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2017 Sustainability Highlights

CONTINUING TO INVEST IN

THE FUTURE

2017 Sustai nab i lity H i g h li g hts

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4 UPDATE from Our CEO

6 OUR SUSTAINABILITY VOICE

8 SUSTAINABILITY VISION STATEMENT

10 WORKPLACE RESPONSIBILITY

14 CORPORATE CITIZENSHIP

18 SOURCING WITH PURPOSE

20 POWER OF OUR PROGRAMS

24 TEA IN ARGENTINA

26 2017 PERFORMANCE DATA

28 ENVIRONMENTAL CONSERVATION

30 CONTINUING FORWARD

TABLE OF CONTENTS

El Cedro farm in the La Coipa district of Peru doubled productivity from its seven acres of coffee after just two years with S&D’s Raíz Sustainability® platform.Cover: Liliam del Socorro Cardona Garcia spreads beans to dry on a space-saving rooftop patio on Casa Blanca farm in Antioquia, Colombia.


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A commitment to sustainability requires investing in the future, a commitment we made

more than five years ago. We recognize that investments in both our operations and our

supply chain are critical for the continued growth of our business and, more broadly, that

the many facets of sustainability relate directly to stronger performance. While challenging

at times, we have learned that creating a culture of sustainability means embedding

sustainability throughout all aspects of the business.

Now, as a part of Cott and as we evolve our offering to become a broader beverage

solutions provider, we are compelled to elevate our strategies even further. We will continue

to assert leadership in coffee and tea and build even further as a global beverage supplier.

I’m proud to share the progress of our investments in coffee communities at origin and

those within our own communities here at home. We invite you to enjoy this highlights

edition covering the 2017 calendar year.

Together, we’re taking action and making bold commitments.

CAPTION

Ron Hinson

President & CEO

S&D Coffee & Tea

UPDATE FROM OURCEO

La Montanita farm in La Armenia Alta, Colombia has seen improvement in all three impact areas of S&D’s Raíz Sustainability®: social, environmental, economic.


6 7Olga Cuellar speaks at Raíz Connect, the first-ever gathering for Raíz Sustainability® partners in 2017.

Sustainability must go further than developing a well-structured supply chain.

At S&D, that is the foundation which then requires integrating core values and

principles into the company’s actions to create meaningful impact.

Investing in long-term sustainability is a critical risk management tool—and

more. It drives innovation. It delivers impact at the farm level. It opens new

business opportunities. And it is critical to the future of the industry.

GOING BEYOND THE NORM

Olga Cuellar, based in Colombia, manages S&D’s strategic sustainability

initiatives to ensure S&D is prepared to meet long-term challenges and

opportunities. A native of a small coffee-producing town, she earned her

master’s degree in the U.S. in Latin American studies with her thesis on the

role of women in coffee production. In addition to being tri-lingual and a

licensed Q-Grader, Cuellar brings a passion fueled by more than a decade

of advocacy in the coffee industry.

STRATEGIC LEADERSHIP

S&D is redefining the corporate climate

with models that create real value.

OUR SUSTAINABILITY VOICE

"�Since�2012,�our�

approach�has�been�

holistic,�tackling�key�

challenges�such�as�

climate�change�and�

economic�support�for�

farmers.�We�are�taking�

what�we�have�learned�

to�reach�for�even�more�

ambitious�impact."

—�olga�Cuellar,� � Sustainability�Strategy�Leader


8 9

SUSTAINABILITYVISION STATEMENT

S&D is paving the way, continuing our growth as a sustainable business. We recognize how vital sustainable

practices are to our current operations and for future growth, and consider it our responsibility to be good

stewards of the planet and positive contributors to society. We have set ambitious goals, made significant

progress and continue to take action. Our sustainability work is aligned with the United Nations Sustainable

Development Goals: promoting development that meets the needs of the present without preventing future

generations from being able to meet their own needs.

OUR SUSTAINABILITY APPROACH

At S&D Coffee & Tea, we strive to be the leading beverage partner within the foodservice industry

with innovative sustainable solutions for all stakeholders.

Key Focus Areas:Workplace Responsibility: We are committed to the health, safety

and continued development of our employees.

Corporate Citizenship: We contribute to the growth of those who live

and do business in our communities—at home and at origin.

Sourcing with Purpose: We know that sustainable investments and

the proactive management of risks drive the success and profitability

of our business, creating shared value within our supply chain that

leads to long-term success at all levels.

Environmental Conservation: We operate in a way that conserves

environmental resources while minimizing costs and improving

efficiencies, all while offering consistent, quality beverage solutions

for our customers.

Hector Fabio Marin is a young farmer who is eager to learn new practices for soil health and water management to apply to his farm in Antioquia, Colombia.


10 11

S&D maintains a safe and inclusive work environment, fostering a culture for

employees to realize their full potential while contributing to individual goals and

company success. We are committed to our employees because we recognize that

our people truly make the difference.

WORKPLACERESPONSIBILITY

Our first-ever employee opinion survey was conducted in September 2017. S&D partnered

with The Employers Association of Charlotte, N.C., to ensure anonymity and objectivity.

All S&D employees were invited to provide feedback through the survey and we received

an impressive 82% participation rate highlighting strengths in employee commitment,

supervisor management effectiveness and organizational practices. The overall measures

for our first survey are in line with national normative comparisons for manufacturing,

with the next survey planned for 2019. Results from the survey have been shared with all

employee teams at headquarters as well as with the sales field. Moving forward, an employee

survey action committee has been established to help identify and oversee the implementation

of potential actions that will continue to cultivate S&D as an employer of choice.

EMPLOYEE SURVEY

Itzel Zaldivar, commodities inventory & logistics coordinator, is part of the team responsible for the raw material requirements for all of S&D’s coffee and tea production.


12 13

Natalie Clontz, S&D marketing manager, with other S&D employees learning about tea on the Charleston Tea Plantation

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Jae Alexander, an inaugural recipient of one of S&D’s 2014 scholarship awards, graduates from the University of North Carolina at Asheville in 2018.

Helen Griffith, currently S&D’s vice president of marketing, was among the first employees to complete an internal training course

known today as the Leadership Enrichment & Achievement Program.

A total of $30,000 has been contributed toward higher education since S&D began a college scholarship program in 2014 for children

and grandchildren of employees. Employees from a number of departments, ranging from sales and manufacturing to fleet services and

order processing, were granted financial assistance toward studies in majors such as psychology, communications, finance and forensics.

A summer camp scholarship was added in December 2017 to enrich the lives of employees’ children and grandchildren by supporting the

cost of a safe and unique summer experience for children who would not otherwise be able to attend their chosen program.

Over the course of 2015 to 2017, S&D has invested approximately $500,000 in leadership development. This includes internal training

through S&D’s Leadership Enrichment & Achievement Program (LEAP), providing over 20 highly qualified participants with advanced

training and personal coaching toward long-term career growth with S&D. Further, S&D continues to support the advancement of

women in foodservice, driving growth for individuals and organizations through Women’s Foodservice Forum (WFF), sending both

male and female employees to WFF annual conferences, local workshops and leadership training.

S&D SCHOLARSHIP PROGRAMS PROFESSIONAL DEVELOPMENT

"�This�program�stretches�

you�in�so�many�ways�

both�personally�

and�professionally.�

Everything�you�learn,�

such�as�stronger�

prioritization�and�time�

management�skills,�you�

are�able�to�apply�during�

the�program�and�on�

the�job�for�continued�

development.�You�

leave�this�program�

much�stronger�than�

you�enter�it."

—�Natalie�Clontz,�marketing�manager� � and�2017�LEAP�participant


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CORPORATECITIZENSHIPWe are passionate about making a difference, both in our home

community around Concord, N.C., and in the global communities

where our raw materials are grown. We embrace the leadership

responsibility of giving back in a number of strategic ways.

We impact the communities where we live and work through

employee-supported efforts that contribute time and resources

to many regional causes.

HOME COMMUNITY

LOCAL CHARITABLE GIVING

S&D continues to partner annually with United Way of the Carolinas, contributing

nearly $53,000 in 2017 from employees, special events and company match,

with 71% of the funds coming directly from our generous employees.

Additionally, employees participate on teams during the United Way Week

of Caring each year. The teams volunteer, on company time, in a variety of

community projects such as delivering meals for Cabarrus Meals on Wheels,

visiting with participants at Coltrane L.I.F.E. Center adult care facility and construction

for Habitat for Humanity. Further, S&D’s annual holiday “Season of Giving” food

and toy drive collected 840 individual food items for Cooperative Christian

Ministry and 260 toys donated to the Concord Fire Department for distribution.

DISASTER RELIEF

In direct response to the 2017 natural disasters, nearly $150,000 was donated

in support of those affected. S&D donated over $70,000 in contributions and

coffee to the Red Cross and Houston Food Banks supporting the Hurricane

Harvey relief efforts. Additionally, as a subsidiary of Cott Corporation,

S&D employees contributed to a greater fundraising effort for employees

of Cott North America affected by Hurricanes Harvey and Irma as well as

the earthquake in Mexico. Just over $79,000 in donations from S&D were

distributed to fellow associates who suffered from these natural disasters

to assist them with basic life necessities.

J&W CULINARY CHALLENGE

2017 marked the 7th annual culinary

competition at Johnson & Wales

University in Charlotte, with $10,600

in student prizes plus $5,000 donated

to a charity selected by the winner’s

chef mentor (the National Multiple

Sclerosis Society). Over the years,

hundreds of students have submitted

original recipes and 120 students have

gained valuable experience and expert

feedback participating through the

semifinal competition round.

S&D employees volunteer each year during the United Way Week of Caring, assisting in the community with tasks such as preparing bagged lunches for those in need.


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RE:CO SYMPOSIUM FELLOWSHIP PROGRAM

The Re:co event, hosted by the Specialty Coffee Association,

delves into the world of specialty coffee, shining a light on

development through speakers and interactive experiences.

The Fellowship Program extends a scholarship opportunity

to future leaders who may otherwise lack the financial

resources to attend. We are proud to invest in providing

access to this important event for up-and-coming thought

leaders and have supported the attendance of over 100

future coffee professionals from 2015 to 2017.

COFFEE QUALITY INSTITUTE (CQI)

S&D recognizes the need to empower women in the

coffee industry with hands-on training and other

critical decision-making tools. In order to more

easily integrate gender equity into existing supply

chain programs, S&D began using methodology from

CQI’s Partnership for Gender Equity (PGE) in our field

projects in Colombia and Nicaragua. Beginning to track

indicators, such as the proportion of women making

key decisions and participating in specific training

programs, will contribute to a systematic approach to

improve gender equity at origin.

The complex sustainability challenges facing our industry can only be tackled through collaboration. We join forces

with leading like-minded organizations to proactively address relevant challenges on a global scale. “S&D is pushing

the envelope in sustainability through industry engagement initiatives that are aligned with the challenges of the

industry as a whole,” notes Saurin Nanavati, COSA Director of Global Partnerships.

GLOBAL

SUSTAINABLE COFFEE CHALLENGE

S&D joined Conservation International’s global

challenge as one of the first members in 2016,

dedicated to the common goal of making coffee

the world’s first sustainable agricultural product.

We strengthened our involvement in 2017 with

a public commitment to support the production

of 150 mill ion lbs. of sustainable coffee through

our sourcing platform Raíz Sustainability® and

our purchases of certified coffees, while directly

impacting the livelihoods of 10,000 farming families

by 2020. Our sustainability team members David Piza

and Olga Cuellar are on the advisory council and

David leads the sustainable sourcing action network.

An aerial view of healthy coffee plants on La Prosperidad, a 29-acre farm in the town of Benatia in the Antioquia region of Colombia.

"�The�attendees�at�the�Re:co�Symposium�

represent�such�a�spectrum�of�coffee—

from�microbiology�researchers�to�

producers—and�I �saw�that�in�the�

Fellows�as�well.�I 've�been�able�to�

reaffirm�that�what�I'm�interested�in�

is�really�relevant�and�there's�a�lot�

of�need�for�research�in�those�areas."

—�Aleida�Stone,�2017�Re:co�Fellow


18 19

Natalie Clontz, S&D marketing manager, with other S&D employees learning about tea on the Charleston Tea Plantation

Advancing resilient supply chains means holding our partners accountable

for sustainable practices. We focus on commodities such as coffee and tea

where we can have the most impact.

Coffee and tea farmers are faced with growing demand, reduced farmable

land and decreased yield due to conditions such as unfavorable climate.

These issues deter younger generations from taking up the tradition, further

destabilizing the future of these crops. Sustainable practices are vital both to

our current operations and for our future growth. That’s why, six years ago,

we began pilot programs that led to the creation of Raíz Sustainability® in

2015, our sustainable sourcing platform for coffee and tea.

As a leader in guiding the foodservice industry toward more sustainable

practices, we take responsibility in educating our customers as well as our

peers. With a solution that provides transparency and traceability across a

complex supply chain, we help our customers understand the deep need for

sustainability. The foundation of our business relies on smallholder farmers

facing unique challenges that require access to resources and training not

otherwise available. One of our key initiatives is arming those in our supply

chain with the education and training to implement sustainable practices

that will effect change that makes significant impact.

SOURCINGWITH PURPOSE

RAÍZ SUSTAINABILITY® IS BUILT UPON THESE IMPACT PILLARS WITH SIX KEY FOCUS AREAS AS INDICATED:

SOCIALPromoting fair labor practices (1) such

as tracking workers’ hours, supplying

protective gear, providing first aid

supplies and ensuring no child labor.

ENVIRONMENTALEnsuring healthy soil (2) and clean

water (3) through proper analysis and

management techniques, plus training

on practices for forest conservation

(4) including using shade to slow

evaporation of water from the soil and

leaving natural growth to draw birds for

organic pest control.

ECONOMICIncreasing productivity (5) within

existing land areas through best

agricultural practices such as proper

pruning plus cost management (6)

through training including methods to

track expenses.

Maintaining efficient water management systems for coffee processing, such as the one on El Tríunfo farm in Nicaragua, is a key focus for the Raíz Sustainability® platform.


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POWER OF OUR PROGRAMS

Colombia (6)

Brazil (2)Peru (3)

Argentina (1)

Nicaragua (2)

6countries

12producingregions

15fully engagedprojects

4,900+farmersdirectlyimpacted

13,000+farmersindirectlyimpacted

COFFEE & TEA

Mexico (1)

Raíz Sustainability®, our sustainable sourcing platform

for coffee and tea, is rooted in impact. An inclusive

approach provides smallholder farmers with immediate

access to training and technical assistance to help adopt

best practices in agriculture and business management.

We work closely with our industry partners toward

measurable improvement in long-term solutions to

sustainability challenges.

In 2017, we continued to broaden our impact in both

coffee and tea, increasing the total number directly

impacted to over 4,900 farmers—an increase of nearly

10% from 2016. This represents more than 13,000

individuals when including family members who also

benefit from the Raíz platform. We expanded into Mexico

while completing the three-year program in Costa Rica.

Raíz had a significant impact in Costa Rica and we are

expecting to realize even greater impact in Mexico.

A worker picks ripe cherries on Los Cipreses farm in the Jaén province of Peru, where productivity has increased 33% as a part of Raíz Sustainability®.

JANUARY 2018


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RA Z CO N N ECT 2017The first-ever Raíz partners meeting was held in Medellin, Colombia, in July following the World Coffee Producers Forum.

Keynote speaker Kim Elena Ionescu, chief sustainability officer for the Specialty Coffee Association, shared thoughts on the future of

sustainability with nearly 50 attendees from Conservation International, Committee on Sustainability Assessment (COSA), SupplyShift and

nine local trading partners at origin whose direct relationships with farmers are critical to the success of Raíz Sustainability®. The event

included a workshop to brainstorm solutions around key challenges, generating ideas such as using pilot coffee farms to explore plant

diversity for increased production and increasing education and the use of technology to encourage youth to remain in the coffee business.

Julio Robledo, a Raíz Connect attendee with the FNC Antioquia Committee, believes that S&D is on the right path: “An important part of the

Raíz platform is caring for the farmers and their families. S&D is always planning for complete training at every farm.”

U PDATE-SO I L LA B In 2016, S&D contributed to the funding of a soil analysis lab for the de los Andes Cooperativa (a collective group of coffee

producers) in the Antioquia region of Colombia. The lab provides access for all 360 Raíz farmers in the region plus the

cooperative members, an estimated 3,500 farmers. In Colombia overall, only 5% of coffee growers utilize soil analysis practices

while a full 30% of farmers within this cluster—six times the country’s average—benefit from the services of the soil lab. Raíz

producers Ramón Alexander Acevedo and Mario Hernando Tamayo have both received significant benefit from the lab: Ramón

was able to reduce fertilizer costs by 16% and Mario was able to stop the use of unnecessary soil additives that had been used for

years without fully understanding the needs of his crops.

The first-ever gathering for Raíz Sustainability® brought together nearly 50 partners in Medellín, Colombia, to brainstorm solutions around key industry challenges.

Thousands of farmers in the Antioquia region of Colombia benefit from access to a state-of-the-art soil analysis lab

funded in part by S&D’s sustainabilty investments.


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Including both coffee and tea within Raíz Sustainability® was a key part of

the original planning and a priority for 2017 as we realized the initial stages of

this goal.

For our first sustainable tea project under the Raíz platform, S&D joined forces in

the Misiones region of Argentina with the Solidaridad Network and the Rainforest

Alliance. This region contains a unique subtropical forest ecosystem and, upon

completion of the project in 2019, producers will be able to certify their tea

production under the Rainforest Alliance’s Sustainable Agriculture Network (SAN)

standard as a first step toward a continuous improvement process. The project

supports 113 small-scale tea producers to improve production while reducing impact

on the environment, improving livelihoods and contributing to the preservation

of the ecosystem. An appropriate training program has been designed based on

initial assessments and five sessions were conducted in 2017, training farmers on

best agricultural practices beyond certification.

In May of 2017, S&D hosted the Landscape Level Risk Workshop in Oberá, Argentina,

in partnership with Tea2030 (a project led by nonprofit Forum for the Future)

and Finlays. This international workshop was the first of its kind for the Argentinian

tea sector, bringing over 60 competitive stakeholders together to openly discuss

best practices as well as shared risks such as climate change, deforestation and

regional infrastructure challenges. A steering committee was formed as a result

of the workshop to coordinate and lead future collective action ventures that will

mitigate risks mapped out during the session.

TEA INARGENTINA

The Nicolau family is among 113 producers partnering with S&D in the Misiones region of Argentina to improve production on their

family farm while reducing impact on the environment.


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SOCIAL

ECONOMIC

ENVIRONMENTAL

71%

70%

81%

28%

81%

3+

99%

86%

87%

100%

81%

99%

participate in social training with 76% practice adoption (worker health and

safety, worker housing conditions, labor rights, community responsibility).

of attendees in training are women, higher than the global average.

experience food security (access to sufficient nutritious food for all

household members).

participate in economic training with 70% practice adoption

(record keeping, land for renovation, tracking cost of production,

traceability standards).

report keeping business records.

report being very happy or happy with their current quality of life.

report that the benefits of coffee farming are very good or good.

report they are likely to continue in coffee farming.

Following three full years of Raíz implementation, a thorough

performance survey was designed by S&D together with the

Committee on Sustainability Assessment, and then conducted

by our local partners to evaluate program progress. We are

proud to highlight the following results.

participate in environmental training with 69% practice adoption

(reforestation, water resource protection, wildlife protection, soil

nutrient management, storage and use of agrochemicals, climate

change adaptation).

water and soil conservation practices have been adopted (water

catchments, irrigation, drainage, crop cover, mulching, shade trees,

live fences).

are now implementing best wastewater management practices.

are avoiding deforestation (not clearing natural land to add coffee area).

“Unlike similar interventions, the Raíz Sustainability® platform artfully addresses the sensitivities of the producers themselves, such as their aspirations and personal fulfillment, and enriches our own understanding.” —ECOM Brazil, trading partner

While women represent 60% of the agricultural workforce, only an estimated 10% have a legal land title. So they do not often have access to the commodities market or training services. —Food and Agriculture Organization of the United Nations

View across a coffee field near the office of Olam, one of our trading partners, in the Cajamarca region of Peru.

PERFORMANCE DATA FOR RAÍZ SUSTAINABILITY ®

PRODUCERS


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ENVIRONMENTAL CONSERVATIONWe are committed to conserving resources at our headquarters in Concord,

N.C., in order to reduce our environmental impact. Our three current areas

of focus are material management, operational efficiency to reduce water,

waste and electricity, and over-the-road fuel consumption.

Caption

PAPERLESS PAYROLL

Continually looking for additional ways to conserve, we made the decision in December

of 2017 to implement electronic pay stubs. With 1,200 pay stubs, an estimated 22,000

sheets of paper (more than 400 pounds) plus envelopes will be saved in 2018 alone.

HVAC SYSTEMS UPGRADE

A single custom air circulation fan in the main facility was replaced with multiple energy-

efficient modular fans with digital control features. These controls allow individual fan

speed to adjust based on the current airflow requirements, providing increased energy

efficiency by reducing electric consumption.

GREENHOUSE GAS EMISSIONS

We continue to look for opportunities to increase efficiencies and reduce the impact our

business has on the environment. Below you will find our Scope 1 and Scope 2 emissions

for our main facility. We will provide an in-depth look at our environmental progress in our

full Sustainability Report to be published in 2019.

Scope 1 Emissions: 21,488.27 metric tons CO2e

Scope 2 Emissions: 5,441.92 metric tons CO2e

OVER-THE-ROAD FUEL CONSUMPTION

We are proud to have realized a 7.67% reduction in fuel consumption (representing over 9,000

gallons) from 2016 to 2017, earning a 2017 High Performer achievement award from SmartWay®,

a program of the U.S. Environmental Protection Agency. Additionally, a new management system

planned for 2018 will utilize technology to further reduce fuel usage and make yard and dock

operations even more efficient.

Targeted management of the S&D fleet trucks led to S&D’s 7.67% reduction in over-the-road fuel consumption from 2016 to 2017.


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CONTINUING FORWARDOur vision for the future includes continuing to operate our

own business in the most sustainable way possible, as well as

working to provide solutions that allow our customers to meet

their specific sustainability objectives. As we leverage the value

of our significant investments to date, we will streamline our

processes and be more intentional in our engagement.

As we move forward, we will build upon our commitment

through strategic projects with an emphasis on environmental

performance, operational efficiency and an expanded sustainable

product portfolio. Long term, our vision includes reimagining

sustainability—challenging ourselves to go beyond—with a

diverse menu of sustainable beverage options that provide

innovative sustainable solutions for all of our partners.

Recognizing that the past 90 years have helped shape our

current business, we are thrilled to lead the way into a future

that will continue to inspire sustainable business practices for

us, our customers, our partners and for the industry as a whole.

Tradition balances with innovation on La Loma farm in the San Iganacio province of Peru, where productivity has increased through strategic investments.


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To learn more about our sustainability efforts, visit www.sdcoffeetea.com/about-us/corporate-social-responsibility-sustainabilitY© 2018 S&D Coffee, Inc.

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