TreeHouse Foods, Inc.'s "Sustainability in Action"

We focus on optimizing shareholder value, while at the same time minimizing our environmental impact and maintaining a safe workplace for our employees. We are committed to conducting our business operations and producing products in a manner that conserves energy and water, minimizes wastes and emissions, and promotes the conservation of natural resources. We take this commitment very seriously with the understanding that achieving environmental sustainability is a continuous improvement process.

As a part of the process of establishing a sustainable future, we focus our efforts on ensuring the safety of our employees; reducing non-renewable energy use and increasing energy efficiency within our production facilities; conserving water; decreasing air emissions by, among other things, reducing over-road transportation and improving transport efficiency; reducing wastes; improving and minimizing our packaging; and promoting more sustainable growing practices amongst our agricultural product suppliers. These efforts are overseen by our dedicated Environmental, Health & Safety (EHS) management team, which is based at our corporate office. TreeHouse Foods continues to explore sustainable projects using pollution prevention teams at each of our production facilities. Each team is charged with reviewing plant operations to determine where and how the facility might conserve water, reduce energy usage, lower air emissions, and decrease waste generation.

The following are concrete examples of TreeHouse Foods' efforts to reduce our environmental impact, promote sustainable operations and practices, and maximize economic performance in 2011 and 2012 to date:

 

SAFETY AND SECURITY

TreeHouse Foods believes that safety and security of our employees is a crucial factor in our drive toward a sustainable future and a primary responsibility of the Company. TreeHouse Foods has established a goal of zero workplace injuries. Admittedly, we have some work ahead of us to achieve this goal but we continue to move in the right direction. Our path to zero workplace injuries will be one of continuous improvement. The implementation of our safety management system and focus on ergonomic risk in 2011 has resulted in notable improvements evident in our 2012 safety metrics thus far. Our Company-wide Days Away, Restricted and Transfer (DART) injury rate has decreased by 50% from 2010 through July 2012. We expect to see a similar, if not greater, reduction in lost days for our employees in the latter half of 2012. Our continuous improvement efforts for the remainder of 2012 include implementing a comprehensive computer based training program for EHS related learning, specifically for our production facilities.

REDUCING NON-RENEWABLE ENERGY USE/IMPROVING ENERGY EFFICIENCY

TreeHouse Foods completed the implementation of a utility management software solution in 2010 giving us visibility to our utility demand, costs, and carbon emissions, at each plant. With greater visibility, TreeHouse Foods is now in a position to more aggressively pursue our greatest improvement opportunities relating to the energy efficiency of our manufacturing operations and the reduction of our carbon emissions. TreeHouse Foods has created an Operational Efficiency - Sustainability Steering Group consisting of key engineering and maintenance leadership throughout the Company to assist in identifying and realizing energy efficiency opportunities. Specific energy efficiency improvement projects completed during 2011 and the first half of 2012, include the following:

  • A Company-wide initiative focused on compressed air leak detection and repair. Each manufacturing facility performed a compressed air leak survey and worked to repair each identified leak. Electricity saved in 2011 totaled 3,968,879 kWh, which resulted in a 2,827 metric tonne reduction in CO2 (e) emissions across the Company.
  • Three of our facilities completed major lighting retrofit projects in 2011 to improve the energy efficiency of these buildings. For areas with limited occupancy, facilities have installed motion sensor lighting controls to provide lighting only when the area is occupied. Lighting upgrades have resulted in CO2(e) emission reductions exceeding 100 metric tonne in 2011.
  • Multiple facilities have installed operating controls on high electricity demand equipment to ensure operation only at times during which the equipment is needed. Examples include: The Pecatonica, Illinois facility replaced an existing air compressor with a high efficiency air compressor equipped with a VFD; and the Pittsburgh, Pennsylvania facility installed an updated control system on building HVAC systems. An estimated 430,000 kWh was saved with these two projects, resulting in a reduction of 302 metric tonne CO2 (e) emissions.
  • All of our facilities utilize boilers to generate steam to support the food production process. We continuously research boiler efficiency opportunities such as replacing inefficient equipment, adopting high-efficiency technology, reducing thermal heat loss and recovering waste heat, all to reduce the fuel demand for our processes.
  • In 2012 our City of Industry, California facility replaced an existing boiler with an Ultra-Low NOx, energy efficient boiler, more appropriately sized for the operation. This project will provide a calculated reduction of 60,666 Therms of Natural Gas fired annually, resulting in an annual reduction of 322 metric tonne of CO2(e) emissions.
  • Three facilities (Winona, Ontario, North East, PA and Dixon, IL) have installed "On Demand Direct Fired Hot Water Heaters" to reduce fuel use in the generation of hot water. The estimated reduction in fuel use of 51,410 Therms will result in a reduction of 305 metric tonne of CO2 (e) emissions annually.

In addition to focusing on the efficiency of our manufacturing processes, TreeHouse Foods continues to seek out opportunities to maximize the energy efficiency and sustainable design of our buildings. Our Midwest DC obtained LEED certification in 2010. In addition, TreeHouse Foods has two new distribution centers, located in Pennsylvania and North Carolina, which have recently obtained LEED Certification.

WATER CONSERVATION

TreeHouse Foods recognizes that water conservation is a vital component to creating a sustainable environment. Our facilities continue to explore opportunities to reduce water usage in our operations. This can include actions as simple as turning off hoses to as complex as modifying the desalt process at our pickle processing facilities. Many facilities have installed meters at certain water intensive steps in the production process to gain a better understanding of actual usage and provide a means to justify additional water reduction projects. These projects have reduced the volume of water required to support their production processes. This has in turn, reduced the volume of wastewater generated, treated, and discharged to the respective local sanitary sewer system or surface water body. For example, in 2011 our Winona, Ontario, Canada, facility upgraded a cooling tower that resulted in increases in blowdown cycles, providing a 632,000-gallon reduction in annual water consumption.

In July 2012, our EHS staff began conducting "kaizen" water reviews at each of our processing locations. Kaizen reviews are multi-function process improvement and productivity exercises based on W. Edward Deming's management principles. The focus was to ultimately, create an accurate water flow balance, identify significant water consumers in the process, brainstorm opportunities to reduce water use, and propose projects aimed at achieving water use reduction targets.

REDUCING AIR EMISSIONS

TreeHouse Foods operations are such that the emissions of hazardous air pollutants are fairly limited. As addressed in a previous section, we continue to explore energy efficiency projects that will also reduce our equivalent carbon emissions.

TreeHouse Foods appreciates that motor vehicles contribute significantly to air pollution and carbon emissions. Currently, we partner with a number of carriers to transport our products; and, many of these carriers are currently working toward creating more fuel efficient fleets. Several of our primary carriers utilize SmartWay Certified tractors.

In early 2011, TreeHouse Foods began an initiative to minimize the environmental impact within our transportation network by maximizing the tonnage in each our shipments and increasing the use of lower emission intermodal shipping. Significant initiatives executed in 2011 include the use of lightweight trailers at select sites. This enabled us to increase the amount of finished product on each trailer, creating an attributed reduction of 7400 annual over the road miles; and a reduction of 15 metric tons of CO2 emissions. In addition, TreeHouse Foods increased the use of intermodal shipments in 2011. This change reduced over the road miles by 5,708,874, resulting in a 586 metric ton reduction in CO2(e) emissions. Furthermore, the locations of our two newest DCs (Pennsylvania and North Carolina) were selected based on availability of common freight lanes to minimize route miles.

IMPROVING WASTE MINIMIZATION

TreeHouse Foods understands that an effective waste minimization program through source reduction and segregation strategies not only results in enhanced environmental protection and reduced carbon emissions, but also a positive economic return. Beginning January 1, 2011, TreeHouse Foods entered into a partnership with a full service waste and recycling management firm to assist us in minimizing our landfill waste and maximizing recycling at our U.S. facilities. In addition, this partnership provides TreeHouse Foods with visibility to all waste and recycling related metrics to measure our progress. With the enhanced capabilities created by this partnership, TreeHouse Foods expects to uncover even more reuse and recycling opportunities for miscellaneous scrap metal, aluminum, cardboard fiber, office paper, plastic materials and food waste. A review of 2011 waste management data indicates:

  • Collectively in 2011, 30.4% of all solid waste generated at TreeHouse Foods manufacturing facilities, was utilized for beneficial reuse, energy recovery, and/or recycling. Six facilities were able to achieve a > 50% rate of diversion from landfill, and our Winona, Ontario, Canada and Kenosha, Wisconsin facilities achieved an 84% and 71% diversion rate, respectively.

IMPROVING PACKAGING PROCESSES

TreeHouse Foods is aware that efficient packaging has a positive impact on the environment given that it, among many other things, decreases raw material needs, reduces waste, and reduces transportation needs, while increasing fuel efficiency. Accordingly, we are continually looking for ways to increase our packaging efficiency in cooperation with our customers.

The Sturm Foods, Inc. facility initiated a project to downsize the packaging for their Stick Pack process. In addition to the 546,667 lbs. of packaging material saved, Sturm Foods achieved a 32% increase in pallet utilization, ultimately resulting in 8,082 fewer pallets used and a reduction of shipments by 150 fewer truck loads. Additional innovative pallet loading strategies are being implemented throughout TreeHouse Foods in an effort to reduce the number of shipments.

In 2011 the Winona, Ontario, Canada facility initiated "Light Weighting" of polypropylene 1-gallon jugs. This reduced polypropylene consumption by 25,356 lbs annually.

PROMOTING SUSTAINABLE GROWING PRACTICES

TreeHouse Foods continues to work to encourage and support sustainable agricultural practices among our growers for our Pickle business. To that end, we reinforce compliance with individual state programs which regulate agricultural practices and their potential effects on the environment. For example, each of our Wisconsin growers is required to report to the State's Department of Natural Resources, detailed plans relating to processes such as fertilizer management. They are also required to address issues such as potential environmental impacts on nearby surface waters. Constant contact with local county and state authorities allows TreeHouse Foods to stay abreast of new or changing regulations, allowing for immediate changes to our policies and procedures when necessary.

Internally, we are working with our growers to ensure they are rotating their crops appropriately to replenish the soil, keep it fertile, and to help protect it from issues such as ground borne diseases. We also ensure, through contract provisions, that our growers do not use fertilizer containing inappropriate by-products from processing facilities. All chemical usage is documented and verified as appropriate. Pesticides are only used when pest thresholds are met.

Today we are working with growers and experimenting with the latest technology in water conservation. Instead of the traditional overhead center pivot irrigation systems, we are working with above ground, reusable plastic strip drip irrigation. This technology utilizes a fraction of the water of conventional systems, thereby encouraging positive long-term results.

We understand that the concept of sustainability goes well beyond environmentally-friendly practices used to produce our crops - it extends to the social well-being of those who nurture, grow, and harvest our crops. Our commitment is therefore also to the growers that maintain these sustainable practices. Accordingly, we have developed our growers' bonus program, through which we aid growers by ensuring that farm workers receive adequate housing during the growing and harvesting seasons - housing that meets all state guidelines.

 

TreeHouse Foods is committed to continually improving our environmental performance and to promoting positive environmental stewardship. In order to do so, we understand that we must continue to embrace new ideas, actively seek out and employ more environmentally sustainable practices, and insist on promoting sustainable practices among our suppliers and contractors. We realize that our current efforts to reduce our environmental impact represent a step toward meeting the on-going challenge of a truly environmentally sustainable future. TreeHouse Foods has and will continue to face that challenge with concrete actions that speak to our resolve. We will continue to share with you our ongoing efforts through our annually updated "Sustainability in Action" program.

Sam K. Reed
Chairman, President, and Chief Executive Officer
TreeHouse Foods, Inc.