricultural practices. andpromote practices. environment good agricultural negative potential analyze the place to onthe impacts in MitigationBCHP Plan putanEnvironmental (“EMP”) America, of Central regions impose coffee-growing on the Given challenges the that climate change to continues of whomare women. registering nearly 9,445 26percent participating farmers, by engaging6,000 smallholdercoffee farmers and To date, reach goal to exceeded has program the its project enabledfaster-than-expected results. America TechnoServe’s incoffee farming and Central expertise planting financing materials. access to and quality well as intensive trainingprovided farmers support to as project Inorder the dothis, practices. to agricultural more 25 percent than through adoption ofgood the by sales andfarm productivity increase their farmers The project goal ofthis help isto smallholdercoffee Salvador. inNicaraguaEl and specifically America, Central in rust leaf of coffee help effects mitigate detrimental the PIMCO andthe Foundation, to Development (“USAID”), TechnoServe, United the for Agency States International with apartnership (“BCHP”), Project Coffee Harvest Currently, we are andfinal the Better fourth of inthe year 35percent ofwhom 80,000 beneficiaries, were women. assisting in10 countries, coffee projects had 17active In2017, show to results. demonstration plots TechnoServe approach, along ahands-on information with with learning model forthat coffee farmers incorporates cycle ofpoverty. TechnoServe developed has anadult developingthe that world break buildbusinesses to the nonprofitrespected to empowering dedicated peoplein isTechnoServe, organizations One ofthose awell- growing regions. improvements andsystematic incoffee address holistic leading nonprofit with to better partner organizations growers linked. For are reason, this we intrinsically small these of viability the economiccoffee supply and Asustainable significant. isoften practices business improve to and where agricultural opportunity the onsmallparcelsfarmers oflandindeveloping countries, Much world’s ofthe grown coffee supply is by individual SMALLHOLDER SUPPORT IN CENTRAL AMERICA CENTRAL IN SUPPORT SMALLHOLDER SMUCKER GREEN COFFEE SUSTAINABILITY STRATEGY IMPACT 2012–2017
CERTIFIED PURCHASES PROJECTS SUPPORTED IN
10% El Salvador Indonesia Goal ACHIEVED Honduras Nicaragua
PARTNERSHIPS
COMBINED PROJECT IMPACT
16,500 19,950 $3.6M 39% Smallholder farmer Hectares of Loans Average beneficiaries land impacted distributed to productivity 991 farmers improvement
ISSUES ADDRESSED
Capacity Climate Change Coffee Farm Building Adaptation Rust Management
Farmer Financing Gender Training Equality
2018 CORPORATE RESPONSIBILITY REPORT 37 HE J. HE 38
RESPONSIBLE SOURCING T • • • • BCHP accomplishmentsAdditional include: growingof coffee this in region. improve livelihoods coffee farmers’ the success and to ameans as practices agricultural using sustainable to commitment BCHP’s demonstrate the to continues received Management Pest Integrated training. This work training, Agriculture and7,387received Climate-Smart evaluation. Additionally,2016 midterm all9,445 farmers 70 percent recommendations ofthe inthe provided 93percentcomplied key ofthese and indicators with BCHP the determined monthlongthis assessment Nicaragua. Using both qualitative andquantitative data, EMP, outlinedinthe measures and Salvador inEl mitigation 30key compliance environmental with its In 2017, assess to BCHP hired the consultant an external
representing 35,000 high-quality coffee plantlets. operators inNicaragua,by four nursery certification A and and exporters; NGOs sector atcoffee trainers community P F and30percent inNicaragua; Salvador in El Incr
M. SMUCKER COMPANY SMUCKER M. IMPROVING PRODUCTIVITY AND LIVELIHOODS IMPROVING PRODUCTIVITY acilitated $3.6 million in loans to 991farmers; $3.6 millioninloansto acilitated ost-project jobplacementfor 65percent of chievement of Good Agricultural Practices (“GAP”) (“GAP”) Practices chievement Agricultural ofGood eased smallholderyieldseased by 34percent two temporary workers year. this temporary two herfarm help to plantandfertilize appreciate itandsodomyI husbandandmy children,” says Xiomara, whohired me things Idid not know ... Ihave changed way the Iseemy coffee plantation. years onlyof herrenovated two old. project “The isstill farm training taught andmuch more insubsequent years, remainder sincethe 2017–2018harvest the during800 poundsofgreen coffee fromsame numberofproductive the plants harvest to Xiomara nowfrom ofproductiveexpects plants. only 0.35 hectares 500poundsshe renovated herplot 2016-2017cycle during the andharvested outbreak,rust years a coffee leaf dueto inprevious producing little After very training since, learning how improve to herplot andincrease herproduction. She BCHP in 2015, joined the not a single and has missed Project (“BCHP”). Harvest from Coffee the Better support with coffee farm ofher2.8-hectare productivity the Xiomara Beltrán deCardona ofJujutla, Salvador, El worked has hard improve to
and farmer organization support. organization and farmer expertise technical by providing with farmers them coffee yields by 50 percent to for up 5,000 participating Thefarming project’s communities. increase goal isto in conditions social,economic, andenvironmental by extremely low yieldsresult indifficult that often is asignificant producer of coffee butis challenged Sumatra. regions ofsouthern Indonesia mountain the outreach smallholdercoffee producers project in with around world. the We’ve beencollaborating onadirect smallholdercoffee farmers with andprojects programs economic development sustainable implements development inGermanythat based organization nonprofit aprivate Foundation”), (“Neumann Stiftung Hanns the Neumann R. with ground inIndonesia the For more four than years, we have beenworking on 24,000 coffee farmers during the next during five24,000 coffee farmers years. BCHP, another assist to isestimated program andthe ofwork by the conducted type same the continues PLUS Project during 2017. inHonduras PLUS largely MAS MAS Agriculture, andSmucker officially launched the ahead,TechnoServe,Looking of U.S. the Department SMALLHOLDER SUPPORT IN INDONESIA IN SUPPORT SMALLHOLDER
Due to the project’s success and visibility, registration has In 2017, WCR published Global Coffee Conservation now reached more than 7,000 farmers, many of whom live Strategy for Coffee Genetic Resources, a comprehensive in remote areas with limited access to extension services strategy to conserve the future of coffee with The or best practices. Active training continues with these Crop Trust. This work assessed the security of the farmers, who are organized into 309 farmer groups, and current conservation system by identifying its gaps, has increased significantly as project technicians have resource requirements, constraints, and improvement equipped farmer trainers and government extension opportunities. The recommended strategy includes officers to lead sessions on their own. With more than six high-priority actions to transition our current system 84,000 training contacts accumulated since 2014, this toward a model that fosters global coffee conservation. training takes an intensive, farmer-centric approach in which the participants are active in determining WCR also announced in 2017 that it is building the what type of training they need. Over the course of world’s largest network of on-farm coffee trials, called this project, farmers have increased yields by 50 percent. the Global Coffee Monitoring Program. This 20-country This productivity is significantly higher than the program will use 500,000 coffee trees on 1,100 sites to regional average. collect a global data set on agricultural practices to assess farmer training protocols. As WCR’s largest project to The significant damage caused by El Niño in 2015 date, it is designed to test how different combinations and La Niña in 2016 has increased farmers’ interest of varieties and climate-smart agricultural interventions in understanding how their farms can be more resilient affect yield, coffee quality, and farmer profitability. The to these severe climatic events. During 2017, farmers trials will provide farmers with improved varieties and adopted new practices at a rate of 57 percent, compared farming approaches, acting as a key mechanism for to 15 percent in 2016. Program participants have also disseminating new technologies and knowledge to learned the importance of healthy, nutritious soil as a producers worldwide. The program is expected to means to greater productivity, and have started to reach 25,000 farmers. incorporate Integrated Farm Management techniques, such as shade trees, onto their farms. To ensure the world’s best varieties are available to the largest possible number of coffee producers, WCR continues ENVIRONMENTAL EFFORTS its global varietal exchange in the International Multilocation AND INDUSTRY RESEARCH Variety Trial. Currently, 14 countries have received the As one of the world’s leading coffee roasters, Smucker 31 top-performing varieties in the world, where they are is committed to ensuring that coffee production around planted, grown, and evaluated in standardized research the world can keep pace with rising demand while plots. Each country monitors how the different varieties protecting natural resources. We partner with World perform under local conditions so they can select the Coffee Research (“WCR”), which aims to increase the best-performing varieties and make them available to availability of quality coffee in a sustainable manner coffee farmers in their country. During 2017, 19 countries through research and development. WCR does vital participating in the trial saw their first vegetative work to address the challenges facing coffee in the growth measurements, a significant achievement for 21st century, including preparing for climate change, the future of coffee in these countries. This, and other increasing yields, improving farmer profitability, WCR research, continues to have a positive impact on protecting and increasing quality, and controlling the coffee supply chain, from agriculture and processing disease and pests. to exporting, roasting, marketing, and consumption.
2018 CORPORATE RESPONSIBILITY REPORT 39 HE J. HE 40
RESPONSIBLE SOURCING T Palm Oil roughly plantation. 30percent the to traceable At year ofcalendar ourpurchases 2018, arethe start grown, thata commitment we achieve hopeto by 2020. onwhich plantation theypalm oilpurchases were the to we work to continue toward tracing 100percent ofour from Malaysia. mill, While 100percent the to istraceable 82 percent ofwhich from comes and17percent Indonesia sources sustainable — from responsible andcertified Today, 100percent palmoilwe ofthe purchase isdirectly handling protocols. training, RSPO record-keeping, additional to andphysical are facilities subjectThese supply chain-certified. RSPO Additionally, are sevenfacilities now ofourmanufacturing palmoilpurchases. PalmOil(“RSPO”)-certified Sustainable have since2012whenwe on madeourfirst Roundtable palmoilsupply chain, we andtraceable as sustainable oil supply chain, afully we maintaining to are committed involved palm inthe risks socialandenvironmental the from petbusiness, food icecream to toppings. Dueto ingredient found inarange across our ofproducts purchasing, of ourcommodity itisaversatile stabilizing Though arelatively palm oilrepresents smallpercentage
M. SMUCKER COMPANY SMUCKER M. SMUCKER PALM OIL PURCHASING PRINCIPLES, POLICIES, AND PROCEDURES • • • Prohibit useofforced the andchild laborandhuman trafficking. • Facilitate supply chain. inclusion inthe the ofsmallholders ofallworkers.• Respect rights andrecognize the Universal the Declaration• Respect andsupport ofHumanRights. RightsFostering onHumanandCommunity Positive Impacts • • Protecting Peat Lands • • Protecting Forests
consultative process. R rights. whichon landsto theycommunal, holdlegal, orcustomary free, their prior,or withhold andinformed allnew consent to development oroperations R for restoration whenfeasible. Appl N N N esolve all verifiable complaints and conflicts through and and transparent, esolveconflicts complaints anopen, allverifiable give including to ofindigenous landtenure communities rights, rights espect the andlocal o development inhigh-carbon areas. forest stock areas orhigh-conservation-value o new development onpeat regardless lands, ofdepth. o burning clear landfor to new planting orreplanting. y Best Management fory Best Practices existing onpeat plantations andexplore lands, options
level certification. ofRSPO highestpalm oil, which isthe certified Preserved) (Identity 100 percent organic, RSPO-IP Spreads Butter contain No Stir Dark Peanut Roasted Santa Cruz Organic Our new SantaCruz SPOTLIGHT PRODUCT
®
Seafood
Seafood is part of the supply practice throughout our supply chain. We require all chain in our pet food and our suppliers to provide us with appropriate legal pet snacks business, documentation to validate they are not sourcing their which uses fishmeal seafood in this manner. in canned, wet pet food. In recent To help eradicate forced labor practices in regional years, there have seafood supply chains, we are members of the Seafood been reports about Task Force, which is focused on addressing fishing labor the use of forced practices in the Gulf of Thailand in Southeast Asia. labor through the Member organizations include U.S. and European practice of transshipping retailers, manufacturers, seafood companies, importers, in certain areas of the world. governments, and NGOs, all of which work together to At-sea transshipping moves fish from one ship to drive measurable social and environmental change in another at sea. We have a zero-tolerance policy for the Thai seafood industry through greater supply chain illegal transshipments at sea and strictly ban the accountability, verification, and transparency.
Black Pepper PRODUCT SPOTLIGHT Some of the finest ingredients in ourSahale Snacks products are sourced from Vietnam, including cashews, Sahale Snacks Valdosta cinnamon, and black pepper. Our partnership with Pecans donates a portion of its PeaceTrees Vietnam is part of an ongoing effort to help proceeds to support the Black Pepper Farming Project. the people who help us make delicious snacks. Among its many missions, PeaceTrees is dedicated to healing the land by making it safe for children to play, farmers to prepare the soil, and families to build their homes by helping clear unexploded bombs and land mines.
The Black Pepper Farming Project is a program funded by PeaceTrees that provides poor, largely ethnic-minority farmers in the Cheng Village of Tan Lien Commune with trees and fertilizer, and trains the farmers to grow their own black pepper plants to earn an income for their families.
2018 CORPORATE RESPONSIBILITY REPORT 41 42
RESPONSIBLE SOURCING T HE J. HE Quinoa project included: objectives andoutcomes management pest Specific techniques. integrated andimplementing achieveto organiccertification, new supplier,the continuing improve to producer capability mechanisms from field the strengtheningto traceability During 2017, focused program on the specifically product fork. from to farm sustainable we are helping growers local bring a consumers Valles, FTDA Through with Bolivia. ourpartnership Altiplano, or“high inthe farmers plain,” regions of indigenousquinoa through ofsmall-scale, support the production oforganic for sustainable builds capacity development the and economies ofrural support to afoundation that innovative offers technology Valles”), Fundación Valles Theseeds. brand works with (“FTDA and legumes, beans, pastas, and nonsprouted grains, including products, sprouted ancientgrain non-GMO Our truRoots
M. SMUCKER COMPANY SMUCKER M. ® brand features gluten-free, organic, and
• Implement new management integrated pest techniques • • • from the field to the supplier mechanisms quinoa traceability organic Establish • • certification and organic standards production (“NOP”)-USDA Program Organic onNational producerContinue to capacity strengthen
management inputtraceability, management, andbiological pest NOP-USDA standards for 2018 climateto effects to producersto foliar bioinputs andinsecticide fertilizing, De He Obt C Pr growing associations D ertified a23percentertified due despite loss 1,420 hectares elivered 402 metric tons oforganic quinoa from tons 402metric elivered ovided technical assistance to 317smallproducers to assistance technical ovided livered nine different types of soil improvement, improvement, livered ofsoil types ninedifferent ld 21 workshops on environmental protection, ld 21workshops onenvironmental ained organic production certification under ained organic production certification management. pest and integrated strengthening traceability focused has on Bolivia incentral supplier program Our organic quinoa
Specialty Corn
Through our Mill-shed project in Tennessee and Kentucky, cycling within the soil. Many of our farmers have been we work with growers who are focused on optimizing practicing no-till agriculture since the 1970s, and their nutrient management and sustainable practices. The continued no-till practice is a testament to long-standing project utilizes the Field to Market® online calculator commitments to sustainability practices. These efforts which allows farmers to input data and compare their eliminated the anticipated use of an estimated 65,000 activities with other farmers in their region. Growers gallons of diesel fuel. It also helps in preserving and provide data pertaining to farm activities, including maintaining healthy soil through the improvement of fertilizer use, water use, soil practices, and GHG emissions, root growth and water-holding capacity. which enables continuous improvement of their farming practices. We also analyze this information with our mill In addition to practicing no-till agriculture, 11 percent partner annually to highlight results and find opportunities of these farmers irrigate their crops, as irrigated fields for further improvement of sustainability practices. Each average about 52 more bushels per acre than only year in our annual grower meeting, we bring in experts rain-fed plots. Of the farmers who irrigate their fields, to speak on topics of interest regarding sustainability. 78 percent replaced fuel-intensive diesel pumps with electric-powered water pumps. Since the program’s More than 94 percent of all the participating farms are start, the use of electric power instead of diesel fuel in no-till, meaning they grow their crops without plowing crop irrigation has avoided the release of 323,000 pounds the soil. This progressive farming practice helps prevent of CO2 equivalents, which is equal to the annual emissions soil erosion and increases organic matter and nutrient from 31 U.S. cars.
SPECIALTY WHITE CORN MILL-SHED BY-THE-NUMBERS
Growers20 Bushels6.2M Acres36,787 Higher22% Yield Since 2015 Using Sustainable Farming Practices
2018 CORPORATE RESPONSIBILITY REPORT 43 HE J. HE 44
RESPONSIBLE SOURCING T Fruit support California’s strawberry industry, with an emphasis anemphasis California’s industry, with support strawberry conductinggovernment research agency charged with to is astate (“CSC”) Commission The Strawberry California research andgrower industry education. support that andmanufacturers, processors, collaborate to composed commissions, ofgrowers, several fruit-growing Drug Administration. on Smucker alsoparticipates Protection Food andthe Agency and Environmental andresidues bannedby U.S. the prohibit allsubstances before400 pesticides and using itinour products, We regularly for ourfruit more sample than andtest high-quality production. work growerswe directly promote often to with safe, of which isprocessed inourown This means facilities. purchases, each we year, oftons buy thousands 80percent ingredient U.S. ofourtotal Though isasmallportion fruit supply chains across offruit the viability long-term the growers research for practices support to andbest and organizations industry-leading We with partner Smucker’s fruit. the juices, with brand issynonymous aleading and producerAs jellies, ofjams, preserves,
M. SMUCKER COMPANY SMUCKER M. The California Strawberry The Strawberry California Commission on various onvarious Commission Smucker works with Smucker works with research projects
to helpto reduce need for the inputs. chemical produceonly to high-yielding, butalso high-quality fruit breeding The aimsofthis varieties. are program not berry andmachine-harvestable disease-resistant breeding develop to program aberry It alsoruns soil. best-quality inthe plants best-quality plantthe to andsoil biology ahealthy balance ofnutrients maintain foster proper to seeks to irrigation andsoilhealth producer Enfield blueberry in Farms, Lynden, Washington, research. and For example, raspberry on-the-farm Smucker growers works directly that with engage in commissions, industry working to In addition with production. black raspberry, blackberry, andboysenberry red promote to raspberry,Commission sustainable Washington andthe Commission Red Raspberry andBlackberry both Oregonwork the Raspberry with We varieties. also reduction, andstrawberry pesticide andcropsoil health, rotation irrigation to management, management, solartreatments, pest integrated practices, rangingprojects, agricultural friendly from environmentally research onfunding various CSC Smucker works with member, anactive As farming practices. on sustainable Peanuts
With peanut butter brands such as Jif, Santa Cruz Organic, we are working to implement practical solutions to Smucker’s Natural®, Laura Scudder’s®, and Adams®, strengthen land and farm resiliency to climate change Smucker is highly invested in the environmental health impacts across a diverse spectrum of land uses and of peanut-producing regions in the U.S. This includes the habitat types. Apalachicola-Chattahoochee-Flint (“ACF”) and Ochlocknee River Basins of the Southeast, which are particularly As a member of the Flint River Peanut Sustainability vulnerable to climate change events such as flooding, Pilot Project, Smucker is helping build a comprehensive extreme heat events, and disrupted water availability, data set showcasing the sustainable nature of peanut according to the 2014 National Climate Assessment. production throughout all peanut-producing regions. These climate change events have the potential to put This project also aims to develop an educational program the region’s agricultural sector at risk. for growers to evaluate their farming practices in comparison with the overall data set to improve their Together with the USDA Natural Resources Conservation environmental and economic sustainability. Service Regional Conservation Partnership Program and the Flint River Soil and Water Conservation District,
PRODUCT SPOTLIGHT
Our Jif Natural Crunchy Peanut Butter Spread is made with five simple ingredients and contains 90 percent peanuts.
2018 CORPORATE RESPONSIBILITY REPORT 45 ENVIRONMENTAL IMPACT
46 THE J. M. SMUCKER COMPANY Respect for the environment is part of Smucker’s heritage. We are committed IN THIS SECTION: to becoming a more sustainable company, with goals to reduce our impacts related to greenhouse gas emissions, water, and waste. 48 Continuous monitoring and auditing help us Sustainability Approach uncover new areas for improvement.
50 Environmental Goals
52 Waste Reduction and Landfill Diversion
53 Water Reduction
54 Energy and Emissions Reduction
55 Product Life Cycle
2018 CORPORATE RESPONSIBILITY REPORT 47 HE J. HE 48 ENVIRONMENTAL IMPACT
T respect to our environmental footprint ourenvironmental respect to Aspire to reach to Aspire a100percent efficient the organization in line with our business strategies. ourbusiness inlinewith organization the mindset across asustainability andachieving Goals which isfocused ondelivering our2020Environmental acomprehensiveinto Strategy, 2020Sustainability aspirations andourfuture we actions captured allofthese useofrecyclablethe In2017, materials inourcafeterias. as such to everyday practices, facilities, Design)-certified manufacturing locations, allofwhich locations, havemanufacturing aspecific atWe programs each ofour have sustainability active Committee. and Corporate Responsibility Board through ofDirectors Nominating, its Governance including team, leadership Chief the Executive Officerand ourexecutive to activities onthese President reports throughout the Company. efforts sustainability Vice The various ofthe progress onthe andreport prioritize onaregular to basis meets The Committee emissions. reduce to climate change opportunities andpursue risks setting includingand relatedto mitigate actions efforts, goal- Director oursustainability ofSustainability, leads Company.the which This ischaired Committee, by our fordirect climate responsibility change initiatives within highest the level andhas of (“Committee”) Committee Steering Sustainability Company’sof the cross-functional executive isthe sponsor President”), (“Vice Sustainability Government President, RelationsOur Vice andCorporate of LEED operations —from construction the such large as projects, ofour aspect every considerations virtually into Today,of ourheritage. we incorporate environmental part beenaconsistent has responsibility Environmental Approach Sustainability PLANT-LEVEL LEADERSHIP CSR AND SUSTAINABILITY GOVERNANCE OPERATIONS EXCELLENCE state in all Company facilities with inallCompanystate with facilities
M. SMUCKER COMPANY SMUCKER M. ® (Leadership in Energy and Environmental andEnvironmental inEnergy (Leadership SUSTAINABILITY FOCUS AREAS
thinking andapproachthinking to Integrated sustainability sustainability Integrated packaging development PACKAGING and sourcing due to climate change could disrupt the productivity of climatedue to change productivity the could disrupt orextreme weather natural Inaddition, basis. disasters which include GHG regulation, emissions onacontinuous GHG We reduction target. climate monitor change risks, toward our corporate strategy, ourefforts anddrive Climate change-related influenceour to continue risks practices. and best goals, metrics, ourCompany-wide understand leaders ensure to leaders new Pillar of ourSustainability initiatives. In2017, we ongoing the continued training plansand andcollaborate onsustainability practices, are being implemented at each facility, best review that projects different the discuss sustainability to throughout meetour facilities periodically year the Company. from leaders each of Pillar Sustainability mindset throughout our asustainability nurture to help engage allemployees at each location inorder they important, Most projects. and energy-reduction water-, andimplementing emissions-, identifying waste-, Specifically,strategies. arewith leaders these charged implementation plansand the to ofthese are critical at leaders Pillar each ofourfacilities SQMS Sustainability specific goals. all employees know what isrequired achieve to their locations so invisible plansandprogress their post facilities Manufacturing return the oninvestment. with benefits water-, andenergy-reduction emissions-, waste-, aneyeimplementation toward with balancing the arewater, Projects evaluated for audits. andenergy ofwaste, results onthe plans are inpart, based, project help planto usmeet ourCompany goals. These CLIMATE CHANGE CHALLENGES MLYE ENGAGEMENT EMPLOYEE employee create to asustainable Unlock ofeach passion the future forfuture Company the
Smucker’s Cincinnati, Ohio, plant received the Mill Creek Watershed Environmental Steward Award in 2017.
our facilities or the operation of our supply chain. We Employees from across our organization serve as part maintain business continuity plans to mitigate these of a Sustainability Employee Engagement Working potential disruptions. Climate change could also cause Group alongside sustainability ambassadors to help changes in global temperatures and weather patterns, encourage a sustainability mindset throughout the which may negatively affect the production of certain corporate headquarters. These employees have commodities that are necessary for our products, such implemented multiple sustainability-focused changes as green coffee, peanuts, oils and fats, protein meals, to help the Orrville office work toward improving waste sweeteners, grains, and fruit. Each commodity supply diversion on campus, including increasing the number chain has different risks, opportunities, and challenges, of campus recycling containers, collecting food scraps and we seek to prioritize our resources and efforts to to convert to energy, and educating employees on how address the risks with respect to our most significant to properly recycle common items. Additionally, the agricultural commodities. team has implemented an internal communications campaign to bring education and awareness about EMPLOYEE ENGAGEMENT sustainability-related topics. While capital investments reduce our impact through process improvements and ongoing plant initiatives, our In 2017, our Folgers coffee roasting facility in Gentilly, employees are the real drivers of sustainable change. Louisiana, was named “Best All Around” at the Love Your We depend on plant managers and operators, who are City Awards, hosted by the New Orleans Chamber of present daily and know plant procedures intimately, to Commerce and the Greater New Orleans Foundation. identify future efficiencies that drive change and progress This ceremony honors sustainable business leaders in toward our 2020 Goals. We also harness the power of our the New Orleans community, and recognized Folgers employees to spread sustainability awareness throughout not only for its commitment to achieving zero waste our local communities. Many Smucker plants, for example, at its plant by 2020 but also its contributions to the host annual Earth Day celebrations. Activities include local community. tree plantings, park cleanups, community picnics, presentations by local environmental organizations, Additionally, our Cincinnati, Ohio, plant has partnered e-waste recycling, and waste audits. with the Mill Creek Alliance for several years to conserve the Mill Creek watershed through financial support and employee volunteerism. The Mill Creek Alliance has improved the diversity of fish and macro-invertebrate species in the stream such as crayfish, caddisflies, and mayflies by double in the past 20 years. Ospreys, herons, ducks, beavers, and many other long-missing species of birds and mammals have also returned to its COMMUNICATION SUPPLY CHAIN shores. As a result of the conservation efforts, people Develop and execute Engage internal and can now enjoy hiking and biking on the banks of the strategies to share external resources to define stream as well as canoing and fishing in the stream. sustainability and prioritize Smucker supply progress chain sustainability efforts
2018 CORPORATE RESPONSIBILITY REPORT 49 50 ENVIRONMENTAL IMPACT
T HE J. HE Environmental Goals Environmental operational data to reflect this integration and will do operational and data reflectthis integration to data, back 2014. to We have Heart”) all restated (“Big Pet Big Brands Heart Smucker historical data with platformadoption ofthis allowed has integrate usto Additionally, the efforts. sustainability our environmental of data results andreporting ofthe of oursustainability more enables improvements. timely tracking This system enhanced tracking ofourplatform andenvironmental tracking platform, which enables sustainability 2017,In October we officially launched our environmental • • • achieveto following the goals by 2020: andchallenges from welessons oursuccesses as work and GHG intensity. emissions We are incorporating reduction inourwaterchallenges useintensity with and from landfillswhileaddressingwaste opportunities 2009, indiverting oursuccess we have with beenpleased in ourprogress andmeasuring monitoring started first Strategy. focus Sinceis acentral we ofourSustainability footprint ofouroperations environmental the Minimizing
R R alternative uses. Di
M. SMUCKER COMPANY SMUCKER M. educe GHG emissions intensity by 10percent. educe GHG intensity emissions by 15percent. educe water useintensity trics donot yet Pettrics in2018. from acquisition Nutrition include Ainsworth facilities the * vert 95 percent of waste fromto 95percent landfills vert ofwaste Me alternative uses. of waste from of waste DIVERT landfills to landfills 95%
REDUCE intensity by intensity water use 15% these assurance statements. assurance these seepage Please assurance. limited 67for obtain to are water withdrawals reviewed Ourtotal of assurance. areasonable level are obtain emissions to examined 2separately, 1andScope Scope total as assured and are emissions Ourgreenhouse gas business. American Protocoland Reporting andencompasses ourNorth The Greenhouse Gas Protocol: ACorporate Accounting fromfinancial control approach oncriteria based using the established was Our reporting boundary procedures.assurance independent reporting scope the ofthese are within includingowned facilities, ourcorporate headquarters, from andwater withdrawals emissions ourwholly gas Greenhouse Public Accountants. ofCertified Institute by American the standards established attestation proceduresassurance inaccordance the with independent perform independent accountants reporting process, ofourannualsustainability part As Pet Nutrition. of Ainsworth reflect to our future inthe recent acquisition same the GHG emissions REDUCE intensity by intensity 10% LEED® CERTIFICATION
Pursuing LEED® (Leadership in Energy and Environmental Design) Certification for construction projects is one way we are realizing our focus on constructing sustainable workspaces. We currently have nine facilities that have earned LEED® designation, and we have made a commitment to strive for LEED® Certification on major new construction projects. We received LEED® Certification in December 2017 for our Origins Building at our corporate campus, home to our Smucker Natural Foods business. The building features sustainable attributes such as bamboo flooring, LED lighting, and furniture made from recycled components and reclaimed wood.
2018 CORPORATE RESPONSIBILITY REPORT 51 HE J. HE 52 ENVIRONMENTAL IMPACT
T which are participating in a variety of waste recycling ofwaste which are participating inavariety of most plants, across ourmanufacturing studies are Ongoingby material facilitated analysis efforts from to alternative landfills uses. waste towardprogress 95percent divert ourgoal to of have make enabledusto significant and consistent atprograms allSmucker programs These locations. is managed through ourrobust reuse and recycling place.wedocreate,waste first The it inthe however, we lookat continually our waste, how avoid to creating Before how responsibly of most dispose assessing to Diversion and Landfill Waste Reduction 86% Diversion Rate: 325,000+ pounds Waste Reduction: Kentucky Lexington, Location: Recycle waste cup stock Initiative:
M. SMUCKER COMPANY SMUCKER M. WASTE DIVERTED FROM LANDFILLS ’09 95% DIVERSION LANDFILL 86.6% ’14 2020 GOAL: 2020 GOAL: 88.3% +1% ’15
92.0% -5% ’16 2017 WASTE REDUCTION INITIATIVES
92.4% -3% ’17 95% Diversion Rate: 50,000 pounds Waste Reduction: Memphis, TennesseeLocation: implementation vacuum Homogenizer Initiative: for other plants to receive to for similarcertification. other plants and we aretrack on Council certification), Business the Zero(previously U.S. WasteWaste certification platinum-level its TRUE maintained has Zero facility OurChico, manufacturing California, Council). Business of TRUE Zero Waste U.S. the (formerly Zero Waste During 2017, member Smucker apartner alsobecame for alternative purposes. used was 97 percent waste manufacturing oftheir landfillsin2017, to waste of their meaning at least sent3percent facilities or less our manufacturing Wetechnologies. that report are to nineof pleased explore to goal andcontinue this emerging atunderway help each ofourlocations to achieve We have management many activities waste year.previous Company in2017, a0.4 percent improvement from the achieved a92.4 percent landfilldiversion rate the for streams, we auditandfindsolutions waste to for our By continuing lastlandfills resort. by makinglandfillsa foodoptimally —reduce amountofsurplus sentto the prevent and—most to foodin tiers anddivert waste Recovery Hierarchy. actions This hierarchy prioritizes we encourage adhere EPA’s to the to allfacilities Food programs, ofthese part As third parties. with programs 97%+anticipated Diversion Rate: 1.2pounds million Nearly Waste Reduction: Kentucky Scottsville, Location: transport recyclable for totes butter peanut with replaceto drums disposable pilot program Started Initiative:
Water Reduction
During the past three years, we have made consistent progress in reducing the amount of water used in our operations. From a 2014 baseline through 2017, absolute WATER USE INTENSITY water withdrawals have decreased by 10.1 percent, (GALLONS PER EU) while water use intensity has decreased by 7.2 percent. Our water data now incorporate historical data from the 2015 acquisition of Big Heart. For more information, 2020 GOAL: please see the Independent Accountant’s Report on 15% REDUCTION page 67. 2.33 2.24 2.24 2.16
-4% 0% -4%
WATER REDUCTION SUCCESSES ’14 ’15 ’16 ’17 Orrville, Ohio: Created a Baseline water conservation team and utilized a third-party to identify Equivalent unit (“EU”) is an internal measure of additional water conservation volume based on tonnage. opportunities.
We are committed to water management best Ripon, Wisconsin: Improved practices that focus not only on water conservation but water management has also on the quality of the water we discharge decreased water consumption into the environment. Water use surveys conducted by 15 million gallons since 2014. across our manufacturing footprint have enabled us to focus on opportunities to recycle, reuse, and Cincinnati, Ohio: Water reclaim wastewater. As opportunities are identified, consumption has been reduced the resulting initiatives fall into one of two types by 242 million gallons, or of activities: general infrastructure improvements, 70 percent, since 2011. such as waterline improvements, or continuous improvement projects, such as water reclamation.
Though all facilities are focused on water conservation, we continue to prioritize initiatives in our most water- intensive facilities. We are investing to improve the water footprints of nine facilities, where we aim to save an additional 120 million gallons to reach our 2020 goal. Such targeted efforts are making a significant difference in our overall water reduction results.
2018 CORPORATE RESPONSIBILITY REPORT 53 54 ENVIRONMENTAL IMPACT
T HE J. HE Reduction andEmissions Energy emissions since 2016. since 2016. emissions realize anearlybeen ableto 9percent decrease inGHG has inLawrence, Kansas, facility our manufacturing realize energy, reductions.Already, andcost emissions, lineinorder andmanufacturing to department exact useby the optimal determine energy soon beableto 80percentthan ofourGHG plantwill Each emissions. engaged which combined account for 11plants, more define what should optimal be.daily efficiency We have days arewhyto more certain than and efficient others, onaplant-by-plant basis, understand, we better to want management. Throughenergy data-driven this process, usethrough where active ourenergy we minimize can During 2017, areas we launched aproject identify to intensity reduced was by 7.0 percent. our baseline by 9.9 percent, whileGHG emissions 2017,2014 to GHG absolute decreased from emissions our operations remains asignificant opportunity. From andGHGImproving footprint of emissions energy the
M. SMUCKER COMPANY SMUCKER M. volume ontonnage. based measure of isaninternal unit(“EU”) Equivalent (TONNES CO2E PER 1,000 EU) GHG EMISSIONS INTENSITY GHG EMISSIONS INTENSITY Baseline 0.98 ’14 10% REDUCTION 2020 GOAL: 2020 GOAL: 1.01 +1% ’15
0.94 -5% ’16 0.91 -3%
’17
more 25 percent. than Kentucky, plantreduce GHG byScottsville, emissions freezer from refrigerant ammoniausehelped to our anexample, As conversion the ofa opportunities. consumption focus onutility to reduction specifically electricity, sources, we natural andsteam continue gas, 96.4percentWith ofourGHG resulting emissions from lighting, chillers,aircompressors, andother plantsystems. improvements, more such as capital energy-efficient make to continue gains throughSmucker will facilities GHG emissions. Company’s ofthe useandrelatedportion electrical nation’s The VPPA grid. electrical offset asignificant will the to we contribute amountofrenewablethe energy power purchase agreementa virtual (“VPPA”) increase to We products. on their seals recently entered into energy andplacerenewable credits purchase renewable energy , also andSahaleSnacks Organic SantaCruz our brands, Chico, Two andHavre California, deGrace, Maryland. of included solararrays at ournatural foods campuses in To opportunities. date, haveenergy ourinvestments renewable andoff-site We evaluate on-site to continue RENEWABLE ENERGY 2017 ENERGY USE BY SOURCE (MWH)
atural Gas 63.4% 31.8% 4.8%
Steam Electricity N Product Life Cycle
From ingredient sourcing to end-of-life disposal, we consider the environmental impact of our products throughout their life cycle. Here’s a look at some of the steps we’re taking to conserve natural resources in the manufacturing, distribution, and consumption of our products.
We engage in sustainable agriculture RAW MATERIALS projects across our supply chain.
We set goals and measure our annual progress toward reductions in water, MANUFACTURING waste, and energy.
We are partnering with the Sustainable Packaging Coalition PACKAGING with the mission to create packaging that is good for people and the environment.
We optimize shipping lanes to reduce energy and fuel costs and forge DISTRIBUTION partnerships to reduce our footprint through shared resources.
When designing new packaging, we consider environmental factors USE throughout the entire process, including minimizing food waste while protecting food safety and quality.
We strive to increase our recyclable packaging content while reducing DISPOSAL the package-to-product ratio.
2018 CORPORATE RESPONSIBILITY REPORT 55 COMMUNITYHEADLINE
56 THE J. M. SMUCKER COMPANY IN THIS SECTION:
As a responsible corporate citizen, we care about the communities in which our employees and consumers live and work. 58 By offering our time, resources, and Our Areas of Giving expertise to a range of community organizations, we’re bringing people 59 together in countless positive ways. Education
61 Family Meals and Hunger Relief
62 Civic and Community
63 Sustainability
63 Family Pets
64 Culture and the Arts
65 Wellness
2018 CORPORATE RESPONSIBILITY REPORT 57 HE J. HE 58
COMMUNITY T CULTURE AND charitable We organizations. work across seven key areas ofgiving: well as and equipment, from time as ouremployees, whomwe and encourage civic volunteer for to various form products, inthe ofdonated comes funds, ofwhichglobal Oursupport we communities are apart. regional, local, national, ofthe andeven andsustainability are success dependentonthe sustainability and success andourcontinued ofaglobal socialandpublicenvironment, Our Company part as exists Our Areas ofGiving COMMUNITY CIVIC AND
M. SMUCKER COMPANY SMUCKER M. THE ARTS FAMILY PETS
OF GIVING SMUCKER EDUCATION AREAS WELLNESS RELIEF AND HUNGER FAMILY MEALS SUSTAINABILITY
business focus and giving philosophy. Our support of Education Boys & Girls Clubs includes a financial contribution at Education is critical to creating better communities the national level, and many of our employees donate today and tomorrow. Employees at our local plants their time and talents to the local Orrville Club. We also and facilities frequently volunteer their time to make donations to Boys & Girls Clubs on behalf of our support education initiatives. Many locations suppliers and vendors in lieu of holiday gifts. participate in Adopt-A-School, literacy, or Junior Achievement® programs in their communities. El Café Del Futuro Scholarship The Café Bustelo El Café Del Futuro Scholarship offers Programs Implemented Across the Company ten $5,000 scholarships to Hispanic students each Our Company strongly believes in lifelong learning and year. Eligible students submit an essay about how their continuous improvement, which we support through Latino heritage, family, and the community impacted partnerships with local colleges and universities. their desire and motivation to obtain a college degree. Smucker has made a significant financial commitment to support ongoing research and student success at LeBron James Family Foundation The Ohio State University’s College of Food, Agricultural, Smucker is proud of our newly formed partnership and Environmental Sciences in Columbus, Ohio. This with the LeBron James Family Foundation (“LJFF”). The monetary gift is supporting scholarship funds within LJFF mission is to positively affect the lives of children who the college in the areas of food science and technology, are at-risk in reading and in need of additional academic leadership, and innovation to help prepare students to intervention through education and cocurricular lead and contribute to Ohio’s food industry. Smucker initiatives. A volunteer service component provides our also provided funding to The University of Akron to teams with numerous opportunities for team-building develop the Institute for Leadership Advancement at the activities. For example, Smucker employees are helping College of Business Administration. The Institute is prepare the new I PROMISE school building in Akron, creating a framework for educating and training Ohio, for its 2018 opening. successful leaders through a unique combination of professional development course work, experiential Heartland Education Community, Inc. learning projects, and campus-wide forums and workshops. Shifting the focus from school to education and shifting the responsibility from school to community. This is the Additionally, in fiscal 2018, 150 internships offered focus of the Heartland Education Community, Inc. meaningful on-the-job learning and experience to (“Heartland”), which started when a group of Orrville, college students. While internships are structured in Ohio, citizens came together in 1991 with a focus on a variety of ways, such as year-round work-study improving education throughout the community. programs, all interns execute their assignments as Smucker has been an ongoing supporter of the Smucker team members and participate in our “Why Heartland Education Community and is proud of the We Are Who We Are” training. Each year, many eligible time and talent that our employees have invested in graduating interns join Smucker in full-time positions, Heartland throughout the past 27 years. underscoring the effectiveness of this educational program. Heartland is led by a volunteer steering committee that includes educators, city Boys & Girls Clubs of America officials, parents, community leaders, Smucker is proud to be a national business representatives, social supporter of Boys & Girls Clubs of service representatives, and America, which offers many students. Heartland efforts are programs focused on education based on “The Five C’s,” which are — particularly literacy, health, fundamental principles about the nutrition, and character education philosophy of education: Community, — all well-aligned with our own Connecting Learning to Life, Critical
2018 CORPORATE RESPONSIBILITY REPORT 59 HE J. HE 60
COMMUNITY T • • include: current priorities Heartland’s • • • • • organization include: the of community. key Some accomplishments Orrville changing the theevolved serve to needswithin haveThrough ofHeartland years, priorities the the Improvement. Thinking, Development, Character andContinuous
begin schoolbegin prepared learn; to children sothat more community in the ofOrrville’s A schoolsthe andthroughout community; the C Suppor newspaper;a community and Cr elementary, middle, andhigh school buildings; new construct to School District allowing Orrville the Cr award Partnership; Education from Character the initiative,Month a“Promising which earned Practice” Cr for GlobalEthics; Institute the with Char
M. SMUCKER COMPANY SMUCKER M. ontinuing promotion education in ofcharacter ddressing availability andaffordability ofpreschoolddressing availability eation andongoing, publication ofOrrViews ofa long-range plan, eation facilities andsupport Word Education eation Character ofthe ofthe acter education training in partnership education trainingacter inpartnership t of the College Academyt ofthe program.
at café. the for orinformallydesk, joinfriends acupofcoffee meetings, volunteercommunity at information the inlifelong participate can hold learning classes, connecting ofallages place. Citizens community a as which serves Point, Heartland called Orrville presence aphysical indowntown alsohas Heartland • • • •
community newspaper.community C and ways thatfuture success; maytheir affect orinother whoare struggling academically students Suppor school, whether it’s college oracareer; forhelp prepare life better beyond students high En families; andtheir students Learner andEnglish Language School District Orrville the C ontinuing to support the publication of the OrrViews publication ofthe the ontinuing support to ontinuing to strengthen the relationship the ontinuing strengthen to between gaging to communities school the andbusiness ting school district mentoring programs for programs mentoring ting school district
near our corporate headquarters. In 2017, we donated Family Meals and nearly 1 million meals to the ACRF alone. Additionally, many of our employees volunteer their time at the ACRF Hunger Relief as part of team-building activities. As a manufacturer of consumer food and snacks, we are uniquely positioned to help relieve hunger and promote wellness through our products and sponsorships.
For more than 20 years, we have made product and We donated more than monetary donations to Feeding America®, a nationwide pounds network of charitable food banks, to help relieve hunger. 4 MILLION Through this partnership, we are able to maximize of Smucker product to the impact on those communities across the U.S. that food banks across the need it most and make a difference in the communities country in 2017 — enough in which we have facilities. In addition to our monetary food for more than support, we donated more than 4 million pounds of Smucker product to food banks across the country 3.4 MILLION meals. in 2017 — enough food for more than 3.4 million meals. We also have a long-standing relationship with the Akron-Canton Regional Foodbank (“ACRF”), located
2018 CORPORATE RESPONSIBILITY REPORT 61 HE J. HE 62
COMMUNITY T area, experience. enhancing community the it alsocreates amore downtown prosperous andviable represent just than expansion the ofcommercial activity; commerce project more area. does This revitalization downtown revitalized residential options the near created inseveral buildings convenient ofthe provide to also have been apartments space. office Loft additional Smucker, which isusing locations for oneofthe community. the to businesses This includes viable attract to properties ofthe andexteriors interiors the downtown goal ofsignificantly the area,renovating with inthe properties purchased more 10vacant than Ohio. Smucker has in ourhometown ofOrrville, Street ofMain We revitalization invest inthe to continue more resilient where communities we have operations. and cultural development, we are working to build relief to arts projects From disaster to environmental and Community Civic
M. SMUCKER COMPANY SMUCKER M. to the American and Canadian Red andCanadian Cross. American the to formatching donations the madeby ouremployees gifts preparedbetter for next the disaster. We alsoprovide they recover peopleas assist andhelpon handto become Red remain Cross can alsoensures American the support they are always ready respond, to day andnight. This vehicles, nationwide, volunteers maintain andtrain so secure supplies, shelters, Redthe pre-position Cross can relief, indisaster Responder pre-invest Program ensuring andproduct donations. Disaster ofthe support Members Responder partner, a Disaster providing monetary Red Cross by American becoming the with partnership need. ofgreatest In2017, time their we our strengthened during helpby disaster andcarecomfort to affected those food,provides shelter, andclothing, butalsooffers andexplosions. The Redaccidents Cross not only weather, transportation to andfloods hurricanes, severe —fromtornadoes, homefireswinterto country around the responds more to 60,000 disasters than year,Each Red Cross immediately American the Red CrossAmerican Sustainability Strong, healthy populations of pollinators, such as honeybees and butterflies play a vital role in the world’s food supply chain. Pollinator health is impacted by a variety of factors, including lack of suitable habitat, increased levels of disease, need for improved colony management, and exposure to pesticides, as outlined in the U.S. National Pollinator Health Strategy. At Smucker, we recognize the seriousness of pollinator health and that all food companies need to understand the implications pollinator health risk has for our supply chain and business.
We have made a multiyear commitment to the Pollinator Partnership (“P2”) in support of the Monarch Wings Across Ohio Project. P2 is focused on promoting the Family Pets health of pollinators, critical to food and ecosystems, As one of the largest manufacturers of pet foods through conservation, education, and research. The and snacks, we regularly donate our products and Monarch Wings Across Ohio Project is focused specifically contribute financially to community-based animal on maintaining and augmenting the Ohio segment of welfare and rescue organizations throughout the U.S. North American monarch migration. Rescue Bank® Smucker is proud of its partnership with Rescue Bank®. Rescue Bank® operates under a national food bank model and provides pet food and pet snacks to community- based animal welfare groups and support to pets that are displaced due to disasters and emergencies. Throughout 2017, we provided product and monetary donations to Rescue Bank®, donating more than 6.1 million cat meals and more than 11.2 million dog meals across the country.
Throughout 2017, In support of this project, we have built a monarch butterfly habitat located at The J. M. Smucker Company we provided product Store & Café in Orrville, Ohio. In addition, we have funded and monetary donations 18 monarch habitat research plots across Ohio, collected to Rescue Bank®, three years’ worth of plant-pollinator interaction data, and donating more than produced four Ohio-specific monarch habitat development guides. Going forward, these monarch habitat research 6.1 MILLION plots will continue to provide valuable insights into cat meals and more than monarch foraging preferences. 11.2 MILLION dog meals across the country.
2018 CORPORATE RESPONSIBILITY REPORT 63 HE J. HE 64
COMMUNITY T monetary and product support to Canine Assistants Canine to andproduct support monetary Since 1997, ourMilk-Bone annual provided brand has Assistants Canine Dogs taught by Canine Assistants taught byDogs Canine improve to who needthem, lives ofoneanother. the a nonprofitthatthe people program and dogs educates $27 million to support cats and dogs. anddogs. cats support $27 millionto The Rachael Ray Foundation donated has more than andmore. treatments, supplies, Through March 2018, food, provide andother to organizations medical charities helps animalsinneedby nonprofit working with animal The Rachael to sales Ray Foundation™. The foundation ofNutrish brand’sthe donate to commitment aportion ofpetportfolio we brands, continuing lookforward to recent the With ofRachael addition Ray our to Nutrish The Ray Rachael Foundation™ media outlets. andsocial across online, broadcast, and placements resulted inhalfamillionviews Thetransformed. video humanswhoselives they andthe havedogs shared four about assistance video incredible stories Are“Dogs More” through The aninspirational video. partnered with Canine Assistants Canine with partnered raise awareness for organization. In2017, the Milk-Bone to spearheaded numeroushas promotional activities more peopleinneedand provide to 2,000 dogs than more Milk-Bone 20-year partnership, than helped has andemotional disorders. Throughoutdisabilities its learning children to with andsecurity bring happiness schools to Thealsovisit dogs limitations. mobility with children individuals to whoare sicksupport andprovide to country,bring andcalm dogs comfort the these across orother Inhospitals needs. special conditions, seizure disabilities, physical with children andadults
M. SMUCKER COMPANY SMUCKER M. ® ® ® provide support to to support provide to demonstrate that to ® , enthusiastic constituency around world. the constituency enthusiastic an to orchestra’s the to access acclaimed artistry andrecordings residencies, broadcasts, touring provide Today, presentations, community performances, concert well-rounded education, andthat learning never ends. a to are critical be touched by that music, arts the engagement, onhisbelief based child should that every musiceducation andcommunity to commitment arenewed with second century orchestra its the into throughout Ohio. Weiser-Most Franz Northeast leads people with ofmusic joyof sharing the andbenefits The Cleveland along Orchestra has andproud history admired most of the symphony world. inthe orchestras grownhas from aregional being to organization one anywhere. orch the ensuing the Over decades, ofgreatperformances orchestra musicpossible powerin the best having ofmusicandaspired the to whobelieved citizens created by agroup ofvisionary The in2018. Cleveland Orchestra wasanniversary The Cleveland Orchestra, which iscelebrating 100th its For more 30years, than we have proudly supported Culture Arts andthe e stra stra
digital, and public relations activities for six brands — Wellness Smucker’s, Folgers, Jif, Smucker’s Uncrustables®, Sahale As a proud sponsor of the 2018 U.S. Olympic and Snacks, and Milk-Bone. As an example, our social Paralympic teams, Smucker provides financial support media campaign, #PBJ4TeamUSA, celebrates PB&J to the United States Olympic Committee (“USOC”) in as more than just a sandwich. It’s a tangible reminder support of Team USA® athletes. Our partnership with of love and support that fuels families and athletes the USOC is a natural fit for our Company. Much like alike. The campaign includes a donation of $100,000 Our Purpose of helping to bring families together to to the USOC to support future Team USA® athletes. share memorable meals and moments, the Olympic Fans can show their support for Team USA® by sharing Games strengthen bonds between families and friends a photo using #PBJ4TEAMUSA or retweeting brand as Americans come together to celebrate the special content on Twitter. moments of our athletes and the Olympic Games.
This sponsorship provides a unique opportunity to reach multiple generations of consumers through exclusive retailer activation, packaging, advertising,
2018 CORPORATE RESPONSIBILITY REPORT 65 HE J. HE 66 66
MARKETPLACE T T Forward-Looking Statements Forward-Looking Measures Non-GAAP
Net income reconciliation: Inc.; andRachael RayInc.; . Smucker Company, isthe owner referenced ofalltrademarks subsidiaries, herein,except orits for the following, which areusedunderlicense: Carnation The J. many of ofwhich andother are factors, outside uncertainties, andare andstrategies plans, subjectanumberofrisks, to assumptions, andbeliefs conditions, events, concerning future are Company’s onthe based estimates, current expectations, initiatives,plans, andobjectives.forward-looking These statements Company’sthe Company’s andthe business business future about forward-looking statements This includes certain Report (A) except inmillions, (Dollars pershare amounts) page J. 32ofthe financialmeasure.See comparable the to measures GAAP financial non-GAAP The following reconciles certain table ome taxes, as adjusted, is based upon our GAAP effective tax rate the GAAP and reflects net income tax impact of effective items excludedadjusted income. toderive from as adjusted, isbased upon ourGAAP ome taxes, Income taxes, as adjusted, also reflects the exclusion of certain one-time tax adjustments during 2018. during adjustments tax exclusion asthe Income adjusted, alsoreflects one-time taxes, of certain Inc Inc A Ot C U Ot G A Amor W A Inc N
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M her special project costs projecther special costs her intangible assets impairment charges assets her intangible ome taxes, as adjusted as ome taxes, ome tax expense (benefit) expense (benefit) ome tax tization tization ® is a trademark of Société des Produits Nestlé S.A.; Dunkin’ Donuts isatrademark Nestlé ofSociété S.A.; Produits des
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Report of Independent Accountants
BOARD OF DIRECTORS AND SHAREHOLDERS OF THE J. M. SMUCKER COMPANY We have examined the Schedule of Total Scope 1 and Scope 2 nature, timing, and extent of the procedures selected depend Greenhouse Gas Emissions (the Subject Matter) included in on our judgment, including an assessment of the risks of Exhibit A for the year ended December 31, 2017 as well as material misstatement of the Subject Matter, whether due to the baseline for the year ended December 31, 2014 for the fraud or error. We believe that the evidence we obtained is J. M. Smucker Company (the Company) 2018 submittal to the sufficient and appropriate to provide a reasonable basis for CDP (formerly the Carbon Disclosure Project) Climate Change our opinion. Our examination does not address other criteria Disclosure and for presentation in the Company’s 2018 Corporate beyond those set forth in Exhibit A. Responsibility Report (the Reports). The Company’s management is responsible for the Subject Matter included in Exhibit A and The Subject Matter is subject to measurement uncertainties as presented in the Reports in accordance with the World resulting from limitations inherent in the nature and the Resources Institute/World Business Council for Sustainable methods used for determining such data. The selection of Development’s The Greenhouse Gas Protocol: A Corporate different but acceptable measurement techniques can result Accounting and Reporting Standard and other source specific in materially different measurements. The precision of calculation methodologies as set forth in Exhibit A (the different measurement techniques may also vary. Criteria). Our responsibility is to express an opinion based on our examination. In our opinion, the Schedule of Total Scope 1 and Scope 2 Greenhouse Gas Emissions for the years ended December 31, Our examination was conducted in accordance with attestation 2017 and 2014 is presented in accordance with the Criteria, standards established by the American Institute of Certified in all material respects. Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Subject Matter is in accordance with the Criteria, in all material respects. An examination involves performing procedures to obtain evidence about the Subject Matter. The July 26, 2018
Independent Accountants’ Review Report
BOARD OF DIRECTORS AND SHAREHOLDERS OF THE J. M. SMUCKER COMPANY We have reviewed the Schedule of Total Water Withdrawal (the necessary in the circumstances. A review is substantially less in Subject Matter) included in Exhibit B and as presented in The scope than an examination, the objective of which is to obtain J. M. Smucker Company (the Company) 2018 submittal to the CDP reasonable assurance about whether the Subject Matter is in (formerly the Carbon Disclosure Project) Water Disclosure and accordance with the Criteria, in all material respects, in order for presentation in the Company’s 2018 Corporate Responsibility to express an opinion. Accordingly, we do not express such Report (the Reports) for the years ended December 31, 2017 an opinion. A review also does not provide assurance that and 2014 in accordance with the Company’s criteria set forth we became aware of all significant matters that would be in Exhibit B (the Criteria). We did not review all information disclosed in an examination. We believe that our review included in the Reports. We did not review the narrative sections provides a reasonable basis for our conclusion. of the Reports, except where they incorporated the Subject Matter. The Company’s management is responsible for the Subject The Subject Matter is subject to measurement uncertainties Matter included in Exhibit B and as presented in the Reports, resulting from limitations inherent in the nature and the in accordance with the Criteria. Our responsibility is to express methods used for determining such data. The selection of a conclusion on the Subject Matter based on our review. different but acceptable measurement techniques can result in materially different measurements. The precision of Our review was conducted in accordance with attestation different measurement techniques may also vary. standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and Based on our review, we are not aware of any material perform our review to obtain limited assurance about whether modifications that should be made to the Schedule of Total any material modifications should be made to the Subject Matter Water Withdrawal for the years ended December 31, 2017 and in order for it to be in accordance with the Criteria. A review 2014, in order for it to be in accordance with the Criteria. consists principally of applying analytical procedures, making inquiries of persons responsible for the Subject Matter, obtaining an understanding of the data management systems and processes used to generate, aggregate and report the Subject Matter and performing such other procedures as we considered July 26, 2018
2018 CORPORATE RESPONSIBILITY REPORT 67 Appendix A: Management’s Schedule of the Subject Matter and Criteria
THE J. M. SMUCKER COMPANY Schedule of Total Scope 1 and Scope 2 Greenhouse Gas Emissions For the Years Ended December 31, 2017 and 2014 Amounts in Metric Tonnes CO2e
2014 2017 Recalculated Scope 1 187,932 196,643 Scope 2 248,095 287,236 Total 436,027 483,879
NOTE 1 — BASIS OF PRESENTATION: The above amounts represent the Scope 1 and Scope 2 greenhouse gas emissions (in metric tonnes CO2e) of the Company for the years ended December 31, 2017 and 2014 that the Company prepared for its 2018 submittal to the CDP Climate Change Disclosure and for presentation in the Company’s 2018 Corporate Responsibility Report. These amounts have been prepared based on the criteria established by the World Resources Institute/World Business Council for Sustainable Development’s The Greenhouse Gas Protocol:1 A Corporate Accounting and Reporting Standard, Revised Edition. The Company additionally uses source specific calculation methodologies established by the Climate Registry: General Reporting Protocol, Version 2.1, and the United States Environmental Protection Agency Mandatory Reporting of Greenhouse Gases: Subpart C.
NOTE 2 — BIG HEART ACQUISITION: Greenhouse gas emissions associated with the facilities acquired in 2015 as part of the Big Heart acquisition are included within both the 2017 and 2014 reporting scope and boundary.
NOTE 3 — MOBILE EMISSIONS: Emissions from all vehicles are included for both the 2017 and 2014. Under the selected reported boundary (financial control approach), only those vehicles under capital or finance leases are required to be included. However, due to informational gaps in historical data, specific lease types were indeterminable in 2014, and therefore JMS continues to report emissions from all vehicles, including those that are leased for consistency.
NOTE 4 — 2014 RECALCULATION: The 2014 baseline recalculation was due primarily to divestitures occurring in 2015 as well as the Big Heart acquisition in accordance with the GHG Protocol criteria on recalculations for structural changes. Also, the greenhouse gas eGrid emission factors were updated for the most recent release (2018). These transactions and updates required the 2014 baseline data to be recalculated for applicable comparisons to current period information.
NOTE 5 — MEASUREMENT UNCERTAINTIES: The Subject Matter is subject to measurement uncertainties resulting from limitations inherent in the nature and the methods used for determining such data. The selection of different but acceptable measurement techniques can result in materially different measurements. The precision of different measurement techniques may also vary.
1 The Greenhouse Gas Protocol released an amendment to the Scope 2 guidance, which requires emission reporting using two different methods: location-based reporting and market-based reporting. Location-based reporting utilizes emission factors generated by geography or specific locations such as eGRID, whereas market-based reporting utilizes emission factors generated by the specific supplier of electricity. Emissions are calculated based only on location-based reporting, with the exception being one location given historically used and more specific information from the energy provider.
68 THE J. M. SMUCKER COMPANY Appendix B: Management’s Schedule of the Subject Matter and Criteria
THE J. M. SMUCKER COMPANY Schedule of Total Water Withdrawal For the Years Ended December 31, 2017 and 2014
2014 2017 Recalculated Water withdrawal (amount in megaliters) 3,906 4,340 Water withdrawal (amount in cubic meters) 3,906,083 4,340,452
NOTE 1 — BASIS OF PRESENTATION: The above amounts represent the total water withdrawal of the Company for the years ended December 31, 2017 and 2014 that the Company prepared for its 2018 submittal to the CDP Water Disclosure and for presentation in the Company’s 2018 Corporate Responsibility Report. These amounts have been prepared based on criteria as established in the World Resources Institute/World Business Council for Sustainable Development’s Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition, and supported by the Global Reporting Initiative Standard, 303.
NOTE 2 — BIG HEART ACQUISITION: Water withdrawal associated with the facilities acquired in 2015 as part of the Big Heart acquisition are included within both the 2017 and 2014 reporting scope and boundary.
NOTE 3 — 2014 RECALCULATION: The 2014 baseline recalculation was due primarily to divestitures occurring in 2015 as well as the Big Heart acquisition in accordance with the GHG Protocol criteria on recalculations for structural changes. These transactions and updates required the 2014 baseline data to be recalculated for applicable comparisons to current period information.
NOTE 4 — MEASUREMENT UNCERTAINTIES: The Subject Matter is subject to measurement uncertainties resulting from limitations inherent in the nature and the methods used for determining such data. The selection of different but acceptable measurement techniques can result in materially different measurements. The precision of different measurement techniques may also vary.
2018 CORPORATE RESPONSIBILITY REPORT 69 One Strawberry Lane Orrville, Ohio 44667 330-682-3000 jmsmucker.com