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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 also involved in the Sustainable Agriculture Initiative ( 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 2017|18, 13.7% of the raw materials procured by AGRANA Fruit Services (AFS) had a sustainability certification; most of these were certified organic, and the remainder were certified under another customer standard of industry-wide relevance or under the Rainforest Alliance (RA) standard. The RA standard and the customer-specific standard are accorded silver status in the benchmarking to the requirements of the Farm Sustainability Assessment (FSA) of the Sustainable Agriculture Initiative ( SAI ). To also evaluate its suppliers for their adherence to social aspects, AFS invites new suppliers to participate in the Supplier Ethical Exchange Database, or SEDEX . In the 2017|18 financial year, suppliers representing 81.7% of the procurement volume of AFS were already SEDEX members. As all procurement in the fruit preparations division is done to customer specifications, the future trend in the amount of certified raw material volumes will depend on these customer requirements.

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 Argentina, Fiji, 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 and Fiji, 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 from traders.

In the 2017|18 financial year, around 11% 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 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 FSA self-assessment and the external audits. As a result, AUSTRIA JUICE is entitled under SAI standards to claim silver (and in some cases gold) status for the majority of Hungarian growers of resistant varieties. In the 2018|19 financial year the FSA questionnaire and external verification are also to be used with the contract apple farmers in Poland.

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 35% of all our production siteswithin 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 2017|18 financial year, we met approximately 77.4% of our direct energy needs around the world with this low-emission fuel.

  • 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. In the area of fruit preparations and primary processing, we aim to reduce direct and indirect energy use (scope 1+2) per tonne of products by 6.8% compared to 2013|14 levels (1.85 GJ per tonne) by 2020|21. 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 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. In the area of fruit preparations, we intend to implement established best practices for using water in the course of trainings to raise awareness at all production sites.

Fruit segment2017 | 18
Water use in m3 per tonne of core and by-products4.39
Waste water in m3 per tonne of core and by-products4.03

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 segment2017 | 18 in tonnes
Waste disposed31,877
of which hazardous waste238
Waste per tonne of product3.8 %
Hazardous waste per tonne of product0.03 %
Non-hazardous waste disposed by disposal method
Composting2,753
Energy recovery855
Reuse2,026
Recycling10,125
Landfill15,454
Other425

An average of 5,613 employees worked in our Fruit segment during the 2017|18 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 28 February 2018)

Non-permanent staff

1,663

72.0 %

Permanent staff

3,988

32.0 %

Blue-collar2,529

23.1 %

White collar1,459

47.4 %

Managers

289

28.0 %

Of which Executive Leadership

12

8.3 %

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 17 | 18(number of accidents/ 100 employees p.a.)

2.0

1.8

2.1

Lost day rate 17 | 18(number of lost days/ 100 employees p.a.)

28.3

27.5

28.7

Absentee rate 17 | 18(hours missed due to accident and sickness/ 100 employees p.a.)

3,922.1

4,171.4

3,779.7

Total

Female

Male

Working conditions and their verification

In the 2014|15 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. 50% 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 24.3 training hours in the 2017|18 financial year. In total, 91.1 % of employees completed a training course. Training and development costs amounted to 1.1% 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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