2014 Sustainability Report
Flowers Foods recognizes that without a healthy environment our company
cannot be successful. We are committed to applying sustainability principles
to all aspects of our business. We encourage every Flowers Foods team
member to be responsible for conserving natural resources and to seek
ways to improve the company’s use of those resources.
Working with our team members, business partners, suppliers, and
customers, Flowers Foods strives to prevent waste of water, packaging,
energy, and other resources. Our commitment to sustainability makes us a
better and stronger company. We believe these efforts increase profitability
and enhance shareholder value over the long term.
Ongoing Sustainability Initiatives
• Reduce all forms of waste
• Recycle and reduce use of resources whenever possible
• Reduce fuel and energy consumption
• Further integrate sustainability into core processes
• Work with suppliers to embrace sustainability initiatives
Content
1.......Sustainability Statement & Initiatives
• Educate workforce about sustainability
• Participate in community efforts to encourage sustainability
2.............................................About this Report
2................2014 Sustainability Performance
3.................................... Operational Efficiency
3..............................................Carbon Footprint
3...........................................Water Stewardship
4.......................................Energy Conservation
4...............................................................Logistics
5..............................Sustainable Procurement
5......................................................... Solid Waste
6...................................... About Flowers Foods
For more information about
Flowers Foods and
its sustainability initiative,
visit www.flowersfoods.com.
Flowers Foods 2014 Sustainability Report 1
About this Report
This report covers the 2014 fiscal year (12/29/13 – 01/03/15) for Flowers
Foods. It includes forward-looking goals, encompasses bakeries owned and
operated by Flowers Foods, and includes data for distribution, warehouse,
office facilities, and resale outlet stores.
Our Vision
Together we work to be a truly exceptional
company focused on growth opportunities for
grain-based foods.
Our Mission
To drive sustainable growth that enhances value
for our shareholders, associates, distributors,
customers, consumers, and communities
Our Guiding Principles
• Integrity
• Service
• Quality
• Commitment
The Flowers Way
• Grow sales
• Invest wisely
• Give extraordinary service
• Bake smart
• Appreciate team
During this period, several production-related changes occurred at some of
our bakeries that should be noted. A bread line was added to our bakery in
Modesto, Calif., a bun line was added to our Henderson, Nev., bakery, and
we transferred two flour tortilla lines from a sold production facility in Texas
to our San Antonio bakery. Also during the year, we opened a closed, former
Hostess bakery in Knoxville, Tenn. Closed and non-operating facilities are
included in this report.
The information contained in this report is subject to internal data
management systems and controls and has been reviewed by our internal
audit staff. Flowers Foods does not yet seek external verification of its
sustainability reporting.
Flowers Foods’ 2014 Sustainability Performance
Flowers Foods’ sustainability performance improved in all areas with
the exception of electricity and transport miles. The factors negatively
impacting these two areas are outlined in this report under Energy
Conservation and Logistics.
Flowers’ sustainability performance continued to be impacted by
consolidation in the U. S. baking industry. Since 2007 (when Flowers issued
its first sustainability report) through 2014, the company acquired 11
bakeries and one bakery mix plant and expanded the geographic reach
of its direct-store-delivery (DSD) territory from roughly 50% of the U.S.
population to more than 81%. This ongoing, sustained growth affected
Flowers’ overall sustainability performance.
Despite operational growth and other market challenges, Flowers is
committed to achieving its sustainability goals, which also are part of the
company’s annual, performance-based Pinnacle Awards program.
Flowers Foods 2014 Sustainability Report 2
Operational Efficiency
Our primary sustainability focus continues to be eliminating all forms of waste within our direct control. We
have found that concentrating on yield and efficiency
have been successful in both cutting costs and minimizing use of valuable resources.
One measure of our operational performance is
production yield, which helps determine ingredient
waste. This is calculated by comparing the ingredients
used to make every product to what ships as finished
product. Our continuing improvement in production
yield is due to our ongoing focus on quality and process
improvement.
In 2014, our overall production yield increased by 0.15%
over 2013, reducing ingredient waste by approximately
5.64 million pounds. Since 2008, our production yield has
increased 2.63 percentage points. This means Flowers
has eliminated approximately 98.80 million pounds of
ingredient waste in 2014 compared to the 2008 rate. This
is equivalent to the amount of bread produced annually
by a large high-speed bakery.
We have achieved consistent improvements in this area
every year since 2008. We believe eliminating ingredient
materials waste not only saves money, but also saves on
the energy and carbon required to bring those ingredients from the farm to the bakery. This reflects an important component of our sustainability philosophy, which is
to be the best steward of all resources within our control.
Carbon Footprint
In calculating our carbon footprint, we use the World
Resources Institute and World Business Council for
Sustainable Development’s Greenhouse Gas Protocol
(GHG Protocol), the global standard for greenhouse gas
accounting.
We focus on Scope 1 and Scope 2 emissions. Under the
GHG Protocol, Scope 1 emissions are direct emissions
from owned or operated facilities, such as the oven fuel
burned during our bakery production and the gas or
diesel fuel used by company-owned or operated vehicles.
Scope 2 emissions are indirect emissions resulting from
the electricity used in our business. Flowers Foods also
has some emissions that fall under Scope 3--indirect
emissions that occur at, or come from sources outside,
our company. These emissions are generated as a
consequence of our business, such as the fuel used by
independent distributor partners. We are not yet able to
collect data on Scope 3 emissions.
In 2014, our Scope 1 emissions for manufacturing
operations were 163,579 metric tonnes of CO2e and
15,437 metric tonnes CO2e for non-manufacturing
facilities for a total of 179,016 metric tonnes of CO2e. Our
Scope 1 emissions increased 6.5% in 2014 compared to
2013. Natural gas consumption at our non-manufacturing
facilities increased for heating purposes, a result of our
expansion into northern climates.
Our Scope 2 emissions were 223,731 metric tonnes of
CO2e for manufacturing operations, and 28,102 metric
tonnes CO2e for non-manufacturing facilities for a total
of 251,833 metric tonnes of CO2e. Company-wide Scope
2 emissions increased by 0.8%, while our manufacturing
facilities lowered emissions by 1.2% from 2013 levels. The
majority of the increase in Scope 2 increased emissions
came from our non-manufacturing facilities supporting
our continued growth.
Indexed to production, our bakeries generated 0.279
tonnes CO2e per metric ton of finished product in 2014
compared to 0.282 in 2013 and 0.392 in 2012. Our nonmanufacturing facilities generated 0.032 tonnes CO2e per
metric ton of product sold in 2014 compared to 0.023 in
2013.
Note: CO2e stands for carbon dioxide equivalent and is the
internationally recognized measure of greenhouse emissions.
Water Stewardship
Water is a valuable resource and a vital ingredient in
bakery foods. A dependable and clean water supply is
critical for our bakeries, which obtain water from local
municipal water systems. At the end of 2014, we operated
five bakeries in water-stressed areas, according to the U.S.
Drought Monitor. The availability of consistent, quality
water is a concern we take very seriously. We are working
with our municipal partners to go beyond compliance to
help ensure a continuous and healthy water supply in all
the communities where we operate.
Flowers Foods 2014 Sustainability Report 3
We are pleased with this year’s progress regarding water
usage. We have seen an increase in water efficiency as
we integrate newly acquired bakeries to our standards.
Total indexed water usage for all Flowers bakeries in 2014
increased to 6.44 pounds of finished product per gallon
of water from 5.99 in 2013. This comes close to our 2015
goal of 6.50. Overall, we used less water in 2014 than in
2013, saving more than 35.8 million gallons of water.
Water usage at non-manufacturing facilities was 8.90% of
our total usage.
Natural Gas Usage
Finished product poundage per therm of natural gas
135.00*
2015*
120.18
2014
115.00
2013
2012
111.46
2011
113.56
2010
114.28
116.85
2009
123.15
2008
118.84
2007
*Target goal
Water Usage
Finished product poundage per gallon of water
2015*
6.50*
2014
6.44
2013
5.99
2012
6.05
5.53
2011
5.66
2010
2009
5.87
2008
5.88
Electricity Our finished product poundage per kWh
decreased from 7.46 in 2013 to 7.35 in 2014. This is
a 1.56% decrease in the indexed usage rate for our
manufacturing facilities.
Our primary challenge for electric efficiency is managing
a high base load to maintain systems, such as air and
refrigeration. Our performance this year was impacted by
a decrease in production volume in foodservice and cake
items and the startup of three new production lines.
5.83
2007
*Target goal
Energy Conservation
Natural gas and electricity are vital energy components in
commercial baking. Our energy performance in 2014 was
mixed compared to 2013 due to changes in production
volume and the startup of new production lines. We
know we achieve the greatest energy efficiency when our
production lines run at or near capacity and this is a focus
of our manufacturing strategy.
Natural Gas Flowers’ finished product poundage per
therm of natural gas increased from 115.00 pounds in
2013 to 120.18 in 2014. This is a 4.5% increase in the
indexed usage rate for our manufacturing facilities.
Overall, we used less natural gas in 2014 than in 2013.
This increased efficiency saved more than 1.14 million
therms of gas. Although we have not met our 2015 target,
our performance in 2014 is the best we have achieved
since 2008.
Non-manufacturing facilities represented 10.17% of our
total gas usage.
Non-manufacturing facilities represented 11.05% of our
total electricity usage.
Electricity Usage
Finished product poundage per kilowatt hours
7.90*
2015*
2014
7.35
2013
7.46
7.09
2012
6.61
2011
6.95
2010
6.81
2009
7.14
2008
2007
7.03
*Target goal
Logistics
We continue to look for ways to reduce the miles our
products travel. Examples include shifting production
between bakeries, adding new production lines, and
building new bakeries or acquiring bakeries in or near
new markets. We also strive to maximize trailer use and
Flowers Foods 2014 Sustainability Report 4
fill returning trucks (back hauls) with ingredients and
packaging shipments whenever possible.
We have made continued progress in this area even
though our DSD territory continues to grow significantly.
(See map below.) In 2008, Flowers acquired two bakeries
in Phoenix that greatly increased our distribution on
the west side of the country, and our pounds per mile
dropped significantly that year. From 2008 to 2011, our
pounds per mile steadily increased each year to exceed
Flowers’ DSD Territory and Expansion
Territory in 2004
Territory growth 2004 - 2014
our 2007 baseline. This is evidence that our logistical
network can build on the synergies of acquired territories
and improve efficiencies.
With the purchase of Lepage Bakeries in Maine and
Vermont in 2012, the trend reversed as we began transporting more products to cover the Northeast corridor.
In 2013, we acquired the Sara Lee brand for the state of
California as well as a bakery in Modesto, and opened a
closed Hostess plant in Henderson Nev. The rapid growth
in the West temporarily lowered our transport rate to
below our 2008 rate.
In 2014, we added a bread line to our Modesto, Calif.,
Transport Miles
Net pounds sold per transport mile
33.28*
2015*
29.12
2014
bakery and a bun line to our Henderson bakery. However,
in 2014, we achieved a rate of 29.12 net pounds sold per
transport mile compared to 30.03 in 2013. While this is
our third year of decline in this measure, it is a natural
consequence of geographic expansion. Since 2007, our
net pounds of product sold have increased by 46%, but
our transport miles have increased 59% to accommodate
a larger geographic area.
Over the next few years, we are confident that we can
achieve higher use of our transport resources as we add
capacity in our markets and build on the efficiency of our
manufacturing and logistics systems.
Looking specifically at the transport of cake products, we
have shipped snack cakes from our bakeries located in
the East to West Coast markets using rail service for the
past seven years. In 2014, we shipped 287 truckloads of
cake product by rail, saving the equivalent of 421,000
miles of truck transport. Since 2008, we have shipped
more than 1,200 truckloads by rail, saving an equivalent
of 1,778,000 transport miles.
Sustainable Procurement
Our bread bags are made with recyclable LDPE (lowdensity polyethylene) plastic and can be recycled. LDPE
is most commonly recycled into trash cans and liners,
compost bins, shipping containers, paneling, landscaping
ties, and floor tile. Most of Flowers’ multi-pack snack cake
boxes are made with 100% recycled paperboard and
also can be recycled. Consumers should check with their
local recycling centers about recycling bread bags and
paperboard.
We continue to look at different materials and methods
to improve the lifecycle sustainability of our consumer
packaging, mindful that the primary function of food
packaging is to protect and ensure quality and freshness.
30.03
2013
2012
31.42
31.96
2011
2010
31.08
2009
30.95
30.42
2008
31.69
2007
*Target goal
Solid Waste
Flowers Foods is committed to continuous solid waste
management and to cutting waste generation in all our
facilities. We believe landfill waste should be eliminated
without regard to production volume. Our goal is zero
waste to landfill. An absolute 10% reduction in landfill
Flowers Foods 2014 Sustainability Report 5
each year is a part of our annual Pinnacle Awards
program.
We calculate our diversion rate using landfill, recycling,
and food waste sent for reuse in animal feed. The
diversion rate for our manufacturing plants was 93.95%
in 2014, which shows continued improvement over the
93.33% achieved in 2013. The diversion rate for all of
our facilities (including non-manufacturing) increased
to 88.98% from 88.21% in 2014. Please note that these
numbers do not include bakery products donated to food
banks or other charitable groups.
Recycling and landfill diversion at our non-manufacturing
facilities (primarily warehouses and resale stores) is
challenging because of their relatively remote location
from our bakeries and the small volume of recyclables
that can be captured at each location. However, these
locations collectively generate about the same landfill as
our bakeries.
We continue to review opportunities to reduce, reuse, or
recycle as many waste items as possible. During 2014, we
returned our broken plastic bread trays to our vendor,
which converted them into 1.59 million pounds of plastic
used to make new bread trays. This is a long-standing,
closed-loop system of recycling that we are looking to
incorporate in other areas of our supply chain. These
numbers are not included in the diversion calculation
above.
About Flowers Foods
Flowers Foods (NYSE:FLO), headquartered in Thomasville,
Ga., is a leading producer and marketer of bakery foods
for retail and foodservice customers in the U.S.
The company’s 46 highly efficient bakeries produce
breads, buns, rolls, snack cakes, pastries, and tortillas.
Approximately 81% of the U.S. population has access to
the company’s fresh bakery foods through a network
of independent distributors serving the East, South,
Southwest, and California. Flowers’ frozen bakery items
and snack cakes are delivered to customers’ warehouses
nationwide.
Flowers’ brands are among the most well known in the
baking industry and are backed by consistent quality,
value, and good taste. Top company-owned retail brands
include Nature’s Own, Whitewheat, Cobblestone Bread
Co., Tastykake, Mrs. Freshley’s, and Blue Bird. In 2014,
Flowers Foods reported sales of $3.7 billion.
Flowers Foods • 1919 Flowers Circle • Thomasville, GA 31757
229.226.9110 • www.flowersfoods.com
Flowers Foods 2014 Sustainability Report 6