2017 ANNUAL Stewardship Report A Message From the Gordon Family For more than 120 years, being a are best able to recognize changes that responsible steward has been a could drive innovation and effi ciency, top priority for our company. That which are central to the economic commitment has shaped how we care vitality of our company and, ultimately, for the people who drive our success, allow us to achieve more with less. contribute to the communities in which For us, being in business is about more we live and work and protect the than making a profi t. It’s about sharing planet we all share. We’re committed to opportunity with our employees, improvement and responsible growth communities and the causes close to our and we’re excited to share our progress hearts. From raising money for people in our 2017 Annual Stewardship Report. impacted by natural disasters to building Now in our fi fth year of reporting, this a crisis pregnancy center in Zambia, we is our fi rst North American report. As believe in sharing the good, so together a growing organization that serves we can grow to our greatest potential. customers throughout the U.S. and Our employees embrace sharing and Canada, we believe a North American service, and in 2017 they demonstrated report provides a more comprehensive their commitment to community by representation of our stewardship supporting more than 460 organizations initiatives. across North America. In 2017, we focused our eff orts in We are grateful to our customers four areas: Sustainable Operations, and suppliers across North America, Responsible Sourcing, Empowering because it’s our business success People and Supporting Community. that aff ords us the opportunity to do In each area we implemented metrics far more than make a profi t. We are to increase our focus and measure our committed to innovation, responsible progress. growth and fi nancial performance, so 3 SUSTAINABLE OPERATIONS we can serve our customers, provide Facilities • Transportation • Waste Management We’re approaching these goals through jobs and strengthen communities for corporate initiatives, but we also believe generations to come. 9 RESPONSIBLE SOURCING our greatest opportunities come Products • Private Brands • Supply Chain • Food Safety through empowering our employees. Those who are closest to each process 14 EMPOWERING PEOPLE e Gordon Family Safety • Employee Wellness • Employee Engagement • Diversity & Inclusion • Learning & Development 20 SUPPORTING COMMUNITY Food Donations • Community Support • Partnerships • Gordon Family TABLE OF CONTENTS GORDON FOOD SERVICE® A MESSAGE FROM THE GORDON FAMILY / 2017 STEWARDSHIP REPORT // 2 SUSTAINABLE OPERATIONS We have a responsibility to safeguard the Earth for future generations. In pursuit of that goal we strive to enhance the sustainability of our operations by minimizing our environmental impact, effectively utilizing renewable resources and minimizing operational waste. Focused energy management in our distribution centers (DCs) and stores is a key strategic initiative. We are committed to designing and operating facilities that Facilities maximize performance while reducing energy consumption. CARBON-FREE ENERGY We’re also investing in other renewable energy sources, like the carbon-free energy options off ered by some electric utilities. We purchase carbon-free electricity plans for our locations in Illinois, Ohio, Pennsylvania and Michigan. With these plans, 100 percent of our energy at these locations is from a carbon-free source. Illinois, Ohio, 100% Pennsylvania CARBON-FREE and Michigan RENEWABLE ENERGY In 2016, we took a signifi cant step power generated by the wind farm DC ELECTRICITY forward in our commitment to using in 2017 eff ectively off set 57 percent OFFSET BY WIND POWER IN 2017 renewable energy by constructing of the electricity required to run our a wind farm. In 2017 we began to 24 North American DCs. Gordon recognize the benefi ts from the Food Service® is far ahead of the wind farm through the production U.S. Department of Energy’s goal of more than 113,000 MWh of for wind to supply 10 percent of the electricity. We earn energy credits nation’s electricity demand by 2020 57% from the electricity our wind farm and 20 percent by 2030. feeds into the electrical grid. The � +� O GORDON FOOD SERVICE FACILITIES / SUSTAINABLE OPERATIONS / 2017 STEWARDSHIP REPORT // 4 U.S. BATTLE OF THE BUILDINGS U.S. DCs competed to see who could reduce their kWh by the greatest percent compared to their 2016 usage. In their “crusade against kilowatts,” teams implemented numerous changes, including sealing vapor barriers, adding insulation, installing Variable Frequency Drives (VFDs), replacing exterior and interior lighting with LED bulbs and fixtures and adding lighting activity sensors. We also rolled out an Energy Management Dashboard during the contest to improve the visibility of DC energy usage. Energy practices are audited at each DC annually, identifying additional opportunities to improve performance. Based on the success of the contest, we will be repeating it for the U.S. and inviting our Canadian DCs to compete as well in 2018. SPOTLIGHT ON GREAT LAKES CENTRAL 9,378 MWh 1,124 MWh Our 50th Street DC in Grand for up to 4 hours each time. Total Rapids, Michigan, was the first-place contribution from those events was a winner in the Central Region in our reduction of 10,748 kWh, more than U.S. Battle of the Buildings. The 250% of their original commitment. team reduced energy use by 25.4% We carefully monitored refrigeration U.S. DCs COLLECTIVELY CANADA DCs COLLECTIVELY or 1,582 MWh: enough energy to and product temps throughout each REDUCED ELECTRICITY REDUCED ELECTRICITY power 127 homes for one year. event to ensure product integrity CONSUMPTION CONSUMPTION was not compromised. by 5.9% by 2.1% In addition to the internal recognition Enough energy to power Enough energy to power for 50th Street DC from the 754 houses 90 houses Battle of the Buildings, the Grand for one year for one year Rapids Freezer DC team was also recognized by Consumers Energy as a Demand Response All Star. As a 25% participant in the Demand Response program we partner with Consumers HOW MUCH ENERGY DO OUR DCs USE FOR EACH CASE SHIPPED? Energy to reduce our load on the 255OTH STREET DC IN +75O energy grid on short notice in an GRAND RAPIDS, MI, 2016 0.53 kWh/case economic event or emergency REDUCED ENERGY USE by 1,582 MWh situation. The Grand Rapids Freezer 2017 0.48 kWh/case DC maintenance team participated Enough energy to power in 9 events in 2017, reducing the 127 houses load from the refrigeration system for one year GORDON FOOD SERVICE FACILITIES / SUSTAINABLE OPERATIONS / 2017 STEWARDSHIP REPORT // 5 STORES FIND SAVINGS Gordon Food Service Store DC WATER locations recirculate the IN LED LIGHTS warm air generated by Efficient water management The Gordon Food Service refrigeration units to practices conserve this critical Store® team began transitioning heat the store. resource, reduce energy use and nearly 9,000 refrigerated contribute to overall sustainability. doors from fluorescent tube We utilize chemical-free treatment to LED lighting. Historically LED LIGHTING RETROFITS processes for water used in our DC the industry standard for We continued the transition cooling applications. Several of our to LED lighting in our DCs, distribution centers utilize retention door lighting, fluorescent offices and parking lots tube lighting is not well through lighting retrofit ponds to capture site runoff. Where suited to cold temperatures due to color loss, short operating life and projects in Central States, practical, we then use this water significant energy consumption. The new lighting offers a better shopping Florida, Great Lakes Central, for irrigation purposes. Our Gordon New England and Ohio Food Service Store locations use experience for our customers, with brighter lighting throughout the Valley Divisions. refrigerated section making it easier to see through the glass doors, while water recirculation pumps on water reducing unnecessary opening. Energy efficient LEDs also generate less heaters to reduce water waste and heat, reducing cooling costs. In addition, LED lighting has a longer life energy consumption. Our stores Gordon Food Service is an span, reducing the need for replacement and disposal of old bulbs. In Energy Star Partner with also have rain sensors on irrigation 2017, more than 30 stores had refrigerator door lights replaced and an the U.S. Environmental equipment to ensure sprinklers are additional 80 stores are planning to roll out these changes in 2018. Protection Agency. only used when needed. SPOTLIGHT ON CALGARY efficiency and nearly doubling the Waste: Reusable garbage bins are Safety: Employees earned a Employees in our Calgary Division utilization of the fleet. now being used instead of plastic Certificate of Recognition in Health bags. Waste is sorted as garbage, and Safety from the Province have embraced our commitment to Deliveries to Lethbridge Kilometers: organic waste and recyclable. of Alberta. The safety focus has maximize efficiency and reduce waste are now hauled using triples instead Recyclable materials are recycled, driven down workplace injuries and throughout our operations. A few of doubles, which eliminates reducing tons sent to the landfill. decreased workers compensation examples of the changes the Calgary kilometers and labor. claims. team implemented in 2017: Pallets: A third-party recycler picks Backhauls: Added backhauls to up damaged wood pallets that can’t Leadership: Leaders have earned Fleet Utilization: Operations existing routes and built internal be reused, reducing tons being sent Six Sigma Green Belt Certification, partnered with sales to implement backhaul routes instead of paying to the landfill. bringing a process quality improvement an earlier order cutoff enabling night a third party to pick up. runs to depart earlier, increasing route focus to the division. GORDON FOOD SERVICE FACILITIES / SUSTAINABLE OPERATIONS / 2017 STEWARDSHIP REPORT // 6 Efficient routing and maximizing our equipment to reduce unnecessary miles, fuel and emissions is a key strategic initiative for our company.