SUSTAINABILITY REPORT 2019 - Heinon Tukku

SUSTAINABILITY REPORT 2019www.heinontukku.fi

Sustainability Report 2019 I Heinon Tukku

CONTENTSPART 1 About us and our responsibility

management

PART 2 Corporate responsibility programme

Heinon Tukku as part of the Tukkuheino Group 3

A word from the CEO 4

Highlights in 2019 6

The best ingredients for customer success 7

Values and actions in the best interests of the customer

8

Responsibility management 9

The meaning of responsibility in our operating environment

11

Stakeholder dialogue 12

Supply chain control and impacts 14

At the forefront of sustainable development 15

Our key goals 16

Aiming to be the most desirable partner 17

By listening to the customer 19

Aiming for the well-being of the environment 20

Aiming for supply chain transparency and sustainable selection

24

Aiming for an attractive working place 29

GRI index 32

"Through our responsible sourcing policy, we progressed toward increasingly sustainable

selections of goods." Petri Heino

3 Sustainability Report 2019 I Heinon Tukku

We are a highly diversified Finnish family business. TukkuHeino Oy comprises wholesaler and importer Heinon Tukku Oy, alco-holic beverage vendor and marketer Uniq Drinks Finland Oy and consumer serving Anton & Anton Oy. The Group headquarters are located in Espoo, Finland. The turnover for the Group in 2019 was EUR 259 million (2018: 263).

Heinon Tukku Oy is the biggest operator of the Group. It has wholesale delivery units in Espoo and Kuopio, cash and carry out-lets in Helsinki and Vantaa, as well as sales offices in Turku, Tam-pere and Oulu. In addition to this, Heinon Tukku has a subsidi-ary named Kalavapriikki Oy, specialized in fish processing with operations in Kuopio.

Uniq Drinks Finland Oy (UDF) is a company founded in 2006 and specialized in beverages. Its line of business includes bever-age importing, marketing and distribution. The UDF represents various beverage producers from all over the world and its prod-uct portfolio includes wines, beers, ciders and spirits. Consumers can buy these products at Alko shops and grocery stores, as well as restaurants around Finland. The beverages are distributed to the restaurants through wholesale dealers.

Anton & Anton is a grocery store that was born in Porvoo, Finland in 2008 to provide an alternative to supermarkets. Now Anton & Anton is a grocery store and restaurant, a kiosk, a grocery bag ser-vice, an online shop, as well as a range of in-house grocery prod-ucts and convenience foods prepared in the company kitchen.

HEINON TUKKU AS PART OF THE TUKKUHEINO GROUP

Heino Since 1899: Memories Over the Years

Our story began in 1899 when Fritjof Juhonpoika Heino gained a permit to engage in the retail and wholesale of meat and other foodstuffs and began selling meat in the Helsinki Market Square. In 1907, Fritjof Heino opened a shop selling meat, butter, fruit and miscella-neous goods at what was then Itä-Wiertotie 2 (currently Hämeentie 1) in Hakaniemi, an unofficial district of Hel-sinki. There was no market hall yet in Hakaniemi at the time.

Earlier in 1901, Mr. Heino had already opened a butcher shop on Kolmas Linja, one of the streets in Hakaniemi. In addition to retailing, he engaged in wholesaling meat and rural produce. His journeys to procure goods reached places like Russia and, from these trips, he brought back things like meat, butter and eggs to sell.

This is our second sustainability report and it describes the events and results for 2019. The personnel numbers in the report are reported at the Group level. Unless mentioned otherwise, the other areas of operation reported mainly concern Heinon Tukku Oy and its subsidiary Kalavapriikki Oy. We publish a sustainability report annually. The report is based on the Global Reporting Ini-tiative (GRI) standards as applicable to Heinon Tukku operations. The GRI table is provided at the end of the report.


4

A WORD FROM THE CEO

Heinon Tukku is a strong and long-established family business for which responsibility and its continuous promotion are important, conscious choices. We want to do things that have meaning. Our goal is to offer our customers products and logistics services as sustainably as possible, using energy in a reasonable way.

For us, last year was different in many ways—and significant. September 2019 marked the 120th anniversary since the days when my great-grandfather, Fritjof Juhonpoika Heino launched business operations that have grown into a diversified family business, which employs almost 500 people today. At the same time, 2019 was tinged with a company acquisition process whereby Heinon Tukku Oy was going to be purchased by Kesko Corporation Oy. Eventually, the Finnish Competition and Consumer Authority proposed banning the acquisition and the Market Court took the same position in early 2020 and banned the process. While this decision had not been expected, it confirmed the significance of our market value and the fact that we are needed.

This year has brought new beginnings and it is time to take things into our own hands. The major theme this year is “Focus on the customer”. Due to the company acquisition process many development projects during the past year were either on hold or progressing slower than planned. Nevertheless, we continued our responsibility work as usual, refined our basic processes and obtained new expertise. Furthermore, our customers kept up with us through the various twists of our story last year. The feedback they sent us was mostly positive. We want to continue to show them that we are worthy of their confidence.

WE ARE ESPECIALLY PROUD OF OUR FOLLOWING ACCOMPLISHMENTS:

§ We re-certified all eight of our management systems. The certifications are valid until the end of 2022.

§ The customer experience feedback we received in the mystery shopping studies conducted at the cash and carry units developed beautifully. The average for the year on a scale of 1–6 was 4.9 (2018: 4.3).

§ At Kalavapriikki Oy, we were the first who brought to the markets a fish box certified by the Forest Stewardship Council (FSC). Moreover, we replaced conventional plastic packaging with skin packaging, featuring a bottom part made of FSC-certified paperboard and a top part made of very thin plastic.

§ We reduced our energy consumption by 7% and, in the best summer months, our solar power systems produced one-third of the electricity we needed.

§ Through our responsibility policy, we progressed toward increasingly sustainable selections of goods. By June of 2020, we are going to offer organic or free-range eggs only.

§ We strengthened our proactive safety culture by increasing the number of safety observations and our accident frequency fell to 16.5, which is below average.

Our responsibility vision is to operate at the forefront of sustainable development. This year, the work continues by developing all the themes under our corporate responsibility programme. Moreover, we are setting ambitious goals on our way toward making our operations carbon-neutral.

On behalf of all the owners, I would like to extend warm thanks to our personnel for their fine work and commitment. We would also like to thank our customers for their confidence.

Responsibility is a conscious choice.

Petri Heino CEO, TukkuHeino Oy

" We want to do things that have meaning."

OSA 2

Vastuullisuus-ohjelma

Sustainability Report 2019 I Heinon Tukku 5

About Us and Our Responsibility Management

PART 1


HIGHLIGHTS IN 2019

We reduced our energy consumption by 7% and, in the best summer months, our solar power systems produced one-third of the electricity we needed.

Our in-house robot Ilmari was utilized for some basic tasks in certain business operations and more tasks are being planned. This has allowed the personnel to use their time for more varied tasks.

Our goal is to improve our waste recycling rate: in other words, to increase the volume of waste sent for recycling and to reduce the share of incinerated waste. In 2019, we made good progress with a recycling rate of 81% (2018: 78).

The reliability of Heinon Tukku deliveries to customers was raised to a record high level in 2019, which was a great achievement after the challenges of 2018.

We renewed our private label Aimo and brought out a completely new product line called Hieno by Heino. It consists of the most delicious, highest quality, premium processed fish on the markets, produced by Kalavapriikki Oy in Kuopio. At present, we have approxi-mately 50 of these products in our selections.

We went through a company acquisition process whereby Heinon Tukku Oy was going to be purchased by Kesko Corporation Oy. The Finnish Competition and Consumer Authority proposed banning the acquisition and the Market Court took the same position in early 2020 and banned the process. While this decision had not been expected, it showed us the significance of our market value and the fact that we are needed.


HEINON TUKKU IN BRIEF Perseverance, doing things together and continuous development have been the driving forces of our business operations throughout their history of 120 years. Our task is to offer the best ingredients for the success of our customers.

The broad range and comprehensive opening hours of our cash and carry units serve the pickup customers of Greater Helsinki at loca-tions in Helsinki and Vantaa. At the Espoo and Kuopio wholesale delivery units, foodservice customers can quickly get all the daily products they need anywhere in Finland with a single order, deliv-ery and invoice.

Kuopio-based Kalavapriikki Oy is an independent subsidiary of Hei-non Tukku Oy, specialized in fish processing. The company produces the processed fish by utilizing modern technology, but respecting traditions. Kalavapriikki produces products under the Aimo and Hieno by Heino brand names for Heinon Tukku distribution to pro-fessional kitchens. In addition to this, the company produces Kala-Onni products for retail stores. Some of the Kalavapriikki strengths include craftsmanship, competent personnel, energy efficiency and responsibility, as well as customer-oriented product development.

Heinon Tukku has a broad basic range of products, consisting of 30,000 products obtained from carefully selected Finnish and inter-national partners, numbering approximately 800. The renewed Heino in-house brand, Aimo, was designed to facilitate the routines of professionals in restaurants and catering firms. This line consists of approximately 350 products. As for the Hieno by Heino product brand, it consists of the brightest star of Kalavapriikki product devel-opment: premium processed fish.

THE BEST INGREDIENTS FOR CUSTOMER SUCCESS

Income tax € 1.1 million

Value added tax € 5.8 million

Alcohol duty (includes excise duty) )€ 6.6 million

Tax deducted at source from salary,

social security contributions€ 5.7 million

The financial administration made a major reform during 2019 when invoicing was outsourced to a partner. Previously, the various stages of invoicing had been carried out partly by a variety of partners and partly by the company itself. In the new model, a single partner is responsible for the whole life cycle of the invoice.

With the reform, the company will achieve big savings in costs. At the same time, it will gain more efficient and well-documented processes and be able to control risks better than before.

Marja Hämäläinen, Operational and Finance Director

Economic indicators 2019. In 2019, the Heinon Tukku and Kalavapriikki turnovers fell by 2.9% and 6.6% respectively. This was caused by individual changes in the customer structure.

Heinon Tukku Oy Kalavapriikki Oy

Turnover, € 239 341 000 16 314 000

Number of personnel 367 32

Personnel expenses, € 19 944 000 2 027 000

Investments, € 1 500 000 120 000

In 2019, Heinon Tukku and Kalavapriikki paid a total of approximately EUR 19.2 million in taxes and tax-like charges.


VALUES AND ACTIONS IN THE BEST INTERESTS OF THE CUSTOMER

Responsibility management at Heino is based on the shared values Group and its Code of Conduct. These values form our ground rules and, by observing them, we can ensure that the activities of each of our personnel are ethical and in keeping with our goals. Our values also support our capacity to act in the best interests of the customer at all times. This is at the very heart of all our values.

Founded on values, our Code of Conduct includes the following principles:

§ We are an honest, reliable and fair partner.

§ We are a reliable employer, treating the personnel fairly and even-handedly and creating a safe working environment.

§ We shoulder responsibility for the environmental impacts of our operations.

§ When making procurement decisions, we favour products and services that comply with the principles of sustainable development.

§ We operate in an open, customer-oriented manner, aiming for dialogue that promotes cooperation.

Our Code of Conduct is also linked with the following Finnish and international ini-tiatives and principles, to which we are committed:

§ The amfori Business Social Compliance Initiative (BSCI) Code of Conduct

§ The United Nations (UN) Sustainable Development Goals

§ The ethical principles of the grocery trade supply of the Finnish Grocery Trade Association (PTY)

§ The trade sector Energy Efficiency Agreement for 2017–2025

§ The food sector Materials Efficiency Commitment for 2019–2021

Our Values


RISK CONTROL

At Heinon Tukku, corporate responsibility risk control is part of the corporate level risk management process. The risks of the business operations are assessed annually from the perspec-tives of the business environment and internal processes. The most significant risks are related to the business environment.

The key procurement risks are related to both in-house brands and imports. The scope of these risks covers product safety and climate change, as well as labour-intensive agriculture and production in those procurement countries where risks related to working conditions and human rights have been observed.

Other key risks that can be controlled include data system accessibility, personal safety and security, and ensuring the continuity of the operations. For each risk, the company has defined measures for minimizing and controlling the risk at the strategic level or through the corporate responsibility programme. Moreover, each operating unit assesses the main risks related to its activities and the means of controlling product safety, environmental issues and occupational safety.

The risks are controlled in many different ways. The risks to fixed assets are covered by insurances while those to data systems are covered by duplication and other backup means. Some of the risks, such as climate change, may show as unforeseeable weather phenomena, such as extensive forest fires or floods, and such phenomena may impact the availability of products. The coronavirus pandemic, which is spreading at the publishing stage of this report, increases the importance of risk control and preparedness.

TUKKUHEINO OY

A responsibility team comprising two members prepares the plans and goals related to responsibility work management. It is also responsible for practical guidance. The team’s work is supported by a Group level responsibility development group, which convenes twice a year.

The responsibility goals and policies are processed and approved by the executive group of Heinon Tukku and the Group. The strategy and the annual goals are established by the Heinon Tukku Board of Directors. The Director of Responsibility, report-ing to the CEO, is the responsibility representative in the Heinon Tukku executive group.

RESPONSIBILITY MANAGEMENT

COMMUNICATIONS ECONOMIC ADMINISTRATION RESPONSIBILITY PROPERTY ADMINISTRATIONHUMAN RESOURCES ADMINISTRATION IT


STANDARDS SUPPORTING RESPONSIBILITY EFFORTS

The certified operating system is a key tool for the practical management of our various operations. It covers a wide range of economic, social and environmental responsibility areas in the procurement and supply chain.

Our management system is certified according to the following international standards:

§ ISO 14001 – Environmental Quality Management system (since 2004) ETJ+ Energy Efficiency System (since 2016)

§ ISO 22000 – Food Safety Management system (since 2007). FSSC 22000 in Kalavapriikki (since 2016)

§ ISO 9001 – Quality Management system (since 2016)

§ ISO 45001 – Health and Safety Management system standard (since 2016, earlier OHSAS certification)

§ MSC and ASC – Marine Stewardship Council standards for Chain of Custody (since 2016)

Heino operations are certified at the Group level, covering the whole procurement and delivery chain from the procurement and importing of daily and consumer goods and beverages and the production and wholesale of fish and meat products all the way to the customer’s doorstep.

All systems are managed systematically through uniform practices. That includes, among others, risk mapping and process descriptions, feedback collection through customer and personnel surveys, as well as responding to any deviations as necessary. All the systems are audited annually and, additionally, a variety of inspections are carried out and personnel competence and communications are developed.

MEMBERSHIPS IN ASSOCIATIONS

Cooperation with other organizations is an elemental part of our development as well as a good way to enhance sustainabil-ity issues on a national and international level. We participate actively in following organizations:

§ Finnish Commerce Federation (Kaupan Liitto)

§ Finnish Grocery Trade Association (PTY)

§ amfori BSCI

§ Corporate Responsibility Network FIBS

§ European Catering Distributions (ECD)

§ Confederation of Finnish Industries (EK)

§ The Association of Alcoholic Beverage Suppliers in Finland (SAJK)

§ The Family Business Network Finland


THE MEANING OF RESPONSIBILITY IN OUR OPERATING ENVIRONMENTTrade structure changes, customer concentration and the growing challenge of climate change offer a multidimensional framework through which we can seek solutions to the changing expectations of customers and consumers by means of sustainable development and by utilizing digitalization and technological solutions. Primarily, we are striving to respond to four areas, which we have identified in the trends of our operating environment.

The choices of consumers are becoming diversified as whole-someness and interest in the responsibility, origin and ethi-calness of food continue to grow. The climate impacts related to the production of products have also been brought out strongly and vegetarian food is still the choice of an increas-ing number of consumers. For us, these things mean the continuous development and expansion of our selections and products according to demand, as well as increasing the transparency of our supply chain. In accordance with our product policies, we are going to gradually shift, for instance, to the use of certified palm oil and soy. We favour locally produced, certified fish and seafood for our production and selections of goods and we are going to offer only organic or free-range eggs in the future.

RESPONSIBILITY

Finns take their meals increasingly outside the home. Restaurants and professional kitchens offer some real experiences to meet a variety of customer needs. The markets are becoming fragmented and new business ideas are being born. People are interested in vegetarian food, fine dining, ethnic cuisine and local foods. We want to offer a broad selection of good and a variety of options to meet the diverse needs of our customers.

DIFFERENTIATION

Sales work is undergoing transformation. Online ser-vices are valued in the trade sector, but so are personal contacts in a way that supports the customer’s business operations. At Heinon Tukku, we devote effort to building added value for the customers by offering them solutions in the most suitable way possible while anticipating the future. To support this, we introduced a new solution in 2019 to facilitate customer relationship control. The solution is further discussed on page 18.

INSIGHTFULNESS

Customer interfaces are provided in electronic format increasingly often. Mobile services are multiplying and partly replacing conventional services. Online shopping is growing at Heinon Tukku as well and it is also possible via mobile devices. Last year, more than 70% of our orders were placed at the online shop and we continuously develop its features. Last year, we introduced more than 100 different, new features that facilitate ordering. Robotic process automation is also of interest to the customers. Our in-house robot Ilmari has already been utilized for some basic tasks in certain business operations and more tasks being planned. This has also allowed the personnel to use their time for more varied tasks.

DIGITALIZATION


STAKEHOLDER DIALOGUE

OWNERSThe Heino Group is very much a family-run business, whose owners participate in its daily management. Third, fourth and fifth-generation family members take part in decision-making on both the Group and Heinon Tukku boards of directors. The primary objective of a profitable business is to offer security to its customers and a good place to work for its employees. It is also to require the same things of its partners as it does for itself.

OTHER STAKEHOLDER CO-OPERATION We also engage in a regular dialogue with authorities, financiers, industry partners, special interest organisa-tions and local communities. Our key stakeholders also include the media, NGOs and educational institutions.

GOODS SUPPLIERS AND SERVICE PROVIDERS Continuity and seamless co-operation are important to goods suppliers and service providers. The responsibility survey also revealed that goods suppliers and service providers expect reliable partnership, the use of good commercial practices, and ensuring profitability and continuity.

EMPLOYEESIn the employee survey on responsibility, key expectations include good supervision, a safe and pleasant work environment, and ensuring product quality and safety. Feedback and discussion channels include employee surveys, work safety committees, department meetings, and development and performance reviews. In a survey assessing well-being in the company, we earned a Quality of Working Life index of 66% at the beginning of 2019. In internal customer satisfaction survey measuring operations in different departments, the result was in early 2020 3.72 on a scale of 1-5 (2019: 3.52).

CUSTOMERSIn addition to hotels, restaurants and cafés, Heino also has customers in public administration foodservices and employee cafeterias, with both chain customers and indi-vidual customer relationships of varying sizes. Kalavapriikki also delivers products for retail trade.

Matters discussed with customer are often related to the product selection, online store and deliveries, such as delivery accuracy and the packing of shipments. The responsible operating methods are discussed particularly with our large chain customers. We receive customer feedback in meetings as well as through customer surveys. In survey in 2019 our customers gave us a total grade of 3.74 on a scale of 1-5 (768 answers). In results Heinon Tukku’s strengths were flexibility and friendly service. Improvement was needed in usability of web store, product selections of cash and carries and in some matters concerning the employees.

We engage in a close dialogue with our key stakeholders, customers, employees, goods suppliers and service providers, and owners. They are also given excellent opportunities to influence Heinon Tukku operations.


Corporate Responsibility Programme

PART 2

Our operations have economic, social and environmental impacts throughout our supply chain from raw material procurement all the way to the customer. We have the greatest impacts and influence on those activities, which are directly related to Heinon Tukku operations: for example, those of the production facilities and the wholesale dealers. Our responsibility and strategy focus is on increasingly extensive supply chain control and a more sustainable selection of goods.


Food industry,inbound logistics Outbound logistics Customers and consumersRaw materials, agriculture

• Product and supplier requirements

• Cooperation• Evaluation and monitoring

• Product and supplier requirements

• Cooperation• Evaluation and monitoring

• Values and Code of Conduct• Certified management systems• Energy and materials efficiency

• Customer cooperation• User-friendly service channels

• Up-to-date distribution equipment

• Full vehicles and efficient routes

• Distribution partner cooperation

• Provision of employment• Use of natural resources• Animal welfare

• Material and energy use• Reduction of emissions• Efficient processes• Appropriate working con-

ditions

• Provision of employment• Taxes for society• Sustainable use of natural

resources• Reduction of emissions

• Reliable deliveries• Safe products• Recyclable packaging

• Provision of employment• Stable and safe working

environment• Reduction of emissions

CONTROL

IMPACTS

A basic selection of

30 000products

40 % of the products made in Finland

50 % from elsewhere

in the EU

800 suppliers of

goods500

in-house or other personnel

31 partners

75 delivery vans,

37 of which have

the Heino colours

25 000 end customers

SUPPLY CHAIN CONTROL AND IMPACTSHEINO


Responsible procurement

"Our procurement chain is transparent and

our selection is sustainable"

Supplier requirementsProduct choice processes

Product policiesProduct development

Expertise

Good workplace

"We are an attractive workplace"

Supervisory workCommunication and co-operationContinuous developmentSeamless internal processes

Environment

“We are at the forefront of environmental work”

EmissionsFood waste, recycling

Transports, mobilityBiodiversity

Energy-efficient facilities

Reliable partner

"We want to be the most desirable partner"

Internal and external communi-cationsResponsibility reportingOperating modelsRisk managementCo-operation

15

AT THE FOREFRONT OF SUSTAINABLE DEVELOPMENTResponsibility is an important part of our corporate level strategy. In order to strengthen this, we built a responsibility program in 2018 with the vision of oper-ating at the forefront of the sustainable development.

In order to define materiality, we inter-viewed some of the key stakeholder repre-sentatives, such as customers and owners. Furthermore, we conducted a stakeholder responsibility survey especially for in-house personnel and the suppliers of goods and services. Based on the responses and the views of our expert group, we compiled a list of sustainable development top-ics describing the whole value chain and then identified and prioritized the essential topics. This process gave birth to nine key areas, which we formed into the following four themes: a reliable partner, responsi-ble procurement, a thriving environment and a good workplace. In the summer of 2018, the executive group processed and approved the results of the materiality

analysis along with the responsibility goals and programme based on those results.

Through our corporate responsibility pro-gramme, we are also responding to global challenges that impact our business oper-ations and that we face in cooperation with our various stakeholders. By having a corporate responsibility programme of our own, we are committed to the Sustain-able Development Goals (SDG) of the UN Agenda 2030. These 17 goals aim to elimi-nate extreme poverty from the world and ensure a thriving environment in a sustain-able way. Of these, we have identified four goals, which we can especially influence by our decisions and business operations.

GOAL 8: Decent work and economic growth

GOAL 12: Responsible consumption

GOAL 13: Climate actions

GOAL 14: Underwater life


OUR KEY GOALSThe key goals of our corporate responsibility programme (2018–2021) are compiled below. Their progress is further discussed on the following pages.

RELIABLE PARTNER

THRIVING ENVIRONMENT

RESPONSIBLE PROCUREMENT

GOOD WORKPLACE

GOAL INDICATOR/MEASURE STATUS

We devote effort to cooperation and service.

§ We have a Code of Conduct that applies to both in-house personnel and partners.

§ Responsibility shows both internally and through customer cooperation. § We support the responsibility of our customers.

We tell others about our work.

§ We report about responsibility on a regular basis. § We develop responsibility communications and interaction.

We make our processes more efficient and control the risks.

§ We identify our responsibility risks and update the continuity manage-ment plan.

§ Our processes are up to date and we continuously make them more efficient. Responsibility is part of the processes.


We offer our products and packaging in a sustainable way.

§ We have product policies and we proceed with them in accordance with the goals.

§ The packaging we select is easily recyclable and we favour renewable raw materials.

Our processes sup-port responsible procurement.

§ We assess the human rights impacts. § We select all suppliers and products in accordance with the agreed

process.

We develop and offer products that meet the needs of the customers.

§ We renew the product lines of our in-house brands. § Kalavapriikki develops products in cooperation with foodservice and

retail customers.


We reduce operating emissions.

§ We refine our carbon footprint calculation and set more specific emis-sions targets.

§ We reduce emissions through our actions.

We increase energy efficiency.

§ We invest in the operations and develop them in an energy-efficient way.

§ We increase the share of renewable energy in our energy consumption.

We enhance ma-terials efficiency.

§ We increase the waste recycling rate. § We reduce food waste. § We donate unsold food to charity purposes.


We devote effort to supervisory work.

§ We train supervisors on a regular basis. § We develop our channels of interaction.

We increase the know-how of the personnel.

§ We introduce a web tool for orientation and training. § We develop the responsibility expertise of our personnel.

We enhance occupational safety.

§ We encourage making safety observations. § We reduce the number of work accidents. § We reduce the number of sick leaves.

Goal reachedGoal 2019 reachedWork continues, progressing as plannedGoal not reached yet


AIMING TO BE THE MOST DESIRABLE PARTNERFor us, the customers and the various suppliers of goods and ser-vices are the most important partners. Our communication with them is regular and the cooperation is development-oriented. This is backed by the principles of the certified Quality Manage-ment system (ISO 9001) together with its goals based on cus-tomer expectations.

DELIVERY RELIABILITY AT A RECORD HIGH LEVEL

The reliability of Heinon Tukku deliveries to customers was raised to a record high level in 2019, which was a great achievement after the challenges of 2018. We reached this through several different measures as follows: We continued to automate the purchase orders and now a considerable share of them is formed directly through the system without a manual interim stage. At the same time, we also adjusted the parameter values to make them more precise than before. We brought the resource planning of our warehouses and transports to a better focus and developed the transportation arrangements. The customers see all these meas-ures as enhanced delivery reliability.

.

TAKING CUSTOMER-ORIENTATION SERIOUSLY

We work to benefit our customers and want to remember this every day in all our activities. A comprehensive cross-section of key personnel from the various stages of our process has been selected to be members of the Heinon Tukku customer relationship teams. We invite customers to talk about their operations and wishes at the meetings of these teams. Indeed, our customers play a major role, for instance, in developing our range of goods, the online shop and the transportation arrangements. After all, it is always the nicest to use a service that is tailored to one’s needs.

At Heinon Tukku, customers can get help with conducting their basic activities responsibly and employing responsible operating practices at their offices. For example, the average weekly order size and delivery volume have a tremendous impact on the carbon footprint we make each year. Like in many other cases, the responsible way is more efficient here and inspires our customers to get better results.

The customers have also commended their visits to our premises. Following such a visit, waiters can describe from personal experience, for instance, how the delicious smoked salmon on a customer’s plate was prepared by utilizing solar power in the quality setting of Kalavapriikki.

Joonas Pikkarainen, Key Account Manager

CASH AND CARRY OUTLETS DEVOTE EFFORT TO SERVICE

During the past two years, we have conducted mystery shopping studies at the cash and carry outlets on a regular basis. These studies involve test subjects shopping as ordinary customers at the cash and carry outlets, making observations and assessing the customer service process and its quality. They made a total of 24 observation visits to our two cash and carry outlets during 2019 and the development for the year was strong in comparison with the previous year. The average customer experience score measuring the various departments and services on a scale of 1–6 was 4.9 in 2019 (4.3 in the previous year).

Ainekset hyvään

MATURED MEAT

Last year the cash and carry units got dry-aged cabinets, which mature up to 200 kilograms of the highest quality of meat from pedigree cattle. The meat is matured in the cabinets for at least 30 days, whereby the natural tenderization of the meat definitely reaches its maximum level with enough time for the flavour to intensify sufficiently. The products are sold directly at the service counter.

Tomi Lotvonen, Cash and Carry Director

Ainekset hyvään

RELIABLE PARTNER THRIVING ENVIRONMENT RESPONSIBLE PROCUREMENT GOOD WORKPLACE


PREPAREDNESS ENSURES CONTINUITY

Heinon Tukku is a member of a food sector trade and dis-tribution pool, which operates in a national emergency supply organization. The pool aims to ensure the supply of food and goods in the event of disruptions or emer-gencies. This is of significance especially to many public services, such as hospitals, schools and day-care centers.

Heinon Tukku updated its contingency plan in 2019. During this process, the company identified the key failures that could impact business continuity and cre-ated operating models for anticipating such failures and being prepared for them. Through such planning, the company strives to ensure that the impact of any fail-ure stays as minimal as possible and that the company can recover as quickly as possible. Isolated failures may occur, for instance, in the data systems, telecommuni-cations, electricity distribution or following an accident or a wide-scale labour shortage.

Päivi Huhtala, Director of Corporate Responsibility

Ainekset hyvään

WE SUPPORT FINNISH FOOD CULTURE

Heinon Tukku is a supporter of the Culinary Team of Finland, which competed in the Culinary Olympics held in Stuttgart, Germany in February of 2020. Finland came in fifth in the overall competition.

We also support Venner, a social organization that offers an easy, empowering way of helping needy Finnish families with children by offering them a healthy grocery bag and recipes, delivered to their doorsteps.

The Heino Anniversary Fund supported a competition in 2019 for putting food waste on people’s tables. It was organized by the Helsinki-based Carrot Revolution, a start-up with the mission of opening kitchen doors to children and giving them sustainable life skills. In the spring of 2019, Carrot Revolution arranged cooking clubs for elementary school-aged children, with special attention to food waste through playful competition. Organic waste was collected in the kitchen compost bin and, to end each club meeting, the children weighed the waste and recorded the result.

Eva Heino, Communications Manager

Ainekset hyvään

DIGITALIZATION BRINGS NEW OPPORTUNI-TIES FOR CUSTOMER COOPERATION

A good customer experience comes from flexible service that is provided efficiently through several different channels, using appropriate tools. During 2019, our telemarketing began to use a system, which displays to customer service providers the matters that are of key importance to customers, linking together into a single whole all the communication that runs through the various channels (telephone, e-mail or chat). Through this system, we can also follow how quickly we are responding to the customers’ service requests and make sure that everyone gets a reply in reasonable time. At the same time, we can make our internal customer service more efficient.

Kirsi Haapasalo, Telemarketing Supervisor

Ainekset hyvään

Photo: Eva Tordera Nuño



Responsibility on a Daily Basis

One of the values of restaurant company Ravintolamestarit Ltd is is responsibility, defining the daily choices made at the Puijo Tower Restaurant and Café, located in Kuopio.

For us, responsibility consists of all three of its aspects: the ecological, the economic and the social responsibility aspect. These are also shown by our strategy. We want to operate in a manner that burdens the envi-ronment as little as possible. We minimize food waste, promote circular economy and operate energy efficiently. We also entail the commitment of our goods producers and suppliers to environmentally responsi-ble operations.

Our cooperation with Heinon Tukku is going well, but we would like the wholesale dealer to have more Finnish produce and food from local operators.

Eeva Mertanen, CEO, Ravintolamestarit Ltd Ambassador of European Region of Gastronomy Kuopio 2020

Responsible Seafood Only

The Hanko Sushi restaurant chain offers only seafood that is farmed and caught respon-sibly. Hanko Sushi is the largest sushi chain in Finland and all 24 of its places of business have been certified by the Marine Steward-ship Council (MSC) and the Aquaculture Stewardship Council (ASC). In addition to cer-tified products, another source of great help in our daily operations is the World Wide Fund for Nature (WWF) Seafood Guide. It is a good, clear tool we can use to support our choices.

It was easy to provide Heino with the criteria we have. After that, the buyer went through the options that are available under the terms we had given. I am pleased about how well we found responsible options in the Heino selections of goods.

Jesper Björkell, Product Development, HankoSushi

We Reduce Emissions

Scandic is a leading Nordic hotel chain that has pioneered responsible operations since 1993. We have worked in a goal-oriented manner to reduce the environmental load and have been a responsible influence within society. The well-being of our personnel and customers and the reduction of carbon dioxide emissions are our key goals.

Similar operating values and goals are the strengths of our cooperation with Heinon Tukku. In cooperation, we continuously develop the order delivery process with responsibility being one part of it. Together, we are seeking the right kinds of suppliers and challenging them in the development of responsibility issues.

Kati Saario, Country Procurement Manager, Scandic

NO to Bullying

Clarion is part of a Nordic hotel group with two hotels in Greater Helsinki. Through its corporate responsibility programme WeCare, Clarion advocates locally as well. One day in August, the Clarion Hotel Helsinki was filled with almost 500 school children from the vicinity for an event, called “Clarion says NO to bullying”. The main attraction of the event was provided by Jarppi Leppänen and Hannu-Pekka (HP) Parviainen from the Dudesons, a Finnish stunt group. They gained the full attention of the participant group to the important anti-bullying matter at hand.

Clarion provided its staff and a great set-ting for the event while partners offered the event content and food. Heinon Tukku had the pleasure and honour of being involved in the event as one of the partners.

Mika Rinne, Key Account Manager, Heinon Tukku

BY LISTENING TO THE CUSTOMER



AIMING FOR THE WELL-BEING OF THE ENVIRONMENTEnvironmental work management is based on our environmental impacts and controlling or mitigating these. The most significant environmental impacts of Heinon Tukku operations come from energy use, transports and waste. These are controlled and managed by the certified ISO 14001 Environmental Management system. We evaluate our operating environment on a regular basis. While the goal is set to a date three to five years in the future, the more detailed objectives and measures are set annually. The certified ETJ+ Energy Efficiency System is part of our environmental management system.

In 2019, the energy consumption of the facilities was 14,185 MWh, which is 7% less than in the previous year (2018: 15,184). Due to the mild spring and early winter in 2019, we saved on district heating in particular, but our electric power consumption also fell (by 4.5%).

During 2018 and 2019, we carried out the following measures by which we increased the share of renewable energy and improved our energy efficiency:

§ Solar power systems on the roofs of all the facilities

§ A biogas-powered delivery vehicle to be used for deliveries in the Espoo area

§ E-Power system installed in Espoo to improve power quality and equalize power surges

§ Roof repairs made with light-coloured materials

§ Ventilation units updated

§ Recovery of condensation heat made more efficient

Furthermore, we overhauled the heating network in all the facil-ities and switched over to LED lighting. In this way, we length-ened the maintenance intervals. This brought us financial savings as well.

Heinon Tukku purchases server room services from Herman IT Oy, a company based in Kajaani, Finland where the climate allows free cooling without any unnecessary power consumption. Moreover, the energy used is carbon-free and any extra heat is recovered and utilized for other heating.

Heinon Tukku emissions by emission type (tonnes CO2e*)

*Carbon dioxide equivalent describing the climate impact of greenhouse gases

0

1000

2000

3000

4000

5000

6000

201920182017

1383

315 364310

12261010

1235

13791310

424396

1886 1796 1704

Electricity WasteHeat Logistics Commuting

2017 2018 2019

Not all third-party transports are included.

EMISSIONSWe have been following our carbon footprint since 2012. Even with the steady growth of our business operations, we have managed to reduce our greenhouse gases almost every year. In 2019, we generated a total of 4,729 CO2e tonnes (2018: 5,189). Most of the measured emissions from our operations consist of Scope 2 indirect emissions (electricity and heating). These accounted for approximately 60% of our total emissions in 2019.

Our goal for 2020 is to gain an overall picture of the CO2e for Heinon Tukku. At the same time, we are going to transfer the emissions calculation to a new service platform and set a long-term goal for the mitigation of operating emissions and the achievement of carbon neutrality.

ENERGY EFFICIENCY Energy efficiency measures have long been a key part of our environmental goals. By investing in renewable energy or energy-saving equipment, we are investing in the future. We have been a party to Energy Efficiency Agreement for industries since 2013. Our goal for the current period 2017–2025 is to increase our energy efficiency by 10.5% by 2025 (reference year: 2015). We already reached this goal in 2018.

Our facilities consume energy mostly for heating and cooling. Heinon Tukku maintains four facilities of its own. All of them have at least three different temperature zones: freezing, cool and room temperatures.



THE USE OF RENEWABLE ENERGY INCREASED

All Heinon Tukku places of business have solar panels on the roof and these provide a major part of the electric power consumed by the facilities. The output of a solar power system is at its best on sunny summer days when cooling cold-storage rooms con-sumes the most energy anyway. From May to August, solar power covered approximately 20% of the electric power consumption for the Group.

Our largest solar power system is situated on the roof of the head-quarters in Espoo and it is the biggest solar power system behind a single metering point in the distribution network of Caruna Espoo Oy. All in all, there are approximately 5,000 solar panels on the roofs of our facilities. In 2019, the systems produced a total of 977 MWh of emissions-free energy (2018: 745). This is equivalent to the annual consumption of more than 50 electrically heated single-family homes. Through solar power, we reduced our CO2 emissions by 160 tonnes (2018: 122).

Our goal is to increase the share of renewable energy in our energy consumption and to reduce the use of fossil energy. In 2019, we obtained 35% of our electric power from renewable sources (2018: 34%),

2017 2018 2019

Total energy (MWh)* 15030 15184 14185

§ Total purchased electricity 9426 8866 8467

§ Total solar power 3 745 977

§ Total district heating 5601 5573 4741

Electricity kWh/m3 26,4 26,9 26,5

District heating kWh/m3 15,7 15,6 13,3

*) Energy consumption figures for the Heinon Tukku sales offices (Tam-pere, Turku, Oulu) are not included.

Heino energy consumption 2015–2019 (MWh)

0

4000

8000

12000

16000

Purchased electricity In-house solar power systems District heating

20192018201720162015

TRANSPORTS

In 2019, Heinon Tukku appointed an instructor to offer new and long-time drivers guidance on distribution transports. This process also involved reviewing the specifications related to customer service and updating the orientation material. The orientation is also continuing in 2020.

The company is striving to reduce the carbon footprint of its trans-ports by optimizing the number of transport vehicles and their capacity and travel routes. The fuel choices and emissions stand-ards of the distribution vehicles are also of significance. Together with our transport partners, we continuously steer the emission levels lower.

In the EU, the volume of harmful exhaust emissions from distribu-tion vehicles is regulated by what are known as EURO standards. Presently, the EURO standard with the lowest emissions is EURO 6. In accordance with the set goals, Heinon Tukku abandoned the last of its EURO 4 vehicles during 2019. The goal for 2020 is to replace the EURO 5 vehicles and use EURO 6 equipment for almost all Heinon Tukku deliveries.



Kalavapriikki Water Consumption

Kalavapriikki uses pure water in its various production stages and especially washing the production areas consumes water.

REDUCING FOOD WASTE

We reduce the volume of food going to waste through good qual-ity monitoring, product sales forecasts and continuous optimiza-tion and order cooperation between various units. We also apply measures like discount pricing in order to activate the sales of food that is about to expire.

Each unit has one or two partners who utilize food waste products. We strive to steer edible food waste primarily to our food aid part-ners or other charitable parties, such as the WeFood supermarket.

We also steer some of the other food waste, such as fish guts from Kalavapriikki or fruit and vegetables from the cash and carry units, to be used as animal feed. Food waste is one of our key indica-tors and we follow it closely—also in terms of food loss going to food aid.

Our goal for 2019 was to reduce the volume of food waste from the previous year, but we did not completely succeed in this and the food waste we generated weighed just over 500,000 kilo-grams. The share of fruit and vegetables was 46%, but in terms of price, much of the food waste consisted of meat products and processed meat in particular.

For a year now, the company has been using a biogas vehicle for distribution in Greater Helsinki and the accumulated experiences have been positive. The vehicle is reliable and its service, mainte-nance and running costs have stayed within the expected limits although the frequent need for refuelling and the long length of time required to refuel came as something of a surprise.

MATERIALS EFFICIENCY By using materials prudently and steering them to recycling as much as possible, we can enhance our materials efficiency. When selecting products and packaging, we strive to choose easily recy-clable options while continuously enhancing waste recycling and food waste control in our operations. We have also made a pledge to this effect in the food sector Materials Efficiency Commitment.

Our goal is to reduce any unnecessary use of plastic. Please see the following page for a description of what Kalavapriikki is doing to reduce the volumes of plastic.

There are also some advantages to plastic, however. Coming in a variety of forms, it is an excellent material from the perspective of food safety, preservation and transports—and equally so in terms of combating food waste. The plastic waste from packaging should primarily be reused as is or recycled. We steer the plastic and styrofoam waste generated by our operations to be reused as industrial raw material.

2017 2018 2019

Total water consumption m3 (Kalavapriikki) 11 436 12 842 12 758

WASTE

Most of the waste that comes from Heinon Tukku operations consists of packaged organic waste. Its share of the total volume of waste was 44% in 2019 (2018: 42). The total volume of waste fell by 16% from the previous year to 1,082 tonnes (2018: 1,283).

In the past two years, the waste recovery rate was 100%. This means that we recovered all our waste as either material or energy. Now our goal is to improve the waste recycling rate: more specifically, we are going to increase the volume of waste sent to recycling and reduce the share of incinerated waste. In 2019, we made good progress with a recycling rate of 81% (2018: 78). The pallets used for warehousing and distribution are constantly recycled for reuse.

44 %19 %

29 %

3 %2 %

2 %1 %

Packaged organicCardboard

OtherMetalPaper

Non-recyclable wastePlastic



KALAVAPRIIKKI FISH PACKAGED IN SKIN PACKAGING

Kalavapriikki replaced conventional plastic packaging with skin packaging featuring a bottom part made of FSC-certified paperboard and a top part made of very thin plastic. When packaged thus, processed fish like hot or cold-smoked salmon has a long shelf life. Such products can be stored for up to 35 days. This is something that is likely to increase product safety as it reduces food waste.

Ari Hietanen, Development and Quality Manager

Ainekset hyvään

CERTIFIED CORRUGATED BOARD PACKAGING

Kalavapriikki Oy has replaced all the current, recyclable packaging made of corrugated board with packaging that is FSC-certified. Earlier, the expanded polystyrene (EPS) boxes had already been replaced with fibre-based Freshbox packaging that is waterproof and recyclable. Fresh-box is supplied to Kalavapriikki by DS Smith and all their factories in Fin-land are FSC-certified. This certifica-tion indicates that the raw material of the product is responsibly produced. The origin of the packaging is always traceable to the very source of pro-duction in the forest.

Jari Korhonen, CEO, Kalavapriikki Oy

Ainekset hyvään

GAINING A CITY BIKE STATION IN ESPOO THROUGH NEIGHBOURLY COOPERATION

In the summer of 2019, a new city bike station was put in place near the Heinon Tukku head-quarters in Espoo. It was obtained through cooperation between Heino and its neigh-bouring Groups, Orion and Oriola. The city bike station is an important addition to the network of approximately 350 similar stations in Greater Helsinki. By being involved in this, we wanted to offer our personnel an oppor-tunity to exercise while commuting either by city bike alone or in combination with pub-lic transport. This promotes the well-being of both ourselves and the environment at the same time.

Sari Sali, Quality and Environment Specialist

Ainekset hyvään

BEES BRING JOY

Once again in the summer season of 2019, the beehives on the roof of our Espoo office produced honey and brought us joy. Now the bees are wintering on the roof for the first time, spending that time in clusters where they are protected from birds and can keep warm by eating the winter food they stored in the hives in late summer. The new bee-keeping season will get under way again in the spring of 2020 when the weather gets warm enough for the bees to fly outdoors.

Eva Heino, Communications Manager

Ainekset hyvään



PRODUCT SAFETY CONTROL

Safe, high-quality raw materials and products are at the very heart of our business operations. The product safety of the supply chain is managed in accordance with the ISO 22000 Food Safety Management system and, additionally at Kalavapriikki, the facility-specific FSSC 22000 Food Safety System Certification Standard. Both of these standards are backed by the Hazard Analysis and Critical Control Points (HACCP) system, which contains food safety risk analyses and procedures for risk control and prevention. At the beginning of 2019, the FSSC standard was revised to include additional requirements. Following this, Kalavapriikki further elaborated on its allergen control and contingency planning.

The products under our in-house brands and our imports along with their suppliers are thoroughly assessed before cooperation can begin. For instance, the backgrounds, origins and production processes of suppliers, as well as their valid product safety cer-tifications, all impact this assessment. Moreover, supplier audits are conducted on a regular basis. Seven goods suppliers were audited in 2019.

Our products are analyzed by an accredited, external laboratory. During 2019, it analyzed a total of 700 test portions (2018: 840), of which 277 were obtained by the authorities (2018: 151). We had a total of seven recalls of in-house products or company imports. The recalls were based on self-sampling or sampling by a goods

supplier or an authority. The most typical reason for recall was the presence of pesticide or heavy metal quantities exceeding the limit value. The number of industrial recalls rose from the previous year.

In 2019, the food control authorities conducted nine Oiva inspec-tions with the result that five of these were graded ‘Excellent’ while four were graded ‘Good’. In addition to these, we had con-tact material inspections and organic product monitoring per-formed at the units.

PROCUREMENT NEAR AND FARHeinon Tukku partners with approximately 800 goods suppliers, more than 80% of whom are suppliers operating in Finland. In 2019, 40% of all the procurements came from Finland and more than 50% from Europe.

The risk country share of the purchase value of all in-house brands and company imports was 3%. By “risk countries” we mean those

with a high risk of human rights violations related to production and working conditions. Heinon Tukku's biggest risk import countries are China, Greece, Thailand, Peru and Brazil. From these countries, the company procures fruit, beef and poultry, canned fish and fruit, and disposable kitchenware in particular.

Within the company and in our cooperative relationships, we comply with the International Labour Organization (ILO) conventions and recommendations, the UN Guiding Principles on Business and Human Rights, as well as the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises. We have pledged our commitment to these through amfori BSCI, an international organization aiming to promote open and sustainable business operations. We joined amfori BSCI in August of 2018.

Through the BSCI Code of Conduct and its supporting tools, such as supplier training and third-party auditing, our goal is to improve the working conditions of goods suppliers in the risk countries and to clarify and harmonize their monitoring. Developing the pro-cesses related to our procurement chain is one of the focal points of our corporate responsibility programme.

We have examined the current status of our suppliers and encour-aged them to pledge their commitment to the principles of amfori BSCI. By the end of 2019, more than 300 of our goods suppliers had made their commitment to the BSCI Code of Conduct, which

AIMING FOR SUPPLY CHAIN TRANSPARENCY AND SUSTAINABLE SELECTION

Recalls 2017 2018 2019

In-house brands, imports 0 2 7

Other range of products (in-dustry) 177* 25 55

*) Removal of cigarette packs without pictures from the markets



THE AMFORI BSCI CODE OF CONDUCT LAYS OUT THE FOLLOWING PRINCIPLES:

§ Freedom of association and collective bargaining

§ No discrimination § Fair remuneration § Decent working hours § Occupational health and safety § No child labour § Special protection for young workers § No precarious employment § No bonded labour § Protection of the environment § Ethical business behaviour

obligates the suppliers to monitor the procurement chains of their own and to commit to the principles and values of amfori BSCI or an equivalent scheme. Other certifications and audits accepted by us are the Sedex/SMETA report, the SA 8000 certification and product group-specific certifications, such as Fair Trade, UTZ and Rainforest Alliance.

Our goal for 2020 is to further expand the focus of procurement responsibility, for instance, by expanding the supplier audits and conducting assessments of human rights impacts in cooperation with the various departments.

GOAL 2018 2019 2020 2021 2022 ... 2025

In-house brands to contain 100 % certifiedPALM OIL 40 % 40 % GOAL

Omissa merkeissä 100 % sertifioitua SOY 0 % 0 % GOAL

EGGS 100% free-range eggs Not measured Not measured ACHIEVED GOAL

COFFEE Verified 100% responsible 68 % 86 % GOAL

TEA Verified 100% responsible 54 % 69 % GOAL

COCOA Verified 100% responsible 45 % 53 % GOAL

FISH AND SHELLFISH

100 % 100%

OUR PLASTIC POLICY Not measured

0 %

88 %

100 %

GOAL

GOAL

We favour products from sustainable stocks. Our selections contain 100% green (“recom-mended”) or yellow (“think twice”) species as classified by the WWF.

In-house brands of disposable kitchenware made of 100% fibre-based or organic materials. Plastic bags made of recycled or organic materials.

Toward Sustainable Selections of Goods

We want to offer our customers selections of goods that include certified options as well. Our focal points are the product groups below, for which we have set product policy goals as also shown below. We are progressing toward all the goals as planned.



RESPONSIBLY FARMED AND CAUGHT FISH AND SEAFOOD The consumption of fish and shellfish is rising while fish stocks are declining due to overfishing, as well as environmental and climatic reasons. The Marine Stewardship Council (MSC) and the Aquaculture Stewardship Council (ASC) are non-profit organizations working to move the fish and shellfish markets of the world onto a more sustainable foundation. Through the MSC and ASC certifications issued to products, these organizations strive to steer people toward a responsible fish and seafood choices.

Heinon Tukku has made a commitment to offer responsibly produced, certified fish and seafood. Our range of products does not include any fish or seafood on the red (“Avoid”) list of the WWF Seafood Guide. We strive to ensure that all new products coming to our range of goods will always be marked “MSC” or “ASC” and at least on the WWF green (“Recommended”) list. At the end of 2019, we had 120 MSC-certified and 26 ASC-certified fish or seafood products in our selections (total for both certifications in 2018: 90).

Heinon Tukku has had the MSC and ASC traceability certifications since 2016. Thus, the origin of all the MSC- and ASC-certified fish and shellfish products passing through our company can be traced through the whole supply chain down to fishing businesses that are administered properly and that operate sustainably.

At Kalavapriikki, we favour fish from local waters and engage in cooper-ation with a number of professional fishers. We were also involved in a two-year project for the sustainability assessment of lake fisheries. For instance, the project sought ways to make cyprinids, such as the roach and the bream, more familiar to people so that they would make more use of such unexploited fish. Read more about it here.

SOME PRODUCT LINES: RENEWED AIMO AND HIENO BY HEINO

Heinon Tukku renewed the in-house line of Aimo prod-ucts in 2019. At the same time, the company brought out a new, accompanying product brand, Hieno by Heino. Both lines of products were introduced to the public at the Heino Wholesale Trade Fair in September.

Having an optimal ratio of price and quality, Aimo products are among the best in our range of goods. The products consist of kitchen essentials, ranging from mayonnaise to rice and from smetana to bratwurst. The fish comes in fillets, but we also carry whole quality fish either fresh or frozen. All in all, we presently have approximately 350 Aimo products in our selections.

As for Hieno by Heino, it is a completely new product line, consisting of the most delicious, highest quality, premium processed fish on the markets, produced by Kalavapriikki Oy in Kuopio. We presently have approxi-mately 50 of these products in our selections.

We built both product lines through a precise selec-tion process. At Heinon Tukku, we continuously follow the food world and its trends, listening to the needs of our customers. We gather together all the information gained thereby when planning our range of in-house brands.

Jari Kousa, Marketing Manager Kirsi-Marja Juvonen, Product Category Manager

Catching the atmosphere at the Heinon Tukku Trade Fair, held in September of 2019.

Ainekset hyvään



OUR IMPORTING PARTNERS ENHANCE OUR SELECTIONS OF CERTIFIED PRODUCTS

Planets Pride A/S is a Danish company selling frozen fish and shellfish products and importing them to Finland. The company has actively changed its offering to certified products, aiming to have all of its products certified by some international standard by 2025. All the new products are certified.

In turn, Coldwater Prawns of Norway AS complements the Heino range of responsible products with individually frozen, Norwegian cold-water prawns. These prawns are the only ones in the world to have been issued not only the MSC certification, but the Friends of the Sea (FOS) certification and the Control Union Certification (KRAV) as well.

Atte Issakainen, Buyer

Ainekset hyvään

THE AGE OF ORGANIC AND FREE-RANGE EGGS

By July of 2020, all the eggs sold at Heinon Tukku are going to be organic or free-range eggs. Under our responsibility policy, this change was planned to take place by 2025, but it happened more quickly than expected.

All eggs produced in poultry buildings with enriched cages are going to be removed from the Heinon Tukku range of eggs by the summer of 2020. Heinon Tukku sells its customers approximately one million kilograms of eggs per year and the number of organic or free-range eggs needed to replace this mass can be obtained as early as 2020.

The company continuously develops its range of processed eggs, adding products that are produced from free-range eggs to a corresponding selection.

Marko Kapanen, Product Category Manager for Fresh Produce

Ainekset hyvään

ORIGIN OF MEAT TO BE SHOWN

A Finnish decree, according to which restaurants must provide customers with a written indication about the country of origin of the meat they serve, came into force at the beginning of May 2019. The decree applies to fresh, cooled or frozen meat, but not uncooked meat or processed meat used as raw material. The decree does not apply to game or reindeer either. The notification obligation depends on the form of the raw material at the time of its arrival at the restaurant.

At Heinon Tukku, we worked hard to ensure that it would be as easy as possible for our customers to com-ply with this decree immediately as of the beginning of May. Where possible, we strove to replace the processed meat from several countries of origin with processed meat coming from a single country. We also displayed the origin marking more clearly than before and showed the country abbreviation alongside the product name.

Janne Nyman, Buyer

Ainekset hyvään



MAKING USE OF BREAM

Kalavapriikki is developing new products of interest from unexploited fish found in Finland. This benefits Heinon Tukku customers, fishers and lakes alike.

Earlier, Heinon Tukku was involved in a project, which developed the fishing and processing of cyprinids, such as the roach and the bream. Now the Kalavapriikki product development stint boasts several cyprinid products and the first of these, a bream patty, is already on the markets. The patty is just made of ground bream and it is suitable for both public catering services and diners. It can also be used, for instance, to make a trendy fish burger.

Fishing cyprinids is of immeasurable benefit: it reduces the eutrophication of waters and improves the condition of the other fish stocks.

Ari Hietanen, Development and Quality Manager

BENELLA COMES TO HEINON TUKKU

In February, the Heinon Tukku selection of fish expanded with the arrival of Benella products when Raisioaqua Ltd granted Kalavapriikki Oy the right to use the trademark. Only Benella fish farmed in Finland by Benella contract fisheries can be sold under the Benella brand.

Benella consists of responsibly and sustainably farmed fish from Finland. Raisioaqua grants a trademark license to contract fisheries that farm fish according to well-defined criteria.

Kuopio-based Kalavapriikki now has rainbow trout, zander and European whitefish under the Benella brand in its selection of products.

Since Benella is local food, customers can help to clean the Baltic Sea by eating it. The fishing of Baltic herring and European sprat from the Baltic Sea helps to remove nutrients from the Sea, improving its natural condition for our mutual benefit. These species can be used as raw material for fish feed.

Jari Korhonen, CEO, Kalavapriikki

FISH FILLETS STRAIGHT FROM KUOPIO

The availability and quality of fish fillets and their delivery reliability became even better than before when Heinon Tukku switched over to order-specific fillet packaging in Kuopio. The new arrangement reduces fillet handling, which is of benefit especially with regard to fragile fish, such as European whitefish and zander.

By packaging all the fillets in Kuopio, we can also improve availability as the whole quantity of products can be managed in one place. Now it is easier to optimize packaging material use and we do not have to decen-tralize material orders and transports to both Espoo and Kuopio.

Sami Laine, Production Manager

Ainekset hyvään

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Additionally, cooperation with partners: 150

man-years of work in production, warehousing, transports, and cash and

carry outlets

Logistics Warehousing

Transports

Cash and carry outlet work

Sales and marketing

Procurement and ordering activities

Supporting activities

Production

Heinon Tukku OyTukkuheino Oy Anton&Anton OyUniq Drinks Finland OyKalavapriikki Oy

*31.12.2019

HEINO

6,7YEARS

40YEARS

AVERAGE AGE

483NUMBER OF GROUP

PERSONNEL*

84 %SHARE OF FULL-TIME

PERSONNEL

AVERAGE LENGTH OF EMPLOYMENT

RELATIONSHIP

AIMING FOR AN ATTRACTIVE WORKING PLACE

Heino Group Personnel

We want to be a fair and even-handed working community where every voice is heard and where it is inspiring and safe for everyone to work. The personnel perform many kinds of tasks for the fulfilment of customer expectations. Most of them engage in moderately heavy tasks in the warehouses and stores.

BLUE COLLAR WORKERS

WHITE COLLAR WORKERS

64 %

36 %

WOMEN

34 %

MEN

66 %

GENDER

AGE DISTRIBUTION

38,7 % 47 % 14,3 %

UNDER 35AGES 35-54

OVER 54



DEVELOPING COMPETENCE

We ensure the proper competence of the personnel and continu-ously develop it. During 2019, we focused a good deal on updating some basic things and working on small-scale development pro-jects. Our goal for 2020 is to develop the internal information flow and communications. Another important focal point is to develop competence and one of the goals in this regard is to adopt a new online platform to support orientation.

Our competence development is steered by strategic goals. Learning at work and transferring tacit knowledge are its focal points. Furthermore, we have charted personnel competence through performance appraisals. Based on these, we have defined task-specific competence goals, which serve as the basis for the training plan we make annually.

The more extensive training packages we arranged for the per-sonnel in 2019 included courses by Wistec Training Oy, as well as training on the General Data Protection Regulation (GDPR). Per-sonnel enrolled in the Wistec online courses studied topics like Office 365 software, social media and data protection. The GDPR training was mandatory for all employees whose job description includes some kind of connection with processing personal data. The training was carried out as an online course. Completing it continues to be mandatory for all new employees whose tasks involve the processing of personal data.

OCCUPATIONAL WELL-BEING We promote occupational well-being in many ways and we want all personnel to participate in the measures related to it. Occupa-tional health care is an important partner in this regard.

At the beginning of 2019, we conducted a survey on the well-being of the personnel. Among other things, it charted the working com-munity, our supervisory work, lifestyles and mental well-being.

With a response frequency of 44%, the replies provided us with a Quality of Work Life index of 67%. This index describes person-nel performance.

The risk of incapacity to work charted through the survey was high or above average for 49% of the respondents. Musculoskeletal diseases were the greatest risk factor. The results showed that it is important for us to continue to support well-being together with occupational health care.

Moreover, we support the well-being of our personnel by offering them the ePassi sports and culture benefit, supporting a mas-sage service provided at the workplace, and giving discounts on the services of our partners. In addition to this, our company has participated in the annual Kilometer Race of Red Cross Finland. The personnel also arrange a light-hearted golf championship annually. The event was last held by Lake Saimaa in Lappeenranta. Additionally, we thank and reward the personnel who have been employed with us for a long time at a party arranged annually in honour of their years in service.

OCCUPATIONAL HEALTH AND SAFETY Occupational health and safety risk control is based on contin-uous improvement and preventive practices. This is backed by a standardized occupational health and safety management system, which was certified in 2019 according to the new requirements of standard ISO 45001.

In 2019, we introduced a new electronic form for reporting safety observations and a related evaluation template. The electronic form considerably increased the number of safety observations made. It can also be used by our partners working on the Heinon Tukku premises. The new form and evaluation template probably had a share in clearly reducing the frequency of accidents in 2019 compared with the previous year.



31

In 2019, the Group had 36 work accidents of which 23 occurred at the work-place. The most common hazards were related to moving heavy objects, using sharp objects, slipping or stumbling. There were 78 safety observa-tions made during 2019 (2018: 63) and our goal is to further increase this number. Our goal is to develop the safety culture so that it is more proactive and, eventually, to reduce the number of accidents to zero.

In cooperation with occupational health care, one area of focus has been preventive occupational health care. We pay attention especially to physi-cally heavy duties and the identification of work capacity risks at the earliest stage possible. An occupational physiotherapist makes rounds to all of our places of business on a regular basis, guiding the personnel toward safe working methods. Additionally, the units in Greater Helsinki had workplace surveys in 2019. These provided us with reports that raised new develop-ment ideas for our plans of measures.

An occupational safety and health committee coordinates cooperation between the management, the personnel and the various business oper-ations. The committee regularly assesses the working conditions and the progress of our development projects. Additionally, the wholesale deliv-ery units and the cash and carry outlets regularly arrange occupational health and safety meetings and safety rounds, which are used to assess the operations and safety in practical work. During the year, we also arranged First Aid training and targeted the cash and carry units with guidance on encountering a threatening person.

INFORMATION ABOUT OUR PERSONNEL AND EMPLOYMENT RELATIONSHIPS The form of the employment relationship is of key significance to the smoothness and efficiency of our operations. Part-time pensions, leave rotations and other flexible working arrangements are good means of influencing the well-being of the personnel and how they cope at work. The number of part-time and fixed-term employment relationships has stayed the same for the past two years.

Some of the personnel of our partners have been employed in the ware-houses, cash and carry units, and fish production as well. In 2019, we used 78 man-years of agency hired labour (2018: 80). Additionally, Heinon Tukku employed its partners’ drivers for 75 man-years.

Occupational safety indicators 2017 2018 2019Total accidents 32 34 36

• Accidents at the workplace 23 27 23

• Accidents while commuting 9 7 13

Accident frequency (lost time one day or more) 8,8 30,1 16,5

Safety observations 45 63 78

Accidents leading to death 0 0 0

We Deepened Our Internal Cooperation

During 2019, we decided to lower the boundaries between the various depart-ments and develop internal cooperation by having them share information with one another about their work. For this purpose, we created new meeting practices among the various departments and became tan-gibly familiar with their various duties. This process was backed, for instance, by the many changes that took place during 2018 when a variety of tasks was centralized and the closest co-workers of many personnel were replaced with new ones.

We put telemarketing in Espoo into prac-tice in several different departments, but in the field as well. All those employed in our telemarketing became familiar with our procurement purchase and order work, as well as our customer service operations. Additionally, our telemarketers in Kuopio rode along with our transports for their rounds.

The goal was to better provide the telemar-keters with the kind of information they need when serving customers. All these experiences have been just positive. At the same time, our internal service has changed and our activities have gained new forms. Our time management has been rationalized more as well.

Kirsi Haapasalo, Telemarketing Manager

2017 2018 2019

Personnel at the end of the year 495 518 483

Blue collar workers/White collar workers (%)

60/40 64/36 64/36

Women/Men (%) 34/66 34/66 34/66

Women in the executive group (%) 44 50 50

Full-time/Part-time personnel (%) 86/14 82/18 84/16

Fixed-term employees (%) 0,60 0,58 1,66

Number of summer workers 10 12 19

Average length of employment relation-ship (years)

7,4 6,7 6,7

Turnover, regular personnel (%) 15,66 15,06 17,39

Average age (years) 39,25 39,50 40,01

Performance appraisal participants (%) Approx. 50 90 95

Number of training event participants 100 150 200

Sick leaves (%) (Confederation of Finnish Industries (EK) calculation)

3,8 4,3 3,8



GRI INDEXGENERAL DISCLOSURES Page, commentsORGANIZATIONAL PROFILE102-1 Name of the organization 3, 7102-2 Activities, brands, products, and services 3, 7102-3 Location of headquarters 3102-4 Location of operations 3102-5 Ownership and legal form 3102-6 Markets served 3, 7102-7 Scale of the organization 7, 29102-8 Information on employees and other workers 31102-9 Supply chain 7, 14 102-10 Significant changes to the organization and its supply chain 4

Change in Heino Tukku's CEO in June 2019

102-11 Precautionary Principle or approach 9-10102-12 External initiatives 8102-13 Membership of associations 10STRATEGY102-14 Statement from senior decision-maker 4ETHICS AND INTEGRITY102-16 Values, principles, standards, and norms of behavior 8ETHICS AND INTEGRITY102-18 Governance structure 9STAKEHOLDER ENGAGEMENT102-40 List of stakeholder groups 12102-41 Collective bargaining agreements Collective agreement for the commer-

cial sector is followed in all employee groups

102-42 Identifying and selecting stakeholders 12, 15102-43 Approach to stakeholder engagement 12, 17102-44 Key topics and concerns raised 12REPORTING PRACTICE102-45 Entities included in the consolidated financial statements 3102-46 Defining report content and topic Boundaries 3, 15102-47 List of material topics 15102-48 Restatements of information Minor changes and corrections102-49 Changes in reporting Anton&Anton is included in group level

information in pages 29-31 102-50 Reporting period 3102-51 Date of most recent report Our first sustainability report was

published on March 28, 2019102-52 Reporting cycle 3102-53 Contact point for questions regarding the report Back cover102-54 Claims of reporting in accordance with the GRI Standards 3102-55 GRI content index 32102-56 External assurance NoMANAGEMENT APPROACH103-1 Explanation of the material topic and its Boundary 3, 15103-2 The management approach and its components 9, 17, 20, 24, 30-31103-3 Evaluation of the management approach 9-10, 12

ECONOMIC201 Economic Performance201-1 Direct economic value generated and distributed 7203 Indirect Economic Impacts203-2 Significant indirect economic impacts 7, 14205 Anti-corruption 205-3 Confirmed incidents of corruption and actions taken No206 Anti-competitive Behavior206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices No

OtherDelivery level 17 (reported partly)Customer satisfaction level 12

ENVIRONMENTAL302 Energy302-1 Energy consumption within the organization 21302-3 Energy intensity 21302-4 Reduction of energy consumption 20-21304 Biodiversity304-2 Significant impacts of activities, products, and services on biodiversity 23, 25-28305 Emissions305-1 Direct (Scope 1) GHG emissions In the report 2020305-2 Energy indirect (Scope 2) GHG emissions 20 (reported partly)305-3 Other indirect (Scope 3) GHG emissions In the report 2020306 Effluents and Waste306-2 Waste by type and disposal method 22

OtherFoodwaste 22 (reported partly)

SOCIAL401 Employment Heino401-1 New employee hires and employee turnover 31401-2 Benefits provided to full-time employees that are not provided to temporary or

part-time employeesAll employees are provided with the same benefits

403 Occupational Health and Safety403-2 Types of injury and rates of injury, occupational diseases, lost days, and absentee-

ism, and number of work-related fatalities31

404 Training and Education404-1 Average hours of training per year per employee 31404-2 Programs for upgrading employee skills and transition assistance programs 30-31404-3 Percentage of employees receiving regular performance and career development

reviews31

405 Diversity and Equal Opportunity405-1 Diversity of governance bodies and employees 29, 31414 Supplier Social Assessment 414-1 New suppliers that were screened using social criteria 24-25414-2 Negative social impacts in the supply chain and actions taken 24-25416 Customer Health and Safety416-1 Assessment of the health and safety impacts of product and service categories 24416-2 Incidents of non-compliance concerning the health and safety impacts of prod-

ucts and services24

417 Marketing and Labeling417-2 Incidents of non-compliance concerning product and service information and

labelingNo

418 Customer Privacy418-1 Substantiated complaints concerning breaches of customer privacy and losses of

customer dataNo

OtherEmployee survey 12, 30


33

TUKKUHEINO OY

HEINO GROUP BUSINESS ADMINISTRATION

Espoo

Orionintie 18-22

02200 Espoo

Heino Group telephone exchange

p. 020 717 000

HEINON TUKKU OY

CASH AND CARRY OUTLETS

Helsinki, Sörnäinen

Vanha talvitie 2

00580 Helsinki

Vantaa, Koivuhaka

Niittytie 12

01510 Vantaa

WHOLESALE DELIVERY UNITS

Espoo

Orionintie 18-22

02200 Espoo

Kuopio

Pienen Neulamäentie 5

70800 Kuopio

www.heinontukku.fi @heinontukku@heinontukku

AINEKSET HYVÄÄN

Images: Heinon Tukku Layout: Heidi MajdahlThis sustainability report was compiled in cooperation with Heinon Tukku and Rodinia Oy. Further information: Päivi Huhtala, Director of Corporate Responsibility

Documents

SUSTAINABILITY REPORT 2019 - Heinon Tukku