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R E P O R T

Royal Cup Coffee’s Core Values

A s a company committed to environmental awareness and socially responsible

practices, Royal Cup takes pride in constantly researching and developing products and solutions. Our goal is to help customers achieve their objectives, while providing solutions that are environmentally and socially responsible.

Quality

We sell quality products and services and are proud of our work.

Customer Driven

We are a 100% customer-driven company and strive to create customer advocates.

Integrity

We maintain high integrity in all interactions and treat everyone like we

would like to be treated.

Social Responsibility

We are good corporate citizens with a developed sense of social responsibility

and we give back to communities our time, talent, & resources.

Work for Fun & Profit

We are a profitable, growing company with a fun-loving spirit, and a great place to work.

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At Royal Cup, we measure sustainability success using

the Triple Bottom Line.

This framework captures an expanded

spectrum of values and criteria for

measuring organizational success by

Social Responsibility, Economic Stability

and Environmental Stewardship.

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SocialResponsibility

At Royal Cup, Corporate Social Responsibility (CSR) is central to our core values. We conduct business in an ethical and responsible way. We are investing in a number of initiatives to maintain our strong CSR position for the future.

Royal Cup is an active

member of the National

Coffee Association,

the Specialty Coffee

Association of America,

and World Coffee

Research.

Royal Cup is committed

to its partnership

with The Nature

Conservancy for over

20 years.

Royal Cup contributes

over 5% of pre-tax

profit dollars to various

charities and non-profit

organizations every

year. Our associates are

encouraged to give of

their time, talent and

money in support of

their local community

activities.

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SuSta inable Sourc ing

EconomicStability

Royal Cup recognizes the necessity of a healthy economic state in order to positively influence the well being of our employees, partners, and customers. We recognize and promote strategies that spur creativity, innovation, and entrepreneurship throughout the organization, which facilitates the creation of shared knowledge that impacts business and industry.

Doing business in a sustainable and

transparent way is a requirement for

Royal Cup Coffee and those in our

supply chain. This is particularly true in

sourcing and production of coffee, and we

are an industry leader in this area.

We support certified sustainable

organizations such as the Rainforest

AllianceTM and Fair TradeTM USA, but

believe deeply that true sustainability in

an organization and its supply chain is

cultural, and we work towards this

every day.

We value all players in the supply chain

who share our values, whether they

be farmers, exporters & importers, or

brokers as they play critical roles in

the sourcing and logistics around

coffee roasting.

We Work with coffee farmers and

cooperatives to support them and ensure

a viable supply chain of high quality coffee

and improve the livelihoods of these

producers. We are at origin continually

during the year working to understand

farm conditions, building relationships,

and sourcing great coffee.

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EnvironmentalStewardship

Royal Cup realizes the importance of being a good corporate citizen. We strive to make choices that positively impact our workplace and community. We believe in operational excellence. Royal Cup is committed to working towards operating in the most efficient, sustainable manner.

royal Cup uses a regenerative

thermal oxidizer to reduce gas usage and

clean smoke from the roasting process.

royal Cup aCtively promotes a rebuilt

brewing equipment program. We recycle

all unused metal.

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We are Continuing to work with a

nationally recognized waste management

company to design a waste recycling

program for all Royal Cup facilities

nationwide. Once implemented, these

efforts will allow Royal Cup to divert 99%

of all waste from land fills.

our espresship Department partners

with UPS to achieve a carbon neutral

footprint for its entire line of business.

royal Cup is testing route technology

to improve efficiencies in fuel

consumption and vehicle emissions.

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OurGoals

Current Status

ProjectedStatus

2014 Goal Complete

Give 5% of pre-tax profits to charity Complete Will complete annually

100%

90% of headquarters employees donate to United Way

Not Complete

85% of headquarters

94%

Royal Cup encourages and supports employee volunteerism in our local communities

Complete Will complete annually

100%

Link all Royal Cup community involvement around the country and develop an interactive map highlighting the company’s service from coast to coast

In Progress Complete in 2015 10%

Obtain Certification from MWBE (Minority and Women Businesses) with the goal of increasing partnerships with women and minority-owned businesses at 10% per annum.

In Progress Complete in 2015 50%

2014 ResultsAgainst Stated Goals

Social

OurGoals

Current Status

ProjectedStatus

2014 Goal Complete

Increase output of Rainforest Alliance CertifiedTM coffee by 5%; from 3.5 million to 3.675 million pounds.

Complete Sold 4.3M lbs of roasted coffee in FY 2014

100%

Increase output of Fair Trade USA CertifiedTM coffee by 60% from 250,000 to 400,000 pounds.

Complete Sold 505,000 lbs of roasted coffee in FY 2014

100%

Increase output of Organic coffee by 15%. Complete Sold 188,000 lbs of roasted coffee in FY 2014

100%

Reduce energy consumption in all our facilities. In Progress Installed Motion Sensor Lights in HQ, Working to convert to LED Lighting

Ongoing

OurGoals

Current Status

ProjectedStatus

2014 Goal Complete

Strengthen and further define supply chain transparency program by working with importers, co–ops, and farmers in producing countries.

Complete Continue initiative every year

100%

Engage the Rainforest Alliance and Fair Trade Organization in an effort to identify cause marketing programs to help support specific projects on one or more farms from which we buy coffee.

In Progress Continue initiative every year

50%

Continue our investment in the World Coffee Research organization’s pivotal work on genetic, disease treatment and prevention, variety trials and other efforts.

Complete Will complete annually

100%

Be a great place to work by actively promoting from within, monitoring and measuring against diversity goals, and developing and promoting safety and wellness programs.

Complete Will complete annually

100%

Environmental

Economic

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baseD on the quality of our response to

CDP, Royal Cup was invited to attend the

launch party for CDP’s S&P 500 Climate

Change report on the floor of the New York

Stock Exchange.

CompleteD CDp’s Carbon Disclosure

Project. Royal Cup was a first responder

for CDP in Alabama, putting Royal Cup

at the forefront of Sustainability for

Alabama based companies.

CDp (Carbon DisClosure projeCt)

holds the largest and most comprehensive

collection globally of primary corporate

climate change, water and forest-risk

information. CDP works to drive action

by companies and cities to reduce

greenhouse gas emissions, safeguard

water resources and prevent the

destruction of forests. www.cdp.netroyal Cup sCoreD 85 out of 100 on

CDP. The average out of 3400 reporting

companies was 53.

2014Highlights

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finalizeD plans for a major facility

expansion at our Birmingham campus,

which will add over 40 jobs and

will have a $3+ million impact in

our community.

testing fleet management softWare

to increase efficiency and minimize

environmental impact.

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5 gave 5% of pre-tax profits to charity

in 2014.

paiD $154,874 in fair traDe premiums

directly to farmer cooperatives in

Ethiopia, Brazil, Honduras, and Mexico.

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Continue giving a minimum of 5% of

pre-tax profits to charity.

90% of heaDquarters employees

donate to United Way.

Develop Digital resourCes that help

demonstrate Royal Cup community

involvement around the country.

establish Corporate volunteer

program framework.

inCrease partnerships with MWBE

(Minority and Women Businesses)

Certified organizations by 10%

per annum.

2015 Sustainable GoalsSocial

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4

3

5

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ContinueD investment in the World

Coffee Research organization’s pivotal

work on genetics, disease treatment

and prevention, variety trials, and

other efforts.

Contributions to support variety

trials of 15 different coffees.

royal Cup q-graDeD Cupper to

participate in Sensory Lexicon Panel

designed to develop industry adopted

terminology around coffee tasting.

Contributions earmarked for roya

(Coffee Rust) relief.

Clearly Define Royal Cup’s

philosophy regarding responsible green

coffee sourcing.

traCe Coffees from various origins

and tell the complete story from seed to

cup. Identify all players in the sourcing

process and define the value that each

touch point brings.

quantify the impaCt of Fair Trade

purchases at specific origins – Mexico,

Honduras, Ethiopia, and Brazil.

proviDe an annual upDate on the

sustainable initiatives at Royal Cup’s

largest Rainforest Alliance CertifiedTM

coffee farms.

Supply Chain Transparency World Coffee Research

2015 Sustainable GoalsEconomic

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ConDuCt the great plaCe to Work

Trust Index Employee Survey with a goal

of 70% participation.

better unDerstanD anD iDentify high

impact focus areas for improvement,

while referencing best practices employed

by Best Companies.

ConDuCt the great plaCe to Work

Workplace Culture Assessment which

identifies gaps between the culture

we intend to create and the one that

employees experience.

aD hoC group assigned to evaluate

findings from the Culture Assessment to

determine if our investments in specific

programs and employee benefits are

truly aligned with employee values

and interests.

Work With stuDents anD faCulty

at Emory’s Goizueta Business School to

develop a Cause Coffee product and launch

strategy. If successful, proceeds from

sales of this coffee will go directly to the

designated charity.

Cause CoffeeGreat Place to Work 43

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install light timers throughout the

Birmingham campus public facilities

(break rooms, restrooms, etc.).

reDuCe eleCtriCity Consumption in

our manufacturing facility and corporate

office by using high efficiency LED

lighting to achieve kWh usage savings of

approximately 750,000 kilowatt hours

annually by 2017.

implement a Waste removal program

for all Royal Cup facilities nationwide

with the goal of diverting 99.9% of the

waste away from a land fill by 2018.

strengthen eleCtroniC CommerCe

capabilities to reduce paper usage.

Work toWarDs eliminating the use of

Styrofoam in the corporate office.

Reduce Carbon Footprint

Reduce Energy Consumption

2015 Sustainable GoalsEnvironmental

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expanD the usage of a fleet management

software to increase the efficiency of the

route system.

replaCe fleet vehiCles with more fuel

efficient vehicles.

Continue to replaCe passenger

minivans with smaller vehicles resulting

in 33% fuel savings annually.

Work Towards a More Environmentally Friendly Fleet

Continue to Work Towards CDP Goals

Increase Output of Sustainable Coffees

Complete CDp’s Carbon Disclosure

annually and continue to improve

our score.

Rainforest AllianceTM, Fair Trade USATM,

USDA OrganicTM

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