Broetje Orchard s Corporate Responsibility PLACE BASED - PEOPLE CENTERED

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1 2016 Broetje Orchard s Corporate Responsibility PLACE BASED - PEOPLE CENTERED

2 All materials, content and forms contained in this report are the intellectual property of Broetje Orchards LLC and may not be copied, reproduced, distributed or displayed without Broetje Orchards express written permission. The information contained in this report is provided merely for educational purposes. Broetje Orchards LLC and/or its affiliates disclaims any responsibility for content errors, omissions, or infringing material and disclaims any responsibility associated with relying on the information provided in this report.

3 OUR MISSION A quality fruits company committed to bearing fruit that will last (John 15:16, 17 NIV) Executive Summary Broetje Orchards is a recognized leader in the apple industry, and for over 25 years has been one of the largest privately owned apple orchards in the United States with more than 6,000 acres of apples and cherries. As large as we are, we know that we did not achieve our success alone. We believe it is our business s mission to be a quality fruit company committed to bearing fruit that will last, that has allowed us to pass the test of time. Implicit in our mission is the concept that business does not have to thrive at the expense of the planet or its people, but can chart a course that provides employees, families, owners and communities an opportunity to grow and thrive. To this point, through the efforts of Broetje Orchard s philanthropic arm, the Vista Hermosa Foundation, we have made positive, community-building impact locally and globally. The work of the Vista Hermosa Foundation, however, is not subject of this report. Rather, our Corporate Responsibility efforts are focused much more on how we do our work within the business itself: how we treat one another, steward the land and build the capacity of all our employees to become better and healthier business leaders, parents and community members.

4 This report represents the third year of Broetje Orchards bringing additional accountability to its Corporate Responsibility efforts. What appears in this report is only a summation of our activities as they relate to the goals articulated in our prior year s report and do not represent the full extent of programs and efforts on the part of the company or its employees Goals: Fair Wage: Workplace Safety: Promote Employee Wellness: Ensure a safe and high quality product: Ensure careful use of natural resources: Meeting or exceeding our livable wage goal for all full-time employees (3/4 time or more) Maintaining a safety record that exceeds the annual, nationwide standards for the industry (per OSHA) Ensuring access to viable health care and the means to improve employee health Meeting or exceeding the expectation of our certifications (Food Safety) and be recognized as a leader in the industry Reducing our consumption - on a per-bin basis - of water. Reduce consumption of non-renewables: Seeking year-over-year reductions -on a per-bin basis - in our consumption of propane, electricity, gasoline and diesel. Reducing Waste/Promote Recycling: Improve Employee Engagement: Implementing measures that reduce year-over-year waste - on a per-bin basis - and increase year-overyear recycling. Implementing measures to assess and increase employee engagement.

5 2015 Employment Summary Highest number of employees at any time 2,100 2,453 Total Year Full-Time Employees Production Summary Bins Picked Bins Processed Cartons Shipped , ,971 5,756, , ,769 6,385, , ,245 6,580, , ,749 6,157, Housing Statistics Permanent Housing Seasonal Housing Total Number of Units/Beds: 136 (units) 364 (beds) Total individuals: Total families served: Number of quarterly inspections: Number of work orders: Number of Evictions

6 GOAL: Fair Wage Broetje Orchards has always provided a competitive wage, but beyond this it has long sought to provide a livable wage for its employees. Recognizing that what is considered a livable wage depends on many factors including where you live, the number of income earners in the family and how many people are in the household, Broetje Orchards works with the self-sufficiency wage calculator maintained by the University of Washington s School of Social Work. Broetje Orchards uses a dual income earning family with 2 children as our standard. Though over 60% of our employees are single and have lower wage-needs, using this as our standard ensures that our measure covers the vast majority of employees. 97% of all employees have 4 or fewer household members. Further, our wage number are based on the average hourly rate earned over the year for all workers deemed to be full-time (3/4 employment or more) and does not include any benefits or alternative compensations afforded to Broetje Orchard employees. Thus, many individuals benefit beyond this wage number in the childcare assistance, health care benefits, etc. that they receive in addition. Based on these criteria, Broetje Orchard s exceeded its self-sufficiency wage goal for the 2015 calendar year. The chart below provides the self-sufficiency standard for Walla Walla County, WA (updated 2015) to which this goal is set. The Self-Sufficiency Standard for Walla Walla County, WA 2015 (updated Aug. 2015) 2 Adults + Monthly Costs preschooler + teenager Housing $731 Child Care $811 Food $888 Transportation $486 Health Care $497 Miscellaneous $341 Taxes $530 Earned Income Tax Credit (-) $-8 Child Care Tax Credit (-) $-50 Child Tax Credit (-) $-167 Self-Sufficiency Wage Hourly $11.54 per adult Annual $48,724 Emergency Savings Fund (Monthly Contribution) $56

7 GOAL: Workplace Safety Broetje Orchards aims to provide all of our employees with a safe workplace. The table below provides a year over year summary of our progress to reduce the number of injuries in the workplace Total Hours Worked 3,417,879 3,722,439 3,559,701 Number of Accident Reports Number of Injury Claims Number of Recordable Cases (to BLS) Total away from work days *Incident Rate (per 100 full-time employees) *Incident Rate for Ag. Industry (WA) 8.3* 8.6* 8.6* *Days Away Rate *Days Away Rate for Ag. Industry (WA) 2.9* 2.7* 3.2* *Source: Bureau of Labor Statistics (US. Dept. of Labor), 2014, Industry Code: In general, Broetje Orchards saw a significant reduction (17%) in its incident rate in 2015, which was below industry averages. Of note as well is the significant reduction in our Days Away Rate which dropped by 43% over the 2014 number though still higher than the industry average.

8 GOAL: Promote Employee Wellness Overall, we define employee wellness as not simply having access to viable health care insurance, but rather improved health on the part of our employees and their families. With the advent of ACA regulations requiring large employers to provide insurance to all full-time employees, we knew that this would still not necessarily address whether our employees accessed doctors care nor if they actually saw better health outcomes. As such, in February of 2015, Broetje Orchards established the Vista Hermosa Clinic to provide access to healthcare at the workplace for both employees and their dependents. With these outreach efforts, we measure three key points in order to assess progress: 1. Having the means to access healthcare: an annual count of all full-time (3/4 time or more) who have health insurance through the company and those who have opted-out Total Full-Time Employees 946 Total Enrolled in company health insurance: 325 Percent Enrolled in health insurance: 34% Total Enrolled in company health clinic 728 Percent Enrolled in company health clinic 77% 2. Having access: annual data of health services provided by Broetje Orchards clinic 2015 % Total # Pt. Visits % Personal Visits % Work-related Visits %

9 Personal Visit Case Types 2015 Wellness services 34% Respiratory-upper 12% Musculoskeletal 8% Skin 8% Gastrointestinal 7% Neurologic 6% Cardiovascular 6% Allergy 5% Education services 4% Genito-urinary 4% HEENT 3% Respiratory-lower 2% 3. Improving health: annual tracking of health indicators based on aggregate data As 2015 represented our first year of both ACA compliance, our self-insurance program and the Vista Hermosa Clinic, we are currently reviewing data and will have a better sense of how to track this indicator moving forward. GOAL: Ensure a safe and high quality product Broetje Orchards will meet or exceed the expectations of our Food Safety certifications. Last Audit Valid Audit Score Certification Program Through SQF WAREHOUSE 10/27/ / SQF ORCHARD 10/27/ / USDA GAP s Harmonized Orchard 02/03/ /2017 PASS PASS Organic Food Handler 03/24/ /2017 Complied Complied Organic Food Producer 08/24/ /2016 Complied PASS Organic Food Producer Wallula 08/28/ /2016 PASS PASS

10 GOAL: Environmental Stewardship Broetje Orchards has had a long-standing goal of ensuring that we are good stewards of God s creation. As such, we implement agricultural best management practices (BMPs) that ensure we maximize our use of water and nutrients and at all times minimize the transfer of possible contaminants into the air and water systems. This is achieved not through any one action or activity, but through a combination of measures. Broetje Orchard s BMPs encompass soil and water conservation practices and other management techniques including: Crop Nutrient Management Erosion and Sediment Control Buffers Integrated Pest Management Irrigation Water Management Proper Handling, Mixing, Storage and Disposal of inputs Beyond these practices, we have established goals and measures focused on specific areas. Ensure careful use of natural resources - On a per-bin basis, Broetje Orchards will seek to reduce our consumption of water. While water usage on a per-bin basis remained relatively equal to the 2014 usage rates, when looking at warehouse usage (increase of 1.4%), water usage in our engine rooms increased 22% over the year before. This had the net effect of Broetje Orchard s potable water usage increasing by 23% as compared to Still, it is important to highlight that the investments in spray technology in 2013 are still having the desired effect given that water usage is still nearly 40% less that the pre-2013 levels.

11 Year Total Potable Warehouse Potable # of bins Gal./Bin Water Use Water Use Processed ,745,600 30,469, , ,735,200 37,913, , ,254,000 20,941, , ,661,800 23,298, , Water Use Detail Water Usage Summary: Dump Tank (HSL) 5,281,500 5,729,400 9,732,000 8,029,000 Dump Tank (CTP) 5,876,521 5,268,847 8,980,617 10,384,200 Total Estimated Packing Line Usage 11,158,021 10,998,247 18,712,617 18,413,200 Engine Rooms 03ER 1,522,200 1,342,800 5,924,100 1,830,700 10ER 1,367, ,500 1,637, ,100 90ER 551, ,900 6, ,300 94ER 4,600,300 3,816,000 5,728,500 4,391,500 87ER 4,098,500 3,694,000 5,905,200 4,493,200 Engine Room TOTAL 12,140,200 9,943,200 19,200,900 12,055,800 TOTAL Warehouse Usage 23,298,221 20,941,447 37,913,517 30,469,000 TOTAL SRHWS Usage 42,661,800 34,254,000 50,735,200 44,745,600 Percent Warehouse Usage 54.6% 61.1% 74.7% 68.1%

12 Reduce consumption of non-renewables - On a per-bin basis, seek year-over-year reductions. Propane Use Broetje Orchards achieved nearly a 10% reduction in the use of propane in 2015 as compared to the two previous years Gal/bin 2014 Gal/bin 2015 Gal/bin CTP - RED line 123, ,644 88,004 HS Line 131, , ,326 TOTAL Usage 255, , , Electrical Use Broetje Orchards considers our electrical use to be 100% renewable given that it is sourced from hydroelectric suppliers. Reducing Waste/Promote Recycling - and increase year-over-year recycling. On a per-bin basis, reduce year-over-year waste Broetje Orchard s recycling program includes office paper and newspaper, as well as polyethylene plastics, corrugated cardboard and cardboard trays from our warehouse operations. In 2015, Broetje Orchards saw a massive increase in the amount of materials recycled, ranging from 151% to a 357% increase Lbs. per bin Lbs. per bin % Change Cardboard Trays 21, , % Baled Cardboard 584, , % Plastic (poly) 8, , % Office/newspaper ,

13 Improve Employee Engagement Engagement can have a variety of meanings. At Broetje Orchards we see engagement as part of our larger mission to bear fruit that will last. As such, it begins with the following targets: Employees feel connection to their work Employees feel their work is important to the organization Employees feel a connection to the mission and vision of Broetje Orchards Employees take the opportunity to improve themselves and their families Employees increasingly offer themselves to serve others In our working with employees over the last 26 years, however, we have learned that often individuals must feel safe, have a sense of self-worth, spiritual wellness, confidence in themselves, and hope of a better future in order to be able to connect with the above measures. With this as our philosophy, Broetje Orchards has two specific strategies to address this larger topic: Manager Capacity-Building: Much of our work toward improving engagement centers on developing the capacities of our managers who are in direct contact with each employee every day. How they speak with their employees, demonstrate true compassion and caring for them, and model teamwork and positive communications helps build a culture that encourages individuals to feel safe, explore their strengths, trust in each other, and form supportive relationships.

14 Employee Assistance Program: To assist individuals who struggle, this program is available to address employee concerns and questions within or outside the workplace. Recognizing that employees are moms, dads, sons and daughters with a life outside the workplace, the program is designed to provide support, counseling, and referrals to help employees through difficulties that pertain to drug or alcohol abuse, family finances, domestic abuse issues, children and youth, and more. Further it provides a neutral forum to help resolve conflict in the workplace was a formative year for Broetje Orchards in its work to increase employee engagement with the creation of a new HR team, including the employee assistance program. In 2016, we will have the opportunity to expand on our experience to further develop measures and indicators.