Process

Supply Chain

Supply Chain

Hormel Foods has a complex supply chain with suppliers for hogs, turkey, ingredients, packaging materials, transportation and more. As part of our ongoing assessment of how the supply chain fits within our overall corporate responsibility and sustainability initiatives, in 2010, we developed Supplier Responsibility Principles that outline specific areas of responsibility with which we expect our suppliers to comply. We plan on launching these principles with suppliers in fiscal year 2011.

During production, many factors are involved. This diagram illustrates the components necessary to produce a product and the resulting outputs. Our main focus for measuring our impact on the environment is our production because we have direct responsibility for these operations.

Agricultural commodities and distribution/consumption fall primarily outside of our direct responsibility, since the majority of these items are purchased from independent farmers. We acknowledge we do have influence and are always looking for ways to ensure our values and principles are upheld throughout our supply chain.

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Evaluation of Suppliers

Hormel Foods is a champion of continuous improvement and we extend this continuous improvement challenge to our suppliers through our Supplier Quality Management (SQM) program. Through our SQM program, we measure suppliers based on quality, delivery, service, technology and price. Our ingredient suppliers are subjected to additional measurements to further ensure the quality and food safety of our supply chain.

To ensure compliance from our suppliers to our SQM standards, we utilize a combination of third-party audits, internal audits and self audits.

Suppliers who exceed our established standards for audits, degree of compliance and other criteria, are eligible for our annual Hormel Foods Spirit of Excellence Awards. In 2010, 58 suppliers received this recognition for their 2009 performance. More recently, we also awarded 65 suppliers for their performance in 2010.

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Supplier Diversity

Our policy states that Hormel Foods is committed to providing a respectful and inclusive environment where our employees, customers, consumers and suppliers grow and succeed. Our supplier diversity program provides businesses an opportunity to provide quality product options that meet the company’s growing business needs.

We are committed to providing opportunities to diverse suppliers, such as women-owned and minority-owned businesses, which provide the highest quality materials and services to our internal and external customers on a timely basis at the best economic value. Suppliers can submit their business for consideration at https://suppliers.hormelfoods.com.

In fiscal year 2010, we purchased 17 percent of our resources from small businesses. Of these small businesses, 1 percent was women-owned or minority-owned businesses. This information includes the independent family-owned hog farmers.

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