Nugget Market, Inc. 2019 Sustainability Report

Nugget Markets Extraordinary Sustainability: Our Vision for Company Sustainability

We are a family business serving our guests, each other and our earth. We are committed to being leaders of sustainability in our industry with a focus on environmental stewardship, social responsibility and economic vitality.

Nugget Markets defines sustainability as the balance of the three pillars: social responsibility, environmental stewardship and economic vitality. We want every associate to SEE sustainability in their departments, that is, make the connections that their practices are socially, environmentally and economically important. Almost every act of sustainability falls into more than one of these categories, as all three pillars are connected and work together to create a better future.

1. Social Responsibility: Taking care of people

   One of our core values at Nugget Markets is to Respect, Appreciate and Value Everyone (RAVE). That means taking care of our guests, associates, communities and producers.

2. Environmental Stewardship: Taking care of the planet

   With every action we take, we aim to ensure the resilience and sustainability of our ecosystems by reducing our environmental footprint and sourcing sustainable products for our guests.

3. Economic Vitality: Taking care of business

   We’re dedicated to being good stewards of our resources, supporting local growers and producers, and partnering with companies who share our values for sustainability.

Social Responsibility Goals

Empower Green Leadership

Empower each store’s Green Guru to connect with fellow associates on sustainability best practices and raise store-level awareness of sustainability.

Strengthen Food Recovery Program

Write the expectations for food donations to ensure consistency across all stores including the donation of foods from all food categories so that we can better support our community members in need with more access to nutritious foods.

Stay Up to Date on Sustainability Trends

Continue learning about sustainability to ensure Nugget Markets is following all Sustainability Best Practices.

Social Responsibility Status:

Empower Green Leadership

Our Sustainability Program is governed by our corporate Sustainability Coordinator position, along with a team of store-level Green Gurus who lead our green charge! Our Sustainability Coordinator and her team work diligently every day with local waste disposal services, water agencies, recyclers and city leaders to promote sustainability throughout our company. During “Sustainability Sundays,” our Green Leadership posts weekly messages that help educate our associates about sustainability terminology, recycling practices and statistics showing how we are improving as a company. Our Green Leadership is constantly rewarding associates for engaging in sustainability by awarding them with cards that they can put into a drawing for money as well as highlighting a monthly “green” associate and rewarding them with a reusable prize! They keep associates engaged by posting monthly “Green Grades” that keep us up to speed on how well our stores are executing our sustainability practices, and one store gets to take home the Sustainability Jar each quarter! Our 2019 winners include:

• Nugget Market, Sacramento, Florin won in quarter two for incredible leadership by their Green Guru who led his store to a 3% decrease in landfill tonnage over 2018 and 50% since 2015.
• Nugget Market, Novato won in quarter three for incredible leadership by their Green Guru who led his team to a 53% decrease in landfill tonnage, an 11% decrease in water consumption and a 10% decrease in energy consumption over 2018.
• Food 4 Less, Woodland won in quarter four for incredible leadership by their Green Guru who led her team to a 59% decrease in landfill consumption since 2015 and a 3.7% decrease in water consumption over 2018.

Strengthen Food Recovery Program

Though we have been donating food for decades, in 2019 we created Food Recovery Guidelines that set expectations for donating food company wide. We reconfirmed old partnerships with local food agencies, solidified new partnerships and increased the number of donated food categories to include perishable, dairy and meat items. By partnering with Feeding America, we began tracking how much food (in tonnage) we were donating and ensuring all edible food that wasn’t sold was donated. We follow the food hierarchy triangle to reduce our food waste: the edible produce we do not sell is offered to other departments, such as bananas from Produce that end up in smoothies in our Juice Bar; if no department can use the food, then we donate the edible food, such as bread from our Bakery, to local food banks in every county. With better reporting, we were able to set tangible goals for increasing food donations. The Food Agency we work with in Marin County had been tracking our donations since 2016, so we knew we already donated roughly 90,000 pounds of food annually. With a strengthened Food Recovery Program, we were looking to match those numbers companywide to ensure our Food Recovery Program reached more of our community members in need with nutritious foods and decreased the amount of food going to waste. In 2019, we boosted that number to 500,000 pounds of food recovered from composting facilities and donated to our local food banks! See below for just a few of the food banks and agencies we work with:

• El Dorado County: Feed El Dorado
• Marin County: ExtraFood
• Sacramento County: South Sacramento Interfaith Partnership Church
• Yolo County: Yolo Food Bank

Stay Up to Date on Sustainability Trends

The complex nature of sustainability is that it is always changing. The best practices of 2018 may not be the best practices of 2019! Our Sustainability Coordinator frequently monitored sustainability news articles online, requested feedback from our associates and received comments from our guests about how we could improve our sustainability best practices. Here are just a few pieces of information she received and how we responded:

• Request to replace plastic single-use items with compostable single-use items
  • Our Sustainability Coordinator thoroughly researched “alternative” materials to plastic such as potato, corn, bagasse, bamboo, etc. and maintained effective communication with our supplier about bringing in better items. In most cases, however, alternatives to plastic are still virgin resources (e.g. growing corn exclusively to produce a single-use item rather than grown for food), so we’re just swapping one virgin resource for another. And it still gets thrown away. In some cases, the resource is a byproduct of another agricultural product (the wheat straw is a byproduct of harvesting the wheat grain, so wheat straw is used as a compostable plate, e.g.) which is better. But 13/15 of our stores don’t have organic waste agencies that can process these materials, so they will still end up in the landfill. Therefore, we made the decision to invest in materials with post-consumer recycled content. This ensures we are buying into the recycling industry and closing the loop on waste.
• Request to incentivize guests to use reusable bags instead of plastic bags
  • Our Sustainability Coordinator joined forces with a local seventh grade student who was interested in providing guests more opportunity to use reusable bags when purchasing groceries. We provided the student with 100 reusable bags and supported her as she tabled in front of the store with information on how reducing plastic consumption supports our environment and offering a free reusable to all guests who talked with her.
• Request to better reward associates and guests who engage in sustainability (see Empower Green Leadership above and Community Events below)

Environmental Stewardship Goals

Decrease Landfilled Material

Decrease tonnage of materials sent to the landfill by 3%

Decrease Water Consumption

Decrease gallons of water consumed by 3%

Decrease Energy Consumption

Decrease kilowatt hours of energy consumed by 3%

Environmental Stewardship Status:

Decrease Landfilled Material

By conducting Waste Audits and through careful inspection of our waste invoices, we were able to track our progress. We have 3 units of measurement as it relates to landfilled material: by tonnage of material sent to the landfill in 2019 over 2018, by tonnage of material saved from entering the landfill in 2019 over 2018, and by the diversion rate of material saved from entering the landfill. Being committed to an ever-increasing landfill diversion rate reduces our greenhouse gas potential, saves our waterways, supports animal welfare and engages our community. Part of ensuring our associates follow recycling best practices is by having effective signage that clearly states what should go in the bin in both English and Spanish so that it can be read by the majority of our associates. Best practices are also communicated to our associates through the sharing of quarterly usage trends. Finally, by supplying all new associates with a reusable water bottle and implementing water bottle refill stations, we encouraged associates and guests to reduce their personal waste of single-use plastic water bottles.

1. Tonnage of material sent to the landfill: Since the start of our Sustainability Program in 2014, we have continued making large decreases in our landfill tonnage even while building and acquiring more stores. That first year, we decreased our landfill tonnage from 2996 tons to 2318 tons, or a 22% decrease. We were hoping to continue that trend. In 2019, we increased our tonnage from 2109 to 2128, or a 0.9% increase. This shows a plateau, which signifies to us that we need to make another big shift in practices to continue reducing our waste production. To achieve our goal of 3%, we will research sustainable packaging options.
2. Tonnage of material saved from entering the landfill: Over the past several years, we were able to decrease our landfill tonnage by increasing our tonnage of recyclable material. We recycle inedible food such as fruit pulp from our Juice Bar, fat from our Meat Department, used cooking oil, plastics, aluminum, glass and cardboard. Part of that effort also included purchasing items made with recycled content such as our copy paper in our offices, our BPA/BPS-free receipt tape and the bags offered to guests at the checkstand, which can be reusable plastic grocery bags made with 100% recycled content and 40% post-consumer recycled content or paper bags made with 40% post-consumer recycled content and certified by the Sustainable Forestry Initiative. In 2019, we decreased our tonnage from 5418 tons to 5379 tons, or a 0.7% decrease. This decrease can happen for any number of reasons including better ordering in-store, change in guest purchasing habits, change in market value of recyclables or human error. We will focus on continued communication with our associates to ensure that all items that can be recycled are making it into the right bins.
3. Our diversion rate decreased from 78% to 72%. We never like sliding back and will fight to get that 72% not only back to 78%, but as close as we can get to 100%.

Decrease Water Consumption

Through careful inspection of our water invoices, we were able to track our progress. We train our associates to have a water-conscious mindset and immediately report all leaks. In recent years, we have remodeled many of our stores, which has helped to reduce our water consumption, safeguard our environment and reduce our operational expenses. Examples include drought-tolerant landscaping and incorporating water-saving technology in our departments such as a blender-rinser that saves 320,000 gallons annually, aerators which saved 75% water the first year of use, diffusers and low-flow toilets. In 2019, we decreased our water consumption from 40,974,841 gallons to 40,699,115 gallons, or a 0.7% decrease. This shows a plateau, which signifies to us that we need to make another big shift in practices to continue reducing our water consumption. To achieve our goal of a 3% decrease, we will research technology that can help us better understand our consumption and reduce any major water events.

Decrease Energy Consumption

Through careful inspection of our energy invoices, we were able to track our progress. We train our associates to have an energy-conscious mindset and turn off all lights when leaving rooms, walk-in coolers and freezers, and desks are no longer in use. In recent years, we have remodeled many of our stores, implementing LED lighting and more energy-efficient refrigeration and equipment. We have video-conferencing hubs at our stores to reduce the miles driven by our associates to attend company meetings. In 2019, we increased our energy consumption from 27,690,101 kilowatt hours to 28,606,665 kilowatt hours, or a 3.9% increase. This increase can happen for any number of reasons including the major expansion of our Distribution Center or the expansion of refrigerated cases. To achieve our goal of a 3% decrease, we will research technology that can help us better understand our consumption and reduce any major energy events.

Economic Vitality Goals

Certified Sustainable

The Business Environmental Resource Council (BERC) named us a 2019 Sustainable Business for all of our stores thanks to our Culture of Sustainability! We were also honored out of a field of more than 100 businesses as the 2019 Sacramento Area Sustainable Business of the Year in Solid Waste Reduction (see Decrease Landfill Material above)!

Certified Bike-Friendly

The League of American Bicyclists awarded our Nugget Markets in Woodland and Davis (Mace and Covell), and our Food 4 Less in Woodland with the classification of Bike-Friendly Business thanks to our pride in creating a bike-friendly workplace for our associates and guests!

Community Events

Check out how we celebrate sustainability with our guests and associates below:

• Earth Day We celebrate Earth Day for the month of April with in-store events, an Earth Day Giveaway and a Green Pledge Challenge. Every April, four of our stores host Earth Day Events complete with Sustainability Trivia and a Sustainability Prize Wheel to win reusable prizes! Guests and associates are also invited to make a Green Pledge to reduce their environmental impact. Check out this fun graphic of the range of pledges submitted.
• May is Bike Month We celebrate May by encouraging associates to choose a way to travel other than a car, including biking, walking, skateboarding, taking public transit and carpooling. In 2019, our associates traveled 1804.5 miles using alternative transportation which saved $1,021.33 and reduced 1,464 pounds of CO2 from being entered into the atmosphere. We also partnered with several locally-organized May is Bike Month events.
• World Food Day We honored World Food Day for the month of October with in-store events and volunteering with our local food banks. Four of our stores hosted World Food Day Events offering the opportunity to talk with guests about world hunger and offering reusable prizes for engaging with us.

Economic Vitality Status:

We will remain vigilant to the ever-changing needs of sustainability. We will keep striving for sustainability awards to use them as a guidepost for our best practices.

2019 Updates to Laws

Policy Changes to Cardboard and Plastic Recycling

When China stopped accepting the bulk of US export recycling, it increased the pressure on our business to send only the highest quality recycling. We had to pivot relatively quickly from the idea of, “When in doubt, recycle it!” to understanding that waste agencies required 100% clean recycling with no room for human error. Much of what used to be considered recyclable became trash or only recyclable under certain conditions. Having stores in eight counties required our Sustainability Coordinator to be diligent about which rules applied in which counties.

Policy Changes to Organics Recycling

In January 2019, Measure 1826 went into effect requiring businesses that generated a certain level of trash to divert food waste from the landfill. Luckily, we had been diverting food waste into fertilizer since 2012 thanks to our partnership with California Safe Soil (CSS). Based in West Sacramento, CSS collects supermarket food waste and uses enzymes to turn it into food hydrolysate, a valuable soil amendment designed to replace chemical fertilizers. Research at UC Davis is showing food hydrolysate can be used by California farms to cut the usage and costs of chemical fertilizers, increase crop yield potential, enhance soil quality and reduce fertilizer runoff. In 2019, we composted 4,000,000 pounds of inedible food waste (to see how much edible food we donated to local food banks, see Food Recovery Program)!