Sustainabilty @ Emmi

Sustainabilty @ Emmi in Switzerland

Chur, October 31st 2014 / Max Peter

ContentAbout EmmiSustainability @ EmmiSustainability issues along the Emmi Value / Supply ChainSome thoughts

Sustainability @ Emmi Seite 2

Emmi at a glance

Sustainability @ Emmi

Sales 2013Sales first half-year 2014

§ CHF 3,298 million (56% Switzerland)

§ CHF 1,625 million

Net profit margin 2013§ 3.0%

Employees (full-time equivalents) § 5,266 (as per 30 June 2014)

Volume of milk processed in 2013 § 1,465 (2012: 1,220 million kg)


Product portfolio

Dairy products31 % (CHF 493 million)

Other products/services5 % (CHF 65 million)

Powder/concentrates3 % (CHF 58 million)

Cheese31 % (CHF 490 million)

Fresh cheese5 % (CHF 93 million)

Fresh products25 % (CHF 426 million)

Group net sales in the first half of 2014: CHF 1,625 million

House of Emmi Brands

One Word EquityEmmi

Product Brands

One Word EquityBrands

Emmi PositionStatement Where milk is turned into

moments of pleasure

Swiss original WellbeingInspirationAged to perfection

Moments of Pleasure

Local jewels


Key production sites in Switzerland


Emmen (Fresh products and cheese)

Bever (Cheese, dairy and freshproducts)

Ostermundigen (Fresh products andice cream)

Langnau (Fondue and processedcheese)

Dagmersellen(Mozzarella, powdered milk)

Kirchberg (Konfektionierung Käse,Export)

Suhr (Milk, cream, butter)

Kaltbach (Cow’s and goat’s milkcheese)

Bischofszell(Organic dairy and freshproducts)

Landquart (Raclette cheese)

Frenkendorf (Cheese, dairy and freshproducts)

Moudon (Cheese)

Key production sites outside Switzerland


USA: PlattevilleEmmi Roth USA

USA: MonroeEmmi Roth USA

France: AvignonEmmi Ambrosi

Austria: Nüziders Ger: Münchehofe, Dechow,Gläserne Molkerei

Italy: RamuscelloVenchiaredo

USA: Penn YanEmmi Penn Yan

Chile: PitrufquénSurlat Industrial (Kaiku)

Chile: LoncocheChilesur (Kaiku)

Spain: PamplonaLàcteos de Navarra

Tunisia: MahdiaCentrale Laitière

Italy: PeroRachelli

USA: ArcataCypress Grove Chèvre

Mexico: Mexideli 2000

Italy: Gattico

Italy:Rancio ValcuviaA-27

§ 1990s Formulation of an environmental policy

§ 1997 The Group's first ISO 14001 environmental certification (Dagmersellen)All Emmi locations in Switzerland have since received theISO 14001 certification

§ 2005 No genetically modified products

§ 2011 Formulation of a sustainability mission

§ 2011 1st sustainability report

§ 2012 1st sustainability motto of the year

§ 2013 2nd sustainability report

§ 2015 expand sustainability focus on the international business

Emmi has a long tradition in sustainability matters


"Our future success is based on achieving balance and

sustainability with regard to our economic, social and

environmental goals. In key areas of sustainability, we aim to act as an

international role model within the sector."

Emmi's sustainability mission


Four strategic directions of impact

Energy and resourcesIncrease in energy and resource efficiency and substitution of CO2-intensive energy sourceswith renewable energies or lower-carbon alternatives.

Milk and ingredientsUse of natural and respectfully produced milk and other ingredients for Emmi brands.

PackagingClosure of materials cycles.

EmployeesCreation of the conditions for family-friendly working models and more…


Key environmental measures 2008 to 2014 (Switzerland)

Sustainability is part of the corporate policy


2008 - Ostermundigen Heat generation fromwaste water

2009

2008 - BischofszellSolar power thanks tophotovoltaic facility

2008 - EmmenNew woodchip-firedsteam plant

2010 2011 2012 2014

Sustainability motto 2014 Intelligent mobility

2013

LandquartHeat recovery usingcompressed air

OstermundigenHeat recovery fromwaste gas

MoudonHeat generation with newcool air compressors

Emmen Heat generationusing ventilation energy

BeverSolar energy facility forprocess water

SaignelégierHigh-temperaturesolar energy facility forprocess water

SuhrExtraction of infrastructure heatfor use in water heating

Sustainability motto 2013 Close material cycles

1990iesEnvironmental organization1997Environmental MgmtISO 140012005 - DagmersellenChange from traditionalenergy to bio gaz2006 - DagmersellenCooling process usingwaste water

2006 - LandquartCooling process usingwaste water

bis 2008

DagmersellenInstallation of microgaz turbine

LogistikPartnership with railCare (Coop)

OstermundigenPre-warming of waterwith process heat

OstermundigenHeat generation with newcool air compressors

Ostermundigen Extraction of energy fromcoffee grounds (Caffè Latte)

comparison based on operating units forming today’s Emmi group

CO2 reduction – we have achieved Kyoto protocol


1990

35’500 35’752

2012

in absolute values

to of CO2

1990

- 52.5%

2011

84.9

g CO2 /kg processed milk

40.3

g / kg processed milk

How do we think and act?


§ one of our most important acting principle

§AVOID§REDUCE§RECYCLE / CLOSE LOOPS

principles



The degree of direct infuence in sustainabilty matters depends upon theindustrial role we have

Source Make

OwnBrands full full full full

Private label reduced Near full full Non existent

Third partyco-

packing

Reduced / none Near full reduced Non existent

Deliver Sale & Market

DEVELOPMENT à most important step to increase future sustainability

Sustainability throughout the Emmi value chain

Clear principles in product development:- No GMOs (genetically modified organisms)- Less additives- No preservatives- No lysozyme in cheese production (enzyme to prevent late blowing)

Example: Reduction of sugar

examination of existing recipes (e.g. yogurts: -10 to 15 % in 2011)new recipes with varying degrees of sweetness

alternatives to sugar (stevia, lactose)


DEVELOPMENT (products and packaging)


Packaging development – in the search of the right balance- thinner packaging- greener packaging material- but: no negative effect on: taste, shelf life, stability (à secondary packaging), haptics or optics

Example: Reduction of packaging material

joint project of packaging development, production, sales, marketing and Coop wins Emmi Sustainability Award 2013

- 19 optimisation projectsà annual cost savings: CHF 330’000

à saved material or replaced by greener alternative: 127’500 kilograms

Example: Reduction of packaging complexity

packaging variations in processed cheese from 20 to 2àless costs à more flexibilityàless faultsàless losses (due to frequent reconfigurations to machinery)


PROCUREMENT à choice of sustainable sources


Clear general terms and conditions of sale for suppliers:- GMO-free goods only- proactive information about nanotechnological components- certified Global Food Safety Initiative (GFSI) quality standard- minimal use uf secondary and tertiary packaging materials- recycling of secondary and tertiary packaging materials- guarantee about the compliance with applicable employment legislation and UN Convention on the

Rights of the Child and International Labour Organisation (ILO) at all stages of production and processing

Example: Coffee from RainforestAliance-certified plantations

Example: Free range eggs indesserts from Italy


PROCUREMENT


Example: Organic milk

Emmi is the largest processor of organicmilk in Switzerland

largest share of organic Swissmilk is processed in the

«Biomolkerei Biedermann»

acquisition of the first organic dairy outside Switzerland: «Gläserne Molkerei»

in Germany (2012)


PRODUCTION à MUDA principle saves every type of ressources

§ MUDA à reduce waste§ do the right things first time right§ increase efficiency & effectiveness§ continous improve



ENVIRONEMENT – Water, energies and waste

Example: Solar power

Biomolkerei Biedermann

Käserei Studer

Lataria Engiadinaisa(Schweizer Solarpreis 2012)

Saignelégier(Schweizer Solarpreis 2013)

Example: Energy and compost from coffee

> 100 mio. cups of EmmiCaffè Latte

freshly brewed coffee

1’900 tonnes of coffeegrounds

950’000 m3 of biogas

950 tonns of compost

Example: Use of process heatfor preheating of brewing water

Brewing process for coffee (Emmi Caffè Latte and Emmi Pure Swiss Yogurt):average temperature of 90°C

Preheating to around 70°C by usingprocess heat

Savings of:- 2,2 mio kWh of energy- CHF 110’000- 110 tonnes of CO2


DISTRIBUTION à management of distribution network reduces tokm


- 6‘000 to 8‘000 pallets per day to our customers- fleet:

- 60 good vehicles owned by Emmi- 100 lorries owned by Emmi‘s subsidiaries Baumann Käse, Biomolkerei Biedermann and Emmi Frisch-Service- additional 60 to 90 vehicles from third-parties- 8,8 kilometres per year à 200 trips around the world- average fuel requirement: 29,2 litres of diesel (vs. 30,4 in 2008)

Example: Cooperation with railCare

deliveries to Coop in Ticinofrom road to rail

1’200 pallets per month

700 lorries per year

around 88 tonnesCO2 reduced

Example: Lorries with high Euro emissions standards

86 % of Emmi’s lorries meetEuro 5 emissions standard

2014: all Euro 3 lorries replacedby Euro 6


SALES & MARKETING à tell the customer the values


Example: Promoting sustainable products together

20th anniversary of Naturaplan

Organic versions of the classic brand cheeses LUZERNER, GALA and Gerber

Example: Emmi makes milk products – not money

Every year, Emmi supports at least 1’000 sport and school camps with products


SALES & MARKETING à labels to impove trust of consumers


Emmi manages more than 20 labels and their respective rules and standards

AHA Glutenfrei (Gluten-free) Kosher SpigaBarrata

Alpinavera GM-free Mountain and Alpine Ordinance SUISSE GARANTIE

AOP / AOC Halal Organic V-Label

Fairtrade / Max Havelaar IP Suisse / Terra Suisse Regional products Wiesenmilch

Rain Forest Alliance FAIR TRADE …

Sustainability @ Emmi 26

lots of chances along the Value & Supply Chain

§ any search of excellence along supply chain operations leads to mor sustainability

§ first step: search in your direct sphere of influence, then enlarge to the other ends of your supply chain (next tiers)

§ involve employees to earn low hanging fruits

§ big savings / big impacts need time, endurance and perseverance

§ think in life cycles and closing of possible loops

§ change managerial and operational thinking and behavior to this thinking

§ create the right incentives – as well on politic / economic level as on company level

§ sustainability is not a one-man/women show, neither a pure marketing issue, it should become part of the enterprise-DNA

§ the best idea is worth nothing, if it doesn’t meets customers

some thougths

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Sustainabilty @ Emmi

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