Our Food. Our Future - OSI Group

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Our Food. Our Future - OSI Group
Our
                           Food.
                           Our
                           Future.

GLOBAL SUSTAINABILITY REPORT 2018 / 2019
Our Food. Our Future - OSI Group
Contents

OVERVIEW                 2

VALUES                  8

STRATEGY                16

SUPPLY CHAIN            24

ENVIRONMENT             36

SOCIAL RESPONSIBILITY   48

                                    |1
Our Food. Our Future - OSI Group
LETTER FROM THE PRESIDENT                                   OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                     In the last decade, sustainability has moved from the periphery of business thinking                                                                                               When we released our first Global Sustainability
                                                                                                                                                                                                       Report in 2016, it was a big step into the
                                                                                                                                                                                                                                                            • It highlights our drive for CONTINUOUS IMPROVEMENT. We have
                                                                                                                                                                                                                                                              consistently been defined by our “can-do” attitude. In addition to
                     to the forefront. It impacts nearly every element of our industry. At OSI, we see this                                                                                           spotlight for OSI. We don’t often talk publicly         delivering the highest quality products in the safest, most efficient way
                                                                                                                                                                                                     about our successes, but producing the 2016-2017         possible, OSI employees also make a difference in their communities
                     as an opportunity to rethink and reform how we work – from processes to people                                                                                                 Global Sustainability Report provided an opportunity      and their workplaces. It is their dedication and personal commitment
                                                                                                                                                                                                   for us to step back and reflect on both our impacts        that enables us to set ambitious targets for expanding our sustainability
                     to partnerships – to ensure we are mindful of the sustainability of our company and                                                                                          and our influence in the industry. Our emphasis on          impacts and ensures our products are responsibly made.

                     communities along the way.                                                                                                                               sustainability throughout the OSI organization provides a platform for us
                                                                                                                                                                                                                                                            • It highlights our spirit of INNOVATION. Entrepreneurial passion is at
                                                                                                                                                                              to activate our values and highlights what those values mean for the future
                                                                                                                                                                                                                                                              the core of the company. Thinking about things in new and better ways
                                                                                                                                                                              of our company and our approach towards sustainability.
                     In this report, you’ll learn about our approach and the concrete steps we’ve taken                                                                                                                                                       easily lends itself to an ongoing search for more sustainable approaches
                                                                                                                                                                              • It highlights our commitment to INTEGRITY. In each interaction and            and creative solutions for difficult problems facing our environment and
                     to date. We share them with you not only as markers of our progress, but also as                                                                           activity, we strive to be consistent and remain true to our principles.       supply chain. We are happy to be pioneers in animal welfare standards
                                                                                                                                                                                First and foremost, we’re dedicated to operating our business                 and resource efficient processing and will continue to lead the way by
                     the foundation for new and far-reaching goals. Sustainability is one of the primary                                                                        responsibly, and we will hold ourselves to best-in-class standards of         providing education and training in sustainability advancements to those

                     concerns of our time, and OSI will continue to dedicate the necessary resources to                                                                         operation around the globe in order to maintain the trust that has been       in our supply chain.
                                                                                                                                                                                placed in us.
                     further progress our sustainability agenda.                                                                                                              • It highlights the priority we place on PARTNERSHIP. We believe
                                                                                                                                                                                                                                                            As a company, we continue to pursue sustainability because we know
                                                                                                                                                                                                                                                            it is fundamental to operating a successful business. To strengthen our
                                                                                                                                                                                collaboration is the key to making positive changes to our industry.        commitment to sustainability, we’re updating our Global Sustainability
                     In this report, we document our intentions, policies, progress, and       The data in this report was gathered from OSI facilities around the globe.
                                                                                                                                                                                The cornerstone of our success has been dynamic and successful              Report for 2018-2019 by releasing new 2025 targets and priority action
                     activities in order to be transparent about our operations and impacts.   We are reporting on the 2016 and 2017 calendar years; however,
                                                                                                                                                                                relationships with our customers, suppliers, and local partners who         areas for our environment, workplaces, communities and supply chain.
                     Although there are areas where we are still making improvements,          examples from other years are included to provide context. In creating
                                                                                                                                                                                join us in identifying and promoting the best practices in sustainability   We have also taken steps to become more vocal about what sustainability
                     we are energized to reach our ambitious goals and contribute to the       this report, we introduced Global Reporting Initiative (GRI) principles as a
                                                                                                                                                                                throughout our supply chain.                                                means to us as a company by appointing Nicole Johnson-Hoffman as
                     sustainability efforts that create positive change throughout the food    framework for communicating about our business and sustainability
                     industry. We are honest and forthright about the challenges we face,      activities. GRI is an independent international organization providing the                                                                                   our Chief Sustainability Officer to lead these activities and expand our
                                                                                                                                                                              • It highlights the power of OSI’s TEAMWORK. The people within our
                     and are dedicated to achieving meaningful results. We look forward to     most widely used standards of sustainability reporting. Guidance from                                                                                        engagement with other industry stakeholders.
                                                                                                                                                                                organization are essential to the positive contributions OSI can make in
                     sharing those results with our partners in the next OSI Global            GRI allows us to clearly communicate our impacts and align our                   our communities. We appreciate the pride each individual takes in their     Thank you for joining us on this journey. We to look forward to providing
                     Sustainability Report planned for 2020.                                   sustainability activities with those of other businesses in our industry.        work to deliver exceptional products, and we support them in their          further updates that highlight the milestones we achieve along the way.
                                                                                                                                                                                personal and career development.
                                                                                               We welcome feedback on our report and sustainability activities.
                                                                                                                                                                                                                                                            David G. McDonald
                                                                                               For questions or comments, please reach out to
                                                                                                                                                                                                                                                            President and Chief Operating Officer
                                                                                               osisustainability@osigroup.com.

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Our Food. Our Future - OSI Group
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

Organization Profile                                                                                                                                           NETHERLANDS

Locations                                    Markets                                    CHINA
OSI is one of the world’s largest            OSI partners with the world’s leading                                                                               GERMANY

privately held food providers. Our           foodservice and retail food brands to
international network of food processing     provide concept-to-table solutions
and vertically integrated poultry            that delight customers around the          PHILIPPINES                                            GREAT BRITAIN
                                                                                                                                                                      POLAND
companies is headquartered in Aurora,        globe. With our extensive international                                  CANADA
Illinois, USA and organized into three       infrastructure, we are able to offer                                                                                     HUNGARY UKRAINE
global zones: North America, Europe,         unparalleled ability to source, develop,
                                                                                        JAPAN                                                        SPAIN
and Asia Pacific. The OSI Group              produce and distribute custom food
operates 77 sites in 18 countries            solutions throughout the world.                                                                                       AUSTRIA                                                                       JAPAN
                                                                                                                      UNITED STATES
and territories and sells products into
                                             In addition to creating customized
68 countries around the world.
                                             solutions for our customers, OSI’s                                                                                                                                          CHINA
                                                                                        AUSTRALIA                                                                                                                                    TAIWAN
                                             product and company portfolio includes
                                                                                                                                                                                                      INDIA
UNITED STATES                                the brands shown here.
                                                                                                                                                                                                                      THAILAND
                                                                                                                                                                                                                                   PHILIPPINES

                                                                                        INDIA
CANADA

                                                                                                      Beef

EUROPE
                                                                                                                                      BRAZIL
                                                                                        TAIWAN        Pork

                                                                                                      Poultry

                                                                                                                                                                                                                                                  AUSTRALIA
                                                                                                      Vegetables

                                                                                                      Fresh Produce

                                                                                                      Other
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Our Food. Our Future - OSI Group
The OSI Group has a proud history of more
                                                   than a century of strategic growth, driven by
                                                   the needs of our customers.

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Our Food. Our Future - OSI Group
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                                                                       Meat market expands to wholesale meat trade and                                                                                                                                                                           As Lavin becomes Chairman and CEO, OSI begins period of                 OSI begins its entry into the Asia Pacific region with joint                       OSI spends two years establishing wholly foreign-owned
                                                                       relocates to another Chicago suburb. The Kolschowsky                   Otto & Sons begins supplying fresh ground beef patties                 Formerly an investment consultant for the Kolschowsky family,               significant growth in the early 1980s, through expansion and joint      ventures in Taiwan and the Philippines, and operations in China.                   enterprises (WFOE) and joint venture entities in China, and
                                                                       sons join the business.                                                for new quick serve restaurants (QSR).                                 Sheldon Lavin becomes a partner in the OSI business.                        ventures in new countries and other sectors of the food industry.       China becomes a focus for OSI’s international growth.                              enters the fresh produce business.                                                                                                                                                       TODAY: OSI Group, LLC is a
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     100-plus year old, privately

         OSI History
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Production facilities open to produce salsa, beans, and tofu         held corporation that is a
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                products in the western U.S. and poultry in China. A Canadian        global leader in supplying
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                company is also acquired.                                            value-added protein items and
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     other food products to leading
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                OSI opens culinary innovation centers in the U.S. and China and      foodservice and retail brands.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                a global R&D center in the U.S.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Beef production facility
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             opens in Japan, and
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             vertically integrated                                                                                 A merger is completed in
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             poultry operations are                                                                                Australia to strengthen
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             initiated in China.                                                                                   OSI’s portfolio in that region.

                                                                                                  1917                                                                     1955                                                                      1975                                                                      1981                                                                   1987                                                                             2001                                                             2010                                                2014                                               2018
1909

          1910

                                                                1917

                                                                                          1920

                                                                                                                                                        1928

                                                                                                                                                                         1930

                                                                                                                                                                                          1950

                                                                                                                                                                                                              1955

                                                                                                                                                                                                                                              1960

                                                                                                                                                                                                                                                                 1970

                                                                                                                                                                                                                                                                                          1973

                                                                                                                                                                                                                                                                                                             1975

                                                                                                                                                                                                                                                                                                                               1977

                                                                                                                                                                                                                                                                                                                                        1978

                                                                                                                                                                                                                                                                                                                                                         1980

                                                                                                                                                                                                                                                                                                                                                                  1981

                                                                                                                                                                                                                                                                                                                                                                                                                    1987

                                                                                                                                                                                                                                                                                                                                                                                                                                             1990

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      2001

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  2004

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  2006

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   2010

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           2011

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    2012

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  2014

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    2016

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      2018
                                                                                                                                                                                  „                                                                    „

                                    1909                                                                  1928                                                             1973                                                 1975                                    1977                                                   1978                                                    1993                                                 1996                                     2004                             2006                                                      2011                                         2012                              2016

                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Acquisition of a            Poultry operations are
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              retail branded              added through acquisition
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              company producing           of vertically integrated
                                                                                                                                                                                                                                                            Company begins operations                                                                                                                                                                                         diversified meat            poultry company.                                                                                           OSI opens two new
                                                                                                                                                                                                                                                            beyond supplying to QSRs                                                                                                                                                                                          products in the U.S.                                                                                                                   vegetable product
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Establish beef deboning                                                                                    processing facilities
                                                                                                                                                                                                                                                            and establishes a separate
                                                                                                                                              Otto & Sons builds its first plant in West Chicago which used                                                                                                                                                                                                                                                                                               and slaughter operations                                                                                   in India.
                                                                                                                                                                                                                                                            unit for the new Glenmark
                                                                                                                                              cryogenic food processing to preserve food through                                                                                                                                                                                                                                                                                                          in Europe.
                                                                                                                                                                                                                                                            brand, which would later be
                                                                                                                                              nitrogen freezing.                                                     Otto & Sons becomes                    sold in 2011.
                                                                                                                                                                                                                     OSI Industries in the U.S.
                                                                                                                                                                                                                     and transitions from
       The company is founded by Otto Kolschowsky as a family-owned            Business grows into a stable, successful local operation and                                                                          family butcher shop to
                                                                                                                                                                                                                                                                                                 OSI begins a decade of international expansion, opening                 Three years of expansion to               New U.S. facility opens to produce bacon, sausage,
       meat market and butcher shop in the Chicago area.                       rebrands to Otto & Sons.                                                                                                              a technologically                                                                                                                                                                                                                                                                                                                                                                                                             OSI opens a European
                                                                                                                                                                                                                                                                                                 facilities in Germany, Spain, Brazil, Austria and Italy.                Hungary, Poland, India and United         and hot dogs. A beef and pork processing facility in
                                                                                                                                                                                                                     advanced manufacturer                                                                                                                                                                                                                                                                                                                                                                                                         regional office in Germany
                                                                                                                                                                                                                                                                                                                                                                         Kingdom, providing greater depth          the Ukraine also opens.
                                                                                                                                                                                                                     of processed meats.                                                                                                                                                                                                                                                                                                                                                                                                           and acquires two more
                                                                                                                                                                                                                                                                                                                                                                         to OSI’s product line and services.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   companies to expand its
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   European footprint.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            A new dry sausage operation opens in the U.S.

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Our Food. Our Future - OSI Group
Our   Our     Our
                                                                                                                                                                                                                                                         OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

Food. Future. Values.                                                                                                                                       Ethics and Business Principles                              Both the CEO and president approve and endorse the
                                                                                                                                                            As an extension of our values, OSI is committed to          Global Business Standards and its updates which are
                                                                                                                                                            operating its business with integrity and believes that     made to align it with applicable new regulations, laws
                                                                                                                                                            ethical conduct is the foundation of our business           and policies within OSI. Our legal department serves as
                                                                                                                                                            success. We incorporate our code of conduct in our OSI      the owner of the Global Business Standards, and there
                                                                                                                                                            Global Business Standards, which is formally provided to    are regional business standards officers as well as a
                                                                                                                                                            our employees annually and is also readily available        team of individuals from our human resources and legal

                  1 2 3 4 5
                                                                                                                                                            through our corporate intranet website. We also provide     departments who serve as resources to employees
                                                                                                                                                            reinforcement to employees with training around these       seeking further guidance.
                                                                                                                                                            business standards and task each individual with the                                                                                Our fundamental
                                                                                       Work                                                                                                                             We maintain high levels of accountability throughout                        beliefs which
                                                                                                                                                            responsibility of promoting and practicing the highest
                                                              Seek                     together                  Strive to                Explore                                                                       the OSI organization. We encourage our employees                          express the OSI
                                                                                                                                                            standards of ethical conduct in their business functions.                                                                      way of doing business.
                           Act with                           partnering               as a                      continuously             innovative                                                                    to apprise us of their concerns and questions
                                                                                                                                                                                                                                                                                                                      VALUES
                                                                                                                                                            The Global Business Standards summarizes relevant
                           integrity                          relationships            team                      improve                  solutions                                                                     through our open door policy and other
                                                                                                                                                            laws and includes OSI’s expectations and policies on
                                                                                                                                                                                                                        reporting mechanisms, including our
                                                                                                                                                            important topics such as Anti-Discrimination and                                                                        Code of Conduct that outlines
                                                                                                                                                                                                                        MAKE IT RIGHT Global Hotline.                                   how to conduct business
                          We pursue honest           We will find the best    We value each other       We believe that any      We go beyond what          Harassment, Privacy, Fair Competition, Federal Corrupt
                                                                                                                                                                                                                                                                                          ethically in accordance     GLOBAL
                                                                                                                                                            Practices Act, Insider Trading, Accurate Records,
                          interactions. Our work     solutions to difficult   because we’re better      problem can be solved,   is easy or obvious                                                                                                                                   with laws, regulations, and     BUSINESS
                                                                                                                                                            Conflicts of Interest, International Business, Human                                                                               company policies.
                          is straightforward,        challenges in            together. The strength    and better operations    because we desire
                                                                                                                                                            Rights and Labor Laws. Each location also has local
                                                                                                                                                                                                                                                                                                                      STANDARDS
                          reliable and consistent    partnership with our     of our collective power   and supply chains are    excellence. We are
                          throughout all global      employees, customers,    is found in safe,         always possible.         confident in our           policies that provide operational direction to supplement
                          operations.                suppliers, farmers       diverse workplaces                                 place and responsibility   the Standards and our senior vice president, general
                                                     and communities.         where our employees                                as leaders.                counsel serves as the chief compliance officer.
                                                                                                                                                                                                                                                                                           Operational directions,
                                                     Our partners’ success    can thrive, develop                                                                                                                                                                                          including management       LOCAL
                                                                                                                                                                                                                                                                                       processes and procedures.
                                                     is our success.          and grow.                                                                                                                                                                                                                               POLICIES

                                                                                                                                                                                                                                                                             Systems that monitor and benchmark
                                                                                                                                                                                                                                                                              operations regularly in order to make
                                                                                                                                                                                                                                                                            the best possible decisions at regional   PERFORMANCE
                                                                                                                                                                                                                                                                                 and global levels of management.
                                                                                                                                                                                                                                                                                                                      & ALIGNMENT

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Our Food. Our Future - OSI Group
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                                                    Food Safety and Quality                                     The OSI Group drives food safety excellence throughout
                                                    Our customers’ trust is of utmost importance to             our network via our Global Food Safety and Quality
                                                    us and ensuring food safety is non-negotiable. We           Council. This council ensures global alignment of our
                                                    take providing consumers, many of whom are our              food safety and quality expectations in order to
                                                    families, with safe, nourishing, and delightful food        consistently deliver best-in-class solutions to our
                                                    as a privilege and honor.                                   customers worldwide. Further, our Global Quality Council
                                                                                                                has made significant strides to develop and implement
                                                    While expanding internationally, OSI has worked with        OSI’s food safety culture in a way that can be easily
                                                    many local suppliers to deliver quality, consistency,       understood, embraced, and adhered to by every
                                                    and efficiency in order to help our partners achieve        employee and externally verified to provide confidence
                     The quality of our             growth and profitability. As a partner, OSI provides        to our customers. We undergo regular internal and
                     products and the               connections to the best practices in food manufacturing     customer safety audits and globally track a strategic list
                     people who work with           operations by introducing our suppliers to better           of food safety key performance indicators (KPIs) for each
                                                    technology, food safety, and management practices as        plant, which are routinely reviewed by OSI’s leadership.
                     us will always come
                                                    well as connections to experts and practical experience
                     first.  That’s why we’re                                                                   We also recognize the importance of continuing
                                                    in the most advanced farming and processing facilities
                     considered number one          around the globe. We’re proud of maintaining the high       to embed and enrich our food safety culture within
                     by the best leaders in         standards our customers have come to expect across          the core of OSI operations. Planned initiatives
                     the business.  Every           each location and facility.                                 include communication campaigns for each facility
                                                                                                                and additional benchmarking of facilities by
                     day is a new day
                                                    We also set high expectations for our suppliers and         external programs.
                     to prove it.”
                                                    insist on the application of Hazard Analysis and Critical
                     SHELDON LAVIN                  Control Points (HACCP) based preventive approaches          All of OSI’s facilities actively maintain Global Food Safety
                                                    to food safety in all supplying facilities to manage risk   Initiative Certification or other globally recognized
                                                    around food safety.                                         certifications for their food safety and quality systems.

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Our Food. Our Future - OSI Group
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                     OSI Corporate Governance
                     and Organizational Structure
                     OSI, like any company, has to balance business realities and stakeholder
                     expectations. As a privately held company, we have the benefit of being able to
                     respond quickly and with both short- and long-term views in mind.
                     The company is governed by a Board of Managers, who                            Over the course of 2016-2017, several new individuals joined OSI
                     include sustainability considerations in their management of                   Group’s Global Leadership Team. OSI Group’s global leadership is
                     company strategy, risk, and investments. The board is chaired                  shown below and on the next page.
                     by Sheldon Lavin and meets quarterly to ensure we are sustaining
                     our values throughout OSI operations.

                     Sheldon Lavin                  David McDonald                   Sherry DeMeulenaere           Donna Coaxum                   Nicole Johnson-Hoffman         Kevin Scott                Brent Afman             Kevin Cahill         Dr. Kenneth Petersen          Mark Richardson
                     Chairman &                     President & Chief                Executive Vice President,     Senior Vice President,         Senior Vice President &        Senior Executive Vice      Senior Vice President   Managing Director,   Senior Vice President,        Senior Vice President,
                     Chief Executive Officer        Operating Officer                Chief Financial Officer,      General Counsel &              Chief Sustainability Officer   President, North America   & Managing Director,    Europe               Quality Assurance, Food       Global Supply Chain
                                                                                     Treasurer & Assistant         Secretary                                                                                Asia Pacific                                 Safety & Regulatory Affairs
                                                                                     Secretary

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Our Food. Our Future - OSI Group
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                                                    Sustainability Governance
                                                    Our Global Sustainability Team and our sustainability strategy and activities are led by our Chief Sustainability Officer,
                                                    Nicole Johnson-Hoffman, who was appointed at the end of 2017. Weekly updates on sustainability goals, performance,
                                                    and initiatives are provided to OSI’s president and chief operating officer. With the launch of the 2018 OSI Global
                                                    Sustainability Strategy, the OSI Board of Managers also provides oversight and receives annual sustainability
                                                    performance updates from senior management on business ethics, environmental, and social sustainability topics.

                                                    OSI’s Global Sustainability Team is a cross-functional group of leaders from across each of OSI’s regions of operation
                                                    who support the direction of OSI’s global priorities. The members of the team ensure that OSI’s sustainability goals
                                                    and priorities are integrated throughout all areas of the business from their expertise in operations, procurement,
                                                    environmental management, health and safety, and quality assurance. The team meets on a regular basis via conference
                                                    calls or face-to-face meetings. Separately, regional sustainability leaders track the progress of OSI’s global initiatives,
                                                    monitor our performance against targets, share best practices across the group and keep internal and external
                                                    stakeholders informed about achievements against targets.

                                                    OSI also utilizes an internal dashboard to track our sustainability KPIs from a plant,
                                                                                                                                                                                                    GLOBAL SUSTAINABILITY TEAM
                                                    regional, and global level in order to understand our performance against
                                                    established targets. Each facility pursues specific, detailed continuous
                                                                                                                                                                                                                 President & COO               Board of Managers
                                                    improvement projects and each region also develops their own action plans
                                                    as they integrate their own sustainability ambitions with those of the broader
                                                    OSI organization. Each action contributes positively to the overall impact the                                                                           Chief Sustainability Officer
                                                    company has on advancing sustainability throughout the business.

                                                                                                                                                                                        Europe                      Americas
                                                                                                                                                                                  Europe Sustainability         Global Sustainability               Asia Pacific
                                                                                                                                                                                        Director                      Leader

                                                                                                                                                                                       Safety             Procurement             Quality             Operations

                                                                                                                                                                                   Environmental           Human                   Sales                Legal
                                                                                                                                                                                   Management             Resources

                                                                                                                                                                                                   Local, Facility-level Sustainability Champions
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Our   Our     Our
                                                                                                                                                                                                  OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

Food. Future. Strategy.
                                                                                                                                                                    STAKEHOLDER ENGAGEMENT
                                                                                                                                                                    OSI heavily engages in multi-stakeholder initiatives as a means of obtaining important feedback from our industry

                                                                                                                                OSI’s Global Sustainability         partners, communicating our own priorities, and staying up-to-date on important trends.

                                                            STRATEGIC SUSTAINABILITY PROCESS                                    Team began a formal strategic        STAKEHOLDER GROUP            ISSUES DISCUSSED                        ONGOING ACTIONS

                                                                                                                                planning process in 2017 to          CUSTOMERS                    •
                                                                                                                                                                                                  •
                                                                                                                                                                                                      Sustainable Sourcing
                                                                                                                                                                                                      Climate Change
                                                                                                                                                                                                                                          • Regular meetings with regional and issue
                                                                                                                                                                                                                                            specific teams on sustainability issues

                                                                                                                                continue to advance our                                           •   Animal Welfare                      • Annual assessments and subject-specific audits
                                                                             Awareness                                                                                                            •   Human Rights                        • Collaboration on pilot projects
                                                                                                                                                                                                  •   Deforestation
                                                                             • Identify risk areas                              sustainability efforts in
                                                                               across global                                                                         EMPLOYEES                    •   Safety                              •   Intranet
                                                                               supply chains                                    alignment with the goals of our                                   •
                                                                                                                                                                                                  •
                                                                                                                                                                                                      Training and Development
                                                                                                                                                                                                      Conservation
                                                                                                                                                                                                                                          •
                                                                                                                                                                                                                                          •
                                                                                                                                                                                                                                              Town halls
                                                                                                                                                                                                                                              Annual performance reviews
                                                                             • Conduct stakeholder
                                                                               engagement
                                                                                                                                customers and the trends of the                                   •
                                                                                                                                                                                                  •
                                                                                                                                                                                                      Animal Welfare
                                                                                                                                                                                                      Community Engagement
                                                                                                                                                                                                                                          •   Regional community outreach teams

                                                                                                                                food industry.                       CIVIL SOCIETY (e.g., NGOs
                                                                                                                                                                     and Research Institutions)
                                                                                                                                                                                                  •   Climate Change                      • Strategic partnerships on pilot projects to
                                                                                                                                                                                                                                            research and inform best practices
                                                                                                                                                                                                  •   Water
                                                                                                                                                                                                  •   Land Management and Deforestation   • Speaker invitations during supplier engagement
                                                      Refinement                                         Planning               We recognize that, given the                                      •   Animal Welfare
                                                                                                                                                                                                  •   Antibiotics
                                                      • Seek areas for                                   • Organize                                                                               •   Strategic Partnerships
                                                        continuous                                         stakeholder inputs   wide variety of issues that are                                   •   Transparency
                                                        improvement and                                    into materiality
                                                        further engagement                                 analysis             raised about food production, it     GOVERNMENT AND
                                                                                                                                                                     REGULATORS
                                                                                                                                                                                                  • Trade
                                                                                                                                                                                                  • Regulatory Issues
                                                                                                                                                                                                                                          • Maintaining regulatory compliance
                                                                                                                                                                                                                                          • Pilot programs
                                                        with stakeholders
                                                                                                         • Highlight priority
                                                                                                           areas with clear
                                                                                                                                is important for us to review and                                 • Antibiotics

                                                                                                           objectives for                                            INDUSTRY GROUPS              • Animal Welfare                        • Sponsorships of annual events

                                                                             Evaluation                    creating impact      prioritize the critical areas                                     • Climate Change                        • Hosting industry tours
                                                                                                                                                                                                  • Land Management and Deforestation     • Participation in monthly calls, annual

                                                                             • Analyze past data,                               where we can specifically drive                                                                             conferences and events on key issues

                                                                               customer market initiatives
                                                                               and societal goals for                           impact. We understand that our       SUPPLIERS                    •
                                                                                                                                                                                                  •
                                                                                                                                                                                                      Animal Welfare
                                                                                                                                                                                                      Antibiotics
                                                                                                                                                                                                                                          • Regular self-assessments and annual on-site
                                                                                                                                                                                                                                            audits
                                                                               setting impact targets
                                                                                                                                customers want to know who                                        •   Environmental Management            • Regular meetings with regional and issue
                                                                                                                                                                                                                                            specific teams on sustainability issues
                                                                             • Align clear metrics                                                                                                •   Human Rights and Labor
                                                                               to targets in order to
                                                                               track progress
                                                                                                                                makes their food and how we          CONSUMERS                    • Food Quality                          • Market research
                                                                                                                                                                                                                                          • Dedicated field service team
                                                                                                                                treat our valuable resources.        PHILANTHROPIC PARTNERS
                                                                                                                                                                        • Food Security                                                   • Donations
                                                                                                                                                                        • Agricultural Training                                           • Volunteer contributions
                                                                                                                                                                        • Workforce Development                                           • Event participation and sponsorship
                                                                                                                                                                        • Health and Nutrition
  16 | OSI GLOBAL SUSTAINABILITY REPORT 2018 / 2019                                                                                                                                                                                                                                          | 17
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                     Materiality Analysis
                     Based on frequent contact with important stakeholders, analysis of public interest
                     issues, and research among the marketplace and consumers, we defined a list of                                                                                                                                                           Antibiotics
                                                                                                                                                                                                                                                                                          Animal
                                                                                                                                                                                                                                                                                           Welfare

                     relevant topics for our business. We then performed a materiality analysis with                                                                                                                                  Forest                                                   Food Safety

                     representatives from a cross section of different geographies and functions within                                                                                                                                                         Water                Workplace Safety

                                                                                                                                                                                                                                                            Climate Change                 Energy
                     OSI to understand the issues that are most important to our success. We evaluated
                                                                                                                                                                                                                                      Labor

                                                                                                                                                     IMPORTANCE TO STAKEHOLDERS
                     topics based on two dimensions in order to prioritize our areas of focus:                                                                                                                                       Nutrition
                                                                                                                                                                                                                                                                                          Waste

                                                        Importance to Business                                                                                                                       Compensation                 Business Ethics

                                                        While there are some issues that exist squarely within the control of OSI’s operations,
                                                        other issues are outside of our direct contact and control. These issues require                                                                                         Land Management              Traceability
                                                        cooperation and partnerships in order to inspire change within our supply chain. We
                                                        included these issues in our analysis because some are critical to our business’s place
                                                                                                                                                                                                                                                             Transparency                Training
                                                        in industry and require our participation in collective initiatives to improve the system.
                                                        The internal evaluation of our responsibility and ability to impact these issues and their
                                                                                                                                                                                                      Philanthropy                                           Job Creation
                                                        relevance to our business operations is included on the horizontal axis.                                                                                                     Diversity

                                                        Importance to Stakeholders
                                                        This analysis relied heavily on the views and perceptions of outside stakeholders
                                                        as we gathered and synthesized inputs from influencers across the industry including:
                                                        key customers, suppliers, non-governmental organizations (NGOs), community
                                                        organizations, industry trade associations, and media attention. Feedback from the
                                                        most important stakeholder groups were given the most weight, with the weighted
                                                        average on the vertical axis.
                                                                                                                                                                                                              IMPORTANCE TO BUSINESS

                                                                                                                                                      This process has identified the ten most important economic, social, and         Going forward, we will maintain an ongoing dialogue with our
                                                                                                                                                      environmental issues to our business: Animal Welfare, Antibiotics, Food          customers, suppliers, NGOs and other stakeholders to continue
                                                                                                                                                      Safety, Employee Health and Safety, Employee Training, Energy, Climate           refining our strategy by monitoring and assessing emerging issues
                                                                                                                                                      Change, Waste Reduction, Water Stewardship and Protecting Forests.               and the evolution of topics included in our materiality assessment.
                                                                                                                                                                                                                                       We expect to review the strategy annually.
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OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                                                    Sustainability Priorities
                                                    From our strategic sustainability process and the materiality analysis, we’ve
                                                    organized the most significant issues into the following six priorities for our company.
                                                    These priorities build on the sustainability vision that OSI has been communicating to our stakeholders and supply base over the past couple of
                                                    years to highlight the specific categories of Sustainable Supply and Procurement, Environmental Stewardship, and Social Responsibility. Highlighting
                                                    specific priorities advances our approach by defining the opportunities where we can drive meaningful and sustainable impact in the long term goals
                                                    that are listed below.

                                                                 Sustainable Supply                                                  Environment                                           Social Responsibility

                                                    ANIMAL WELFARE                ANTIBIOTIC                     CONSERVATION                   CLIMATE CHANGE                 WORKPLACE                   COMMUNITIES
                                                    Animals respectfully          STEWARDSHIP                    Reduced environmental          Risk to changing               Safe workplaces where       Shared value for company
                                                    managed to ensure             Antibiotic effectiveness       impact through                 climates addressed by          everyone’s rights are       and community created
                                                    health and welfare            preserved for human            responsible stewardship        mitigating greenhouse          protected and skills
                                                                                  and animal health              of natural resources           gas emissions                  are enhanced

                                                    • Ensure respect for         • Healthy animals               • Use water sustainably        • Reduce                       • Reduce workplace          • Provide safe, quality food
                                                      animals in supply chain                                                                     GHG emissions                  hazards
                                                                                 • Reduce critically             • Reduce waste                                                                            • Enrich our communities
                                                    • Lead animal                  important antimicrobials                                     • Use energy sustainably       • Respect workers’ rights
                                                                                                                 • Protect forests                                                                         • Support individuals most
                                                      welfare practices            from use in supply chain
                                                                                                                                                • Build resilience to          • Empower workforce with      affected by food and
                                                                                                                                                  changing environment           the skills to succeed       agriculture supply chains

20 | OSI GLOBAL SUSTAINABILITY REPORT 2018 / 2019                                                                                                                                                                                     | 21
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

          &          with Nicole Johnson-Hoffman
                     Chief Sustainability Officer
                                                                                                                                                                                   2018 was a great year for         2025 Sustainability Targets
                                                                                                                                                                                                                     OSI has been reporting on our sustainability activities since 2010, but our 2016-2017 Global Sustainability Report
                                                                                                                                                                                   OSI in terms of our increase in   was the first integration of our sustainability efforts into a single narrative from around the globe. Since then, we have
                     Sustainability is a term that many people define                                What are OSI’s biggest sustainability                                                                           continued to refine our approach in order to target strategic impacts in the areas of environmental stewardship, social
                                                                                                                                                                                   transparency and building a
                     differently. What does it mean to you?                                          opportunities? And the challenges?                                                                              responsibility, and sustainable supply chains. We have evaluated the progress made toward our prior regional

                     Sustainability articulates our aspiration that OSI’s business and supply        When I joined OSI, I knew that we had both a tremendous opportunity and
                                                                                                                                                                                   strategic sustainability action   commitments and set new, ambitious targets at the global level for 2025 in accordance with our greater focus and
                                                                                                                                                                                                                     conviction around sustainability. We have also looked for opportunities to use our size and global scope to our
                     chains can always be improved to deliver better outcomes for OSI’s              responsibility in our company’s vision of being a Premier Global Food
                                                                                                                                                                                   plan. Focusing in on our six      advantage by highlighting and sharing resources for best practices across the global business.
                     customers, the environment and the communities in which our company             Provider to Leading Branded Companies. Our customers maintain
                     operates. Making commitments to sustainability shows that we plan to be         ambitious, best-in-class sustainability goals because it is demanded by       priority topics will give us a
                     around and competitive long into the future. I am confident that OSI will       their customers, investors, and the public. For them, many of their
                                                                                                                                                                                   great start in meeting our                          All suppliers for all                                                                    Expand industry

                                                                                                                                                                                                                       SUPPLY
                     continue to link hands with our fellow stakeholders around the globe to         sustainability goals begin in the supply chain, and we’re fortunate to                                                                                         Utilize outcome based        Third-party video
                                                                                                                                                                                                                                     species have externally                                                                 engagements across
                                                                                                                                                                                                                                                                   indicators for all animal   auditing at all primary
                     say “we will do our part” in providing sustainability leadership and
                     influencing our industry and supply chains to ensure consumers trust the
                                                                                                     benefit from their important industry leadership that helps make those
                                                                                                     goals a reality. As we join their sustainability momentum and help add our
                                                                                                                                                                                   common goal: a sustainable                          recognized animal
                                                                                                                                                                                                                                     welfare training in place
                                                                                                                                                                                                                                                                          welfare KPIs          processing facilities
                                                                                                                                                                                                                                                                                                                             relevant species and
                                                                                                                                                                                                                                                                                                                                    regions
                     quality and care for communities and natural resources that went into           own energy and influence to the movement, we look forward to the              food industry.
                     producing the food on their plate.                                              change that we can create in our supply chains.

                                                                                                                                                                                                                       ENVIRONMENT
                                                                                                                                                                                                                                                                                                                     Report to
                     How did you approach your first year as                                         In the same way, building a sustainable industry is a challenge bigger than                                                     Reduce water                             Reduce energy
                                                                                                                                                                                                                                                                                               Reduce GHG*
                                                                                                                                                                                                                                                                                                                   CDP** Supply
                                                                                                                                                                                                                                                                                                                                      Increase
                                                                                                                                                                                                                                                          100% landfill                           emission                           renewable
                     OSI’s Chief Sustainability Officer? Has anything                                any one of us can tackle alone. OSI brings our long history of building                                                         usage intensity
                                                                                                                                                                                                                                                          free facilities
                                                                                                                                                                                                                                                                               intensity by
                                                                                                                                                                                                                                                                                                intensity by
                                                                                                                                                                                                                                                                                                                    Chain and
                                                                                                                                                                                                                                                                                                                                    energy usage
                                                                                                                                                                                                                                        by 15%                                     20%                                Forests
                     surprised you?                                                                  successful partnerships into this space as well, supporting collaborative                                                                                                                      20%
                                                                                                                                                                                                                                                                                                                   questionnaire
                                                                                                                                                                                                                                                                                                                                        75%
                                                                                                     multi-stakeholder initiatives, like the Global Roundtable for Sustainable
                     As I began to scope OSI’s 2025 Sustainability Strategy, listening to our        Beef, to start chipping away at the challenges and combining our
                     stakeholders was a clear first step. OSI has always been a company that         influence to ensure that OSI, our customers, and our communities can be
                                                                                                                                                                                                                                      Implement integrated
                     is finely attuned to our customers’ needs, and for the majority of leading      confident about their future.                                                                                                      health and safety                                        Provide expanded

                                                                                                                                                                                                                       SOCIAL
                     branded companies, sustainability is a critical capability for food suppliers                                                                                                                                                                  Donate 2000 volunteer                                   Achieve new standard
                                                                                                                                                                                                                                     system at all facilities to                                support to agriculture
                     and most certainly a priority for their customers. From there, we identified    What is next for sustainability at OSI?                                                                                           improve monitoring,
                                                                                                                                                                                                                                                                       hours per year to
                                                                                                                                                                                                                                                                     community initiatives
                                                                                                                                                                                                                                                                                               education, families and
                                                                                                                                                                                                                                                                                                                            minimum training hours
                                                                                                                                                                                                                                                                                                                                at all facilities
                     a couple of key sustainability levers that we could pull to play our part in                                                                                                                                    education and accident                                    hunger relief at all sites
                                                                                                     We’re becoming a stronger sustainability partner to our customers and to                                                              reductions
                     helping our customers reach the commitments they have made toward
                                                                                                     our suppliers. This report is another milestone in our goal of becoming
                     sustainability objectives.
                                                                                                     more vocal about the great achievements we’ve had in sustainability and                                                                                                *GHG = Green House Gas       **CDP = formerly Carbon Disclosure Project
                                                                                                     the role we want to have in telling our own story about what sustainability
                                                                                                     looks like in our industry. Further, we’re looking forward to increased                                         For our targets, we look at our own operations from a baseline of 2015 as we can control these outcomes ourselves.
                                                                                                     engagement with both our suppliers and other collective action groups.                                          We have been monitoring them closely through OSI Advantage, our proprietary data dashboard for tracking
                                                                                                                                                                                                                     operations KPIs. Separately, we are continuing to engage in other partnerships and industry associations to influence
                                                                                                                                                                                                                     and drive greater impact throughout our supply chain.

22 | OSI GLOBAL SUSTAINABILITY REPORT 2018 / 2019                                                                                                                                                                                                                                                                                               | 23
Our   Our     Our
                                                                                                                                                                OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

Food. Future. Suppliers.
From raw material suppliers to the consumer’s table, OSI performs a critical role in a      BEEF                                         POULTRY                                                PORK
complex supply chain. This role positions us between the needs of our customers,
                                                                                                   Industry Roundtable*                                  Breeder
demands of the market and the realities of on-farm operations and raw material

                                                                                                                                                                                                     Feed
                                                                                                                                                                                                                 Producers
suppliers. Although we have direct control over only some stages of the supply chain,                  Cow-Calf Operations

                                                                                                                                           Feed
                                                                                                                                                        Hatchery

we work hard to bring all parties together to ensure the highest quality possible.

                                                                                            Feed
                                                                                                      Sale        Feedlots
                                                                                                    Barns &      & Finishing                           Broiler Farm                                          Primary Processing
                                                                                                    Stockers       Farms

                                                                                                                                                   Primary Processing                                        Further Processing
                                                                                                       Primary Processing

                                                                                                       Further Processing                           Further Processing                                           Distribution

                                                                                                           Distribution                                Distribution                                            Customer Store

                                                                                                         Customer Store                                                                                          Consumer
                                                                                                                                                     Customer Store

                                                                                                            Consumer                                    Consumer

                                                                                         Before a hamburger, nugget or slice of bacon ends up on the plate,                                 OSI REGIONS            OSI ACTIVITY
                                                                                         OSI plays a critical role in connecting the dots in the supply chain                               ● Asia		                              Direct Operations
                                                                                         and adding value to protein products.                                                              ● Australia		                         Indirect Influences
                                                                                                                                                                                            ● Europe               * Leaders, partners, influencers

     24 | OSI GLOBAL SUSTAINABILITY REPORT 2018 / 2019
                                                                                                                                                                                            ● U.S.                                              | 25
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY
SCHOERGERER

                                                                           Influencing the Supply Chain                                                                                                   GRSB brings together      Industry Roundtables
                                                                           We view it as our responsibility to source high-quality materials and raise supplier expectations in order to ensure           people from around the    Protein supply chains are complex systems with a wide         OSI Group Memberships & Associations
                                                                           the best product possible before it enters our facilities. We recognize the importance of long-term, trusting                  world who represent all   variety of producers and practices that differ across each    • Global Roundtable for Sustainable       • Australian Chicken Meat Federation
              We’re proud to highlight the outstanding farmers,
                                                                           relationships with raw material suppliers, and continually seek to engage them independently and through industry              segments of the beef      country and region. For this reason, OSI harnesses our          Beef (GRSB)
              ranchers and producers in our supply chains because we                                                                                                                                                                                                                                                                        • Victorian Chicken Meat Council
                                                                           roundtables. This helps us facilitate the sharing of best practices in environmental protection, business and supply           value chain, including    partnering mindset and looks for ways to work                 • U.S. Roundtable for Sustainable
              believe it is important to recognize what successful,                                                                                                                                                                                                                                                                         • Board of PrimeSafe Victoria (Victorian
                                                                           chain ethics, as well as communicate economic opportunities from market demands.                                               individual producers      collaboratively with our counterparts in the industry in        Beef (USRSB)
              sustainable farming systems look like and facilitate the                                                                                                                                                                                                                                                                        State Government Meat, Poultry and
                                                                                                                                                                                                          who, ultimately, agree    order to communicate effectively with our stakeholders        • Sustainable Agriculture Initiative        Seafood Regulatory Body)
              transfer of best practices to others within our network.     We believe that animal welfare and good agricultural practices are pre-competitive issues, and so we participate               there’s massive value     and contribute to meaningful change.                            (SAI) Beef Platform
                                                                                                                                                                                                                                                                                                                                            • China White Feather Broiler
                                                                           in programs with our industry and supply chain to identify and address issues that do not meet our ethical                     in sharing knowledge
              Beginning in 2016, we were honored to showcase the                                                                                                                                                                                                                                  • National Chicken Council                  Association
                                                                           responsibilities. OSI is also proud to support commitment-led supply chain enrichment programs on behalf of                    and who want to           OSI is a founding member and dedicated supporter of
              Schoergerer farm in Austria. The dairy flagship farm was                                                                                                                                                                                                                            • U.S. Poultry & Egg Association          • China Poultry Industry
                                                                           our customers. With expertise in a wide variety of such programs, our supply chain management experts engage                   partner to drive          the Roundtables for Sustainable Beef. Since January
              specifically recognized for its strong focus on animal                                                                                                                                                                                                                                                                          Association, CAAA
                                                                           our suppliers and industry partners to meet targets through programs for:                                                      exciting new levels of    2018, our chief sustainability officer has served             • Professional Animal Auditor
              welfare with a loose house system and careful herd                                                                                                                                                                                                                                    Certification Organization (PAACO)      • CLFMA Membership: Compound
                                                                                                                                                                                                          performance in areas      as the president of the Global Roundtable for
              management to protect the environment of alpine                                                                                                                                                                                                                                                                                 Live Stock Feed Manufacturers
                                                                            Enriched Housing     Enriched          Specific        Varied           Animal Medicine   Farm Assurance Certifications       impacting GRSB’s          Sustainable Beef, and other members of OSI’s                  • Animal Agriculture Alliance
              pasture and forest. In 2016 and 2017, we were pleased                              Animal            Diets           Production       Regimes
                                                                                                                                                                                                                                                                                                                                              Association of India
                                                                                                 Management                        Methods                                                                principles and criteria   sustainability team also participate with the regional        • North American Meat Institute (NAMI)
              to highlight our Hungarian poultry supplier, Master                                                                                                                                                                                                                                                                           • Protein Foods & Nutrition
                                                                                                                                                                                                          of sustainable beef.”     roundtables in Europe, the United States, and Australia.      • Professional Dairy Producers              Development Association of
              Good, for their leadership in animal husbandry, welfare,      • Gestation          • RSPCA           • Grass-fed     • Organic        • Never Ever      •   Bavarian Origin
                                                                              crate-free pork      assured         • Sustainable   • Transitional     Antibiotics     •   Fair Foods                      NICOLE JOHNSON-HOFFMAN                                                                    of Wisconsin (PDPW)                       India (PFNDAI)
              biosecurity, environmental activities and human welfare.                                                                                                                                                              OSI is also active within industry and agricultural
                                                                            • Cage Free          • GAP certified     Soy             Organic        • No Hormone      •   Food Alliance
                                                                                                                                                      (HGP Free)                                                                                                                                  • Roundtable for Responsible              • Roundtable on Sustainable
                                                                            • Natural behavior                     • Non-GM        • Non-GM                           •   German QS                                                 associations for other proteins. Dave McDonald,
              We’re continuing to nominate leading suppliers and look         enablers                                                                                                                                                                                                              Soy (RTRS)                                Palm Oil (RSPO)
                                                                                                                                                                      •   Great Southern                                            President and COO of OSI Group, has served on the
              forward to reporting on other supply chain leaders and        • Lighting
                                                                                                                                                                      •   Marine Stewardship Council                                                                                              • Women’s Food Service Forum (WFF)        • ZDF (German Meat Association)
                                                                              specifications                                                                                                                                                Board of Directors for the North American Meat
              their sustainable operations.                                                                                                                           •   Origin Green
                                                                                                                                                                      •   Red Tractor                                                                         Institute (NAMI) since 2003.        • IPC (International Poultry Council)     • U.S.-China Agriculture and Food
                                                                                                                                                                      •   SFS, OSI’s personal 3rd party                                                                                                                                       Partnership (AFP)
                                                                                                                                                                                                                                                              Ben Harrison, President and         • ZDG (German Poultry Association)
                                                                                                                                                                          certified Farming Standard
                                                                                                                                                                                                                                                              CEO of Amick Farms, has             • Association of Poultry Processors
                                                                           As part of this effort, we strive to recognize the highest performing suppliers and farmers. Our Quality Assurance                                                                 served on the Board of                and Poultry Trade in the EU countries
                                                                           Team is critical in benchmarking supplier performance with best practices and ensuring consistent quality                                                                       Directors and as Chairman of the
                                                                           through regular audits and supplier feedback loops. Through these activities, our suppliers can showcase their                                                           National Chicken Council for 2017-2018.
                                                                           best practices and influence their peers and the industry to adopt practices that improve animal welfare, build                                                   He is also currently serving on the Board of
                                                                           environmental resilience, and create positive social and economic impacts for their communities. We’re proud                                                      Directors of the U.S. Poultry & Egg Association.
MASTER GOOD

                                                                           to showcase these individuals in our publications and sponsor them in recognition programs from customers
                                                                           and industry groups.

                                                                           From 2018 onward, we will also engage our supply chain annually through regional conferences, where we
                                                                           bring together thought leaders from across our industry to share best practices, including specific sustainability
                       26 | OSI GLOBAL SUSTAINABILITY REPORT 2018 / 2019   highlights with our supplier base.                                                                                                                                                                                                                                                                      | 27
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                                                                                                                                       Priority 1: Animal Welfare
                                                                                                                                       OSI is committed to respectfully managing animals to ensure the
                                                                                                                                       health and welfare of livestock in our supply chain and lead best
                                                                                                                                       practices in our industry.
                                                                                                                                       Both OSI and our stakeholders insist on high standards          • Since 2013, OSI has provided ongoing sponsorship
                                                                                                                                       of animal care in our supply chain. We recognize that this        of several science-based animal welfare organizations,
                                                                                                                                       is not only an ethical responsibility, it also ensures a high     including the Professional Animal Auditor Certification
                                                                                                                                       quality product. For this reason, we are careful about our        Organization (PAACO), North American Meat
                                                                                                                                       supply of raw materials. We source exclusively from               Institute (NAMI) and Professional Dairy Producers
                                                                                                                                       approved external suppliers or, in some areas of the              of Wisconsin (PDPW).
                                                                                                                                       world, from our own primary processing facilities for
                                                                                                                                                                                                       • OSI supports and promotes meat and poultry
                                                                                                                                       beef and chicken, which we take care to operate
                                                                                                                                                                                                         animal auditor trainings, assessments and
                                                                                                                                       according to best practices of industry experts such
                                                                                                                                                                                                         programs throughout the industry in the U.S.,
                                                                                                                                       as the World Organization for Animal Health (OIE),
                                                                                                                                                                                                         Europe, China and Australia.
                                                                                                                                       Dr. Temple Grandin and the North American Meat
                                                                                                                                       Institute (NAMI) Animal Handling Guidelines.                    • OSI employs numerous PAACO certified auditors
                                                                                                                                                                                                         with ongoing goals for more.
OSI respects OIE’s Five Freedoms of Animal Welfare, which standardizes primary animal needs under                                      The quality controls in our supply chain’s policies and
human control:                                                                                                                         procedures ensure humane treatment, handling and
                                                                                                                                       slaughter of animals at all times and in every global

1                          2                            3                          4                        5
    Freedom from                 Freedom from fear          Freedom from               Freedom from pain,       Freedom to express     sourcing avenue. Our OSI Group Animal Welfare
    hunger, malnutrition         and distress               physical and thermal       injury and disease       (most) normal          Policy is available for review on our website and we
    and thirst                                              discomfort                                          patterns of behavior   are regularly assessing the performance of our animal
                                                                                                                                       welfare management systems to improve outcomes of
                                                                                                                                       measurable key performance indicators.

    28 | OSI GLOBAL SUSTAINABILITY REPORT 2018 / 2019                                                                                                                                                                                                                                                                | 29
OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                     Some Specific Animal Welfare Guiding Principles of Our Activities Include:                                                                                                                   We were honored that, in 2017, our integrated
                                                                                                                                                                                                                  poultry processing facility in Weihai was recognized

               1                                  2                             3                                 4                                 5
                     Compliance with all            External standards and          Regular internal and              Ongoing technological             Training, competence                                      as one of three outstanding Chinese companies
                     applicable legislative,        definitions of animal           external animal welfare           innovation for improved           and awareness for all                                     with a “Good Farm Animal Welfare Award” for
                     regulatory and                 welfare responsibility          verification audits               key animal welfare                employees handling                                        Good Chicken Production by the International
                     non-regulatory                 from recognized,                                                  indicators                        livestock                                                 Cooperation Committee of Animal Welfare (ICCAW)
                                                                                    In addition to daily animal                                                                                                   and Compassion in World Farming. For us,
                     requirements                   scientific experts
                                                                                    welfare verification              We are investigating the          We strive to foster a                                     this award represents our leadership in animal
                     All livestock destined and     OSI recognizes that the         activities by designated,         use of technology to              culture of best practice in                               welfare and the entire food industry in China.
                     received for slaughter at      public perception of            specially trained animal          leverage improved animal          science-based animal                                      It has been very important to us to ensure that our
                     OSI facilities and             animal welfare differs          welfare officers, OSI             welfare outcomes in our           welfare with trained and                                  Chinese livestock operations follow advanced
                     suppliers will be treated      across cultures and             conducts annual third-            slaughter facilities. In          competent employees,                                      international concepts including best practices
                     humanely and with              regions. We intend to           party auditing of its             over 50% of OSI                   auditors and suppliers.                                   such as reduced stocking densities, leg health
                     respect in accordance          implement, at a                 facilities. Our suppliers         operated slaughter plants         OSI’s auditors are trained                                plans, housing enrichment and natural light in the
                     with OSI procedures and        minimum, consensus-             must demonstrate                  and some of our supply            under recognized animal                                   sheds. Our development of activities such as these
                     in compliance with             based best practices for        ongoing compliance,               chain partners, we have           welfare auditing                                          is what makes us a best-in-class operation.
                     regulations.                   animal welfare. We do           and any finding of                already incorporated the          certification programs,
                                                    follow science-based,           egregious abuse to                latest in closed circuit          such as PAACO, and we
                                                    internationally recognized      animals results in                television (CCTV) and             utilize globally recognized
                                                    standards, such as OIE’s        immediate suspension or           computerized data                 subject matter expert
                                                    Five Freedoms and               potential termination of          analysis and automation           trainers and training
                                                    include veterinarians as        business. OSI is actively         of the lairage and                materials. This same
                                                    part of our process. We         developing global animal          slaughtering process. We          level of excellence is
                                                    also support the sharing        welfare key performance           intend to continue the            expected of our
                                                    of best practices               indicators that we will           roll-out of this technology       suppliers, and we will
                                                    between countries and           apply at all of our beef          to the maximum extent             continue to implement an
                                                    regions where our               and chicken primary               practicable in order to           animal welfare KPI
                                                    suppliers are located, to       processing facilities.            support robust animal             scoring system for all
                                                    ensure consistent quality                                         welfare management.               suppliers in our primary
                                                    controls are maintained                                                                             processing business
                                                    in all areas.                                                                                       operations to further
                                                                                                                                                        measure and manage
                                                                                                                                                        animal welfare in our
                                                                                                                                                        supply chain.
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OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                                                                                             Priority 2:
                                                    ON TARGET FOR

                                                    90% reduction
                                                                                             Antibiotic Stewardship
                                                    of critically important Antimicrobials
                                                    in Europe by 2019

                                                                                             OSI is committed to preserving antibiotic effectiveness for human
                                                                                             and animal health by prioritizing healthy animals and the reduction
                                                                                             of critically important antimicrobials from use in the supply chain.
                                                                                             Antibiotics play an important part in both human             antibiotics appropriately in food animal production will
                                                                                             and animal health by treating bacterial infections.          lead to optimal animal health and welfare, which is good
                                                                                             Unfortunately, some bacteria are no longer able to be        for producers and the rest of the food production chain,
                                                                                             controlled by antibiotics after developing full or partial   and is essential to helping ensure a safe, affordable and
                                                                                             resistance to their effectiveness. We recognize that using   abundant food supply.

                                                                                             IN 2017, BEGAN PHASING OUT

                                                                                             highest priority
                                                                                             critically important
                                                                                             antibiotics
                                                                                             as defined by World Health Organization

                                                                                                                                                          OSI Asia Pacific
                                                                                             (e.g., Macrolides and Fluoroquinolones) across
                                                                                             operations globally.
                                                                                                                                                          is actively collaborating with government officials in three
                                                                                                                                                          different emerging markets at both a technical level for
                                                                                                                                                          prudent use of antibiotics, and at the policy level to
                                                                                                                                                          develop pilot programs to measurably reduce the use of
                                                                                                                                                          antibiotics used in poultry grow out operations.

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OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

                     We Manage Antibiotic Use Through Responsible Sourcing Guidelines.                                                                                    No Antibiotics Ever at Amick Farms                             OSI Europe Targets Antibiotics
                                                                                                                                                                          “In 2016, we developed a program, in addition to our           Reduction Across The Poultry

               1     Dedicated antibiotic-
                     free programs

                     In some instances where
                     we have vertically
                                                   2Animal care under
                                                    veterinarian supervision

                                                    We recognize and believe
                                                    that farmers and
                                                                                 3   Reduction of critically
                                                                                     important antibiotics

                                                                                     We recognize the World
                                                                                     Health Organization’s
                                                                                                                 4Ensuring compliance
                                                                                                                  with withdrawal times
                                                                                                                  and residue testing

                                                                                                                  Legal regulations and
                                                                                                                                              5Supporting industry
                                                                                                                                               research

                                                                                                                                               We work through industry
                                                                                                                                               groups to support
                                                                                                                                                                          other product lines, to better serve the growing segment
                                                                                                                                                                          of our partners who wanted chicken products that have
                                                                                                                                                                          never, ever been given antibiotics of any kind. Grown
                                                                                                                                                                          completely free of antibiotics—from hatching, to raising,
                                                                                                                                                                                                                                         Supply Chain
                                                                                                                                                                                                                                         “We have been monitoring antibiotic use for many
                                                                                                                                                                                                                                         years in chicken integrations and working closely
                                                                                                                                                                                                                                         with our suppliers on reduction strategies to help meet
                                                                                                                                                                          to harvesting, our No Antibiotics Ever (NAE) program           future requirements of customers and make progress
                     integrated poultry supply      ranchers work diligently         categorization of            our clear supplier           ongoing and future
                                                                                                                                                                          makes up about 50 percent of our total production. The         towards embedding sustainability practices within our
                     chains or through              to manage their livestock        antibiotics to include       expectations dictate         research into the best
                                                                                                                                                                          NAE supply directly addresses increasing customer              supply chain. These activities include following World
                     dedicated suppliers in         in the best manner               those antimicrobials         strict withdrawal            practices for treating
                                                                                                                                                                          requests for an antibiotic-free product that will meet their   Veterinarian Association’s 10 Prudent Use Principles
                     other proteins, we are         possible through sound           designated as critically     guidelines and residue       animals and the way that
                                                                                                                                                                          own commitments to antibiotic stewardship over and             for antimicrobial usage, restricting antibiotic use in the
                     able to provide products       husbandry practices,             important to human           testing that is closely      antibiotic resistance is
                                                                                                                                                                          above industry standards for antibiotic vigilance with         hatcheries, and good farm management practices that
                     to the growing number of       including genetics,              medicine. OSI supports       followed in both our and     developed in humans
                                                                                                                                                                          veterinary oversight, withdrawal times, and compliance         are combined with vaccination programs, feed which
                     consumers who want to          nutrition, housing,              efforts of our suppliers     our suppliers’ operations    and animals.
                                                                                                                                                                          to minimum residue limits. We worked with the United           meets specific nutritional needs of the chickens,
                     ensure that their food is      handling, and veterinary         to implement animal          to ensure that all raw
                                                                                                                                                                          States Department of Agriculture (USDA) to implement           and so on.
                     completely antibiotic-         care in order to eliminate       production practices         material is subject to
                                                                                                                                                                          our NAE program as a process verified program to
                     free. Through these            any potential illness and        that reduce, and, where      ante-mortem and                                                                                                        Another challenge has been the phase-out of Highest
                                                                                                                                                                          ensure that our system had the proper documentation
                     programs, any livestock        need for medicine. When          possible, eliminate          post-mortem                                                                                                            Priority Critically Important Antibiotics (HPCIA). Since
                                                                                                                                                                          and auditing procedures to support our antibiotic claims.
                     used in production has         necessary, sick animals          subtherapeutic antibiotic    inspections, confirming                                                                                                2014, we have encouraged our suppliers to seek
                                                                                                                                                                          We’ve also dispatched our “Chicken Experts” - or
                     never been given               are treated in accordance        use in food animals.         that it contains no                                                                                                    technical advice from experts and have initiated
                                                                                                                                                                          veterinarians and field technicians - to help support
                     antibiotics of any kind at     with veterinary guidance         We also encourage and        antibiotic residue.                                                                                                    meetings to speak about topics like substitution
                                                                                                                                                                          growers in raising antibiotic-free flocks with necessary
                     any time during their life.    as part of animal welfare        are piloting programs                                                                                                                               possibilities and best farm practices. OSI Europe has
                                                                                                                                                                          alternatives such as incorporating additional probiotics
                     Our antibiotic-free            commitments.                     that adopt best                                                                                                                                     introduced antimicrobial susceptibility testing prior to
                                                                                                                                                                          to promote good intestinal health and reducing risks
                     programs are closely                                            practices that result in                                                                                                                            treatment on a mandatory basis. Since the beginning of
                                                                                                                                                                          for contamination and stress. As always, we maintain
                     monitored and kept                                              subsequent reduction                                                                                                                                2018, we have achieved the elimination of some groups
                                                                                                                                                                          high standards of animal welfare for all of our programs
                     separate from the                                               of antibiotic use.                                                                                                                                  of the HPCIA and the rest will follow in 2019.
                                                                                                                                                                          and implemented a “Plan B” for treating any sick
                     remainder of the
                                                                                                                                                                          animal, if necessary, by moving those birds to our             Despite these efforts, we know that to manage infectious
                     conventional supply.
                                                                                                                                                                          conventional program.”                                         diseases, it is sometimes necessary to turn to antibiotics.
                                                                                                                                                                          BRITTNI MILLER                                                 Therefore, our primary target is to reduce antibiotic use
                                                                                                                                                                          Communications Manager, Amick Farms
                                                                                                                                                                                                                                         without compromising animal health and welfare.”
                                                                                                                                                                                                                                         SAULE IALGASBAEVA
                                                                                                                                                                                                                                         Quality Assurance Raw Material, Europe

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Our   Our     Our
                                                                                                                                                                         OVERVIEW | VALUES | STRATEGY | SUPPLY CHAIN | ENVIRONMENT | SOCIAL RESPONSIBILITY

Food. Future. Planet.
                                                                         OUR OPERATIONS                                   OUR EMPLOYEES                                         OUR SUPPLIERS

We want to be more than a “green” company and consider environmental
                                                                         We have prioritized the establishment of         OSI Europe has been celebrating the United            Environmental considerations are especially
stewardship to be particularly important given the opportunities and     Environmental Management Systems (EMS)           Nations’ (UN) World Environment Day held              important to our European Quality
                                                                         in our facilities as part of our environmental   annually on June 5 since 2011. Every year,            Assurance Raw Material Team. We’ve
challenges that agricultural supply chains offer to our planet and the   and sustainability risk management. As a         during the week of activities, each facility          guided our customers’ dedicated supply
                                                                         best practice, the EMS is developed from         uniquely celebrates with events such as
resources we rely on for our operations. We want to lead by example in   the ISO 14001 standard, which helps              employee presentations on the year’s
                                                                                                                                                                                base through ISO 14001 Environmental
                                                                                                                                                                                Management Certification, or equivalent
environmental management and consider both our processes and             organizations manage environmental               highlighted focus.                                    systems, over the past seven years.
                                                                         compliance and track performance against
sourcing decisions to be influential platforms to drive these impacts.   environmental goals.
                                                                                                                          BEYOND ISO 14001 CERTIFICATION,                       AS OF 2017

                                                                         AS OF 2017
                                                                                                                          8 facilities                                          87% of suppliers
                                                                         13 facilities
                                                                                                                          achieved Eco-Management and Audit                     Grade A environmental ratings
                                                                                                                          Scheme (EMAS) accreditation
                                                                         ISO 14001 certified
                                                                                                                          This next level of environmental                      54%
                                                                                                                          management has some of the most                       ISO 14001 accreditation
                                                                         Four of OSI’s facilities and office buildings    stringent criteria for external auditing
                                                                                                                                                                                This indicates that, in addition to legal
                                                                         are LEED certified, a marker in Leadership       and official registration with government
                                                                                                                                                                                compliance, suppliers are also maintaining
                                                                         in Energy and Environmental Design               bodies. The system implemented for eight
                                                                                                                                                                                robust environmental policies, environmental
                                                                         and the globally recognized marker of            of OSI’s European country operations
                                                                                                                                                                                risk management, regular trainings, and
                                                                         environmentally sustainable construction.        also boasts increased transparency of
                                                                                                                                                                                continuous improvement in energy, water
                                                                                                                          environmental impact and demands
                                                                                                                                                                                and waste efficiencies.
                                                                                                                          creative engagement of employees in
                                                                                                                          achieving environmental objectives.

    36 | OSI GLOBAL SUSTAINABILITY REPORT 2018 / 2019                                                                                                                                                                                                 | 37
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