Our Commitment to Sustainability Welcome to Hilmar Cheese Company
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2 012 Our Commitment to Sustainability Welcome to Hilmar Cheese Company Making cheese and whey products that contribute nutrition, enjoyment and value to people’s lives. Owned by 11 local Jersey cow dairy farming families, Hilmar Cheese Company, Inc. produces cheese and whey products that nourish more than 20 million people worldwide each day. From the shredded cheese in tacos to the whey protein and lactose in infant formula, Hilmar Cheese Company and our division, Hilmar Ingredients, deliver the promise of dairy to consumers around the world. About Our Cover Contents Reflecting our commitment to the environment, The Company the community and our employees Letter from CEO 3 $10,000 Donated Our History 4 to Snack Pak 4 Kids Our Mission 5 to help them provide Goals and Progress 6 weekend meals for hungry students www.snackpak4kids.org Environmental Stewardship 8 100% of Our Employees 10 Reclaimed Economic Value 12 Water Community Engagement 14 is recycled and reused on our facilities and 40 Employees 31 Students for irrigation were promoted from received college within the company scholarships from Hilmar Cheese Company 100% of the This report is based on the methodology outlined by the Global Reporting Initiative (GRI), a nonprofit Dairy Farm Families organization that develops and publishes guidelines who ship their milk directly to Hilmar Cheese for reporting on sustainability performance. Company participate in the Farmers Assuring More information on the GRI can be found Responsible ManagementTM animal care program at www.globalreporting.org. The information presented reflects data collected for 2012 .....2 A Letter from Our CEO We appreciate you – a customer, business partner, employee, community member or consumer – taking an interest in learning a bit more about Hilmar Cheese Company, Inc. This is our third annual corporate sustainability report. In it, we reflect on our accomplishments and the areas in which we continue to improve. We know that we must earn the right to do business with our customers and within the communities where we operate. Our 2012 accomplishments included in the marketplace. Our dedicated staff works groundbreaking in California for a major hard to convert high-quality milk into products construction project – a LEEDS-certified demanded by global consumers. We know corporate headquarters and food innovation that as consumer desires change, conversion center. Our California facility also saw the equipment improves and formulas evolve, our installation of an additional biogas (methane) success depends on continuing to provide the digester to reduce our carbon footprint. Milk cheese and whey products our customers need. receiving and process improvements were completed at the Texas facility. People are our most valuable resource and we must take good care of our employees 2012 also had its challenges, especially and their families. In 2012, the severity of for many of the 230 independent dairy farm workplace injuries decreased. We have improved businesses from whom we purchase milk. Feed ergonomics, implemented new technology prices were at all time highs, squeezing the to assist with specific jobs and developed margins for dairies. Yet, the dairy farm families processes that reduce risk. Our “near miss” who directly ship milk to us demonstrated their program strives to reduce risk before it becomes continuing efforts to improve animal well-being an issue. With these actions in place we by participating in the National Dairy FARM continue looking for more we can do to make Program. Farmers Assuring Responsible Hilmar Cheese Company a safer and more ManagementTM, or FARM, includes best practices rewarding place to work. for dairy cow nutrition, health, housing and more developed by animal scientists and veterinarians. We are focused on protecting our natural resources, our employees and our future Hilmar Cheese Company is privately owned generations. It is our obligation, and it is by dairy farmers who understand the challenges the right thing to do. of the dairy farm business. The company was founded on the principle of paying for high- value milk and the philosophy that long-term industry success will come from innovation John Jeter .....3 Our Family-Owned Company Breaking ground on new headquarters, Hilmar, CA Our History In 1984, 12 Central California dairy families, seeking to maximize the value of their Jersey cows’ premium milk, created Hilmar Cheese Company, Inc. They invested heavily in research, the latest technology and employee excellence – a practice that continues to guide the privately held company today and remains a core part of The Hilmar Way. Company owners Committed to continuous improvement and innovation, the company has grown to be a leading producer of American-style cheese and whey products. We enjoy an international reputation for superior quality and consistency of our products and unparalleled, personalized service. Today, that reputation continues as the second and third generations of family owners (pictured at right with founding owners) share responsibility. For Hilmar Cheese Company, success means fostering long-term, mutually beneficial relationships between company owners, employees, milk producers, customers and the local community. .....4 Sustainability, Part of Our Legacy Dalhart, TX, facility Innovation Center & Headquarters Hilmar, CA, facility with new building site Our Mission from our Dalhart, Texas, manufacturing facility, and from our headquarters and manufacturing Commitment to sustainability is a core element facility in Hilmar, California. of the mission statement that Hilmar Cheese Company follows: We have incorporated recommendations from the newly created Stewardship and Through leadership-driven, high-performance Sustainability Guide for U.S. Dairy, a voluntary teamwork, Hilmar Cheese Company and framework for tracking and communicating Hilmar Ingredients develop and convert in a progress. The report also incorporates sustainable manner our premium milk supply methodology from the Global Reporting into innovative, top-quality dairy products for Initiative (GRI), a nonprofi t organization that customers worldwide who further add value develops and publishes guidelines for reporting in their markets. sustainability performance. And lastly, the report acknowledges principles important to our customers and our industry. Scope of this Report This report for calendar year 2012 is our third More about our sustainable practices can annual report. It refl ects total company efforts be found at hilmarcheese.com. .....5 Goals and Progress Category Focus Goals 2012 Progress Future Plans Environmental Recycled 100% of reclaimed water 8% increase in total volume of Increase the total amount of Stewardship Water for is recycled for facility reclaimed water available, with reclaimed water recycled for Irrigation landscaping and crop 100% of the water recycled for irrigation irrigation facility landscaping and crop irrigation Well Water Minimize the amount of 3% decrease from 2011 in the Implement additional strategies Use Reduction well water used for amount of well water used per to reduce well water use for production thousand pounds of production production Renewable 100% of the internally 45% of internally generated Increase amount of internally Energy available biogas (methane) biogas (methane) was used as generated biogas (methane) used as a fuel source a fuel source in boilers at both for use as a fuel source. facilities in 2012 Continue to evaluate other renewable energy opportunities. Energy Continually reduce 2% decrease from 2011 in Identify areas to implement Efficiency energy use the total amount of natural improvements gas used for production and other internal uses Air Emissions Decrease the amount of 6% decrease from 2011 Evaluate renewable options greenhouse (GHG) direct in the total amount of to reduce GHG emissions emissions per thousand greenhouse (GHG) direct pounds of product emissions per thousand pounds of product Solid Waste Recycle and reuse to Implemented office and break Continuous improvement Minimization create zero waste from room recycling program in recycling the material stream Package Minimize product Installed additional Work with suppliers Minimization packaging while cardboard compactor to continually improve maintaining quality packaging efficiency and material integrity Supplier Develop and maintain Reviewed sustainability Improve supplier auditing Responsibility relationships with suppliers programs of key production system who have similar material suppliers sustainability goals Transportation Reduce shipping Coordinate shipping to reduce Fully utilize options to reduce miles overall number of loads shipping miles Supplying Develop and maintain Completed dairy farm reviews Work with dairy farms who make Dairy relationships with the sustainability, animal care and Responsibility supplying dairy farms who quality milk a priority responsibly provide the highest quality milk .....6 Goals and Progress CategoryCategory FocusFocus GoalsGoals and Timing 2012Progress Progress FutureFuture Plans Employees Safety Decrease incidents of Severity of workplace injuries Performance is not acceptable. workplace injuries continued to decrease; overall New and additional proactive total of OSHA workplace safety programs under injuries increased 34% development for implementation. Training Implement The Hilmar Incorporated The Hilmar Way Adopt modules from continuous Way training into all new staff training improvement programs Tuition