INTROCLIMATESUSTAINABILITY2 019 /2020 REPORTWATERWASTEPACKAGINGLOGISTICSFlowers Foods is committed toapplying sustainability principlesto all aspects of its business.SCORECARD
Flowers SustainabilityScorecardAbout thisReport2
EO’s Message At Flowers Foods, we understand consumers care about where their food comes from and how it’s made.Our leading brands and delicious bakery foods are made with a commitment to operating efficiently,reducing waste, and sourcing ingredients responsibly. As part of that, we recognize our responsibilityto uphold the company’s founding values, which for more than 100 years, have centered on workingethically, responsibly, and with integrity. We also look for ways to make a positive difference at work andin our communities.By collaborating with stakeholders, including team members, business partners, suppliers, and customers,we’ve become a more sustainable company. We’re excited to share the progress we’ve made towardachieving Flowers’ 2025 goals:“By collaborating withstakeholders, including teammembers, business partners,suppliers, and customers, Invested in energy-efficient upgrades. Flowers continues to find new ways to integrate energyefficiency into the business. For example, we incorporated energy efficiency into the design ofa recent line addition at the Suwanee, Georgia bakery. Fifteen Flowers bakeries achieved U.S.Environmental Protection Agency (EPA) ENERGY STAR Certification in 2020 in part due to theseimprovements. Reduced waste sent to landfills. We have strengthened our waste program and developedinnovative methods to reduce and reuse at our bakeries and warehouses. In 2020, we set goalsto convert all of our packaging to recyclable, reusable, or compostable materials and to increasethe recycled content of our packaging by 2025. We’ve expanded our commitment to responsible sourcing practices. Flowers’ cake bakeriesmaintain Roundtable on Sustainable Palm Oil (RSPO) Supply Chain Certification, building uponour pledge to source 100% RSPO-certified palm oil for all cake products.Year after year, we’ve made progress against these goals, and we recognize there’s still work that needsto be done as we strengthen our commitment. In these unprecedented times, our progress would not bepossible without the focus and dedication of our team members.we’ve become a moresustainable company.Ryals McMullianPresident and CEOFlowers Foods3
ERFORMANCE SUMMARY PROGRESSSUSTAINABILITYSTRATEGY2025 GOALS*Reducegreenhouse gas emissions-17%20% per metric ton of product-17% Reducewater use 20% per-6%metric ton of product-6%Integrate sustainabilityinto existing processes Achievezero waste to landfill (98%91%or greater diversion) company-wide91% Provide support andresources for continualimprovementCommunicate successthrough multipleplatformsa. Convert 100% of packaging to recyclable/reusableor compostable materialNEWb. Introduce 20% of recycledmaterials into packagingNEW Source 100% RSPO-certified palm oil for100%products and achieve RSPO Supplyall cakeChain Certification for all cake bakeries100% *Compared to 2015 Baseline4
INTROCLIMATEWATERABOUT FLOWERS FOODSWASTEPACKAGINGLOGISTICSSCORECARDFlowers recognizes that sustainability makes the company stronger, increasingprofitability and enhancing shareholder value over the long term. Flowers iscommitted to applying sustainability processes to all aspects of its business. Workingwith team members, business partners, suppliers, and customers, the companystrives to prevent waste of water, packaging, energy, and other resources. Flowers Foods (NYSE: FLO), founded in Thomasville, Ga., in 1919 and headquartered there,is a leading producer of packaged bakery foods in the United States with reported sales of 4.1 billion in 2019. The company operates 46 bakery subsidiaries in 18 states and employsapproximately 9,700 people.OUR PRIMARY BRANDS:WHERE OURPRODUCTSARE BAKEDAND SOLDFresh (DSD*) territoryFrozen bakery foods and snackcakes are available nationwide.*Direct-store deliveryClick here for more info on Flowers Foods OUR STRATEGIC PRIORITIESOUR VISIONFOCUS ON BRANDSPrioritize national brands, invest in brand growth andinnovations, and streamline product assortment.OUR VALUESPRIORITIZE MARGINSReduce organizational and indirect costs, focus on strategic pricingand optimizing portfolio and network profitability.OUR CULTURESMART M&ASeeking innovative platform brands in grain-based foods beyond freshpackaged bread and geographic expansion of growth and core brands.As America’s premier baker, we craft foods that make people smile. We are driven by apassion to boldly grow our business through inspiring leadership, teamwork, and creativity.A passion for baking and our commitment to integrity, service, quality, and creativityguide all our efforts. Read more about our Social Responsibility practices.Always do what’s right. Respect every person. Be fair. Work as a team.DEVELOP TEAMEnhance critical capabilities to build brands, manage costs, deliverinsights, and drive execution.5
LIMATE Flowers recognizes that carbon dioxide and other greenhouse gases (GHG) in the atmosphere can havean adverse impact on global temperatures, weather patterns, and the frequency and severity of extremeweather and natural disasters. We make progress toward our emissions goal through a combination ofenergy awareness and efficiency upgrades. Manufacturing Emissions Intensity(mt CO2e/mt product)2016.2672017.2532018.2492019.2372025 Goal*.229*Compared to 2015 baseline2025 GoalResultsReduce manufacturing (GHG) emissions 20% permetric ton of productIn 2019, 86% of goal achieved.6
INTROEl PasoBakeryHEATRECOVERY1PACKAGINGLOGISTICSTRACKAt all of our facilities, including bakeries, distribution centers and warehouses,Flowers team members continually track energy and emissions with an onlineenergy management program – notifying bakery management of any unusualto operate proofchanges in energy consumption warranting investigation.boxes. Reducesmetric tons CO2e.WASTESCORECARD in place of boilersemissions by 248WATERENERGY STRATEGYUses heat recoveryannual GHGCLIMATE 2INTEGRATEWe continually look for opportunities to improve energy efficiency ofoperations. When upgrading equipment or installing new lines, weincorporate energy saving measures into the project. 3SHAREFlowers communicates best practices and recognizesenergy successes to internal audiences.Our Newton,North Carolinabakery receivednew LED lighting.7
INTROFOCUSAREASCOMPRESSED RGY INITIATIVES A large part of reducing our energy footprint comes from lighting our facilities, and we continue to find newways to integrate more efficient lighting fixtures and practices.LightingSince 2015, Flowers has completed LED lighting upgrades at 31 of its 46 bakeries. The new LED fixtures reduceenergy use with the added benefit of improving lighting levels and reducing the heat in the bakeries. Whenrenewing warehouse leases, we request LED lighting upgrades and repairs to improve the building’s overallenergy efficiency. We also upgraded lights to LED throughout the distribution center in Crossville, Tennessee.Compressed AirWe continue to upgrade compressed air systems to increase energy efficiency. These improvements involveinstalling systems with variable frequency drives, redesigning piping and air nozzles, and repairing air leaks.Heat RecoveryFlowers reuses waste heat from ovens at many locations. One bakery in Lewiston, Maine captures waste heat toheat water and warm the building and save approximately 217 metric tons of CO2e by using heat recovery.LIGHTINGHEAT RECOVERYThe Oxford, Pennsylvania bakery reusesheat generated by ovens to heat waterand other areas of the facility.8The Henderson, Nevada bakery upgraded to The Henderson bakery also removedenergy waste from its compressedLED lighting in 2019, one of 31 Flowersair system by redesigning air nozzles.bakeries to complete the process.
NERGY INITIATIVES As we invest in our operations – whether it’s new bakeries, production lines, or upgrades to existing equipment– sustainability and predictability features are an integral part of the design process.We consider energy usage at the start of capital projects, when planning new production lines, in order togenerate significant savings. One such example is the new energy-efficient production line added to theSuwanee, Georgia bakery in 2020.The production line’s new heat recovery system captures wasteheat from the oven’s oxidizer to heat the proof box and tote jackets.The line’s new pan cleaner uses an electric blower ratherthan compressed air to improve energy efficiency.The Suwanee bakery has LED lighting and motion sensors in storage areas.Engineers can adjust lighting levels and on/off times remotely.9
ARTNERSHIPS BETTER PLANTSEntering keyIn 2019, Flowers joined the U. S. Department of Energy’s (DOE)Better Plants Program, a voluntary public-private partnershipto help manufacturers set long-term efficiency goals.partnershipsDOE provides technical assistance, tools, and networkingopportunities to help companies like Flowers meet those goals.(See more on page 17.)to help usmeet ourgoals.Flowers’ Sustainability team attended a Better Plants Programevent during 2019. Shown from left: Wei Guo, DOE advisor;Margaret Ann Marsh, Flowers’ vice president/sustainability &environmental; Thomas Riggs, Flowers’ sustainability projectengineer; and Lori Driver, Flowers’ sustainability manager.10
N ENERGY STAR CERTIFICATIONThe Henderson, Nevada bakery celebrates its EnergyStar Certification with a socially distanced photo.Fifteen Flowers Foods bakeries earned the EPA’s ENERGY STARSCORECARD33%of Flowers Bakeries2020 Energy StarCertifiedcertification in 2020. More than half scored in the top 10 percent ofsimilar U. S. facilities for energy efficiency and meeting strict EPA-establishedperformance levels.Bakeries that achieve ENERGY STAR certification score in the top 25 percent of all U.S. commercial bread androll bakeries for improving energy performance through best practices and cost-effective improvements.These are the Flowers bakeries that earned ENERGY STAR certification in 2020:In 2020, the Batesville, Arkansas bakery receivedmore than 11,600 in rebates after completing twoefficiency upgrades. The bakery has completed sevenenergy projects since 2016, significantly reducing itsannual energy usage.Dave’s Killer BreadFlowers Baking Co. of HoustonFlowers Baking Co. of NorfolkFlowers Baking Co. of BatesvilleFlowers Baking Co. of LafayetteFlowers Baking Co. of TylerFlowers Baking Co. of Baton RougeFlowers Baking Co. of LynchburgHolsum Bakery of TollesonFlowers Baking Co. of El PasoFlowers Baking Co. of ModestoMesa Organic Baking Co.Flowers Baking Co. of HendersonFlowers Baking Co. of New OrleansTuscaloosa Organic Baking Co.11
INTROFOCUS AREAS BAKERIES:Nurture a culture where sound waterstewardship and operational excellenceis “business as usual.”CLIMATEWATERWASTEPACKAGINGLOGISTICSWater Stewardship Water PolicyWater is critical to the long-term health and vitality of people, communities, and ecosystemsand essential to Flowers operations. We are committed to applying water stewardshipprinciples to all aspects of our business. KEY INGREDIENTS & SUPPLIERS:Use resources, knowledge, andexpertise to facilitate improvementsin water stewardship within thecompany’s supply chain.Manufacturing Water Use(m3/mt product)20161.3620171.2320181.2920191.282025 Goal*1.09 COMMUNITY & WATERSHEDS:Understand water demand anddischarge in relation to the conditionsof communities and watersheds whereFlowers bakeries operate.SCORECARD*Compared to 2015 baseline2025 GoalResultsReduce water use 20% per metric ton of productIn 2019, 32% of goal achieved.12
ATER RISKS Water usage is essential to Flowers’ direct operations as well as across our supply chain. We have identifiedfacilities with high water risks and have taken actions to mitigate those risks.Direct OperationsFlowers’ bakeries depend on water as an ingredient and for cleaning. We evaluate current and potential wateravailability at bakery locations using the World Business Council for Sustainable Development’s Global WaterTool (WBSCD), the World Resources Institute (WRI) Aqueduct, and a third-party consultant.Since 2016, Flowers hasparticipated in the annualCDP Water Program, a publicdisclosure of the company’swater use. This reportprovides insight for investors,customers, non-governmentalorganizations, and othersinterested in how companiesmanage water risks.Supply ChainFlowers analyzes water risks across themajority of its wheat and sugar growingregions. Wheat and sugar are two keycommodities required for the manufactureof most Flowers products.HIGH WATER RISK LOCATIONSAs a CDP Supply Chain member, werequested ingredient suppliers to respondto the CDP Water Program in 2020. Thesesuppliers represent more than 75% ofFlowers’ annual ingredient spend. We willuse this information to better understandpotential water risks in our supply chain.Using the WBCSD Global Tool, WRI Aqueduct and a third-partyconsultant, Flowers identified eight bakeries with high water risks.13
ATER INITIATIVES Water use is inherent in our business, but we recognize the importance of conservation and work hard tobe as efficient as possible.MonitoringFlowers monitors monthly water consumption across all bakeries and alerts management of any unusualFlowers’ 2019 Pinnaclechanges in water usage. Managers also have access to Flowers’ energy management website and canAwards, the company’swater use more frequently and verify invoices.annual performanceprogram, recognizedregularly track their location’s water consumption. Some locations take on-site meter readings to monitorWater ReuseThere are limited opportunities to reuse water in baking processes. When possible, we reuse water forequipment that does not come into direct contact with food products, such as cooling towers. Flowers isbakeries that reducedexploring ways to expand water metering to improve tracking and help quantify water reuse.water withdrawals byTraining & Recognition8% or more comparedto their 2015 baseline.Flowers shares best practices through multiple communications platforms, highlighting sustainable cleaningpractices, water-efficient equipment use, and water leak identification. Flower’s 2019 Pinnacle Awardsprogram recognized bakeries that reduced water intensity by 8% or more compared to their 2015 baseline.14
INTROWASTEtoENERGYPROGRAMSSeveral bakeries achieved Zero Wasteto Landfill status by partnering withwaste-to-energy vendors.CLIMATEWATERWASTEPACKAGINGSCORECARDWASTE & RECYCLING Improving our recycling initiatives is central to our overall waste reduction. In 2019,Flowers took on the management of waste and recycling services across all bakeries,warehouses, and thrift stores. Through this transition, we have gained insight intoour waste operations and identified additional opportunities for diversion. Flowers’ Sustainability teamprovides the following waste/recycling supportCompany-wide Diversion Rate201689.9%201790.1%201891.1%201991.4%2025 Goal* Virtual dumpster surveys Site-specific best practicesand solutions On-demand training onmaterial handling Equipment technical support98% Reporting of bakeries’ wastesstreams and costs*Compared to 2015 baselineLast year, our Bradenton and Lakelandbakeries in Florida partnered with a newwaste-to-energy company. Each bakery nowdiverts over 100 tons of waste from landfill.LOGISTICS2025 GoalResultsAchieve zero waste to landfill company-wide (98% orgreater diversion of waste from landfill)In 2019, 93% of goal achieved.15
ECYCLING INITIATIVESThe Batesville, Arkansas andJamestown, North Carolinabakeries reduced landfill costs andincreased their diversion rates bytransporting cardboard waste fromwarehouses to the bakery for recycling. Flowers partners with external organizations to reduce waste and make donations.Site AssessmentsFlowers conducts site assessments to identify potential recycling savings and improvements. As a result, we haveinvested in waste equipment, such as balers and compactors, to improve recycling efforts at several bakeries.Special Recycling ProgramsIn 2020, we launched a company-wide battery recycling program and expanded our ink and cartridge recyclingprogram to all locations. The program provides containers with pre-paid shipping labels. Once containers arefilled and properly packaged, they are mailed to the vendor for recycling. We donateproceeds to local charities.Compactor MonitorsFlowers installed compactor monitors at many bakeries. The monitors automatically notify waste haulers whena pickup is needed. These devices provide intelligent monitoring and maximize container capacity to reduce thenumber of hauls.The Batesville Green team launched abackhaul program. Members includedrepresentatives from engineering,production and shipping departments.Logistics (Backhauls)Some Flowers warehouses and distribution centers utilize existing routes (relays) to returncardboard and stale to central locations for collection and baling. At high-volumewarehouses and distribution centers, we installed bulk collection systems for bothcardboard and stale from the market.The Suwanee, Georgia bakery recycles gaylord boxes (see photo at right)by sending them to other bakeries needing recycling containers.16
ARTNERSHIPS WASTE REDUCTION PILOT PROGRAMFlowers participates in a waste reduction pilot with the DOE’s 20 other10X20X30FOOD WASTEBetter Plants partners. Flowers works with this group to collectively set,track, and meet waste reduction goals. The pilot will help determinehow to expand the program to support other DOE partners.REDUCTION INITIATIVE In September 2020,Flowers joined the10x20x30 food wasteFOOD DONATIONSTo avoid food waste, Flowers bakeries partner with Feeding America and independentinitiative led by a group offood banks, soup kitchens, and other organizations that provide food to thethe world’s biggest foodneedy, donating unsold bakery foods. In 2019, we donated a total of 10.2retailers and providers. Themillion in bakery foods toward this effort. Flowers Foods is a Missionprogram offers training andPartner of Feeding America.technical assistance to helpsuppliers reduce food lossand waste in theiroperations.17Flowers operatesthrift stores thatsell product to thelocal community atdiscounted rates.
ACKAGING MADEof100%RECYCLABLEFlowers looks for ways to improve the sustainability of our packaging and limitthe amount of materials used to package our products. Most packaging is madeof recycled or recyclable materials.Flowers’ bread bags are made of 100% recyclable low-density polyethyleneplastic and the gauge of the plastic and size of the bags have been reduced tominimize plastic waste. Approximately 65% of folding cartons used for snackcakes are made from recycled materials. In addition, polystyrene trays forcake items are Polyethylene terephthalate (PET), a form of resin that is fullyrecyclable.LOW-DENSITY2025 TARGETSPLASTIC1POLYETHYLENEConvert all packagingto recyclable, reusable,or compostablematerials 2Introduce 20% ofrecycled materialsinto packaging 18
OGISTICS Through the direct-store delivery (DSD) network, Flowers ships fresh bakery foods from bakeriesto warehouses where it is picked up by independent distributor partners for delivery to retailand foodservice customers. DSD bakery’s products ultimately reach customers located withinapproximately 250 miles of the bakery.When Flowers serves markets farther from its bakeries, the sustainability and logistics teams lookfor ways to reduce the company’s carbon footprint of this greater travel distance. One solution isto ship product by rail, especially to the West Coast. Over the past few years, Flowers has divertedmore than 1 million miles of truck transport to rail.The Benefit of BackhaulsIn 2018, Flowers launched a company-wide pallet reuse program.Several bakeries use Grade A pallets to ship products to customers.To reduce waste and costs, bakeries send extra pallets fromingredients and packaging shipments to plants needing themfor existing backhauls. Over the past three years, Flowers hasreused over 150,000 pallets internally.19
ASB IndexThe disclosures in this report are informed by the recommendations of the Sustainability Accounting Standards Board (SASB)Processed Foods standard. SASB is an independent, standards-setting organization dedicated to improving the effectivenessand comparability of corporate disclosures on environmental, social and governance factors.Topic and Accounting MetricCodeSelective DisclosureFB-PF-130a.12019: 4,247,739 MMBtuEnergy ManagementTotal Energy Consumed2018: 4,270,474 MMBtuWater ManagementTotal Water WithdrawnFB-PF-140a.12019: 1,995,548 m32018: 2,001,360 m3Description of water management risks and discussion ofstrategies and practices to mitigate those risksFB-PF-140a.3See pages 12-14FB-PF-410a.2See page 18FB-PF-440a.2See Water Risks – Supply Chain, page 13FB-PF-000.B46Packaging Lifecycle ManagementDiscussion of strategies to reduce the environmental impactof packaging throughout its lifecycleIngredient SourcingList of priority food ingredients and discussion of sourcingrisks due to environmental and social considerationsActivity MetricNumber of production facilities20
019 SUSTAINABILITY SCORECARDEnergy ConsumptionManufacturing (MMBtu)Manufacturing (MMBtu/mt product)Company-wide 764,270,47420193,860,4302.804,247,739Green House Gas EmissionsScope 1 EmissionsManufacturing (mt CO2e)Manufacturing (mt CO2e/mt product)Company-wide (mt CO2e)Scope 2 EmissionsManufacturing (mt CO2e)Manufacturing (mt CO2e/mt product)Company-wide (mt ,32718,20095.1%90.1 %Water WithdrawalManufacturing (m3)Manufacturing (m3/mt product)Company-wide (m3)Waste & RecyclingManufacturing Waste (mt)Company-wide Waste (mt)Manufacturing Diversion Rate (%)Company-Wide Diversion RateManufacturing values include all locations that manufacture product. Company-wide values include warehouses, thrift stores, and corporate and sales offices, in addition to all manufacturing locations.MMBtu One million British thermal unitsmt metric tonsm3 cubic meters21
BOUT THIS REPORT VERIFICATIONInformation in this report was analyzed by internal departments but wasnot independently verified. Data was collected using external energymanagement programs, SAP, and manual data entry. Proxy data was usedrarely, and only when results were skewed due to individual meter failures. CONTACTPlease direct questions regarding this report to:Margaret Ann MarshVP, Environmental and SustainabilityFlowers FoodsEmail me 22
ORWARD-LOOKING STATEMENTStatements contained in this report are not historical facts andare forward-looking statements as defined in the United StatesPrivate Securities Litigation Reform Act of 1995. Forward-lookingstatements relate to current expectations regarding our futurefinancial condition, performance, and results of operations, plannedcapital expenditures, long-term objectives of management, supplyand demand, pricing trends and market forces, and integration plansthat are often identified by the use of words and phrases such as“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”“intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,”“is likely to,” “is expected to” or “will continue,” or the negative ofthese terms or other comparable terminology. All forward-lookingstatements are based upon assumptions we believe are reasonable.Forward-looking statements are based on current information andare subject to risks and uncertainties that could cause our actualresults to differ from those projected. Other factors that may causeactual results to differ from the forward-looking statements containedin this report and that may affect the company’s prospects in generalinclude, but are not limited to: (a) competitive conditions in thebaked foods industry, including promotional and price competition,(b) changes in consumer demand for our products, including changesin consumer behavior, trends and preferences, including health andwhole grain trends, and the movement toward more inexpensivestore-branded products, (c) the success of productivity improvementsand new product introductions, (d) a significant reduction in businesswith any of our major customers including a reduction from adversedevelopments in any of our customer's business, (e) fluctuations incommodity pricing, (f) energy and raw material costs and availabilityand hedging and counterparty risk, (g) our ability to fully integraterecent acquisitions into our business, (h) our ability to achieve cashflow from capital expenditures and acquisitions and the availabilityof new acquisitions that build shareholder value, (i) consolidationwithin the baking industry and related ind
achieving Flowers' 2025 goals: Invested in energy-efficient upgrades. Flowers continues to find new ways to integrate energy efficiency into the business. For example, we incorporated energy efficiency into the design of a recent line addition at the Suwanee, Georgia bakery. Fifteen Flowers bakeries achieved U.S.