From raw material to product:
The AGRANA value chain in the
Fruitsegment

Procurement of raw materials
in the Fruit segment

Sustainability is an integral element of AGRANA’s corporate philosophy. For us, this commitment begins long before the industrial processing of agricultural raw materials, namely during their procurement. In our Fruit segment, we produce custom fruit preparations for the dairy, ice-cream and baking industries around the world. We also manufacture, at production sites located mainly in Europe, apple and berry juice concentrates, and not-from-concentrate juices and purees for the highly specialised fruit juice industry. Our Fruit segment is involved in the Sustainable Agriculture Initiative Platform (SAI).

Membership in the SAI:

The fruit used in our fruit preparations is sourced largely from primary processors or traders in the form of intermediate products (i.e. fruit in a frozen or aseptic form, purees). As part of our principles for procuring agricultural raw materials, we have defined international standards that, if complied with, we accept as proof of sustainability. In the 2019|20 financial year, 16.7% (prior year: 17%) of the raw materials (fruits and other ingredients) procured by the purchasing organisation, AGRANA Fruit Services GmbH, for the fruit preparations segment had a sustainability certification. Of the fruits processed worldwide, 5.6% had a sustainability certification (prior year based on new definition: 4.3%); these were largely organic certifications. The target under the strategy of the fruit preparations business for the period to 2025 is to increase the proportion of processed fruit with a sustainability certification to 20%. To evaluate our suppliers for their adherence to social criteria, AFS invites new suppliers to participate in the Supplier Ethical Data Exchange, or SEDEX. In 2019|20, 94 % of suppliers accepted the invitation and shared their self-assessment and audit documents (if any) with AFS.

We acquire around 22% of fruit used in the preparations in the form of fresh fruit from contract growers. These are then washed, cleaned, chopped and frozen at our own primary processing plants in Mexico, Morocco, Poland, Serbia and Ukraine for them then to be processed into fruit preparations.

In the course of sourcing from contract growers, we work closely together with our fruit suppliers, for example in Mexico in qualification and certification projects.

In the fruit juice concentrate business, we process apples and berries in Europe and in a plant in China. We primarily acquire our raw materials via collection points from dealers. In 2018|19, AUSTRIA JUICE joined the Sustainable Juice Covenant, a global initiative aimed at making the procurement, production and marketing of fruit- and vegetable-based juices, purees and concentrates 100% sustainable by the year 2030.

In the 2019|20 financial year, around 8 % of total apple supplies processed came from two projects launched in Hungary and Poland in 2000 to grow resistant types of apples, which require the use of 60 to 80% less pesticide. At the start of the project, the growers received financial support planting new trees and have since been receiving advice during the whole growing season and guaranteed purchases, something which we even reward by paying a premium in normal harvest years.

The prior, 2017|18 financial year was the first in which Hungarian suppliers of disease- and pest-resistant apple varieties, who were selected according to SAI standards, also participated in the mandatory completion of the FSA questionnaire and the external audits. In 2018|19 the FSA questionnaire and external verification were also used for the contract growers of resistant apple varieties in Poland. As well, FSA silver status can be claimed under the benchmarking of the FSA requirements against the national legislation of, for example, Poland, Spain and Hungary, when combined with a certification to the Global GAP standard. In total, AUSTRIA JUICE in 2019|20 was thus able to claim FSA silver or higher status for about 15.5 % of its raw material processing volume. The FSA reverification audits in accordance with the SAI requirements are scheduled for the 2020|21 financial year.

Transportation
in the Fruit segment

Even though the transportation of raw materials and products has a comparatively low impact on the carbon footprint depending on the calculation method and country, we still try to keep transportation as sustainable as possible both in terms of the infrastructure and commercial viability.

Production in AGRANA
fruit processing plants

As a result of our close dependence on agricultural crops, we feel a particular obligation to protect all natural resources. We have taken this self-imposed obligation and created the AGRANA environmental policy, which covers major aspects such as energy use and emissions, water and waste management.

As a processor of agricultural raw materials, we strive to optimise our energy consumption and our energy efficiency on an ongoing basis. In order to achieve these objectives, we are integrating an energy management system, based on standards such as ISO 50001, into our existing quality management system. At the balance sheet date 2018, the energy management systems of 33.3 % of all our production sites within the GRI reporting boundaries held a certification under ISO 50001.

ISO 50001 certified:

In our energy policy, we place particular emphasis on:

  • Natural gasIn the 2019|20 financial year, we met approximately 70 % of our total energy needs around the world with natural gas, 23 % with electricity (22 % of this electricity came from renewable sources).

  • Supplying ourselves with renewable energyAt a number of our plants, we met some of our energy needs from biogas produced on site.

  • Continuously improving our specific energy consumptionWe have set ourselves specific targets in the Fruit segment. By 2025|26, the fruit preparation plants (exlcuding primary processing facilities) want to reduced their total energy consumption by 5 % to 1.95 GJ/ tonne of product output. In the area of fruit juice concentrates, energy use (scope 1+2) per tonne of core and by-products should remain on a par with 2014|15 levels (3.43 GJ per tonne) until 2020|21.

Water, perhaps the most important resource globally speaking, is used and drained in a sustainable manner at all our sites. We harness the water contained in the agricultural raw materials for use in our processes where possible, as is the case when producing juice concentrate from apples. Water is cleaned and reused time and again. On-site or communal waste water treatment plants ensure that the waste water produced is treated in an environmentally sensitive way in accordance with local regulatory thresholds.

In the area of fruit preparations (excluding primary processing facilities), we want to reduce the amount of water withdrawn by 5 % to 4.24 m³/t of product output. In the area of fruit juice concentrates, the aim is to reduce the amount of water used per tonne of core and by-products by 5% (reference year 2014|15: 4.43 m3) by 2020|21.

Fruit segment 2019 | 20
Water withdrawn in m3 per tonne of core and by-products 4.72
Water discharged in m3 per tonne of core and by-products 4.67
Water consumed in m3 per tonne of core and by-products 0.05

It is our operating principle to maximise the utilisation of agricultural raw materials by making valuable by-products, contributing to our economic and social bottom line.

While the production of fruit preparations generates very little agricultural residue suitable for further use, the press cake from apple juice production, known as apple pomace, is processed into high-quality by-products.

Fruit segment 2019 | 20 in tonnes
Waste disposed 25,142
of which hazardous waste 268
Kilogramme waste per tonne of product 28.3 kg
Gramme hazardous waste per tonne of product 302 g
Non-hazardous waste disposed by disposal method
Composting 3,358
Energy recovery 1,743
Reuse 2,306
Recycling 9,568
Landfill 7,368
Other 531

An average of 6,098 employees (headcount) worked in our Fruit segment during the 2019|20 financial year. They are a key factor for success due to their commitment, range of skills, experience and views.

AGRANA endeavours to offer interesting work, opportunities for professional and personal development and training, and a workplace environment in which employees feel integrated, respected and connected.

Employees in the Fruit segment (as at 29 February 2020)

Non-permanent staff

2,097

72.0 %

Permanent staff

4,193

32.6 %

Blue-collar2,593

23.4 %

White collar1,600

47.6 %

Managers

292

27.1 %

Of which Executive Leadership

10

10.0 %

Total

Female



Workplace safety in the Fruit segment

At the end of the day, it is important that all of our employees return home safely. We strive to achieve this objective by means of regular trainings on safe working processes, implementing best practice cases and providing workplace safety materials as part of our zero-accident policy.

In the 2013|14 financial year, we have started to collect workplace safety data across all business segments by means of uniform worldwide criteria. On the basis of annual evaluations, we have defined individual targets in the area of fruit preparations at present for the coming financial year. /p>

Injury rate 19 | 20(number of accidents/ 100 employees p.a.)

1.1

0.0

0.1

RAte of high-consequence injuries 19 | 20(high-consequence injuries / 100 employees p.a.)

0.0

0.0

0.1

Rate of fatalities 19 | 20(number of fatalities/ 100 employees p.a.)

0.0

0.0

0.0

Total

Female

Male

Working conditions and their verification

In the 2018|19 financial year, we revised the AGRANA Code of Conduct, which establishes minimum (social) standards and rules of conduct for all employees around the world.

SEDEX:

As part of our membership of SEDEX , which we have had since 2009, our production sites perform a SEDEX self-assessment every year. In order to underpin our commitment, 4-pillar SMETA audits took place at approx. 31 % of fruit preparation and fruit juice concentrate sites. The audit reports can be accessed by SEDEX members on the organisation’s online platform.

Employee training hours

The education and training, as well as the personal development, of our employees is important to us. Employees in the Fruit segment completed an average of 31.6 training hours in the 2019|20 financial year. In total, 89.8 % of employees completed a training course. Training and development costs amounted to 0.8 % of total wages and salaries.

Products

AGRANA is the world's leading manufacturer of custom fruit preparations for the dairy, bakery and ice-cream industries. Our fruit preparations can be found in one out of every three yoghurts.

In the area of fruit juice concentrates, we are the leading manufacturer of apple and berry juice concentrates in Europe, also offering fruit purees, beverage bases, natural aromas and not-from-concentrate juices for the downstream beverage industry. We also sell the press cake from apple juice production, known as apple pomace.

Some of our certifications:

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