Supply Chain - Hormel Foods Corporate Responsibility Report

Ensuring sustainable and ethical practices

At Hormel Foods, our multifaceted supply chain includes suppliers of hogs, turkeys, ingredients, packaging materials and transportation.

20 By 30 Challenge Goals

As part of our 20 By 30 Challenge, we are striving to achieve the following goals by 2030:

Maintain high standards for animal care and handling throughout our supply chain.
Advance our antibiotic stewardship efforts and pilot an antibiotic use measurement and reporting system.
Continue to increase our purchasing spend annually with small and diverse businesses.

These ambitions help support UN Sustainable Development Goals 3, 8, 10 and 12.

Supplier Code of Conduct and Sourcing Policies

All of our suppliers are required to follow our Supplier Code of Conduct to ensure the products and services we receive from them adhere to our commitments to responsible environmental and social performance. In partnership, we deliver quality products and add value to society.

In addition, we work closely with our palm oil and South American beef suppliers to ensure they comply with these principles as well as additional requirements we have outlined. We made a commitment to source only sustainable palm oil that is fully traceable to the plantation level by the end of 2025. We have made significant progress toward this commitment and reached 77% of our goal at the end of 2021. We will continue working with our suppliers to reach our 100% traceability goal.

If a supplier is found to be in violation of our Supplier Code of Conduct/sourcing policies, we require the supplier to implement corrective actions. If appropriate corrective actions cannot be agreed to or are not made, Hormel Foods will suspend or discontinue purchases from the supplier.

For more information about our palm oil and South American beef sourcing requirements, please visit our corporate website.

Supplier Assessment

We have established supplier quality management (SQM), which evaluates our suppliers based on quality, delivery, service, technology and price. Our ingredient suppliers are subject to additional measurements to further ensure quality and food safety. Suppliers that exceed our established standards are eligible for our annual Hormel Foods Spirit of Excellence Awards. In 2021 alone, we recognized 61 suppliers for their performance.

In 2021, we implemented an online survey assessment process with our suppliers to evaluate their environmental, social and governance (ESG) performance. Third-party audits may be conducted based on the results of these assessments. We will report additional information about this initiative in future reports. We also meet with our top suppliers annually to evaluate their initiatives and review service metrics along with diverse business spend and sustainability. This includes environmental and social responsibility, as well as business drivers for the upcoming year. We report our internal results through a third party for our customers.

61

Spirit Of Excellence Awards

given to suppliers for performance

As part of our commitment to supply chain sustainability management, we require all ingredient suppliers to have third-party food safety audits. In addition, in 2021 we conducted eight food safety supplemental audits. If suppliers are found to be noncompliant, appropriate action is taken — up to and including termination.

Hormel Foods values the long-standing relationships we have established with our suppliers. In fact, in calendar year 2021 only 3% of our purchases were from new suppliers.

Supplier Diversity Program

We aim to continue to increase our purchasing spend annually with small and diverse businesses. In addition to ensuring our suppliers comply with the food safety standards recognized by the Global Food Safety Initiative (GFSI), we make a concerted effort to give diverse companies, such as small, women-owned, minority-owned and veteran-owned businesses, the opportunity to supply quality products that meet our company’s growing business needs. In calendar year 2021, our purchasing spend with small and diverse businesses was $1.3 billion. This amount includes independent family-owned hog farms.

For additional information about our supply chain, please visit our corporate website.