Growing for Good Our sustainability progress 2020 CONTENTS INTRODUCTION

Introduction 3 We are Our 2030 goals 7 Frucor How we’re doing 8 Since our beginnings in the early Sugar 10 1960s as part of the Apple & Pear Board, has Packaging 13 evolved from a small local juice business to a significant trans-Tasman beverages company. Waste 18

Frucor Suntory manufactures, markets We employ 1,000 people across Australia Emissions 20 and distributes a range of fruit juices, and New Zealand and since 2009, we’ve fruit , energy drinks, waters and soft been wholly owned by leading Japanese Water 22 drinks. We’re the company behind iconic beverage and food company, Suntory Group. brands V, h2go, Just Juice, Maximus, We’re passionate about satisfying Fresh Up and Simply Squeezed – and tomorrow’s thirst and offering more choice we produce more than 25 million cases when it comes to choosing a beverage of drinks a year at our South Auckland to suit people’s lifestyle. Alongside our manufacturing plant. parent company Suntory, we believe it is our social responsibility to have a positive impact on the world around us.

We produce 200 million litres of product annually

We sell 25 million cases of product per year

We have offices across New Zealand Over 550,000 deliveries and Australia and two per year across Australia manufacturing sites – and New Zealand in Auckland and Napier

2 Growing For Good 2020 Frucor Suntory Growing For Good 2020 Frucor Suntory 3 INTRODUCTION INTRODUCTION

From the Chief From the Head Executive Officer of Sustainability At Frucor Suntory, we’re Hungry to Make Drinks Better – and Welcome to Frucor Suntory’s inaugural annual sustainability part of this hunger is our commitment to help lead positive report. I’m delighted to be able to showcase our progress change in the New Zealand and Australian beverage market. against our goals – and to introduce some of the people who helped make it happen. As part of the Suntory Group, Growing for This report details the progress we have Good is all about growing our business made over the last year against these In many respects, 2020 was a year of We made great progress this year across while protecting our environment and Sustainability Commitments – and the surprises as we adjusted to the new almost all areas of our sustainability agenda playing our part in the community. challenges we continue to face. “normal” of an international health and implemented a number of projects We believe it’s our social responsibility to Our commitments drive us to improve and pandemic. We faced many challenges – that are delivering encouraging results. have a positive impact on the world around to deliver better outcomes for our team, and I am proud to be part of an Our largest production site is based in us, and we want to make sustainability an our customers, consumers and the planet, organisation who puts the safety and Auckland, which also faced drought – and easier choice for consumers. and they force us to acknowledge there are wellbeing of their people first. I’m hugely proud of our Engineering and areas where change is harder to achieve. We’ve made a commitment to achieve We increased our focus on sustainability Manufacturing teams who worked hard these five key goals by 2030: As we head into 2021, our work won’t stop. in 2017, and set some ambitious goals. to install and commission new equipment We have a clear plan and an unrelenting Reducing our environmental impact was that’s delivering a 12 million litre per . Zero waste to landfill across our sites hunger to make meaningful change and a prioritised and formed part of our long term annum water saving. . All packaging to be recyclable positive contribution to the world in which 2030 vision. The work we’re doing isn’t easy, Packaging changes are complex and we live. nor is it quick to implement – and we need . Reducing CO2 emissions by 35% require collaboration and commitment to ensure we recognise the journey and from our teams to rethink the way we do . Reducing water usage by 20% Darren Fullerton mindset required to change. In many cases, things. And we have done both. 93% of our Chief Executive Officer there are interdependencies across teams . One of every three drinks we sell to be packaging portfolio is now recyclable. low or no-sugar and it will take time. However, we know the work we’re doing is important to our Backed by our Executive Leadership And we are making changes that make customers, our consumers, our people – Team, our cross-functional Sustainability a difference. and the environment we live in. Working Group is responsible for leading change, supporting action and tracking results. Looking ahead to 2021, we have a comprehensive calendar of activities building on the work completed this year – specifically a continued focus on developing opportunities and solutions to the issues of packaging and climate change. This involves a shift towards a circular economy, and ongoing efforts to decarbonise our operations.

Ben Walkley Head of Sustainability

4 Growing For Good 2020 Frucor Suntory Growing For Good 2020 Frucor Suntory 5 INTRODUCTION

The Suntory Group has a mission Our 2030 goals

To create harmony with people and nature In line with our parent company Suntory, we’ve set ourselves ambitious targets to ensure our environment is fit for the future. We are actively working towards achieving these five goals by 2030. Within the context of the United Nations’ Sustainable Development Goals (SDGs) adopted in 2015, the Suntory Group established its Sustainability Vision with seven Waste sustainability themes. Zero waste to landfill

In addition to conserving water resources, Suntory established a Plastic Policy in

reducing CO2 emissions, promoting 2019 with a goal of 100% sustainability by a circular economy for plastics and switching the materials for all of PET bottles Packaging respecting human rights in the supply used in its global operations to recycled chain, Suntory will further accelerate efforts materials or plant-derived materials by 100% recyclable packaging that contribute to the people leading 2030 in order to contribute to a recycling- spiritually rich and healthy lives. oriented and carbon-free society. The Suntory Group will continue to take on Emissions Suntory’s sustainability vision is unique challenges to innovate and build a richer society as a multifaceted beverage Reduce CO2 emissions by 35% “Growing for Good.” and liquor company growing globally while listening to the voices of customers and The promotion of water sustainability other stakeholders. on a global scale continues to be key to Water Suntory’s sustainability efforts. Water is a Reduce water usage by 20% precious resource that supports people’s lives and livelihood and is also the source of the Suntory Group’s corporate activities. In addition to water sustainability Sugar initiatives, the Group will also strengthen One in three drinks we sell will be low or no sugar its efforts to tackle climate change – including its goal to deliver net zero gas emissions by 2050, by promoting energy conservation activities, proactively introducing renewable energy, utilising next-generation infrastructure, and Delivering on our commitments to sustainability collaborating with stakeholders in the relies on taking action in every part of the business. value chain.

6 Growing For Good 2020 Frucor Suntory Growing For Good 2020 Frucor Suntory 7 How we’re doing*

Water 2020 highlights Focus areas for 2021 – 2023

. Investigate further cleaning process Air rinser installed on New processes created PROGRESS: one of the canning lines changes to optimise water use 14% reduction to reroute water . Install additional air rinser saving 12 million litres in water use reusing rather . Reuse options investigated for of water annually than wasting process heating or cooling

Sugar

. Launched a new Lower sugar through innovation, PROGRESS: Launched low / no sugar products leveraging Suntory Group relationship One in five of our marketing campaign . Introduce greater choice through drinks sold are low, including V Sugarfree Blue, NZ Natural flavoured water highlighting Pepsi Max as new products or contain no sugar in cans, Gatorade No Sugar a no sugar beverage . Continue to introduce smaller pack sizes

Emissions

Created a co-shipping Introduction of . Continue fridge upgrades arrangement with PROGRESS: lower emission fridges . Expand co-shipping program partners to 8% reduction to key customers . Partner with suppliers to reduce in emissions maximise capacity emissions from the raw material Top 10 carbon reducer supply chain utilised on all freight recognition by Toitu- Waste

Diverted . Continue to find alternatives to PROGRESS: Audited waste divert waste from landfill 90% of our waste collection points to 99 tonnes identify potential . is recycled across Encourage suppliers to consider of waste from landfill the business sustainable packaging when recycling opportunities (2019 & 2020) delivering raw materials

Packaging

Transition 11 SKUs . Understand our non-recyclable PROGRESS: APCO accreditation to recycled plastic packaging and source alternatives 93% of our (PET) resulting in . Continue to grow rPET3 packaging packaging is Seven PET1 SKUs . recyclable 270 tonnes Understand consumer insights and lightweighted2 drivers around packaging to incorporate of virgin PET used in brand / product processes . Continuation of lightweighting packaging programme including glass, PET and aluminium

8 Growing For Good 2020 Frucor Suntory *Against 2017 baseline. 1. PET – polyethylene terephthalate. 2. Lightweighting – reduce the weight of the packaging through removal of raw material used. 3. rPET – recycled polyethylene terephthalate. 9 SUGAR SUGAR

. Pepsi Minis – our smaller serve size Progress on sugar cans are proving popular, and our focus How we’re on advertising Pepsi Max is working. We’re doing our bit to encourage healthy lifestyles It’s growing faster than full sugar Pepsi making a and reduce the sugar consumed in our beverages. in volume and value. . Gatorade No Sugar – has exceeded difference forecasts and represents 68% of the Our hunger to make drinks better is what Here’s a flavour of our 2020 innovation: brand’s growth since launch. drives us – and this means offering choice For many people, eating . Maximus Game On – contains 20% and great tasting drinks. . NZ Natural Flavoured Sparkling Cans – less sugar than core flavours with no and drinking less sugar is have nailed consumer desirability. Not We know that while some people may compromise on taste. only are they zero sugar, they are growing becoming an increasingly want to reduce their sugar intake, they . V Sugarfree Blue – the great taste at more than three times the nearest don’t want to compromise on taste. It’s a important issue. we’ve achieved with no sugar using competitor and have driven more than tricky balance, and we’re working hard to technology is driving repeat purchase! 40% of this segment’s growth. We’re taking voluntary, practical get it right. Since launching in Australia last year, V action to help consumers make We work closely with Suntory and our When we design new drinks, we’re Sugarfree Blue been largely incremental more informed dietary choices. Flavour Houses on sugar reduction and designing for consumer desirability, and to the V range. After the first 13 weeks This includes: sweetness enhancement tools and this is resulting in lower sugar products. in grocery, the multipack was the #1 technology, to find new ways of giving . New and reformulated products, In some cases, it’s lower sweetness (like NPD launched in the past two years! consumers the same great taste with offering low and no-sugar varieties. our NZ Natural flavoured sparkling water It has just launched in New Zealand, less sugar. range) and in others, it’s offering the same and is flying off the shelves – in some . Adopting the Health Star Rating sweetness with less sugar (V Sugarfree cases, selling more than V green. food labelling scheme with the Ruth Muller Blue, for example). % Daily Intake Energy icon on . Suntory BOSS Coffee – is lowering Research, Development front-of-pack labelling. Our launches over the past 12 months the average sugar of the Energy & and Inventions Director show that what we’re doing is working – Transformation category. Suntory BOSS . Offering more portion sizes than for our consumers and our business. Coffee Black contains no sugar, and ever before. consumers love it! . Investing in “Better Choice” fridges to help consumers pick healthier drinks. . Ensuring our marketing activities are responsible and do not actively target children. . Partnered with New Zealand government as part of the Healthy Kids Industry Pledge. Gatorade No Sugar We directly sell only water to has exceeded primary and intermediate forecasts and schools in New Zealand. represents 68% of the brand’s growth since launch

10 Growing For Good 2020 Frucor Suntory Growing For Good 2020 Frucor Suntory 11 SUGAR PACKAGING

Introducing NZ Natural cans Support for a sustainable

This year we created and This makes it an easy offering for and circular economy consumers looking for a better-for-you delivered a new product that offer that’s in a readily accepted and Reverse vending machine eligible beverage containers, and result in has been embraced by the easily recyclable pack. increased recycling and re-processing of market – 250ml sparkling This was our first foray into canned water trials – making it easy to these high commodity materials. water in a can. We’ve and wasn’t without it’s challenges, but do the right thing In New Zealand, work kicked off in 2020 thanks to our hard working research and We’re on a mission to prevent our bottles to investigate and design a nationwide packaged it in an eight-pack development team we’re really proud of from harming the environment by beverage container return scheme (CRS). the product we’ve created. NZ Natural is cardboard wrapped sleeve. encouraging more people to recycle them. It would involve a refundable deposit on 100% recyclable packaging, has 100% One way to achieve this is with reverse containers – redeemed when they natural ingredients and is sugar free. vending machines. are recycled at a collection depot or drop-off point. A comprehensive proposal was presented to the Government at A reverse vending machine is a unit the end of the year. As a member of the for returning empty containers for NZ Beverage Council, Frucor Suntory was represented on the Scheme Design recycling purposes. Working Group tasked with the design of a CRS. This year, we introduced one of New Zealand’s In Australia, container deposit schemes first reverse vending machines at the have already been established in five University of Otago – and at Auckland states with the other states expected AUT’s campus. The machines take all to follow. plastic and cans and have the capacity to hold 1,500 units. It’s a great demonstration of the support we want to give to make recycling easy – and to reducing the amount of recyclable material incorrectly put in landfill bins.

Container Return Schemes – reducing litter and waste to landfill We recognise our responsibility to mitigate the environmental impacts of single-use beverage containers. We’re eager to see a sustainable solution that will reduce waste to landfill, increase collection rates of

12 Growing For Good 2020 Frucor Suntory 13 PACKAGING

Reduce, reuse, recycle Our dedicated packaging team, led by Kitty Sandoval, is committed to delivering meaningful innovation consumers love – and improving the sustainability of our packaging at Frucor Suntory.

We made great progress in 2020, and This takes into consideration efficient . NZ Natural 500mL – locally sourced launched our first rPET into market. manufacturing and distribution PET material and a weight reduction of

The NZ Natural range is now in recyclable (CO2 reduction) as well as consumer 1g per bottle. packaging, using as much locally recycled functionality, safety and recycling. The In 2021, we’ll continue to keep consumers content as we can get our hands on – results mean we’re always trying to and customers at the heart of what we do something that’s important to us, as it helps minimise the environmental impact of and take further steps to introduce more maintain and develop local infrastructure. our packaging, while still delivering the rPET and to lightweight packaging. We’ve products that consumers know and love. During the development of our rPET begun work on moving our carbonated bottles, we were able to collaborate with Despite the global challenges this year, the beverages to recycled PET, removing shrink our Suntory colleagues around the world. team has managed a host of incremental wraps from our multipacks and continue to We tapped into their expertise – which improvements to packaging sustainability, remove the colour from some of our PET – helped fast-track our local solution – and with a big focus on reducing the use of like 7Up, Wave and V Iced Coffee bottles – shared learnings from the development. unnecessary plastic. to maximise their recycling value and And there are more projects we’re reduce consumer confusion. . Just Juice and Fresh Up 1L have seen connecting on globally. a material reduction of over 40%. Kitty Sandoval When it comes to improving our existing . h2go 600mL – PET material is now packaging we use the 3R mindset, Consumer Packaging Manager locally sourced and has seen a “Reduce, Reuse and Recycle”. material reduction of 15%.

Our packaging portfolio Our NZ Natural packaging

93% of our drinks containers are 58% 24% recyclable and a Cans PET bottles Glass bottles PET bottles Cans significant amount are recyclable are recyclable are recyclable of our packaging and made with and made with and made with range contains 60% recycled 100% recycled 65% recycled 8% 7% 3% recycled content content content content Glass bottles Tetra Pak rPET bottles

14 Growing For Good 2020 Frucor Suntory Growing For Good 2020 Frucor Suntory 15 Packaging is a hot topic PACKAGING for consumers and customers alike, so it’s a hot topic for us too. Same great taste... 2030 Dedicated 93% now with less waste Packaging G AL of our 2020 rating Excellence portfolio in is We’ve taken a significant step towards reducing waste of Level 4. team driving already We’re leading! by introducing cardboard packaging to our multipacks innovation 100% recyclable packaging of Pepsi, Pepsi Max, Mountain Dew and 7Up. Recyclable Our boxes Packaging The move from shrink wrap to cardboard contain, on average, will remove 2.7 million pieces of plastic Introduced 56% recycled from going to landfill each year – 2,800 public content and makes the packaging easier for place recycling consumers to recycle. bins across NZ There is greater consumer trust in the 60% of recycling process of cardboard compared APCO 2025 our Water SKUs are to soft plastics like shrink wrap, and packaging commitment in rPET recycling options are more readily Colour removal signatory available. programme underway The packaging can also be more to improve efficiently stacked and transported – recyclability meaning the change will also help We use Signatory reduce our carbon footprint. FSC paper Lightweighting to the NZ in packaging of Pepsi PET & Australia material where packaging Packaging possible in progress Forum’s 2025 Founding Pledge signatory of Ministry for the 85% of Environment’s our NPD is in NZ Packaging can or glass Our cans Declaration packaging contain an average of 66% recycled content Progress made so far...

2R+B Strategy APCO is a co-regulatory, not for profit organisation that As part of the Suntory Group, we adhere to the 2R+B strategy for partners with government and industry to reduce the harmful plastic bottle containers. The concept is to make thoroughly efficient impact of packaging on the Australian environment. APCO use of resources by reducing the amount of resins used, and by using promotes sustainable design and recycling initiatives, waste recycled materials, while replacing petroleum-based raw materials to landfill reduction activities and circular economy projects. with bio-based raw materials as much as possible in the development.

16 Growing For Good 2020 Frucor Suntory Growing For Good 2020 Frucor Suntory 17 WASTE WASTE

Our journey to zero waste Simply Squeezed At our main manufacturing plant in Auckland, we have takes steps to focussed on diverting waste from landfill and increasing our on-site recycling. reduce fruit waste A large contributor of waste at Frucor Suntory’s Hawke’s Bay We partnered with our waste service . Made some simple choices – like provider to conduct a detailed waste audit recyclable tasting cups (which our R&D production site is actually from remnant fruit material to better understand the largest areas of teams use daily as part of our product (the pomace) of the Valencia Oranges blended into the impact and opportunities for improvement. quality process). The results indicated a need to explain the company’s Simply Squeezed juices and smoothies. Our Procurement Team is working with key importance of putting waste in the right suppliers to build awareness of our plans place – and to make it as easy as possible The pomace is the seeds, peels and oils By-products that can be extracted and investigate opportunities to transition to do the right thing. So we introduced an that remain after pressing is complete, and from the pomace include Valencia oil, their packaging to materials that are internal campaign and simple branding to it makes up almost half the total waste New Zealand orange flour, freeze dried recyclable. help our teams understand what to do. that comes from juice pressing. cells and peel, orange fibre, orange As a result of our continuous improvement, thickener, orange antioxidants and orange In addition, we have: Put another way, over 43% of every we diverted an additional 5% waste from smoothie puree bases. orange that goes into making Simply . Introduced organic waste collection to going to landfill in 2020. Squeezed juices and smoothies is The next phase of the project will look our site – we now separate food scraps currently not being utilised. at the feasibility of extracting these for composting. ingredients, and assess the market demand Since October 2019, Frucor Suntory’s team . Arranged collection of electronic waste and opportunities for the by-products. of researchers has been working to find throughout the year – amounting to Progress is also being made with third alternative viable solutions for this waste almost one tonne! parties to develop products. with food technologists from Callaghan Innovation. The venture is being funded by the Bioresource Processing Alliance, New Zealand. The information that’s being realised Recycling waste diversion Recycling Waste through this work sets Frucor Suntory on a path to investigate opportunities 2020 to use more of the fruit in their products and gain more value from what is currently wasted. 2019

2018

18 Growing For Good 2020 Frucor Suntory 19 EMISSIONS EMISSIONS

Reducing our Frucor Suntory named environmental impact Top 10 Carbon Reducer - Since making our commitment to reduce our carbon by Toitu Envirocare footprint and partnering with Toitu- Envirocare in 2017, we’ve been actively measuring greenhouse gas emissions Being named a Top 10 Since then we have been measuring and - working to reduce our CO2 emissions in across the business in both New Zealand and Australia. Carbon Reducer by Toitu almost every one of our departments. Envirocare, illustrates the Last year, we also stepped up our We take a broad approach to our Part of our role is not just looking at the great work we’re doing commitment to reduce our CO2 emissions emissions reduction targets, looking at all emissions we are directly producing, but - - - to reduce our carbon by becoming a member of Te Ropu Kokiri – areas of the organisation to create three also working with customers to understand a subgroup within Toitu- made up of a core focus areas. how the fridges they select for stores has emissions (CO2). cross-section of organisations. an impact on the environment. . Making improvements to our Toitu- offers independent assessments As part of this working group, we have manufacturing equipment. Using an energy efficient fridge can lower and certifications aimed at aiding collectively helped to prevent 55,979 tonnes . overall emissions and have an impact on Changing our “tools of the trade” organisations to reduce their CO2 footprint. of carbon dioxide equivalents – that’s the their power bills and maintenance costs – fleet to hybrid vehicles. same as taking 33,000 cars off Auckland’s so it’s a long term win for everyone! We signed up to the Carbon Emissions streets for a year. Put another way, to offset . Placing low emission fridges with Measurement and Reporting Scheme in 55,979 tonnes with quality New Zealand customers. Marie Waterhouse 2017 after adopting a target to reduce CO2 forestry credits would cost over $2.7 million. In 2020 we introduced more hybrid Sustainability Working Group emissions by 35%. vehicles to our fleet. They now account for 20% of the vehicles our sales team operate. Hybrid vehicles reduce emissions by 50% – which is a big win for our sales team who need to be out and about every day. Although individual travel to and from our offices isn’t currently part of our calculations, we encourage those who can work flexibly to do so. By empowering our people to work from home during the week when it’s appropriate or to adjust their hours of travel outside peak times also helps our team to make a personal contribution to reducing their impact.

20 Growing For Good 2020 Frucor Suntory Growing For Good 2020 Frucor Suntory 21 WATER WATER

Using water thoughtfully Chasing some specific water savings targets during a confirmed drought is just the kind of challenge we should have expected from 2020!

Our big goal for the year was to install an All corporate businesses in Auckland We collect water air rinser on one of our can lines – a piece were asked to make a 10% water saving used during the of equipment enabling us to make savings on 2019 during the drought, to relieve bottle rinsing of 12 million litres of water every year. The the ongoing pressure on dams. We were process and technology is usually best installed by the able to do this consistently, and met with re-use it in the expert technicians at Jet Air that designed Watercare regularly to share insights, cooling process it... but with a global pandemic taking hold learnings and our progress. in March, the US-based engineers were Water response Alongside the air rinser install, our team unable to travel and assist with placement. introduced a number of initiatives to save Auckland’s drought impacted businesses across the region After weeks of discussions between our water wherever possible. We regularly local team and Jet Air, we agreed we had tap into the Suntory Global Engineering with a mandate for a 10% reduction in water use. the in-house expertise to proceed with network for best practice projects the install, supported – virtually – by the underway, machine performance insights At our Auckland-based manufacturing site re-use it in the cooling, finished batch supplier, and to start realising these water and innovative ideas for saving, reclaiming in Wiri, we instigated a cross-functional process. This demonstrates a thoughtful savings in 2020. and re-using water. team of people to investigate all application of water, and has contributed opportunities to reduce water use. In total, to our overall water savings targets. Over the year, our focus and effort on the team reviewed more than 300 ideas! making every drop matter throughout the We challenged our staff to play their manufacturing process has put us well One initiative that’s been introduced is a part too, keeping them updated on the ahead of the improvement rate required to new container rinser in batching. As part of state of our local dams with weekly achieve our 2030 water savings target. our manufacturing process, it’s essential levels and reminders shared via digital that flavour pails and liquid ingredient screens in key locations around our site. Jon Sackree containers are thoroughly rinsed and We encouraged the team to support each Chief Supply Chain & using flow moderation, the team can now other to do better by crowd sourcing ideas Quality Officer accurately control the water flow between to save water, distributing shower timers change-outs. and drip counters. Our juices are hot filled to maintain a We held weekly meetings with Watercare quality beverage going to market – but representatives to share our progress, need to be cooled in a special cooling gain their expert advice and insights tunnel before the bottles can proceed and teamed up with their engineers to to labelling. We now collect water used understand best practice initiatives we during the bottle rinsing process and could bring into our own operations.

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