MILL STREET BREWERY2015 sustainability

report

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Introduction from our Co-founder

For me, the most interesting part of the craft beer scene, by far, has been all of the characters I’ve gotten to know over the years. From quirky brewers to the most die-hard craft fanatics, it’s a fun world inhabited by passionate people who are never satisfied with the mundane, and I’m grateful to be a part of it. As craft brewers, passion is what makes us quit our day jobs to follow our dreams; it fuels our innovation and makes us take chances.

I’ve also found that when a brewer extends that passion beyond brewing great beer to actually making a difference in the world - something remarkable happens: people take note and actual change becomes possible!

Canada’s passion for beer and its celebrated place in Canadian popular culture are well known. I truly believe we can leverage these to bring about positive change in our world. As responsible craft brewers, we must embrace and promote sustainability. Most importantly, we will preserve our resources and the environment for future generations, and we will also extend the high level of trust we’ve earned with Canadians.

I’m immensely proud of Mill Street’s important role in raising the bar for Canadian craft beer, and spurring the growth of domestic, certified organic malt production.

I’m now equally incredibly proud to present Mill Street’s first-ever Sustainability Report, which reminds us of our core values, highlights areas requiring improvement, and engages stakeholders through meaningful dialogue. By measuring and candidly reporting on our activities, we will move towards true accountability and further reduce our environmental impact.

We are pleased to share this Sustainability Report with you and welcome your feedback.

Cheers,

Steve Abrams Co-founder, Mill Street Brewery

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Our Sustainability starts locally

As a company, we strive to align “People, Planet and Profits” in every action we take and every business decision that we make out of concern for our employees, our communities and the future of our planet.

This report highlights the progress we’ve made toward our commitment to sustainability.

Mill Street crafts the highest-quality beer using sustainable methods and locally sourced ingredients whenever possible. Our contributions to the growth of craft beer and organic production in Canada will continually improve on the sustainability of our methods and processes company-wide.

In fact, Mill Street Brewery brewed Ontario’s first organic beer, our own Original Organic Lager in 2002, which went on to become the most popular certified organic beer in Canada. The immense demand for Mill Street’s Original Organic Lager resulted in an overall increase in the amount of organic barley crops planted domestically and the establishment of Canada Malting’s first certified organic malting facility in Thunder Bay, Ontario in September 2012. We were proud to consult with government partners as they created Canada’s organic beer standards and are now subject to an annual third-party audit to ensure our compliance with those standards.

Today, Mill Street's annual organic beer production (Original Organic & 100th Meridian combined) accounts for about 70 percent of the brewery's total annual volume – a testament to how much organics matter to Canadian craft beer lovers.

MILL STREET PILLARS OF SOCIAL RESPONSIBILITY

The following pillars are integral to our sustainability commitments:

• Responsible Employment: As a family, we are committed to the health, safety, and welfare of all our employees.

• Community focus: Our company and employees will participate and engage with our community and give back through volunteering, donations and sponsorships that support a variety of causes.

• Environmental Stewardship: Our environmental practices and initiatives will focus on water, waste, energy and sustainable production and sourcing.

mill street's mission

1. Raise the bar for Canadian beer culture in every drop we make (and serve!)

2. To brew world-class craft beer while remaining unpretentious and fun!

3. To make a positive difference in our community

4. To remain passionate about

everything we do

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2015 Report HighlightsAt Mill Street, we are committed to considering the environmental impact of every decision we make. As a result, we implemented a number of organizational and operational changes across our company in 2015 with a focus on these key areas.

• Stakeholder Engagement: Stakeholders were interviewed and surveyed to identify their priorities to help shape Mill Street’s sustainability focus and strategy for the next five years.

• Green Team: We formalized an employee Green Team to organize and support a corporate culture of giving and volunteering. We also expanded the management Sustainability Committee’s membership to ensure our sustainability goals are implemented across all levels of the organization.

• Waste Reduction, Reuse and Recycling:

In 2015, Mill Street Brewery: • Diverted 2,200 metric tonnes of spent malt from our brewery and brewpubs

to local farmers for feed.• Improved discarded glass bottle recycling to a near 100 percent diversion rate.• Recycled approximately 90 percent of all packaging waste.• Used 100 percent biodegradable and compostable cups at all Mill Street

events and worked with organizers to ensure proper sorting for final disposal and diversion from landfill.

• Water Management: The diversion rate of spent yeast from city sewers at our Toronto brewpub and brewery was improved to 85 percent.

• Local Purchasing and Sustainable Production: The certified organic barley malt used in our Original Organic & 100th Meridian beers is now 100 percent Canadian. Mill Street Organic brands constitute about 70 percent of our total annual output.

• Energy Efficiency: The energy from a heat recovery system that was installed on the brewhouse’s kettle stack heats more than 15,000 litres/day of water to 90°C without any additional energy input. All Bermondsey facility light bulbs have been replaced with high efficiency, low wattage bulbs.

• Community Engagement: In 2015, we supported well over 100 charitable events and contributed approximately $400,000 to charities and community initiatives.

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We conducted 123 employee surveys and numerous interviews with all key stakeholders, including customers and suppliers.

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Stakeholder EngagementIn 2015, Mill Street committed to becoming a better corporate citizen, which required formalizing our sustainability efforts and setting targets for waste, water and energy reductions while increasing sustainable sourcing. To do this, we engaged with all stakeholders, including our employees, suppliers, customers and community.

Our existing Sustainability Committee membership was expanded to better represent our employees. The committee’s purpose is to establish sustainability targets, generate feedback on initiatives and continue developing a comprehensive sustainability strategy. To date, the committee has set waste, water and energy benchmarks and developed a sustainability policy. In addition, it supports the water, waste, energy and climate, sustainable sourcing and community/internal engagement priorities that were identified by stakeholders.

In the Spring of 2015, brewery and brew pub management and employees, consumers, key customers (Beer Store & LCBO), and top-tier suppliers were surveyed and interviewed to:

• Find out what sustainability means to our stakeholders;• Determine if stakeholders felt that Mill Street Brewery was doing enough in

terms of sustainability, and if not, what we should be doing;• Assess stakeholder priorities for sustainability;• Identify sustainability best practices that could be adopted by Mill Street

Brewery and Brewpubs;• Identify stakeholders that want to be more involved in our sustainability efforts.

2015 sustainability commitee members

Steve Abrams – Co-founderCatherine Oppedisano – Marketing Manager

Joel Manning – BrewmasterGoeff Wiseman – Head BrewerJeffrey Zietlow – VP MarketingDavid Coutts – Plant Manager

Adil Qureshi – IT ManagerJason Richard – Quality Control Manager

Kaitlin Vandenbosch – Quality and Brewing Technical Manager

Mark Hall – VP Operations

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Our stakeholders prioritized the following sustainability issues:

• Waste management• Water efficiency• Community engagement and internal culture• Climate change and energy efficiency

Specific stakeholder ideas and suggestions have been and are being adopted going forward, including:

• The establishment of a Green Team;• Reducing biochemical oxygen demand

(BOD) in our wastewater by constructing a treatment pool;

• Recycling all office paper;• Diverting all discarded glass from landfill;• Diverting all polypropylene bags and straps

from landfill;• Increasing employee engagement events to

improve internal culture;

Mill Street Green Team: After its 2015 launch, the Green Team, which is open to all employees, has continued to support our existing community outreach program and help employees liaise with the Sustainability Committee to initiate new ideas. To date, employees have participated in community events such as tree plantings, recycling initiatives, and fundraisers for environmental groups.

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Focus AreasSince Mill Street’s founding, the company has been committed to reducing our carbon footprint. However, in 2015, after years of significant growth, Mill Street formalized its sustainability initiatives, goals and policies while also setting benchmarks and targets based on consultation with various committees and stakeholders. In addition, Mill Street Brewery’s senior managers and employees took note of the beer industry’s most significant best practices prior to identifying the five benchmarks that affect our environmental impact: waste, water, energy, purchasing and community engagement.

Going forward, Mill Street will focus on developing and meeting our three- and five-year objectives to reduce our impact on water, waste and energy while improving our sustainable production and community engagement efforts. To effectively assess the results of our initiatives and actions, our progress will be consistently tracked and measured.

Water Use

Water is a precious, finite resource and an integral component of virtually every brewery process as well as a key ingredient in the beer itself. As a result, we developed a comprehensive strategy to prioritize and maximize the conservation, reuse and restoration of this vital, natural resource. In 2015 and beyond, Mill Street is managing what gets into our wastewater to reduce the burden on the wastewater treatment systems in our communities. We also successfully reduced yeast and excess Biochemical Oxygen Demand (BOD) from municipal sewer systems at all three Mill Street locations.

• At the Toronto brewery and brewpub, 85 percent all spent yeast was diverted from city sewers.

• At the Midwest brewery, the production and lab teams devised a yeast diversion solution that has been in use since July 2015. Our centrifuge system allows us to spin off solids and capture them prior to disposal to increase the beer yield and reduce our reliance on filter powder and increased beer yield. A decommissioned fermenter tank is now used to store the waste yeast before it’s shipped off

site for agricultural use.

• By the end of 2015, nearly 65 metric tonnes of spent yeast had been collected and shipped off-site for agricultural use. While this was a great step in the right direction, more diversion work will be needed to drastically reduce the main brewhouse’s annual discharge. Our move to the new Bermondsey facility in 2016 will serve to greatly mitigate overall effluent figures.

• Mill Street continues to provide significant support to water-related initiatives such as the Lake Ontario Waterkeeper which focuses on keeping the water swimmable, drinkable and fishable into the future.

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Waste Management

Ultimately, our goal is to become a zero-waste brewery and innovation will be the key to finding new ways to follow the waste hierarchy guidelines which are to reduce, then reuse and finally recycle.

First and foremost, we will take the steps required to reduce the volumes of waste produced. Secondly, we commit to creatively reusing and repurposing any and all of the waste we create. Thirdly, we recognize that recycling is an option only when we have fully explored the first two strategies.

Our production team continually improves our plastic and cardboard recycling program and employees have taken ownership and leverage their creativity and initiative to maximize the amount of waste diverted from landfill.

For example, in 2015, we started returning the pipette tips used in our lab to our supplier after learning about their recycling program that converts used tips into park benches!

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In 2015, our brewery & brewpubs collectively diverted over 2,200 metric tonnes of spent malt.

100 percent of our spent malt is shipped to local farmers for feed.

Since August 2015, Mill Street’s glass bottle recovery program has captured close to 100 percent of all discarded glass for recycling which has cut the volume of glass sent to landfill by over 40 metric tonnes. Our bottles are also designed for maximum reuse and in partnership with the Beer Store, they are sorted and returned for reuse about 12 times before being recycled. On average, our reusable bottles are comprised of 34 percent recycled glass which is also known as cullet.

Diverting 2,200 tons of spent malt is the equivalent of 6,547,619 litres. One dump truck holds 1,000 litres so that

equals 6,548 dump trucks of spent malt are diverted.

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Since spring 2015, a systematic waste diversion system is now up and running at the brewery to capture about 90 percent of our packaging waste material, then bundle and ship it off for recycling. This includes all forms of cardboard, light density plastic pallet wrap and polypropylene skid ties. As a result, in 2015, we diverted nearly 900 non-metric tons of paper and cardboard from landfill.

Every year, Mi l l S t reet par t ic ipates in hundreds of community events and for more than a decade, our event team has used 100 percent biodegradable and compostable sampling and full-size cups. We make a point of working with the event organizers to ensure our bio-cups are properly sorted and disposed of correctly.

As a result of our new office recycling program, all paper and pr inter car tr idges are now diverted, and a battery recycling program is planned for next year.

Looking ahead, as we upgrade our Clean In Place (CIP) equipment and information technology system at our new facility in 2016, there will be a significant reduction in the amount of caustic cleaning material used in all tanks.

Separating waste streams requires teamwork!

Brewmaster Joel Manning hanging out with farmer Earl, who cultivates 2,600 acres of organic crops in

Saskatchewan, including some of our malting barley.

900 tons of paper and cardboard is equivalent to 10,800 trees. 12 trees make

one tonne of paper!

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Purchasing & Sustainable Production

All of the certified organic barley malt used in our Original Organic and 100th Meridian beers comes from farms in western Saskatchewan and eastern Alberta. It then travels,via rail to a malting facility in Thunder Bay, Ontario, before covering another 2,000 km en route to our brewery in Toronto. In 2015, we purchased nearly 18,000 kilos of certified organic hops and 1,322 tonnes of certified organic malt. Our organic brands constitute around 70 percent of our total annual output.

All of our core brand bottles have permanent, silk-screened rather than paper labels to reduce the amount of water, energy and cleaning product required to wash the bottles for reuse. In 2011, we replaced all phosphorus-based cleaning chemicals with environmentally-friendly cleansers.

As we continue to green our supply chain and sustainably brew and package our beer, we work closely with suppliers to limit our collective environmental footprint. All of our suppliers provide us with detailed information on their Corporate Social Responsibility policies.

Mill Street is proud of its work with the following green suppliers:

• Canada Malting• VICAL• Atlantic Packaging & Recycling• Krones• MeadWestvaco• Metal Container Corp• Hopunion LLC

Energy Use and Climate Change

Brewing and distributing great tasting beer is an energy-intensive process and to improve our operational efficiency, Mill Street’s fleet uses cleaner fuels and we closely monitor our natural gas consumption during production.

Here are some energy-saving highlights from the past few years:

• Installed a heat recovery system on the Midwest Road brewhouse’s kettle stack. Recovered energy is used to heat more than 15,000 litres per day of water to 90°C without any additional energy input. This water is then used in the brewing process and for equipment cleaning.

• State-of-the-art Freeaire walk-in fridge reduced energy consumption significantly over conventional commercial walk-ins by using cold outside air to increase efficiency.

• Replaced all light bulbs at our Bermondsey facility to high efficiency, low wattage bulbs with motion sensor activation.

• Fuel efficient delivery fleet, with tractors averaging 7.2 km/litre, straight trucks averaging 6.87 km/litre, and light "city core" vehicles running 8.9 km/litre.

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Community and Employees

A t M i l l S t r e e t , we s t r i ve t o b e g o o d neighbours, employers and citizens because our employees and our community are at the forefront of our business.

In 2015, we supported well over 100 charitable events and contr ibuted nearly $400,000 to worthy causes. While we have ongoing partnerships with environmental non-profits such as Earth Day Canada, Environmental Defense Canada and Lake Ontario Waterkeeper, we also support many other deserving initiatives, such as local Rotary Clubs, the 519 Centre’s outreach to Toronto’s LGBTQ community, and the Luminato Festival, Toronto’s ten day festival of arts and creativity.

In 2013, we even developed a solar-powered event bar that allows our event team to operate in places with no direct hydro connections.

Since 2011, we have raised over $300,000

for Earth Day Canada through our Lights Out and Pint for the Planet programs. We are especially proud to sponsor the Hometown Heroes program, which annually recognizes and celebrates environmental leaders, individuals, small businesses and groups, that foster meaningful, long-term community awareness and action. The celebration of these heroes culminates in the annual Earth Ball, which Mill Street has hosted at our Toronto Beer Hall for the past two years.

Solar Powered Event Bar

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Some of the par tnerships Mill Street has maintained with community environmental organizations over the years:

• EARTH DAY CANADA “Hometown Heroes” program

• Greenpeace• Taskforce to Bring Back the Don River• Not Far From the Tree• World Wildlife Fund• Toronto Environmental Alliance• GreenHere• Environmental Defence Canada• Earthroots• L.E.A.F. (Local Enhancement &Appreciation of Forests)• Organic Trade Association• OceanWise• Green Enterprise Ontario• FoodCycles• Earthroots• Lake Ontario Waterkeeper• Ottawa Riverkeeper• Friends of the Rouge Watershed• Two-Wheel View• Cycle Toronto• Duncan Gordon Foundation• Wilderness Society• 10,000 Trees for the Rouge Valley• SolarShare Co-operative Inc• Ontario Nature• Cape Farewell• Trees for Life• Toronto Wildlife Centre• Toronto Park Summit• MaRS Cleantech

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Future InitiativesThe next step towards improved sustainability is to develop goals for the next three and five years. In 2016, we will undertake a strategic planning session and develop targets towards reducing our impact on water, waste, climate and sustainable production by 2021.

We will be commissioning a state-of-the-art 120 Hectolitre brewhouse that will greatly improve our energy & water efficiency during production. Meanwhile, our Sustainability Committee will be implementing new strategies to reduce our waste and water consumption at the new Bermondsey facility.

In 2016, we expect to hire our first full-time Health & Safety Manager who will be responsible for ensuring that our facilities are not only compliant but exceeding regulatory standards. The manager will also oversee the implementation of Mill Street’s sustainability policy going forward.

We are excited to enhance our future environmental goals, as we continue “raising the bar” for Canadian craft beer culture. We are as passionate about sustainability as we are in making great beer, so stay tuned for great things to come!

We look forward to your feedback and to engaging with you as we improve the ways in which the beers you love are made

Please send any questions or comments to: sabrams@millstreetbrewery.com