THE NEXT CHAPTER 2017 IN ACHIEVEMENTS WELCOME TO THE NEXT CHAPTER UTZ was founded 15 years ago with a simple vision: to be proud of, sourced sustainably from bean to cup. Back then, was still treated with suspicion, especially in mainstream markets.

The 15 years since have taken us on quite a journey. Over 1.3 million farmers and workers and 3.4 million hectares of land are now part of our certification program, across the coffee, cocoa, and hazelnut sectors. In partnership with farmers, companies, civil society organizations, governments and other stakeholders, we have achieved great scale and great impact.

In more recent years we have also broadened our scope of work to further our mission. Our sector partnership program with the Dutch Ministry of Foreign Affairs has given us a chance to work with many partners on complex issues that require a sector approach, such as child labor, climate change and gender equity. Collaboration and partnerships have been key for UTZ from the very beginning and we are proud of the impact we have created together.

Through these fifteen years, UTZ has become more than just a label. It has become a driving force for change. We were thrilled to celebrate our anniversary with hundreds of our closest partners in October.

A NEW FUTURE AS THE We always knew that our 15th anniversary year would be special, but it became an even greater milestone than we could have imagined. In June we announced our intention to merge with the Rainforest Alliance, and on 1st January 2018 it became a reality.

Our merger will enable us to have a greater impact on the ground, and to be a better partner to all our stakeholders. We know we need to step up our game, as the challenges we work on are more urgent than ever: climate change, , systemic poverty and inequality. All are increasingly intertwined with the way we manage land and produce food.

With a combined 45 years of leadership in sustainable , forest conservation, and livelihoods, the new Rainforest Alliance will have unparalleled depth and breadth of expertise across agricultural commodities and geographical landscapes.

My pledge, as CEO of the new Rainforest Alliance, is to keep our focus on the shared vision that brought us together. Our organization will have a bigger reach and stronger voice, and will continue on the journey towards sustainability.

We are grateful for the support of all our partners, not only in 2017, but throughout our history. I warmly invite you to join us as we begin the next chapter.

Han de Groot, CEO of the Rainforest Alliance (former Executive Director of UTZ)

Page 2 - UTZ 2017 IN ACHIEVEMENTS - Page 3 THE STORY OF UTZ

Page 4 - UTZ 2017 IN ACHIEVEMENTS - Page 5 SCALING UP IMPACT FOR FARMERS AND COMMUNITIES CERTIFICATION PRODUCES AWARD-WINNING COCOA “It’s not just about buying and selling. It’s about empowering people.” Agung Widi from Kerta Semaya Samaniya cooperative, Jembrana, Indonesia.

In areas such as Jembrana cocoa is the lifeblood of the community. But until certification in 2011, cooperative members were lucky to produce 500kg of dry beans. The quality of the beans was low, and finding new buyers extremely difficult.

Now, after six years of UTZ certification, one family can produce more than 1-1.2 tons per hectare per year. Certification has introduced new processes such as fermentation, which has increased productivity and opened up new markets.

“UTZ is not just about the Code of Conduct. It’s about training, and how to build a spirit of togetherness. It starts in the field, and goes all the way to finding a good market,” says Widi.

It’s certainly paid off. Cocoa produced by the cooperative was recognized as one of the 50 best in the world at the 2017 International Cocoa Awards, held at the Salon du Chocolat event in Paris. And the cooperative is proud to supply seven new international buyers.

CONDITIONS IMPROVE FOR MIGRANT WORKERS “I employ 11 workers during harvest season and care about their living conditions. If I don’t want to live in that house, then workers also should not live in those conditions.” Turkish hazelnut farmer Sabahattin Ilgun.

Sixty percent of the world’s hazelnuts are produced in , but the industry remains heavily reliant on migrant workers, who often have to live and work in poor conditions. The UTZ hazelnut program launched in 2014, and has since tripled in size. By teaching better farming practices and addressing child labor and other social concerns, UTZ and our partners are changing attitudes and daily life for farmers and workers.

Sabahattin owns a 1.7-hectare hazelnut orchard, and last year he rebuilt the workers’ house on his farm to meet UTZ standards, installing hot water, a kitchen and electricity.

Almost 4,500 hazelnut farmers are now UTZ certified. As they adapt to certification they can become better employers, at the same time as improving their yields. With 14 exporters and processers and more than 60 market members, including Ferrero, the world’s largest buyer of hazelnuts already on board, their future prospects look bright.

A village in Côte d’Ivoire Page 6 - UTZ 2017 IN ACHIEVEMENTS - Page 7 PROGRESS TOWARDS A LIVING WAGE “Staying at a certified farm has given us more comfort both for ourselves and our children, who can go to school nearby while we work.” Brazilian coffee worker Renilson de Souza.

The reality of life on many coffee farms is tough. The work is physical and demanding, but often poorly paid. Yet for millions of people in coffee producing countries such as Brazil it is the only way to earn a living. Fortunately, certification can make a difference.

Every year, Renilson and his family make a 1,000-km journey across Brazil to harvest coffee. In the course of three months, the parents of the family can earn roughly the equivalent of nine months on the minimum wage back home.

The Ponto Alegre farm where Renilson’s family works is UTZ certified, and offers better conditions than many other farms.

UTZ certified farms are required to work towards paying a living wage – calculated as enough to give workers and their families a decent standard of living. Almost always more than any legal minimum wage, a living wage has the potential to make a significant difference to workers and their families.

A recent study of certified farms in Brazil found that 70% of workers had directly seen the benefits of certification, including improved wages, safer working conditions and better facilities*.

STRENGTH IN NUMBERS “As a cooperative we have a relationship of trust with farmers.” Bruno Valderrama Villafuerte, certification manager, ACOPAGRO cooperative, Peru.

Being part of a well-organized farmers’ group can be vitally important for small-scale farmers. A great example is ACOPAGRO, a Peruvian cocoa cooperative with around 2,000 members, 1,000 of whom are UTZ certified.

ACOPAGRO is organized into committees, each with its own network of trainers and promoters, who all help roll out new information and techniques to farmers. Technical assistants help implement changes in the field, and act as data gatherers, using GPS to check the land area of individual farms, estimating yields and keeping digital records.

This data makes it much easier for the cooperative to see how different farmers are doing, so they can target resources and training appropriately. With such a support network in place, no farmer is left to struggle on their own. “Here at our cooperative the farmers can see the impact of certification. They see their farms improving and their incomes going up,” says Bruno.

*“Effects of UTZ certification according to coffee farmers in Brazil”, BSD Consulting, 2015

A coffee farm in Brazil Page 8 - UTZ 2017 IN ACHIEVEMENTS - Page 9 WORKING TO BECOME CLIMATE-SMART “The climate has sort of changed. I had to introduce my irrigation system. But it’s costly. If you don’t have money in your pocket you can’t grow tea because it’s too dry.” Princewell Arnold Pendame, Malawian tea farmer.

Despite changes already felt on the ground, little information is available on the effects of climate change in the tea sector. So in 2017 UTZ worked with the Center for Tropical Agriculture to map the effects of climate change on Malawian tea growers.

The research revealed it will become harder to grow tea everywhere in Malawi over the coming decades, and the results will help us work towards long-term sustainability in the wider sector.

Many practices promoted by the UTZ Code of Conduct aim to make producers more resilient against climate change. In light of the new findings, we are increasing support on shade tree planting through more specific guidance, as well as facilitating knowledge exchange between countries such as Kenya, Zimbabwe and Malawi. We will continue to work innovatively to help make the tea sector in Malawi and beyond climate-smart in the long term.

10,000 FARMERS. ONE YEAR. ALL FULLY TRAINED. “I love the way the system transfers knowledge and empowers farmers. There are visible improvements almost straightaway.” Kwame Osei, UTZ Country Representative for Ghana and Nigeria.

With 100,000 members, Kuapa Kokoo cocoa cooperative in Ghana is huge. When 10,000 members became UTZ certified, the challenge was to roll out the knowledge and skills necessary for UTZ certification within a year.

Enter our ‘train-the-trainer’ model, where expertise and information is passed on in a cascade system. First, a needs assessment is carried out. Then field officers are given responsibility for a geographical area, some with upwards of 2,000 farmers to train. They start by leading two-hour training sessions with 15-20 farmers’ group leaders, often using their farms as demonstration plots.

Once group leaders are trained, they share their new skills with all farmers in their local group. And so knowledge is multiplied at every stage. “It’s a great way to make sure farmers can become entrepreneurs and run their farms as a professional business,” says Kwame.

Rooibos harvest in South Africa Page 10 - UTZ 2017 IN ACHIEVEMENTS - Page 11 THE FUTURE IS DIGITAL “The future of UTZ will be to find ways to make smart use of data and information to deliver more value to our partners.” Henk van Rikxoort, UTZ Innovation Manager.

UTZ has been testing several digital tools, including mobile apps that can be used offline in remote areas, and collaborating with cooperatives and farmers to support them with collecting information such as farm name, location and sustainability performance via their smart phones.

Once data is collected, we can analyse it and turn it into valuable information. Our in-house experts collate it with other available databases and technologies such as satellite imagery. This results in advanced performance reports and interactive maps pinpointing specific feedback for cooperatives or even for individual farmers. For instance, if we see deforestation occurring, we can give more targeted advice or suggest corrections on the ground.

The benefits of this digital revolution will ultimately extend throughout the supply chain, increasing the transparency, credibility and efficiency of the UTZ certification system, which is valuable for farmers and companies that invest in sustainability.

WORKING WITH NATIONAL AND INTERNATIONAL PLATFORMS At UTZ, we believe that multi-stakeholder collaboration is key to addressing the long-term issues that affect production. That’s why we work so closely with organizations like the Global Coffee Platform.

The Global Coffee Platform and UTZ are helping to create a space for discussion between governments, the private sector, producers and civil society in several countries worldwide, bringing people together to identify and address key challenges in the coffee sector. And by funding and co-convening several national platforms as part of our Sector Partnership Program, we are seeing concrete benefits filter down to many coffee producing countries.

In 2017 UTZ worked with many other organizations to convene and launch the Nicaraguan National Coffee Platform (NICAFES), and the Kenyan National Coffee Platform (‘Sauti ya Kahawa’ – voices of coffee in Swahili). In Honduras we brought stakeholders together to build a joint vision for the sector and discuss their priorities on enhancing coffee quality and increasing environmentally friendly coffee production.

In Uganda we supported the secretariat and members of the national coffee platform to study the profitability of coffee farming and share experiences on climate change adaptation, which will feed into training materials. And we supported SCOPI, the Platform of Indonesia, to help the agriculture ministry launch the National Sustainability Curriculum of Arabica, leading to training opportunities for thousands of farmers.

Drone technology is used at a hazelnut farm in Turkey to gain insights from the air Page 12 - UTZ 2017 IN ACHIEVEMENTS - Page 13 Page 14 - UTZ TRANSFORMING THE MARKET FOR SUSTAINABILITY FROM PIONEER COFFEE PROGRAM TO GLOBAL VOICE IN SUSTAINABLE MARKETS UTZ was founded with the goal of bringing more sustainably produced coffee to a mainstream market, and Dutch consumers were the first to buy UTZ labeled coffee in 2002, in the supermarket Albert Heijn.

Since then, we have taken big leaps forward. In 2017 alone there were more than 15,000 new consumer products on the market with the UTZ label on pack, in 131 countries.

CHANGING ATTITUDES, INCREASING COMMITMENTS Since the UTZ program began in 2002, there has been a fundamental shift in the mindset of many companies – from sustainability as a niche market or optional extra, to a growing recognition that corporate responsibility is now a license to operate. We have also seen this shift in our own work, with UTZ certified coffee, cocoa and tea – as well as our newest program, hazelnuts – seeing big growth year on year.

One factor at play is a change in consumer attitudes. Research consistently shows that consumers are more aware and more demanding around sustainability. Recent research by Cone Communications, for example, revealed that 91% of consumers in the world’s biggest economies expect companies to act responsibly in addressing social and environmental issues.

Another factor is an ever expanding legal framework that places obligations on companies to carry out due diligence or report on their sustainability initiatives. Many companies are choosing to use the UN Guiding Principles on Business and Human Rights or the Goals as a framework.

But there’s no room for complacency. A 2017 study by the Economist Intelligence Unit indicated that company actions may not always live up to the commitments they make. The report found that, while four in five companies said they had responsible supply chains, less than a quarter were actually addressing key issues such as climate change or child labor. In fact, 30% had decreased their focus on supply chain responsibility over the last five years.

What’s clear is that companies will continue to face greater scrutiny, with demand coming from all sides to put their commitments into action. Taking action is no longer a matter of choice - it is a matter of not being left behind.

Cocoa being spread to dry in Ghana 2017 IN ACHIEVEMENTS - Page 15 Page 16 - UTZ CERTIFICATION AT THE CORE OF SUSTAINABILITY STRATEGIES 2017 saw further evidence that certification is the primary tool for companies committed to improving their sustainability credentials.

Research from WWF and ISEAL showed how sustainability standards can help accelerate progress on many of the Sustainable Development Goals, while also delivering direct benefits for companies and small-scale producers. The research found that, “businesses have a key role to play in addressing social and environmental issues in their own supply chains and the wider sector they are part of,” adding that, “credible sustainability standards offer businesses a ready-made tool to do so.”

It’s not only the UTZ program that has grown in the last 15 years – the market for certified ingredients as a whole has grown exponentially, and this trend continues today. According to the International Trade Centre (a joint venture between the World Trade Organization and the UN), “sustainable agricultural products, demonstrably compliant with internationally recognized standards, are growing at a pace that outstrips markets for conventional products.”

LOOKING FORWARD In the future, the merger with the Rainforest Alliance will reduce the complexity of the certification process for companies that are now working with both programs, and at the same time it will increase efficiency and flexibility so that we can continuously improve services to meet business needs. Our new certification program will bring together and build upon the best of UTZ and the Rainforest Alliance, and we will guide companies through a step-by-step transition.

Visit the Better Business Hub at www.utz.org/better- business-hub and sign up via utz.org/newsletter.

A tea farm in India 2017 IN ACHIEVEMENTS - Page 17

“Regardless of whether it will give us any commercial benefit or not, we have a moral responsibility to do the best we can for the people in our supply chains. It’s important for companies to see the big picture and recognize that business as usual is no longer an option. When it comes to issues like climate change, the food value chain has a big impact. So committing to change this, to improve it, is absolutely worth it.” Robert Ronning, Director of Corporate Comnmunications, Orkla

“We recognize that to be out there in the field, we cannot do it by ourselves. We need to work with partners, and UTZ is the biggest partner we have. What UTZ does in the marketplace and how it secures its standard plays a very important part in securing our own value chain.” Erica Bertilsson, Arvid Nordquist

“We work together with UTZ because it is a reliable and well-recognized sustainability label. The philosophy of UTZ is to empower farmers by capacity building. For instance, farmers are trained in better farming methods, which allows them to adjust and improve their faming and harvesting methods in the long term. With this approach they can safeguard their income for the long run and at the same time protect the environment.” Stefan Feldbusch, Head of Tea Buying, OTG

“Certification is an essential building block in the Cocoa Promise approach. It allows us to address issues in our value chain, and show our capabilities beyond just generating a nice product. It was a solution that provided enough added value for our customers.” Taco Terheijden, Director of Cocoa Sustainability, Cargill

“When we started working towards sustainability almost 20 years ago, the idea of certification labels on packaging was quite new, and for the most part consumers were not aware of the sustainability challenges. Nowadays, we see many more people are willing to pay more for a higher quality product. For some, that’s about paying more for sustainability, while for others higher quality simply means better flavor.” Martijn Duin, Sourcing Manager, Ahold Delhaize Coffee Company

“Guided by our vision of creating a better everyday life for many people and being a responsible company, IKEA has worked with UTZ since 2008. Our customers expect that we are sourcing our ingredients in a responsible and transparent way. By working with UTZ we make it possible for our customers worldwide to make a conscious choice of a product that is better for the environment and for the workers that produce it.” Jacqui Macalister, Head of Health and Sustainability, IKEA Food Services

“The primary reason for working with UTZ is because we want to contribute to a more sustainable supply chain from farmer to consumer. At HEMA, the customer only needs to worry about what their favorite type of chocolate is or the flavour they want to eat that day. UTZ helps us build this reality.” Lian Enting, Category Manager Chocolate, HEMA

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A tea farm in India

2017 IN ACHIEVEMENTS - Page 23 OUR GLOBAL REACH

2017 FACTS & FIGURES

Page 26 - UTZ 2017 IN ACHIEVEMENTS - Page 27 Page 28 - UTZ 2017 IN ACHIEVEMENTS - Page 29 GOVERNANCE This section outlines the UTZ governance structure and membership until 31st December 2017.

JOINING FORCES In January 2018, UTZ merged with the Rainforest Alliance to create a new organization that carries forward the Rainforest Alliance name. We are combining our respective strengths because we know that together we can have a greater impact and be a better partner to our many stakeholders.

For more information visit www.utz.org/merger.

EXECUTIVE TEAM The UTZ Executive Team was responsible for the day to day affairs and management of the organization. In 2017, the Team consisted of:

Han de Groot Daan de Vries Britta Wyss Bisang Justin Leavenworth Executive Director Innovation & Program Director Global Markets Technology Director Director

For all UTZ staff please see: https://www.utz.org/who-we-are/who-is-who/

Page 30 - UTZ SUPERVISORY BOARD UTZ was governed by a multi-stakeholder Supervisory Board. Members included representatives from producer organizations, the supply chain (including brands, processors, trade, retailers), civil society/non-governmental organizations and trade unions.

Having supported the UTZ mission and governance for many years, the UTZ Supervisory Board has been indispensable. With their input and leadership, the organization has been enabled to achieve its impacts. Since January 2018, most members of the UTZ Supervisory Board sit on the Rainforest Alliance Board of Directors. Nina Haase Juan Esteban Orduz SB member since 2016. Civil Society Representative. Head, Advocacy SB member since 2014. Producer Representative. President of Colombian and Policy Market Transformation Initiative at WWF. Coffee Federation, Inc., the North America subsidiary of the National Federation of Coffee Growers of Colombia (FNC) which Ton van der Laan represents more than 563,000 coffee-growing families. SB member since 2012, SB chair 2013-2018. Supply Chain Representative. Former CEO of Nidera, a commodity service and solutions provider for the Anurag Priyadarshi global agricultural markets and also worked for Cargill, Provimi, Unilever SB member since 2017. Supply Chain Representative. Global Sustainability and Philips. Manager at Tata Global Beverages. Board member of Ethical Tea Partnership UK and founding member of Trustea. Nalin Miglani SB member 2010-2016 and since 2017. Supply Chain Representative. Paul Andela Executive Vice President and Chief Human Resources Officer of Exl SB Member 2011-2017. Union Representative. Former International Service Holdings Inc. Former Chief HR and Corporate Development Secretary FNV Bondgenoten (largest Dutch trade union), former President Officer at Nutreco; and former Chief HR and Communication Officer at of ECF-IUF (now EFFAT), former President IUF. Tata Beverage Group. Sidiki Cissé Stefanie Miltenburg SB Member 2014-2017. Producer Representative. General Manager at SB member since 2011. Supply Chain Representative. Manager ANADER, the National Agency for Rural Development Support in Côte Sustainability & Global Partnerships at Royal Flora Holland. Formerly d’Ivoire. Director of International Corporate Social Responsibility at Jacobs Douwe Egberts and Director of DE Foundation. Cees van Rijn SB member 2013-2017. Supply Chain Representative. Worked for more than Paula Nimpuno 35 years in the agribusiness and food industry. He is former CFO at Nutreco SB member since 2013. Civil Society Representative. Development and worked at Sara Lee, McCain Foods and Nutricia. planning consultant working on issues of rural enterprise, social justice and policy development. Formerly Program Officer for Economic Jos de Loor Opportunities and Assets at the Ford Foundation Southern Africa. SB member 2016-2017. Supply Chain Representative. Former business leader for cocoa and chocolate for Cargill EMEA. Vanusia Nogueira SB member since 2014. Producer Representative. Executive Director of the Brazil Specialty Coffee Association (BSCA). Vanusia comes from a coffee growing family.

STANDARDS COMMITTEE The UTZ multi-stakeholder Standards Committee consisted of experts in the field of certification and sustainability, responsible for adopting and revising the UTZ standards. In 2017, we had to say goodbye to some of the pioneers that had been with us for the three term maximum. The new standard of the Rainforest Alliance will be published in 2019, for which we will appoint a new Standards Committee.

Niwton Castro Moraes Jean-Yves Couloud Producer Representative. Technical Advisor for Coffee of Department of Producer Representative. Program Coordinator, World Cocoa Foundation, Agriculture of Minas Gerais State, Brazil. Côte d’Ivoire. On SC until 2017.

Anneke Fermont Stephanie Daniels Industry Representative. Regional Sustainability Manager, Kyagalanyi NGO Representative/Individual Expert. Program Manager, Agriculture & Coffee Ltd. (Volcafe), Uganda. Development, Sustainable Food Lab, USA. On SC until 2017.

Michele Pisetta Jürg von Niederhaeusern Industry Representative. Sustainable Project Developer. Ferrero Trading Industry Representative. Head of Social Compliance & Standards, Migros, Lux., Luxembourg. Switzerland. On SC until 2017.

Kraig Kraft Ximena Rueda Fajardo NGO Representative/Individual Expert. Regional Technical Advisor for Producer Representative. Research Associate, Stanford University, USA Coffee and Cocoa at Catholic Relief Services, Nicaragua. (previous: Strategic Marketing Director, Federación Nacional de Cafeteros de Colombia). On SC until 2017. Jenny Walther Thoss NGO representative/Individual Expert. World Wildlife Fund, Germany. Leonardo Sánchez Hernández NGO Representative/Individual Expert. Environment and Certification Ute Eisenlohr Expert, Aceres Consultants, Costa Rica. On SC until 2017. Certification Body Representative. IMO, Switzerland. Winaryo Suyono Britta Wyss Bisang Certification Body Representative. Control Union Certifications, Indonesia. Non-Voting Member. Program Director, UTZ. On SC until 2017.

Hugo Byrnes Industry Representative. VP Product Integrity, Ahold Delhaize, The . On SC until 2017.

The UTZ financial statements will be published later in 2018. For questions, please send an e-mail to [email protected].

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