Animals. People. Planet.

2015 CORPORATE CITIZENSHIP REPORT

HIGH PLAINS DAIRY FARMS (Gill)

HIGH PLAINS DAIRY FARMS 6,200 organic acres*

COLORADO

BOULDER HQ

PLATTEVILLE DAIRY FARM & MILK PLANT

ADDITIONAL CROPLAND (Yuma County)

Farm

Number of Organic Cows

High Plains Dairy Farm

5,400

Little Calf Ranch & Dairy Farm

3,300

High Meadow Dairy Farm

3,500

Ray-Glo Dairy Farm

2,000

(includes calves)

PLATTEVILLE DAIRY FARM & MILK PLANT

State-of-the-art, on-farm milk processing plant 1,400 organic cows and calves with 700 organic acres* YUMA CROPLAND 10,400 organic & transitional feed crop acres*

WE ONLY HOUSE OUR ANIMALS IN FREE-STALL BARNS AND OPEN, LOOSE-HOUSING. TIE-STALL BARNS ARE NEVER USED.

COLDWATER DAIRY FARMS 4,000 organic acres* COLDWATER DAIRY FARMS (Stratford)

Farm

Number of Organic Cows

Coldwater East Dairy Farm

6,700

Coldwater West Dairy Farm

4,000

PEPPER HEIFER FARM 4,300 organically managed heifers with 1,500 organic acres*

TEXAS

PEPPER HEIFER FARM (Dublin)

* acres include land for pasture, crops & facilities As of March 2015

2015 Corporate Citizenship Report

Table of Contents DESCRIPTION

PAGES

CEO LETTER

2

OUR SUPPLY CHAIN

4

CORPORATE CITIZENSHIP GOALS

6

20-YEAR COMMITMENT TO ORGANIC

10

ANIMAL HUSBANDRY IS A TOP PRIORITY

16

SUPPORTING PEOPLE & COMMUNITIES

22

People

24

Community

28

REDUCING OUR ENVIRONMENTAL IMPACT

30

Life Cycle Assessment of a Half Gallon of AOD Milk

32

Greenhouse Gas Emissions & Energy Use

35

Water Use & Recycling

38

Solid Waste & Recycling

40

If you are interested in additional GRI disclosures and information, please refer to the Appendix section, beginning on page 42.

APPENDIX

42

Goal-Setting Process

45

Stakeholder Engagement

46

Important Topics

49

Topics Related to Mission & Culture

50

Topics Related to Animals

52

Topics Related to People

54

Topics Related to the Planet

56

Governance & Oversight

61

GRI Index

62

Within the PDF - Click on the sections above to jump to that page.

Aurora Organic Dairy

1

Marc Peperzak, Founder & CEO Platteville, CO

Dear friends of Aurora Organic Dairy, Our Company was founded to bring the highest quality and freshest organic

To keep up with burgeoning consumer demand and help fill the gap in the

milk to mainstream America, with more affordable pricing and improved

overall U.S. organic milk supply, we significantly expanded our business

availability for consumers. It is this mission and our core Company values that

in 2013 and 2014, and can now positively influence more of our supply

drive our day-to-day decision-making and overall vision of corporate citizenship.

chain. We added one new farm – the High Meadow Dairy – in Gill, CO, expanded capacity at our Platteville milk plant by 40%, built an on-site cold

Since we published our first Corporate Citizenship Report in 2013, we have

storage facility at the plant, and launched a small organic beef business to

expanded our operations to meet the growing demand for organic dairy

respond to customer needs.

products. According to the Organic Trade Association, the organic dairy category now represents more than $5.4 billion in annual sales in the U.S.,

Each of our major expansions over the last two years has not only supported

and reflects one of the fastest growing segments in organics, with 10%

our mission, but has also driven environmental savings. For example, we

growth in 2014.

built our High Meadow Dairy close to our plant, which reduced the average distance our raw milk is shipped for processing, saving transportationrelated emissions.

“ Our vision for a sustainable future

With the new on-site cold storage facility, built in 2014, we now ship directly to retail customers out of our Platteville milk plant. This has greatly

is to tread more lightly on the planet,

reduced the number of transportation shuttles between our plant and

treat our people and animals with

advanced robotics and equipment to conserve energy.

respect, and give back to our local communities."

third-party off-site cold storage. Our state-of-the-art storage facility features

Greater efficiencies and the higher volumes of milk produced and processed at our facilities have driven reductions in our greenhouse gas (GHG) emissions and energy use per half gallon equivalent of milk. In areas that have proven more challenging, such as waste recycling and farm water

~MARC PEPERZAK, FOUNDER & CEO

measurement, we have placed renewed emphasis on investments in people and technologies to ensure we improve our progress toward our goals.

Aurora Organic Dairy

2

2015 Corporate Citizenship Report

In total, the feed ration requirement of our cows supports more than

PROGRESS TOWARD 2017 GOALS

80,000 organic acres used for grazing and harvesting crops. Of this, approximately 70,000 acres are operated by more than 120 independent farmers, and 11,000 organic pasture and crop acres are operated by our

9%

Company. In addition, we currently manage 12,000 acres of land used for facilities and farmland we are actively transitioning to organic. This includes 7,700 acres under management we have added since our prior report was published in 2013.

CO2e EMISSIONS

12 %

Because we actively grow feed crops and pasture, own cows and farms, and process organic milk, we can introduce values-driven practices throughout our supply chain. For example, animal husbandry is a top priority and we developed standards across our farms to ensure our cows are treated with

ENERGY USE

respect. To confirm we are doing our best to care for our animals, we certify our farms – and our raw milk and heifer suppliers – to high standards of animal welfare through Validus, a third-party animal welfare certification program. Going forward, we believe we have more opportunities to further collaborate with our suppliers – such as feed growers and milk haulers –

Per half gallon equivalent of milk in 2014 vs. 2012 baseline

on ways we can all adopt more sustainable practices. Over the last two years, we have made great strides in providing our 550

At Aurora Organic Dairy, corporate citizenship encompasses our three main

employees with safe working environments, enhanced job training, better

pillars of animals, people and planet. In the pages of this report, you will

communication, and competitive pay and benefits.

learn more about our unique vertically integrated business model, and how influencing more of our supply chain allows us to make a bigger overall positive impact. We are making progress toward our 2017 corporate citizenship goals (please refer to pages 6-9), and will continue to develop and refine individual goal areas. We will reduce our environmental footprint, further improve the well being of our dairy cows, and support our communities and employees into the future. We are also committed to transparent, comprehensive reporting, and are proud to be recognized for these efforts. In fact, our first Corporate Citizenship Report, published in 2013, was honored as the Best First Time Report in the 2015 Corporate Responsibility Reporting Awards. Thank you for your interest in our corporate citizenship program. We recognize that we are learning as we go, and we appreciate your support as our knowledge and ability to manage our various impact areas continue to evolve. As one of our most important stakeholder groups – our cows – would say … we will continue moooooooving forward toward our goals. Sincerely,

Platteville Dairy Farm, early 1980s

1976

Aurora Dairy Corp. founded in Jerome, ID

Aurora Organic Dairy

Marc Peperzak, Founder & CEO

1980

Phase 1 of Platteville Dairy Farm built

1984

HQ moves to Boulder, CO

3

Our cow-to-carton supply chain drives corporate citizenship at every stage CROP GROWING + TRANSPORT

FARMS, COWS + PASTURE

DISTRIBUTION

Our Core Values:

•

Organic

•

Environmental Stewardship

CROP GROWING + TRANSPORT

FARMS, COWS + PASTURE

RAW MILK TRANSPORT

70,000+ total organic crop acres supported, primarily operated by 120+ independent farmers   2,000 organic crop acres operated by AOD, with more being transitioned to organic

100% Organic

Full, efficient routes

1994

Aurora‘s Idaho farm began producing organic milk for start-up organic dairy brands

Aurora Organic Dairy

Cow Care

100% non-GMO Validus Animal and Worker Care Certified 9,000+ organic pasture acres operated by AOD

2003

Commitment to 100% organic, store-brand focus; Platteville farm converted to 100% organic

2004

Platteville on-farm milk plant built, shipped first organic milk to store-brand retail customer

4

•

•

2015 Corporate Citizenship Report

Our mission is to bring organic milk to mainstream America with the highest quality and freshness, more affordable pricing and improved availability for consumers.

RAW MILK TRANSPORT

Integrity

•

PLANT + COLD STORAGE

People

•

Stakeholders

PLANT + COLD STORAGE

ORGANIC MILK + BUTTER

•

Satisfaction

DISTRIBUTION Carriers EPA SmartWay certified

Safe Quality Food Level III Certified - 97% quality score

Aurora Organic Dairy

•

Returns

ORGANIC MILK + BUTTER Organic and non-GMO

Greater value Healthy and nutritious

78% of plant water recycled

High Plains Dairy Farm developed as new greenfield model for organic dairy farms

Innovation

Award-winning quality

Energy-efficient systems and robotics

2006

•

2007

Pepper Dairy Farm leased to meet growing customer demand for organic milk

2007

Coldwater Dairy Farm in Texas built to model High Plains Dairy Farm design

5

Corporate Citizenship Goals Mooooooving forward ENERGY USE – ON TARGET 2017 GOAL

2014 PROGRESS

15% 12% farm and plant energy use per half gallon equivalent of milk vs 2012 baseline

PLANT WASTE + RECYCLING FARM WASTE + RECYCLING – OFF TARGET 2017 GOAL

2014 PROGRESS

25% 0% diversion of landfill waste

– ON TARGET 2017 GOAL

2014 PROGRESS

75

54

%

%

diversion of landfill waste

In 2012, we had diverted 50% of our landfill waste, or 430 tons.

We will keep our farm waste diversion goal and increase efforts to achieve a 25% diversion by the end of 2017.

2008

First Life Cycle Assessment (LCA) conducted to determine environmental impacts

Aurora Organic Dairy

2008

Began tracking environmental footprint and developing corporate citizenship program

2009

Organic-born calf-rearing operations built and established at Little Calf Ranch in CO

6

2015 Corporate Citizenship Report

GHG EMISSIONS – ON TARGET 2017 GOAL

2014 PROGRESS

15

9

%

%

FARM WATER USE – RESTATED GOAL

per half gallon equivalent of milk vs 2012 baseline

PRIOR 2017 GOAL

15

%

per half gallon equivalent of milk

PLANT WATER USE

2014 PROGRESS

Measurements not precise without proper technology

Install remote operation technology on irrigation pivots

(2012 – 2014)

70% of irrigation pivots by end of 2015; 90% by end of 2016

– ON TARGET 2017 GOAL

15

While we have been estimating our farm water use, the data lacks precision. Additionally, our prior goal did not consider factors such as precipitation and soil composition. We are investing in irrigation technology that will enable us to remotely operate pivots and measure water use. This is the first step toward establishing water efficiency goals in the future.

2014 PROGRESS

%

NEW 2016 GOAL

18

%

ENTERIC + MANURE GHG EMISSIONS

per half gallon equivalent of milk vs 2012 baseline

– ON TARGET Net of pretreated and recycled water

2017 GOAL

2014 PROGRESS

Achieve best management practices to reduce cow emissions

Approx. 75% of all manure is managed using composting principles and best management practices in manure handling

Currently there are no proven, organic-approved methods to consistently reduce enteric emissions (from cow digestion), but we will continue to research this area.

2012

Began purchasing additional cropland to grow more of our own organic feed crops

Aurora Organic Dairy

2012

Dairy built at Little Calf Ranch in CO

2012

CSR goals and baseline established

7

Corporate Citizenship Goals Mooooooving forward

LAND MANAGEMENT – ON TARGET 2017 GOAL

2014 PROGRESS

Establish land management & acquisition criteria

All 7,700 additional acres since 2012 met established criteria for water, soil health & proximity to our dairies

Of our 23,000 acres under management, approximately 9,000 acres are pasture and the remainder is largely conventional farmland we are converting to organic.

ANIMAL CARE – ON TARGET & NEW GOAL ADDED INCIDENCE OF LAMENESS

INDUSTRY LEADERSHIP IN ANIMAL CARE

2015 GOAL

NEW 2017 GOAL

2014 PROGRESS

3rd party monitoring of dairy farms

Video cameras installed at critical areas of farms, internal monitoring occurring

2014 PROGRESS

20% 58% vs. 2012 baseline

2013

High Meadow Dairy Farm built in Gill, CO

Aurora Organic Dairy

24/7

2018 GOAL

2014 PROGRESS

2017 GOAL

2014 PROGRESS

Achieve Validus Animal Welfare Certification for three 3rd party heifer growers

2 of 3 heifer growers have been Validus Certified

Develop programs to minimize dehorning on farms

Using polled bull semen to minimize number of calves born with horns

2013

Pepper Dairy Farm becomes heifer raising farm

2013

First corporate citizenship report published

8

2015 Corporate Citizenship Report

WORKER HEALTH + SAFETY – NEW GOAL INCIDENCE OF INJURY 2017 GOAL

2014 PROGRESS

Continuously improve workplace injury rates at our farms and plant*

Plant

5%

Farms

9%

As compared to prior three-year average number of incidents per 200,000 hours worked

*Based on AOD average number of farms and plant OSHA reportable incidents from 2012 - 2014 vs. 2011 - 2013. Note: Plant incidents in the current period were inflated due to the plant expansion and cold storage facility construction. In 2014, our plant reported 5.3 OSHA incidents per 200,000 hours worked, which is 17% lower than the dairy manufacturing industry average of 6.4 incidents.

COMMUNITY + EMPLOYEE – ON TARGET 2017 GOAL

2014 PROGRESS

2017 GOAL

2014 PROGRESS

Demonstrate value of employee benefits to all employees

Face-to-face benefit enrollment meetings in English & Spanish at all locations

Improve communication with bilingual employees

All pertinent company information and trainings offered in English & Spanish

2017 GOAL

2014 PROGRESS

2017 GOAL

2014 PROGRESS

Enhanced training programs

Comprehensive animal welfare and safety training programs & videos presented to all employees at all facilities

Develop a community center at a remote farm location

Coldwater employee cafeteria and break room scheduled to be completed in 2015

2014

Plant expansion and on-site cold storage facility completed

Aurora Organic Dairy

2015

Recognized for Best First Time Report (published in 2013) in the 2015 Corporate Responsibility Reporting Awards

9

20-year Commitment to Organic For 20 years, Aurora Organic Dairy has produced organic milk.

We produce organic milk, butter and non-fat dry milk powder for

In 1994 we began producing organic milk for the new start-up

our customers. Our white fluid milk is ultra-pasteurized and is

brands in the organic dairy industry. In 2003, we committed

bottled at our plant in recyclable gallon plastic jugs and half gallon

exclusively to organic. Since then, we have continued to expand

cartons in non-fat, 1%, 2% and whole milk varieties. Our butter

our operations to meet the growing consumer demand for high-

and non-fat dry milk powder are processed at third-party facilities.

quality organic dairy products.

Our products are sold exclusively in the U.S. in all 50 states.

Platteville, CO

Aurora Organic Dairy

10

2015 Corporate Citizenship Report

Core Value: Organic Organic agriculture removes the use of synthetics from food production, reduces our impacts on the environment and provides consumers a healthful choice they want.

Aurora Organic Dairy

11

Stratford, TX

WE BELIEVE ORGANIC IS BETTER FOR ANIMALS,

100%

PEOPLE AND THE PLANET

ORGANIC

Our Colorado farms are certified organic by the Colorado Department of

The USDA National Organic Program requires that producers and

Agriculture, and our Texas farms and Colorado milk plant are certified by

manufacturers achieve a rigorous set of standards for agricultural crops,

Quality Assurance International (QAI). It is through this annual certification

livestock management and food processing. No synthetic pesticides,

process that we develop and adhere to our organic system plans and

herbicides, fertilizers or genetically modified organisms (GMOs) are used

demonstrate the many facets of our operations that make us organic.

to produce or manage crops and pasture we feed to our dairy cows. It also means our animals are never treated with antibiotics, synthetic growth

Sustainable and responsible farming is central to our organization and is

hormones or other unapproved substances. Organic dairy cows must receive

important to our key stakeholders (please refer to page 46). We manage

at least 30% of their dry matter intake (DMI) from certified organic pasture

the majority of our manure using composting principles and apply it to

for a minimum of 120 days during the grazing season.

our fields as organic-approved fertilizer, which provides environmental benefits, including better water retention, higher soil quality and fertility,

PREVENTION IS THE PRIORITY

and greater carbon sequestration. Other sustainable farming methods, such as proper crop rotation, help to keep our soils rich and nutrient-dense while

Because organic cows cannot receive antibiotics to prevent or treat disease,

suppressing insect pests and crop diseases.

we have a comprehensive animal health and wellness program that focuses on disease prevention. It includes high standards of sanitation at our

Each year, we have participated in the transition of more acres of farmland to

facilities, quality organic feed and bedding, organic-approved vaccines,

organic. In total, we currently manage more than 23,000 acres of farmland

activity collars that help to identify when a cow is sick, and employees who

for pasture, crops and facilities. Much of our cropland was purchased as

are trained to recognize when a cow needs attention. We evaluate our cows

conventional and is undergoing the three-year transition to organic. As we

daily for health indicators, and our nutritionist modifies feed rations for each

manage more farmland for organic feed crops, we will continue to enhance

group of cows based on needs. In addition to our on-staff veterinarians, we

our data-driven sustainable farming standards and criteria to keep our soils,

contract with local veterinarians who regularly visit our farms and help to

water, air and animals healthy.

keep our animals healthy.

Aurora Organic Dairy

12

2015 Corporate Citizenship Report

THE ORGANIC DAIRY DIFFERENCE

Input

Organic Dairy Always

Organic Pasture

minimum 30% DMI for at least 120 days each year during grazing season

USDA Certified

Always

Synthetic Pesticides

Never Used

Synthetic Herbicides

Never Used

Synthetic Growth Hormones

Never Used

Antibiotics

Never Used*

GMOs

Never Used

Location, TX

*Except to preserve the animal’s life – once treated, the animal is sold to a conventional dairy

We also maintain our animal care certification through Validus. Every

More than 80% of the milk we sell is produced on our own farms.

year since becoming Validus Certified, each of our farms has received

We also purchase milk from a few, select organic dairies once we

the highest rating of ‘Excellent’ (for more on Validus, please refer to

have ensured our milk quality and animal care programs are in place.

page 20).

These producers are Validus Certified for animal care and must have valid USDA organic certifications.

OUR SUPPLIERS MUST MEET OUR STANDARDS FOR ORGANIC EXCELLENCE

Companies supplying materials to our milk plant must adhere to our Supplier Policy, which is reviewed annually by our Director of Quality.

Our organic commitment provides a strong foundation for our business.

Suppliers must undergo a comprehensive food safety audit and meet the

It reaches deep into the supply chain to our many organic feed, animal

requirements of our Safe Quality Food (SQF) 2000 Level III Certification.

and raw milk suppliers, and to providers of farm and plant operational

SQF is a comprehensive third-party food safety certification program that

supplies. We support more than 120 independent certified organic

goes beyond the standard food manufacturing requirements for food safety

farmers, and require that they adhere to our farm sourcing policies. Our

and quality. In 2013 and 2014, all of our suppliers were compliant with our

sourcing policies stipulate that products must meet our quality standards

sourcing policies for our farms, milk and plant.

and be USDA organic certified. We expect competitive rates, open and transparent communications, and reliable service. In return, we treat all of our suppliers with integrity, provide a fair price and nurture long-term relationships. Our first preference is to work with local farmers and suppliers in the communities where we have facilities.

Aurora Organic Dairy

13

AWARD-WINNING ORGANIC MILK

1st Place for Ultra-Pasteurized Milk – World Dairy Expo, 2012

Best Fluid Milk Plant – All Star Dairy Association, 2008, 2012

Exceeds Industry Quality Standards – All Star Dairy Association, 2009 - 2012

LEADERS IN FOOD SAFETY AND QUALITY

MAKING ORGANIC DAIRY MORE AFFORDABLE

Our Platteville processing plant is 100% dedicated to organic milk

We believe organic dairy products should be readily available and more

processing and is certified organic by Quality Assurance International (QAI).

affordable for all consumers who choose them. In fact, it is our objective

Because we own much of our supply chain, we can focus on food quality

to bring our high-quality organic dairy products to more people through

and safety from cow to carton. Our plant is staffed with quality experts

our vertically integrated supply chain, efficiencies, spirit of innovation and

who provide ongoing feedback to our farms, which continuously improves

exclusive commitment to retail store brands. These store brands are typically

the quality of the milk we bottle. Whether it is sensory feedback related to

more affordable than their name-brand counterparts and are oftentimes

the diet of our dairy cows, or a result from the numerous quality tests we

available in stores that may not otherwise carry a large selection of organic

conduct at eight stages along the supply chain, this continuous feedback

products. Our 100% commitment to organic, store-brand dairy products

results in high-quality milk.

is central to our organizational mission, and allows us to have a positive influence on more organic acres, animals and people – both our employees

In addition to being organic certified by QAI, and meeting all the regulations

and consumers.

and requirements for dairy processing in the U.S., our milk plant is SQF Level III certified. This is a voluntary program that exceeds standard dairy manufacturing requirements. SQF Level III certified manufacturing facilities are certified to comply with international and domestic food safety regulations and, as a result, meet the highest standards for food processing, preparation and handling. Our Platteville milk plant has participated in SQF since 2009, and has received annual SQF audit scores between 97% 99% for the last six years. Our facilities are frequently visited by our stakeholders, including: Board of Directors, banks and lenders, retail customers, regulators, suppliers and insurers. Stakeholders visiting our facilities review our practices in a variety

CORE VALUE: SATISFACTION

We must earn our customers’ business every day by delivering relevant, high-quality products at an exceptional value.

of areas, including adherence to organic standards, employee benefits and practices, codes of conduct, ethical sourcing, workplace safety and quality. Aurora Organic Dairy

14

2015 Corporate Citizenship Report

MILK QUALITY SCORE OF

97% IN 2014

based on a maximum score of 100% from annual SQF audits

Stratford, TX

Aurora Organic Dairy

15

Animal Husbandry is a Top Priority At Aurora Organic Dairy, our dairy cows and employees are

above-and-beyond what is expected to ensure every employee,

our most important stakeholders. Animal husbandry is the

supplier and facility participating in our milk production reflects

cornerstone of our dairy farm operations, and we go

our high standards for animal care.

Dublin, TX

Aurora Organic Dairy

16

2015 Corporate Citizenship Report

Core Value: Cow Care The health and well-being of our dairy animals are our top priorities.

Aurora Organic Dairy

17

ANIMAL HUSBANDRY

Cow comfort Year-round outdoor access

Disease prevention

24/7 Supervision & health evaluation Nutritious organic feed & pasture

Employee training & in-house veterinarians Dublin, TX

Aurora Organic Dairy

18

2015 Corporate Citizenship Report

“Healthy, stress-free cows contribute to higher quality milk.” HANS BOTHE, DVM, DIRECTOR OF HERD HEALTH

Gill, CO

IN-HOUSE ANIMAL HUSBANDRY EXPERTISE A comprehensive animal care program, high standards for cleanliness, and

We have always employed on-staff veterinarians, and also have a dedicated,

employee training are critical to maintaining animal health and well-being

full-time farm management position to oversee all animal husbandry

in an organic system. We cannot rely on antibiotics to treat disease, so our

protocols. Dr. Hans Bothe, a long-time on-staff veterinarian, is our director

animal care protocols are crucial to keep our herds healthy. Throughout our

of herd health and ensures our dairy farms deliver the best in animal

35-year history as dairy farmers, we have cultivated expertise and adopted

care. Additionally, we consult with an outside nutritionist who continually

best practices in animal care. In fact, our Executive Vice President of Farm

customizes the feed ration for each facility, cow group and developmental

Operations, Juan Velez, MV, M.S., DACT, has spent more than 30 years in

stage to maximize animal health.

the dairy industry. During that time, he has developed many of the common animal care protocols used in organic dairy production to ensure cows stay

Our facilities are designed to optimize cow comfort and employee safety.

healthy without the use of antibiotics.

For example, walkways are lined with rubber mats to provide a cushioned lane for cows and employees, and milking bays are raised to reduce back

Animal care is the responsibility of every employee on our farms. Several

strain in our milking staff. Our cows have year-round outdoor access and

times a year, each worker participates in comprehensive training that covers

are protected from the elements with open, loose-housing and free-stall

key animal care and safety protocols. In 2013 we further enhanced our

barns. They graze on organic certified pasture in the grazing season, and

employee training programs by developing various modules and supporting

eat a nutritionally dense diet of organic feed from our fields and the fields

materials – such as presentations and videos – that provide continuous

managed by the more than 120 independent organic farmers we support.

reinforcement to our employees regarding animal care and safe animal handling best practices.

For more detail on our rigorous animal health and management protocols, please refer to page 53-54 of this report.

Aurora Organic Dairy

19

BE COMPASSIONATE / SEA COMPASIVO

To reflect our core values of compassion towards animals and people, bilingual signs are posted throughout our dairy farms.

Platteville, CO

CERTIFIED FOR ANIMAL HUSBANDRY BEST PRACTICES To ensure we maintain and continue to strengthen our commitment to animal husbandry, each of our farms and processing plant are voluntarily audited and certified by Validus, an independent USDA process verified animal welfare certifier. Our first farm was Validus certified in 2005, and we have since achieved Validus certification for each of our farms and milk plant. The audits include a thorough inspection of our animals, facilities, protocols and records. Inspectors score all of our farms on more than 115 animal welfare metrics, including: lameness, cleanliness, body condition, behavior, facilities, protocols and management. Every one of our farms has consistently received the top rating of “Excellent.”

“ After a thorough review of all the animal welfare certifications available, we selected Validus because of their rigorous review and audit process. Validus certifiers spend several days on our farms. They review our standards, practices and records, and observe our cows in all areas of our facilities. We are scored on more than 115 metrics related to animal care, and our farms have consistently earned the highest rating of Excellent.”

As of the end of 2014, two of our three major heifer suppliers, and our primary outside milk suppliers, have been Validus certified. Our goal is to certify our remaining heifer grower by the end of 2018.

Aurora Organic Dairy

DR. JUAN VELEZ, EVP OF FARM OPERATIONS

20

2015 Corporate Citizenship Report

CONTINUOUS IMPROVEMENT IN ANIMAL HUSBANDRY In 2012 we set additional animal care goals, including: minimizing dehorning on our farms, reducing the rate of lameness in our herd, and increased employee education and training. We set a goal to reduce the rate of lameness in our herd by 20% by 2015. Since we established this goal in 2012, the percent of cows with lameness characteristics within the herd declined by more than half in 2014, already exceeding our 2015 goal. In 2015 we added an additional animal care goal focused on 24/7 monitoring of our facilities to provide further assurance that our animal care protocols are being followed at all times. We have installed video cameras

Dehorning

In 2013 we began using polled bull semen to minimize the number of calves born with horns on our farms.

at key areas of our farms and are conducting internal monitoring. We plan to add external monitoring of these video feeds by a third-party animal care expert by 2017.

Stratford, TX

Aurora Organic Dairy

21

Supporting People and Communities People are integral to our corporate citizenship program at

innovation and the spirit of entrepreneurship upon which our

Aurora Organic Dairy. Our 550 employees, more than 120

Company was founded. We recognize that our business cannot exist

independent farmers, our suppliers and our local communities

without our talented and passionate people, and without our deep

make it possible for us to achieve our goals. We embrace

relationships with our stakeholders and local communities.

Dublin, TX

Aurora Organic Dairy

22

2015 Corporate Citizenship Report

Core Value: People Employee satisfaction and development are keys to our success.

Aurora Organic Dairy

23

“ When I founded Aurora Dairy 39 years ago,

EMPLOYEE DISTRIBUTION

I committed to providing the same benefits to all employees, regardless of job title or

PLANT

level within the organization. Today, with

28%

550 employees, I am proud to say that we continue to embrace this commitment. Regardless of whether you are milking cows, processing and packing milk or working in

HOME OFFICE

an office, you have the same access to

9%

benefits as everyone else.”

FARMS

63%

MARC PEPERZAK, FOUNDER & CEO

550 full-time employees as of March 2015 (nearly 100% of total workforce)

550 EMPLOYEES. INDUSTRY-LEADING TEAMS

COMPREHENSIVE BENEFITS FOR ALL EMPLOYEE LEVELS

We are proud of the teams we have built across our organization, and strive

We believe if we provide our employees with a rewarding work experience

to attract and retain best-in-class employees in their respective fields. Our

and recognition, and treat them with respect, they will be more dedicated to

leadership group is comprised of individuals who helped establish and

our shared success. We also provide competitive wages and comprehensive

grow the organic dairy industry. Our comprehensive benefits, training &

benefits across all levels of our Company. As a result, our employees are

development programs, and competitive pay allow us to hire and maintain a

invested in our success and support the values of our organization.

consistent workforce with extensive knowledge and expertise in our industry. All full-time employees have access to comprehensive benefits, including: WE WELCOME DIVERSITY We embrace diversity at Aurora Organic Dairy. Approximately 60% of our total employees are of Hispanic descent and predominantly speak Spanish as a native language. As a result, we hire many managers who are bilingual, and we provide all important company information and training programs in both English and Spanish. In terms of gender diversity, 20% of our total workforce is women, and of the 88 professional and management-level employees across our farms, plant and home office, 31 are women (35%). Both the High Plains and Platteville Dairy Farms are managed by women.

• • • • • • • • • •

Medical coverage with various options Dental & Vision coverage 401K with a company match Paid Time Off On-site housing for farm employees Competitive wages Life insurance Access to short-term disability coverage Tuition support Scholarships for family members seeking post-high school education

CORE VALUE: INNOVATION

New ideas and entrepreneurship from stakeholders, and talent across our organization drive industry leadership. Aurora Organic Dairy

24

2015 Corporate Citizenship Report

EXCELLENCE IN EMPLOYEE CARE

The Validus Worker Care audit and certification program provides third-party verification that employees are legally hired, fairly compensated and treated, and have a safe working environment and sufficient training to ensure job competency. Each of our farms is audited and certified annually, and earns scores in excess of 90% out of 100%.

Stratford, TX

Aurora Organic Dairy

25

TRAINING AND EDUCATION HELP OUR PEOPLE

CONTINUOUS IMPROVEMENT IN WORKPLACE

SAFELY PERFORM AT THEIR BEST

HEALTH AND SAFETY

Providing training and education for our employees is a critical aspect of

In addition to keeping our facilities safe and clean, the training programs

our business. Our farm employees work around animals and with farm

we provide to our farm and plant employees help to minimize workplace

equipment, and our plant employees work in a manufacturing facility,

accidents and injuries. We believe it is our responsibility to support our

all of which have multiple hazards. Therefore, comprehensive training is

employees and minimize the risk for serious injury.

required to ensure the safety of our people and our animals. Because workplace health and safety is so important to us, in 2015 we added a new goal area to continuously improve workplace injury rates at our farms and plant. Progress against

WORKPLACE HEALTH + SAFETY

this goal will be measured by a three-year average of OSHA

– NEW GOAL

reportable incidents of injury per 200,000 hours worked. In 2014, using this methodology, our milk plant average number of incidents increased by 5%, and our farm average number

INCIDENCE OF INJURY

of incidents declined by 9% (average incident rate from 2012 2017 GOAL

2014 PROGRESS

– 2014 compared to the average incident rate from 2011 – 2013). Our plant incidents in the current period increased as

Continuously improve workplace injury rates at our farms and plant*

Plant

Farms

5

%

a result of our 2013 and 2014 plant expansion and on-site

9

%

As compared to prior three-year average number of incidents per 200,000 hours worked

cold storage construction. Even with the construction and expansion, in 2014, our plant reported 5.3 OSHA incidents per 200,000 hours worked, which was 17% lower than the dairy manufacturing industry average of 6.4 incidents. Our retail customers and other key stakeholders require we provide programs for our employees that meet their comprehensive criteria for partnering with companies that have strong workplace

*Based on AOD average number of farms and plant OSHA reportable incidents from 2012 - 2014 vs. 2011 - 2013. Note: Plant incidents in the current period were inflated due to the plant expansion and cold storage facility construction. In 2014, our plant reported 5.3 OSHA incidents per 200,000 hours worked, which is 17% lower than the dairy manufacturing industry average of 6.4 incidents.

conditions and ethics. Several customers and other stakeholders require code of conduct and workplace audits to ensure their standards are being met. These audits of our facilities include safety, proper storage of cleaning supplies, proper use of Personal Protective Equipment, as well as worker care measures, such as job satisfaction, hours worked, pay and overtime rates.

All farm employees participate in comprehensive training when they are hired, and frequent job-specific training programs during their tenure with

The auditors conduct individual interviews with randomly selected employees, and

the Company. Each of our farm employees must go through comprehensive

review workplace procedures and records. The feedback we receive from these

animal care training and regular refresher trainings throughout the year.

audits is that our facilities have excellent standards for worker care.

Our plant employees participate in food safety and quality training, plant safety programs and specific training for various processing plant job responsibilities and duties. We estimate that, in 2014, farm, plant and home office employees participated in more than 10,575 hours of comprehensive training programs, which is an average of almost 20 hours of training per employee. We also offer tuition assistance and other opportunities for job training to encourage our employees to grow in their careers. Twenty-four percent of our employees have been with Aurora Organic Dairy for five or more years. We are not only proud of this longevity within our workforce, but we encourage them to advance within our organization, and use the many educational and training opportunities to accelerate that process.

Aurora Organic Dairy

RESEARCH TO IMPROVE DAIRY FARM WORKING CONDITIONS

In 2015 our Platteville Dairy began participation in a dairy farm worker health study with Colorado State University to determine ways to mitigate dust exposure at dairy farms. This is just one example of how we work with various academic and research institutions to support our industry.

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2015 Corporate Citizenship Report

Platteville Milk Plant, CO

COMMUNITY + EMPLOYEE – ON TARGET

Aurora Organic Dairy

2017 GOAL

2014 PROGRESS

2017 GOAL

2014 PROGRESS

Demonstrate value of employee benefits to all employees

Face-to-face benefit enrollment meetings in English & Spanish at all locations

Improve communication with bilingual employees

All pertinent company information and trainings offered in English & Spanish

2017 GOAL

2014 PROGRESS

2017 GOAL

2014 PROGRESS

Enhanced training programs

Comprehensive animal welfare and safety training programs & videos presented to all employees at all facilities

Develop a community center at a remote farm location

Coldwater employee cafeteria and break room scheduled to be completed in 2015

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RELATIONSHIPS BUILT ON TRUST AND INTEGRITY We value our relationships with our stakeholders across our supply chain and with the communities where we do business. We strive to work with as many local and regional suppliers as we can, supporting them as they transition their crops to organic. We treat our suppliers with integrity, pay competitively and nurture long-term relationships.

38,375

5,910

gallons of Organic Milk

pounds of Organic Butter

CORE VALUE: INTEGRITY

Strong relationships are built on trust forged by openness and honesty.

COMMUNITY SUPPORT FOR AGRICULTURE,

Donated in 2014

this equals (approximate retail value)

EDUCATION AND HUNGER RELIEF Our community support programs focus on hunger relief, local schools, and education in agriculture and dairy sciences to support the future leaders

$318,000 in product donations

of our industry. We actively donate organic milk and butter to schools and food banks, and provide monetary support to local non-profits and educational programs. In 2014, we contributed more than $97,000 in scholarships and cash donations to nonprofit organizations. Our product donations in the communities where we operate totaled a retail value of approximately $318,000 – or 38,375 gallons of milk and 5,910 pounds of butter. We also provide free organic milk to employees every payday, and each month supply free organic milk to neighbors who live near our dairy farms.

We also donated more than $97,000 in scholarships and cash to nonprofit organizations throughout the year

We host educational tours of our facilities and our employees often lend their expertise by speaking at local schools and community groups. Our farms often serve as an educational facility for universities teaching veterinary medicine and organic agriculture. We actively engage with and support local community organizations.

SCHOLARSHIPS SUPPORT HIGHER EDUCATION Our scholarship programs include: Future Farmers of America high school scholarships, Colorado State University organic agriculture scholarships, and scholarships for family members of our employees who pursue education beyond high school. We also provide cattle, milk and monetary donations to local 4-H programs. In addition to funding scholarships for students interested in pursuing a career in organic agriculture, we have a robust internship program at our farms. Since 2003, we have hosted more than 100 interns, representing 14 different countries. Several members of our farm management team started as interns at our farms and, since supporting these various

Platteville, CO

scholarship programs, we have hired two employees who were recipients of those educational funds.

Aurora Organic Dairy

28

2015 Corporate Citizenship Report

RECOGNIZING FUTURE LEADERS

Since 2006, we have donated nearly $275,000 in funding through various scholarship programs to ensure a vibrant future for the organic dairy industry. In 2014, we donated approximately $36,000 in scholarships. In 2011, we started our Barney Little Scholarship program, giving educational funds to family members of our employees. Our suppliers and other stakeholders make donations by sponsoring our annual charity golf tournament and, to date, we have provided nearly $100,000 in scholarships to our employees’ families. One star student (pictured here), who is the daughter of a 20-year Aurora farm employee, received a scholarship that helped pay for three years of her college education. Upon graduation, she was hired on our farm accounting team in 2014. Since its inception, we have provided $20,000 a year in scholarships to the Colorado State University College of Agriculture organic program, funding scholarships, teaching assistants and experiential activities. We further support these students by offering internships, and have hired organic agriculture soil and crop scientists from the program to manage our farmland and grow high-quality organic pasture and feed crops.

Platteville, CO

Aurora Organic Dairy

29

Reducing Our Environmental Impact As an organic dairy company, we have always been conscious

This, along with the U.S. dairy industry’s efforts to reduce the

of our impact on the planet. The affect of agriculture –

overall impact of dairy production and processing (U.S. Dairy

particularly livestock operations – on global warming and

CSR), further heightened our awareness of our environmental

overall environmental degradation has been widely publicized.

impact areas.

Platteville, CO

Aurora Organic Dairy

30

2015 Corporate Citizenship Report

Core Value: Environmental Stewardship We will be conscious of our impact on the planet and preserve our natural resources for future generations.

Aurora Organic Dairy

31

2014 Life Cycle Assessment of AOD milk CROP GROWING + TRANSPORT

31

%

OF TOTAL GHG EMISSIONS

1.2 kg CO2e

SUPPLIES + MISC

9%

0.4 kg CO2e

FARMS + PASTURES

RAW MILK TRANSPORT

COWS

4%

26%

0.2 kg CO2e

1%

1.1 kg CO2e