2013 benefit corporation report 1

2013 benefit corporation report
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Here at King Arthur Flour, we’re committed to treating our customers and partners, our community, and the natural environment with as much care as we give
to maintaining the high quality of our flour. After all, healthy relationships with all of
these stakeholders will enable our centuries-old business to continue working toward
our mission for another 200-plus years.
We focus our efforts in four core areas: environment, employees, products, and community. We strive every day to be good stewards of each of these things; identifying
and implementing ways to improve our environmental footprint, providing funding and
service to community organizations, nurturing an employee-focused ownership culture,
and maintaining the highest standards for our products and services.
This approach has helped us win numerous workplace and product awards, grow our
team of passionate and talented employee-owners, and build meaningful relationships
with customers worldwide around the pure joy of baking. It’s our recipe for success,
and, like all of our recipes, something we hope will inform and inspire.
— Steve Voigt, CEO
As Benefit Director for The King Arthur Flour Company,
it is my opinion that the company acted in accordance
with its general benefit purpose during Fiscal Year 2013
and that the directors and officers acted in accordance
with Benefit Corporation standards of conduct. I am
proud of the efforts made by the Company this year and
look forward to further progress in the years to come.
— Carol Atwood, Benefit Corporation Director
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Table of contents
Vision, Mission, Values...........................................................4
Benefit Corporation...............................................................5
Employee Owners...................................................................6
Community..................................................................................8
Our Products.......................................................................... 11
Environment............................................................................ 11
FY13 Challenges....................................................................12
FY14 Goals...............................................................................14
Contact ..................................................................................16
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Vision, Mission, Values
Vision:
To be the premier resource
bringing people together through
wholesome baking.
Mission: We support and seek to expand all aspects of baking by being the highest quality product, information, and education resource for, and inspiration to, bakers worldwide.
Our foundation is our good King Arthur flours and our commitment is to the highest standards of excellence, value, and integrity in everything we do.
Core Values
Passion: We love what we do; we connect through the age-old, cultural tradition
of baking.
Employee-Ownership: As employee-owners, we create a workplace that embraces
respect, trust, open communication, and personal fulfillment through honest hard work.
Quality: From us, the employees, to our relationships with others, to our flour and all our
products, we seek the highest standards in everything we are, and in everything we do.
Community: We strive to serve, educate, and inspire those around us.
Stewardship: We carry on our centuries-old heritage of stewardship through the quality of our brand, and the steps we take to preserve the vitality of our community and the
earth on which we live.
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Benefit Corporation
What is a Benefit Corporation?
A Vermont Benefit Corporation is a new type of corporation that is required by state law
to create a general benefit for society and the environment. Benefit Corporations must
consider non-financial interests when making decisions, such as social benefit, employee
and supplier concerns, and environmental impact. All Benefit Corporations must also provide transparency and accountability on their social and environmental performance by
publishing an annual benefit report which is subject to third party assessment standards.
In 2012, The King Arthur Flour Company became designated as a Vermont Benefit Corporation, consistent with our company values and culture.
B Impact Report
Certified since: May 2007
Summary:
KAF Score
% Available
Points
Earned
Governance
14
91%
10
Workers
61
86%
22
Community
16
35%
32
Environment
14
31%
9
Overall B
Score
105
Median
Score*
MEASURING PROGRESS—
B IMPACT ASSESSMENT
One requirement of this designation is that we provide an annual
report on the benefits we provide
based on an independent, thirdparty assessment instrument. King
Arthur Flour has been working with
B Lab since 2007 to evaluate our
social and environmental benefit
and we will continue to do so as a
Vermont Benefit Corporation.
80
80 out of 200 is eligible for certification
*Of all businesses that have completed the B Impact Assessment
*Median scores will not add up to overall
2013 assessment
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Employee Owners
Our commitment to our employees has helped make us
an award-winning employer and a successful business
for more than 200 years, and it will remain a critical
part of our philosophy for the next 200.
Employee Ownership
As owners of the company, there’s no one who cares more about ensuring the success
of our company than the employees. We work within a culture of ownership that gives
us both rights and responsibilities. We have the right to be informed about the management, strategy, and financial health of the company, to question practices we feel may not
be in the company’s best interest, to work in a positive environment, and to share in the
company’s financial success. We have the responsibility to understand our own roles in
achieving the company’s goals, to support management decisions and initiatives, to create a positive work environment, to find solutions and share ideas for improvement, and to
be good stewards of our company’s resources.
Compensation
Base pay /salary: King Arthur Flour believes in paying at or better than a livable wage.
We currently pay all regular employees at least 14% above livable wage.
Profit sharing is paid when the company achieves certain financial targets. All eligible
employees draw from a pool amount according to a formula set by the Board of Directors
each fiscal year.
The Employee Stock Ownership Plan (ESOP) is an important part of total compensation for King Arthur Flour employees. The ESOP helps tie us together as one company,
making it clear that we succeed by succeeding together. The amount in each employee’s
account increases based on company contributions, our stock price growth and person's
tenure at King Arthur Flour. Employees may also participate in a matching 401(k) program.
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96%
EMPLOYEES LIKE THE WORK
THEY DO AT KING ARTHUR FLOUR
91%
NON-ENTRY LEVEL POSITIONS
FILLED INTERNALLY
ARE SATISFIED WITH
KING ARTHUR FLOUR AS AN EMPLOYER
OF REGULAR EMPLOYEES PAID AT LEAST
14% ABOVE LIVABLE WAGE
Benefits
Regular full-time and part-time employees have 7 paid holidays a year. In addition, King
Arthur Flour maintains a system of earned time in which employees earn time to be used
for any reason throughout the year: sick days, personal days, and vacation time. Accrual
rate increases with years of service. King Arthur Flour offers its eligible employees Medical, Dental, Vision, Life, Accidental Death and Dismemberment, Dependent Life, and Longand Short-Term Disability Insurance coverage. Some of these benefits are companysponsored and others are voluntary. Starting in 2013, employees now receive one week of
paid maternity/paternity leave.
Wellness Initiatives
We upped the ante in the past year to help our own KAF community become healthier
while also thinking more broadly about what our role can be in a larger movement to make
healthcare more effective and sustainable. Some of the programs at KAF include:
Fitness Reimbursement program gives $200 to full-time employees (30 hours or more)
and $100 to part-time (20-29 hours) for membership to a fitness facility and/or Weight
Watchers
Reduced membership rates at several local fitness centers
On-site exercise and wellness classes for a very reduced rate
KAF bikes provided for between-building transportation
On-site employee garden
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Community
Donations
For the most part, we donate cash or products to nonprofit organizations within a 100-mile
radius of Norwich, Vermont that focus on nutrition education, hunger relief, and environmental sustainability. These guidelines help focus our giving not only in the geographical
area in which most of our employee-owners live and work, but on the issues of greatest
concern to our company. In some instances, we have chosen to be involved with organizations further from our home base due to the alignment with our mission.
IN FY13, THE COMPANY DONATED
$110,000.00
IN DOLLARS, GOODS, AND TIME
TO VARIOUS ORGANIZATIONS
Local Involvement
King Arthur Flour continues to support the re-localization of sustainable grain production
to help preserve rural landscapes, secure a healthy food source, and invigorate local
economies. This support is given via monetary and resource support for Kneading Conferences East and West, which strive to preserve and promote grain traditions. We also use
local grain in our bakery to produce sourdough bread made entirely with Vermont-grown
grain. It has, at times, been challenging to source local wheat that meets KAF’s specifications; however, the results and response from our customers make it worthwhile.
Volunteer Time
Our volunteer program encourages employee-owners to spend time helping nonprofit
organizations by providing paid time off for volunteering. We provide 40 hours of paid
volunteer time per year to part-time and full-time employees. In our fiscal year 2007, just
26 employees volunteered a total of 215 hours. With increased focus on this benefit and
some company-organized group projects each year, we’ve grown the program annually.
In fiscal year 2013, 147 employees volunteered a total of 1,645 hours. That’s a lot of time
spent helping nonprofit organizations, but we know we can do better. Currently employees
are only using 12% of the available paid volunteer hours. We aim to increase that to 20%
in the coming year.
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Life Skills
King Arthur Flour’s Life Skills Bread Baking Program has
reached more than 200,000 students nationwide since it began in 1992, providing kids with a fun, real-world application
of skills they’re already learning in school—math, science,
reading, following directions, problem solving, and more. And
then they use their new bread baking talents to help people
in their community. Each future baker takes home materials
and the know-how to bake two delicious loaves—one to enjoy, the other for donation to a community organization chosen by the school. In FY13, Life Skills presentations reached
36,000 students in 176 schools (goal was 160 schools).
In Good Company
In FY13, KAF became part of In Good Company, a group of values-driven companies
joined together to make a difference through hands-on action and volunteerism. For one
week, participants work together on healthy food, housing, and environmental restoration
projects. In FY13, King Arthur Flour sent two employee-owners to participate in In Good
Company volunteer projects. One project focused on bringing access to healthy, fresh
food to residents in the Bronx and the other project was working to restore wetlands in
the Gulf Coast. Both KAFers had amazing experiences and really helped make an impact
in the communities they visited. Next year, we’ll send two more employees with both
projects focusing on improving access to healthy, fresh foods in the communities.
Hunger Free VT
Hunger Free Vermont is an education and advocacy nonprofit organization with the mission to end the injustice of hunger and malnutrition for all Vermonters. They are dedicated
to providing nutrition education and expanding access to nutrition programs that nourish
Vermont’s children, families, and communities. King Arthur Flour is passionate about this
cause and contributed $5,000 to their efforts in FY13. KAF plans to do even more in coming
years, as working toward ending childhood hunger is a company-wide goal.
Cookies for Kids’ Cancer
In 2012, King Arthur Flour became the official flour of Cookies for Kids’ Cancer, a nonprofit organization that uses the allure of fresh-baked goodies to raise money for pediatric
cancer research. In October, we hosted our own bake sale at Dartmouth College in
Hanover, New Hampshire. King Arthur Flour employee-owners volunteered
more than 100 hours to make and sell 5,000 cookies, raising $13,500 for
Cookies for Kids’ Cancer!
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Our care for the community and the environment starts with our products. From our
centuries-old commitment to providing flour without unnecessary chemical additives,
to our support of American farmers and baking supply manufacturers, we do our best to
make sure that social responsibility is at the core of our business. After all, our products
are the building blocks that create a strong foundation for everything else we do.
Environment
13%
ALL FLOUR PACKAGING,
EXCEPT THE INNER POUCH
ON MIX DIVISION ITEMS,
ARE BIODEGRADABLE.
OF PURCHASES WERE
FROM LOCAL VENDORS
76% 100%
WAREHOUSE BECAM E SQF CERTIFIED
CATALOGUE MIXES &
CAKE FLOUR BOXES
ARE MADE WITH
100% RECYCLED FIBER.
OF THE PAGES IN OUR
CATALOGUE ARE 100%
RECYCLED PAPER.
OF THE PAPER USED IS
FSC CERTIFIED.
Core Performance
Camelot, our store, café, bakery, and school, was awarded the Advanced Buildings Core
Performance Designation in April 2013.
Attention to a tight, well-insulated building envelope, a high efficiency air-cooled chiller,
and an advanced building automation system were among the many energy efficient
strategies implemented in the building.
Estimated Annual Electricity Savings:
114,622 kWh
Estimated Annual Fuel Oil Savings:
658.4 MMBtu
Estimated Lifetime Carbon Dioxide Reduction:
1,920 tons
Estimated Annual Energy Savings:
$27,100
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Green Commute Reimbursement Policy 2013
Much of our stewardship work at King Arthur Flour is focused on how our company can
reduce our impact on the environment and community. At the same time, we support our
employee-owners in their personal efforts to be better stewards in and outside the office.
Our green commute initiative is a step in that direction. We encourage and monetarily
incent employees to find more sustainable ways of commuting and provide resources to
help them figure out how. Prime parking spaces are dedicated to carpoolers, and we even
have bicycles for employees to use when they need to travel between our facilities.
The Green Commute challenge now has two quarters under its belt and the statistics are
impressive.
$3,663.00
26,266
MILES SAVED!
REWARDED TO
GREEN COMMUTERS!
1,942
SOLO-VEHICLE TRIPS SAVED!
Recycling
Like most businesses, King Arthur Flour produces some solid waste. From office paper
and ingredient packaging, to coffee grounds and vegetable peels, we have a variety of
waste to manage. In 2009, we implemented a zero-sort recycling system that enables us
to toss all recyclables – papers, a variety of plastics, metal, glass – into one bin, making it
simpler for employees to recycle. Food scraps from our café kitchen, bakery, and classrooms are picked up by a local farmer and used to feed her cows, pigs, chickens, and
more. Coffee grounds and anything else we can’t send to the animals goes into our on-site
three-bin composter. We’ve also eliminated most disposable kitchenware from our facilities, and we continue to remind employees that while diverting waste through recycling
and composting is good, “reduce” is the first “r”!
In July 2013, The Northeast Resource Recovery Association (NRRA) recognized King
Arthur Flour with the “2013 Retailer of the Year” Award. The NRRA stated that "King Arthur
Flour annually recycles 33 tons of zero-sort material and 76 tons of cardboard, in addition
to wood and metal recycling, through Northeast Waste’s zero-sort recycling program. The
company’s current initiatives include cardboard reduction and reuse, composting, K-cup
recycling, and use of EO water bottles. Future plans include a shrink-wrap compactor and
a flour silo that prevents an estimated 22,800 bags from entering the waste stream.”
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FY13 challenges
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We had many successes over the past year, but we also had some challenges to overcome to reach our goals. The following highlights the most significant:
Volunteer Time on Hold. We put volunteer time on hold for the first three months of
calendar year 2013 because we were not meeting financial targets. As a triple bottom-line
and employee-owned company, we need to be achieving our financial number in order to
do all the other great things for our people and the planet. Luckily, it wasn’t long before we
were back on track and volunteer time was reinstated.
Solar. Solar has been elusive for King Arthur Flour up until this point. We have tried on
several occasions to install varying degrees of solar power at our facilities to no avail
either due to prohibitive cost or location requirements. During the past fiscal year, our
facilities team was able to research and define what will be our first execution of solar
power in fiscal year 2014.
The grand opening of King Arthur Flour’s new Camelot (retail store, café,
bakery, and school) took place in the beginning of fiscal year 2013. We originally thought
this building would be LEED certified; however, when we found the administrative costs to
be prohibitive and some of the regulations incompatible with our goals, we chose instead
to put the dollars into making it as energy efficient as possible. Due to these efforts,
Camelot was awarded the Advanced Buildings Core Performance Designation in April
2013.
Evaluating Significant Suppliers. We believe in partnering with like-minded
companies who share our commitment to quality and values. We are working to formalize this belief starting with ensuring that all significant suppliers undergo regular quality
assurance reviews or audits. Evaluating the social and environmental performance of our
suppliers will be our next hurdle, which we hope to achieve in the next five years.
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Goals for FY14
We’ve taken great strides toward making a positive impact on
our society and environment, but there is still a lot more we
want to do. In fiscal year 2014, we hope to achieve the
following goals:
*
Based on what we learned in FY13, expand our
solar efforts to offer a more significant energy
savings. Efforts will include a solar-powered car
charging station at Camelot and solar panels
on the new manufacturing building which may
supply as much as 75% of energy needs for
that building.
*
*
*
*
**
*
Implement comprehensive energy monitoring
in all King Arthur Flour buildings.
Continue to work with suppliers to ensure they
are meeting our quality assurance guidelines.
Establish goals for evaluating social and environmental performance of suppliers.
Save time and energy in manufacturing by installing
a silo for flour storage rather than using bags.
Further develop and act on our non-GMO stance.
Increase Volunteer Time used to 20% of what is available.
Increase charitable financial giving to $62,000.00.
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Steve Voigt
President & CEO
Carol Atwood
Benefit Corp Director
62 Fogg Farm Road White River Junction, VT 05001
802.526.1806 [email protected]
kingarthurflour.com