SHARING OUR VALUE - 2021 Environmental, Social and Governance Report - The Kroger Co.
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SHARING OUR VALUE 2021 Environmental, Social and Governance Report
2 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Welcome to
Our ESG Report
We are pleased to share this A cross-functional Kroger team of Reporting Frameworks In This Report
sustainability, business and functional
report on key environmental, leaders oversees the company’s
The content in this report has been 3 Q&A With Rodney McMullen,
prepared with reference to select
social and governance (ESG) management approach to, and portions of the Global Reporting
Chairman and CEO
topics with our associates, performance on, ESG topics. This Initiative (GRI) Standards. We leveraged 4 About Kroger
report marks the launch of our newly
customers, communities, the same principles for defining report
formalized ESG strategy, which content as in earlier years—such 5 Our Approach to ESG
shareholders, suppliers, non- highlights our focus on driving positive 7 Goals Performance
as stakeholder inclusiveness and
governmental organizations impact for People, Planet and Systems. materiality—as well as discussion of 11 Stakeholder Engagement
(NGOs) and others. Details on our management approach our management approach and several
12 People
to ESG topics can be found throughout relevant topic-specific disclosures. 13 Food Access, Health & Safety
this report. Additional details on key Kroger is a member of the Standards 20 Just & Inclusive Economy
topics are also available online at Advisory Group (Food & Beverage
www.thekrogerco.com. Sector) for the Sustainability 24 Planet
Read more about how we align impact Accounting Standards Board (SASB) 25 Climate Impact
28 Resource Conservation
philanthropy and investing to our ESG standards. Volunteer industry experts
strategy through corporate giving, are appointed to advise on issues that 34 Systems
The Kroger Co. Foundation and The should be considered in the standards 35 Business Integration
Kroger Co. Zero Hunger | Zero Waste development process. To review our 38 Responsible & Resilient Systems
Foundation. disclosures against the Food Retailers
& Distributors Standard, refer to our 44 Appendix
Report Scope
SASB Index at the end of this report.
This report covers the Kroger family of We strive to increase Kroger’s SASB- 46 SASB Index
companies’ 2020 fiscal year, which ran aligned disclosures over time.
from February 3, 2020, to February 1,
In addition, Kroger is highlighting how
2021. Unless otherwise noted, data
our management approach aligns
included in the report reflects this time
with the Task Force on Climate-related
period. This ESG Report incorporates
Disclosures (TCFD) framework.
most of our operations, except for
certain datasets where we are still
integrating banners from more recent
mergers into our tracking systems.
Where appropriate, we note the scope
of specific performance tracking in the
relevant report section.
Kroger ESG Report & Resources
3 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Q&A
With Rodney McMullen,
Chairman and CEO
I am pleased to share Kroger’s What are the key business learnings How is Kroger continuing to support What drove the formalization of Kroger’s
from 2020? Associates and Communities? ESG strategy? Why now?
2020 progress on the ESG
This past year presented challenges Kroger directed more than $2.5 Kroger’s ESG strategy is the next evolution
topics that matter to our that none of us could have predicted. billion to support and safeguard of a journey that started decades ago with
Company and stakeholders. Our priority—then and now—is the our Associates, Customers and energy efficiency and waste reduction
As I reflect on the past year, health and safety of our Associates, Communities during the pandemic, initiatives. With this report, we share
Customers and Communities. Despite including committing nearly $1 billion our final progress on Kroger’s 2020
I am so proud of how Team
the obstacles in 2020, Kroger continued to better secure pensions for more Sustainability Goals and look ahead to
Kroger rose to meet every to make progress on our ESG strategy than 30,000 Associates. We continue what’s next. Our ESG strategy reflects what
challenge and be there for our and long-term targets. The Kroger team to provide support by offering personal we’ve learned, what we will achieve by
Customers when they needed always shines during difficult times, and protective equipment (PPE), social living Our Purpose, and how we will create a
we continue to do so as we navigate distancing precautions in stores, world where we are truly Thriving Together.
us most. I’m incredibly thankful each phase of the COVID-19 pandemic. COVID-19 vaccines and vaccination
for our Associates’ continued We learned how quickly we can adapt clinics, COVID-19 testing, pharmacy and
dedication and service. More our team, resources and modalities to retail clinic services, and mental health,
serve our Customers, no matter how telehealth and telenutrition services.
than ever before, we are they need or want to shop with us.
deeply committed to Our How is Kroger working toward
Purpose—to Feed the Human How did 2020 change the way Kroger racial equity?
approaches ESG issues?
Spirit™—and to advancing Diversity and inclusion are among
The past year confirmed Kroger’s unique Kroger’s long-standing Values. In 2020,
our Zero Hunger | Zero Waste role in advancing positive impacts for amid renewed calls for social justice,
social and environmental people, our planet and the complex we were inspired to accelerate our path
impact plan to create a global systems on which we all depend. forward and introduce our Framework
2020 also demonstrated the relevance for Action: Diversity, Equity & Inclusion.
better future for people of Kroger’s leading Zero Hunger | This 10-point plan captures the next
and our planet. Zero Waste social and environmental steps in our expanded commitment
impact plan. We are humbled by and to advance progress across
grateful for the opportunity to lead the company.
meaningfully at such a challenging and
pivotal moment in our shared history.
Going forward, we will help create a
more equitable, sustainable and resilient
global food system and supply chain.
Rodney McMullen
Kroger’s Chairman and Chief Executive Officer
Kroger ESG Report & Resources
4 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
About Kroger Read more about Kroger and our consolidated
subsidiaries in our 2020 Fact Book.
As America’s favorite grocer, In fulfilling Our Purpose—to Feed the Human Spirit—we always live by Our Values:
2,742
Kroger is committed to
Honesty Diversity Safety retail supermarkets
delivering fresh food at We insist on truthfulness with We seek and embrace We protect our customers
affordable prices, redefining each other, with our customers, differences in the backgrounds, and each other from injury
the customer experience with our vendors and in our cultures and ethnicities of with a safe and secure
34
business records. We expect all associates, customers workplace and shopping
and giving back to our and value openness. and vendors. environment. manufacturing plants
communities. We believe that operated by the Kroger
no matter who you are or Integrity Inclusion Respect family of companies
where you live, you deserve We act in accordance We encourage and expect We treat all with dignity
with Our Values, even collaboration, teamwork and value the opinions and
affordable, fresh, healthy when it’s difficult. and the active involvement perspectives of others.
food. This idea is embodied of all associates. 45
in a simple tagline—Fresh for distribution centers
Everyone™—that represents
our egalitarian brand and
underscores our commitment 60M
to our customers. households
served annually
$132.5B
total 2020 sales
179M
square feet of
supermarket space
M = million
B = billion
Kroger ESG Report & Resources
5 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Our Approach to ESG
Kroger’s objective is to achieve lasting positive change for Zero Hunger | Zero Waste social and environmental impact
plan. Kroger’s evolution to a 10-year ESG strategy and greater
billions of people and for our planet by 2030. To do this, we ESG leadership are the next steps on our journey to delivering
are building a shared-value ESG framework that will unlock shared value—to the business and our stakeholders.
greater business value as we work collectively to create more Over time, we continue to more deeply understand and embrace
resilient, equitable and sustainable systems. Kroger’s unique role and responsibility as a food and consumer
goods retailer. We strive to lead responsibly across a broad
Our Journey portfolio of topics, integrate ESG accountability within lines of
Our roadmap to achieving long-term sustainability and social impact commitments business and derive financial value in opportunities that create
began decades ago. More recently, we formalized our approach with the a more sustainable future for all.
announcement of our 2020 Sustainability Goals and the introduction of our
The Roadmap for Our Journey
2016 2017–19 2020–21 2023 2025 2030
Sustainability Goals Social Impact Plan ESG Strategy ESG Leadership Shared Value Achieve Kroger’s
long-term
K
roger announces Kroger refines Kroger establishes Recognized leader Innovation in ESG
commitments,
2020 Sustainability Our Purpose—to Feed ESG framework in impact ESG in helps deliver growth
which contribute
Goals the Human Spirit Wraps up select topics Key businesses derive to UN Sustainable
oals focus
G Introduces Zero progress on 2020 roger businesses
K value from ESG Development Goals
on operational Hunger | Zero Sustainability Goals co-own relevant ESG workstreams (SDGs)
waste, packaging Waste social and Formalizes ESG workstreams and Measure and report
and sourcing environmental strategy & longer- targets collective positive
Largely directed by impact plan term ESG targets Supply chain impacts with suppliers
discrete Corporate onducts first
C I ntroduces Framework engagement in ESG on select ESG targets
Affairs teams formal materiality for Action: Diversity, targets, including Achieve 2025 targets
assessment Equity & Inclusion sustainable packaging
Review and refine
egins aligning
B and Scope 3
eeper supply chain
D roadmap for 2030
philanthropy to social emissions reduction
engagement targets
impact plan Achieve key
ommits to Human
C
Introduces master milestones toward
Rights Due Diligence
brand: Fresh for 2025 goals
process
Everyone
Kroger ESG Report & Resources
6 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
ESG Strategy: Thriving Together
We imagine a world where People: Help billions live healthier, more sustainable lifestyles
everyone is Thriving
Food Access, Health & Safety Just & Inclusive Economy
Together. The objective
Kroger’s brand promise, Fresh for Offering access to employment, benefits
of our ESG strategy is to Everyone, reflects our priorities around and more; providing career paths that
achieve lasting positive food and product safety, food access, attract and retain talent; and fostering a
impacts through a shared- and health and nutrition. Protecting our culture of diversity, equity and inclusion
associates’ health and safety and providing for all.
value framework that the best customer experience are also
benefits people and our
ZERO
critical elements of our approach.
planet and creates more
resilient systems for
the future. People
The centerpiece of Kroger’s ESG strategy
is our Zero Hunger | Zero Waste social and
environmental impact plan. Introduced
HERO
four years ago, Zero Hunger | Zero
Waste is an industry-leading platform for
collective action and systems change at Systems: Build more Planet: Protect and restore
global, national and local levels. responsible and inclusive natural resources for a
global systems brighter future
Our strategy aims to address ESG topics
of importance to our business and to our Business Integration Climate Impact
associates, customers and communities. Strong ESG governance Reducing climate impact and
These topics align to three strategic and a commitment to supporting the transition to
pillars: People, Planet and Systems. ethics and compliance help a lower-carbon economy by
build trust and promote investing in energy efficiency
the long-term interests and renewable energy and
To address the complex of our stakeholders. Our by reducing food waste and
Sys
issues most relevant to our responsibilities include data refrigerant emissions.
et
business, we continue to learn privacy and cybersecurity
tem
an
from internal and external and adopting responsible
Resource Conservation
stakeholders through the marketing practices.
Pl
s
materiality assessment process Kroger committed to achieve
and ongoing engagement. Responsible & zero food waste to landfill
Resilient Systems company-wide by 2025, and
Our efforts to improve we also focus on achieving zero
environmental and social operational waste, offering
impacts throughout our more sustainable packaging
global supply chain include and optimizing water use.
responsible sourcing,
supply chain accountability
and a holistic commitment
to respecting human rights.
Kroger ESG Report & Resources
7 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Goals Performance
Having reached the end of our 2020 Sustainability Goals reporting period, we are now looking to what lies ahead.
By engaging key stakeholders, subject matter experts and internal business owners, we established new long-term
commitments and goals to advance Kroger’s sustainability leadership through the next decade.
Goal 2018 2019 2020 Baseline Target Year Status
People
Zero Hunger | Zero Waste
Total Meals: Increase cumulative total of meals directed to our communities (food and funds)
1 billion meals (2017–2019); 3 billion meals (2017–2025) 641M 1.1B 1.8B 2017 2020 – 2025
Surplus Food: Improve management of surplus food company-wide
Optimize recovery of surplus food for donation through Kroger’s Zero Hunger |
100M pounds 101M pounds 90M pounds* 2017 2025
Zero Waste Food Rescue program
Strive for 100% of retail stores to participate in food rescue every year 97% 98% 93%* 2017 2025
Increase retail donations of fresh Produce, Deli and Dairy items to be 45% of total
26% 29% 37% 2017 2025
food rescue
Philanthropy: Strategically optimize giving to hunger relief partners as share of
$192M: $328M $205M: $279M $213M: $301M 2017 2025
total company-wide charitable giving (total of food and funds)
Increase The Kroger Co. Foundation grant-making to advance Zero Hunger |
$6.1M $10.5M $16.4M 2017 2025
Zero Waste, racial equity and other focus areas
Establish The Kroger Co. Zero Hunger | Zero Waste Foundation and Innovation
– $10M $16.5M 2017 2025
Fund; increase national and local grants to accelerate positive impact
Wages & Benefits: Provide solid wages and good quality, affordable health care and retirement benefits
Invest $500 million in cumulative associate compensation and benefits
$216M $508M $798M 2017 2020
through Restock Kroger
$14.40/hour; $18/ $15.50/hour; Over
$15/hour; $20/hour
Increase average retail hourly wages and benefits over time hour including $20/hour including 2017 2020
including benefits
benefits benefits
M = million B = billion
*Reflects pandemic-related disruptions in surplus food recovery
√ Extending goal Did not achieve Area of focus On track Significant Progress Achieved Achieved ahead of schedule
Kroger ESG Report & Resources
8 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Goal 2018 2019 2020 Baseline Target Year Status
People
Just & Inclusive Economy
Framework for Action: Diversity, Equity & Inclusion: Achieve commitments to create a more inclusive culture
Create DE&I Advisory Council to advance our long-term DE&I commitments – – Completed – 2020
100% of leaders participate in Unconscious Bias training – – 96% – 2020
100% of associates participate in Inclusion training in 2021 – – Will report in 2022 – 2021
Increase annual spend with inclusive suppliers to $10 billion $3B $3.4B $4.1B – 2030
Deploy funds to advance social justice through The Kroger Co. Foundation’s
– – $3M – 2025
$5 million Racial Equity Fund
Planet
Food Waste
Reduce total food waste generated in our retail supermarkets by 50% 9.3% 13% 19.3%
2017 2025
cumulatively from our 2017 baseline (cumulative reduction; annual tons generated) 301,282 tons 288,966 tons 268,248 tons
Achieve 95% retail food-waste diversion 39.7% 44.7% 48.3% 2017 2025
Strive for 95% or more of retail stores participating in food waste 74% 76% 87%
2017 2025
recycling programs (2,039 stores) (2,120 stores) (2,407 stores)
Operational Waste
Company-wide, meet and exceed the zero waste threshold of 90% diversion
76% 80% 81%* 2016 2020√
from landfill
Recycle over 200 million pounds more plastic cumulatively since 2016 137.4M pounds 191.1M pounds 248.9M pounds 2016 2020
Continue to integrate reusable plastic containers (RPCs) into our network and test
160M RPCs 123M RPCs 197M RPCs 2016 2020
new technologies that reduce waste in the supply chain
Recover over 3.3 billion pounds of cardboard annually 1.5B pounds 1.6B pounds 1.7B pounds 2016 2020
Achieve zero waste in 50% of new store and remodel construction projects 40% 54% 64% 2019 2020
Phase out single-use plastic shopping bags. Phaseout commitment is in addition QFC division Developing
– 2018 2025
to any existing and future legislation for plastic bags phaseout complete roadmap*
M = million B = billion
*Reflects pandemic-related disruptions
√ Extending goal Did not achieve Area of focus On track Significant Progress Achieved Achieved ahead of schedule
Kroger ESG Report & Resources
9 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Goal 2018 2019 2020 Baseline Target Year Status
Planet
Water
Achieve a 3% annual reduction in water consumed per unit produced in our plants 3.44% ↑ 1.7% ↓ 3.43% ↓ 2019 2020
Packaging
Optimize Our Brands product packaging in the following ways:
2020 Sustainable Packaging Goals—Our Brands-manufactured products
Reduce plastic resin by 10 million pounds cumulative 9.8M pounds 10.1M pounds 15.1M pounds 2015 2020
Use at least 20% post-consumer recycled (PCR) content – – 5% 2016 2020
Increase communication about recyclability on all applicable packaging
1,830+ items 3,000+ items 4,800+ items 2016 2020
(no. items labeled “Please Recycle”)
Increase certified virgin fiber from well-managed forests for paperboard
– 80% 74% 2016 2020
packaging (% certified)
Increase the recyclability of plastic packaging Read more in Packaging section 2016 2020
Support the expansion of infrastructure to increase the availability and
Read more in Packaging section 2016 2020
accessibility of recycling for Our Brands product packaging
2030 Sustainable Packaging Goals—All Our Brands products
Complete a baseline product packaging footprint to fully understand current
Reporting to commence in 2022 ESG Report 2020 2030 –
packaging impacts
Seek to achieve 100% recyclable, compostable and/or reusable packaging Reporting to commence in 2022 ESG Report 2020 2030 –
Product portfolio collectively contains at least 10% recycled content
Reporting to commence in 2022 ESG Report 2020 2030 –
in packaging
Reduce unnecessary packaging Reporting to commence in 2022 ESG Report 2020 2030 –
Increase awareness among Kroger customers about how to properly manage
Reporting to commence in 2022 ESG Report 2020 2030 –
product packaging at end of life
M = million B = billion
√ Extending goal Did not achieve Area of focus On track Significant Progress Achieved Achieved ahead of schedule
Kroger ESG Report & Resources
10 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Goal 2018 2019 2020 Baseline Target Year Status
Planet
Climate Impact
Achieve a 30% cumulative reduction in greenhouse gas emissions (GHGs) Baseline 3.4% ↑ 8.6% ↓
2018 2030
(metric tons CO2e) 5,774,060 MTCO2e 5,967,865 MTCO2e 5,275,845 MTCO2e
Improve our ton miles per gallon (TMPG) by 20% 10.21% 10.84% 15.47% 2010 2020
Achieve a 3% annual reduction in electricity consumed per unit produced in 0.36% ↓ 2.47% ↑ 5.26%* ↓ 2019 2020
our plants
Achieve a 3% annual reduction in natural gas consumed per unit produced in
4.95% ↑ 3.12% ↑ 5.49%* ↓ 2019 2020
our plants
Achieve a 10% annual reduction in refrigerant leakages in our retail stores 0% 0% 10% 2019 2020
Systems
Responsible Sourcing**
Source 100% of wild-caught seafood from fisheries that are Marine Stewardship
Council (MSC) certified, in MSC full assessment, in comprehensive fishery
88% 88% 86% 2016 2020√
improvement projects (FIPs) or certified by other Global Sustainable Seafood
Initiative (GSSI)-recognized programs
Preferentially source MSC-certified wild-caught seafood and source
75% 71% 72% 2016 2020√
at least 90% of volume from fisheries that are MSC certified
Source 100% of farm-raised seafood from farms that are Best Aquaculture Practices
(BAP) 2-Star or greater certified, Aquaculture Stewardship Council (ASC) certified 89% 96% 98% 2016 2020√
or GLOBALG.A.P. certified
Source 100% of shelf-stable tuna from companies aligned with the International
100% 100% 100% 2016 2020√
Seafood Sustainability Foundation (ISSF)
Source 20% of Our Brands shelf-stable tuna from fisheries that are MSC certified Reporting to commence in 2022 ESG Report 2020 2025 –
Transition to a 100% cage-free egg supply chain (% shell eggs that are cage-free) 23.3% 23.1% 24.9% – 2025
Source 100% of fresh pork from suppliers and farms that have transitioned away
from gestation crates (% of supply chain not using gestation crates for at least part 38% 43% 51% – 2025
of pregnancy)
M = million B = billion
*Per-unit decrease partially driven by increased production tonnage due to pandemic-related demand
**Data reflects calendar year
√ Extending goal Did not achieve Area of focus On track Significant Progress Achieved Achieved ahead of schedule
Kroger ESG Report & Resources11 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Stakeholder Engagement
Kroger has a large and Key Stakeholders Primary Engagement Methods Engagement Outcomes 2020
diverse group of stakeholders
that affect our ability to Shareholders Our leaders, Investor Relations team and other subject matter In 2020, we met with investors who manage
experts engage with shareholders throughout the year. Key nearly 58% of the active institutional float and
successfully run our business channels include direct engagement, investor conferences, with investors holding approximately $38 billion
and may be impacted by our our annual shareholders’ meeting, quarterly earnings calls, of purchasing power. Discussions with socially
operations. We proactively financial reports, investor questionnaires about ESG topics, conscious investors helped inform our new ESG
www.thekrogerco.com, press releases and webcasts. strategy and long-term commitments.
manage relationships to
foster open dialogue with, NGOs We have long-standing partnerships and open dialogue NGO engagement shaped our new ESG
and capture feedback from, with many NGOs to share our ESG priorities, plans and strategy, our priorities for 2025 and 2030, and
more than 70 organizations performance. We welcome constructive discussion on many our roadmap for human rights due diligence,
social and sustainability topics to help advance common as outlined in an updated Statement on
on over 40 ESG topics. While goals for people and our planet. Human Rights.
our approach to engagement
varies by stakeholder
group, we prioritize topics Associates & To gather feedback from associates, we use one-on-one Input informed our COVID-19 response plan,
discussions and coaching, our intranet, email, leadership including measures to help protect health
based on our strengths, our Labor Unions meetings and town halls, affinity and inclusion groups, and safety, invest in wages, rewards and
ESG strategy, materiality internal and external social media, and an annual employee paid sick leave for frontline grocery workers,
and risk-based analyses. engagement survey. We communicate with labor unions and offer access to testing, vaccinations and
through scheduled meetings, telephone calls and ongoing telehealth services.
collective bargaining agreement negotiations.
Customers Customers can engage with us through in-store service Based on customer feedback and changing
counters, surveys, focus groups, websites and social media, shopping behaviors during the pandemic,
as well as Kroger Customer Connect, our live call center. Kroger accelerated digital options for low-
contact and contact-free shopping, and
activated payment using Electronic Benefits
Transfer (EBT) at curbside pickup.
Communities We foster close relationships with the neighborhoods in National and local conversations about social
which we operate through direct engagement, local giving justice and ongoing dialogue with community
and fundraising, service and volunteerism, weekly food and non-profit leaders shaped our Framework
donations, hunger relief, ongoing special events, store for Action: Diversity, Equity & Inclusion.
openings and media relations.
Suppliers & Supplier engagement is a critical element of our Connecting with suppliers throughout the
commitment to responsible sourcing and supplier pandemic helped keep shelves stocked
Manufacturers accountability. We focus our engagement during the amid supply chain constraints, onboard new
onboarding process and continue it through ongoing suppliers quickly, offer COVIDCare+™ testing
meetings, site visits, surveys, audits and scorecards. and vaccination solutions, and share best
practices for worker health and safety through
Sharing What We’ve Learned: A Blueprint for
Businesses.
Kroger ESG Report & Resources12 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
PEOPLE
Help billions live healthier, more sustainable lifestyles In This Section
We believe in building a just and inclusive world where 13 Food Access, Health & Safety
everyone can access nutritious, affordable foods and where 20 Just & Inclusive Economy
our associates, customers and communities thrive. We aspire
to help build more resilient communities where individual
and collective rights are respected and protected.
Kroger ESG Report & Resources13 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Food Access, Health & Safety
Material Topics Our Impact in Numbers Charitable Giving Directed to Hunger Relief in Our Communities
• Food & Product Safety 90 million pounds of food donated $ to Hunger Relief as Share of Total Charitable Giving Meals Directed to Our Communities (food + funds)
through the Zero Hunger | Zero Waste $301M
• Food Access Food Rescue program 2020 $213M 640M
• Health & Nutrition irected nearly 1.8 billion meals (in food
D $279M
and funds) toward our 2025 target of 2019 $205M 493M
• Customer Experience
3 billion meals to our communities Achieved goal to give
• Associate Health & Safety $328M
116% growth in total digital sales in 2020 2018 $192M 316M 1B meals
• Community Engagement Our Simple Truth® brand exceeded $358M
by 2020
$3 billion in annual sales 2017 $200M 325M
M = million, B = billion
The events of 2020 and Food & Product Safety We have a comprehensive company-
wide management approach focused on
the COVID-19 pandemic Providing quality, safe food for our
mitigating risk at our stores, plants and
highlighted the complex customers and their families is Kroger’s
distribution centers.
highest priority. Quality assurance and
issues surrounding access regulatory compliance are key facets Throughout the pandemic, the Kroger
to fresh, healthy foods of our business and, for our suppliers operations and food safety teams adjusted
master sanitation and cleaning schedules
across the country. As and partners, they are essential
conditions of working with us. We at all facilities, with guidance from
America’s grocer, we are focus on meeting and exceeding our sanitation partner Ecolab, to help protect
committed to fulfilling our stakeholders’ expectations for food the health and safety of our associates
brand promise, Fresh for safety and quality. and customers and keep food safe.
Everyone, our Zero Hunger Under the leadership of our Vice Kroger teams managed 39 recall events
President of Corporate Food leading to 55 Class I product recalls last
| Zero Waste social and Technology and Regulatory year, 46 of which were related to food
environmental impact plan, Compliance, more than 50 scientists products. Two of these recalls involved
and our Food as Medicine and technologists in the Corporate Our Brands products, including one
Food Technology group oversee produced in a Kroger-operated facility.
strategy so that everyone As in previous years, recalls for undeclared
food safety for our manufacturing
can access affordable, operations and retail stores. Among allergens continue to be a primary cause
nutritious food. other responsibilities, this team tests of Class I recalls.
products we manufacture for safety,
audits all Kroger facilities, reviews Number of Kroger-Manufactured
third-party audits of suppliers’ facilities Our Brands Products Recalled
for compliance, and works closely with 2018 2019 2020
Contributing to the SDGs regulatory agencies and suppliers to
3 0 1
process recalls affecting products sold
in our stores.
Kroger ESG Report & Resources14 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Supermarkets We also monitor safety for our non-food
Across our stores, food safety managers products, such as clothing. In 2020,
help ensure compliance with all applicable we developed an Apparel Restricted
federal, state and local regulations Substance Policy that establishes new
through our risk prevention strategy. In chemical compliance requirements for
2020, Kroger trained nearly 90% of new our private-label clothing suppliers.
retail store fresh department associates,
Distribution Centers
totaling more than 21,300 associates who
completed the Serve Up Safe Delicious Maintaining excellent food safety
Food™ program. We also completed nearly practices is also critical across our 45
15,000 in-store food safety audits in 2020. national distribution centers. Established
food safety and sanitation standards
While the Centers for Disease Control
outline management responsibilities, and
determined that the virus that causes
associates implement formal documented
COVID-19 is not transmissible by food,
programs, including Food Safety Plans.
Kroger followed guidance to close some
Kroger’s distribution centers follow
store departments, such as salad bars
established cold chain management
and bulk foods, and remove unpackaged
standards to help ensure perishable food
self-service items from sale. As certain
under our control is kept intact. This is of
restrictions were lifted, we temporarily
particular importance during inbound and
introduced protective single-use plastic
outbound transportation.
packaging for items like fresh pastries in
the self-service Bakery case. Our standards outline these requirements
in detail for our associates. Based on best
Manufacturing Facilities practices and regulatory requirements, key
All of our manufacturing facilities are elements of the standards include:
certified to Safe Quality Food Institute • Food safety responsibility
standards, and every plant has an assigned and documented practices
Quality Assurance Manager and a Safe • Proper receipt and storage of materials
Quality Food Practitioner. We manufacture
• Cleaning practices
45% of Our Brands food items at 34
Kroger-operated food processing plants • Maintenance for food safety
across the country, offering customers • Pest prevention to avoid
thousands of quality Our Brands and food adulteration
banner brand products like Private
Selection®, Simple Truth®, Simple Truth
Organic® and many more.
Our risk mitigation strategy includes: Learn more about Kroger’s
commitment to food safety and
• Leadership and training
leadership in the Consumer
• Hazard analysis and risk-based Goods Forum’s Global Food
preventive controls Safety Initiative Coalition of
• Sanitation control Action on food safety.
• Food allergen control
• Environmental monitoring programs
• Audits and food safety reviews
• Recall management
Kroger ESG Report & Resources15 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
rescue food for donation wherever
ZERO
food banks were able to collect it.
In 2020, the closure of restaurants,
hospitality and entertainment venues
created a surplus of some items, including
HERO
raw milk. Kroger’s Manufacturing and
Dairy Sourcing teams quickly scaled up
a Dairy Rescue Program to collect,
process and direct raw milk to families
in need. Through this program, Kroger
donated an additional 200,000 gallons
Food Access of milk in partnership with our dairy
With access to healthy, affordable food cooperative suppliers and farmers across
more important than ever today, we the Midwest and South.
continue to advance our brand promise, Kroger also introduced a brand new way
Fresh for Everyone. Many customers count to help families stretch their budgets.
on Kroger for low prices and unique, Kroger Chefbot is a smart recipe bot
personalized offers to make healthy that uses artificial intelligence to “see”
options even more affordable. We also nearly 2,000 ingredients and unlock
work with key partners to find creative almost 20,000 recipes. Developed with
ways to direct more fresh surplus food to integrated creative and media agency
individuals and communities in need. 360i and technology partners Coffee
Labs and Clarifai, @KrogerChefbot offers
Zero Hunger | Zero Waste families an innovative and easy solution
Kroger’s Zero Hunger | Zero Waste social for meals made with items already
and environmental impact plan is our at home.
commitment to help create communities
free from hunger and waste. As America’s
grocer, we promote healthy product
choices, as well as health and nutrition
services, for millions of customers every
day. In 2020, we directed a record Balancing the Plate:
640 million meals to our communities, Zero Hunger | Zero Waste Food Rescue 17.5%
19% 23% 19% 23%
including food and funds to help end
hunger at national and local levels. During Kroger is making solid progress on 29%
our commitment to donate more
the past four years, Kroger has directed a high-nutrition items like Produce, Deli,
total of nearly 1.8 billion meals toward our and Meat & Seafood as a share of
12% 12% 2017 2020
3 billion meal goal by 2025. 7%total surplus food rescue. Working with 7%
national partner Feeding America, we
Our Zero Hunger | Zero Waste Food 3%also achieved our goal to eliminate the 3%
Rescue program directs surplus food from64.59%
64.59% undefined “mix” category in 2020 to
64.59%
64.59% 64.59%
64.59%
10.7%
our stores, plants and distribution centers improve data and37% insights that inform 34.2%
37%
surplus food rescue.
to families in need. In 2020, associates
36% 36% 8.7%
rescued 90 million pounds of food for
hunger relief organizations across the
country. Total food rescue declined by 10%
Bakery Dairy Deli Meat & Seafood Produce Mix
due to pandemic-related disruptions in
donations. Despite this, we continued to
Kroger ESG Report & Resources16 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Health & Nutrition and medications. As a result, the pandemic budgets, nourish critical and chronic health Provided
Kroger Health leads the company’s
contributed to closing gaps in health care
access by making telehealth services
conditions, and learn to shop online and
cook at home. Use of Kroger’s telenutrition
560,000 COVID-19
health and nutrition strategy, services tests at pharmacies, clinics
more familiar. services increased significantly during
and programs, which include retail, mail and drive‑through testing sites
We believe promoting long-term health and the pandemic, up 300% between April
order, central fill and specialty pharmacy
nutrition is a shared-value proposition with 2020 and April 2021. The service remains
operations, retail health clinics, nutrition
the potential to improve population health available to the public today through paid-
and dietitian services, and health advocacy. Administered
and increase sales, customer loyalty and for appointments and insurance.
In 2020, the company’s health services
included COVID-19 testing, nutrition alternative revenue streams. We will extend Hometown Pickup
over 4.7M
support and some of the earliest deliveries our commitment to serving vulnerable
We recognize that many people live
COVID-19 vaccines
of COVID-19 vaccinations. populations beyond the pandemic, with through May 2021
outside of Kroger’s current retail store
supermarkets as destinations for both
A team of 22,000 health care practitioners, footprint, and some lack convenient
nutritious food and preventive health care.
including pharmacists, nurse practitioners, access to a full-service grocery store and
dietitians and technicians, serves over Innovative Solutions affordable fresh food choices. In the spirit Delivered
14 million customers a year. In 2020, we
connected with more people than ever Kroger continues to develop and test
of Fresh for Everyone, we are piloting a
new retail model, Hometown Pickup, which
over 840,000
through COVID-19 testing, vaccinations, creative solutions to improving food access
offers grocery order pickup locations in dietitian-approved
and nutrition. Last year, we introduced
and telehealth and telenutrition services.
three new ways to extend our reach.
neighborhoods within a certain radius of a meals to at-risk patients
Mass flu shot clinics in the fall helped Kroger store. Customers can place an order through the Pantry Staples Program
prepare for COVID-19 vaccine clinics Pantry Staples Program online, and Kroger brings it to a designated
in 2021. location for convenient collection. After a
In 2020, Kroger’s expert clinical dietitians
Kroger Health drives our ambitious Food late 2020 launch in select Ohio locations,
hand-selected nourishing pantry staples Offered telenutrition services across
as Medicine strategy, which aims to Kroger expanded the pilot to a number of
to be shipped to the homes of vulnerable
achieve a 20% improvement in five critical and food-insecure individuals across the
Kentucky communities earlier this year. 48 states
dimensions of population health—obesity, country. The pilot began with insurance-
diabetes, food insecurity, cost and product funded patients, who received Pantry
assortment—by 2025. The team’s first year Staples boxes to support healthy food
of programs was disrupted as services choices during stay-at-home orders.
pivoted to support pandemic-related Kroger Health is actively reviewing
efforts. But COVID-19 also confirmed feedback and options for scaling up the
the urgent need for action to improve reach of the program.
health among vulnerable populations
and communities of color, which were Telenutrition
disproportionately affected by the The pandemic advanced a nationwide
coronavirus pandemic. conversation about health and nutrition.
During the pandemic, Kroger Health Because choosing the right foods can be
partnered with many federal, state and daunting, Kroger offered free nutrition
local agencies, programs and health counseling via video chat with expert
providers to assess needs and expand registered dietitians—credentialed by the
services. By quickly introducing innovative Commission on Dietetic Registration—
solutions, we met customers where they as an emergency response to support
were—often sheltering at home and public health in 2020. Through thousands
connecting via technology—throughout of free consultations, patients received
the year. Remote clinics and free personalized nutrition care from the
prescription delivery gave patients safe, comfort and safety of home. Telenutrition
contact-free access to nurse practitioners services help customers navigate their food
Kroger ESG Report & Resources17 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Customer Experience Customers can now shop online for over
70,000 items, with more regularly added.
In 2020, the Kroger team learned we
We offer 2,223 curbside pickup locations,
are capable of doing more and pivoting
2,472 delivery locations and same-day
quickly to offer what matters most to our
home delivery from 2,385 stores through
customers and communities.
our partnership with Instacart. Kroger
Since the beginning of the COVID-19 is expanding home delivery services
pandemic, our priority has been to in existing and new markets through
safeguard our associates and customers the country’s first Customer Fulfillment
while keeping stores open to provide Centers, powered by Ocado.
dependable access to food and essential
• Personalization: Our data and
supplies. We implemented new safety and
personalization strengths enable
cleaning procedures in all of our stores
meaningful customer moments across
and facilities, including safety partitions,
channels to address specific needs and
mask requirements, physical distancing
enhance the overall relationship with
reminders and customer capacity limits.
Kroger. Our customers—nearly 60 million
The pandemic also changed how our households across the country—are at
customers enjoy food and family meals. the center of everything we do. In 2020,
We continue to see people work remotely we shared nearly 11 billion personalized
and prepare more meals at home. recommendations every week, which
We expect some of these trends and amounted to more than half a trillion
preferences to persist going forward, over the year.
and we remain committed to putting
• Fresh: We continue to bring our brand
our customers first. Our Marketing,
promise—Fresh for Everyone—to life
Merchandising and 84.51° customer
across the company. Many customers
insights teams lead Kroger’s management
focused on fresh categories in 2020,
approach to customer experience.
with strong sales in Produce, Meat &
Kroger’s Fresh for Everyone brand Seafood, Deli/Bakery and meal solutions.
recently celebrated its first anniversary. Home Chef finished the year with
The marketing campaign is reaching new record sales, capturing additional share
heights in ad effectiveness, and customers from restaurants and other retailers.
have responded positively. We continue to promote and expand
Our key strategic focus areas include: affordable access to fresh, healthy foods.
• Seamless ecosystem: New customers • Our Brands: Our Brands achieved its best
are engaging in both our in-store and year ever in 2020, exceeding $26.2 billion
online offerings, resulting in a 98% in sales, and our Simple Truth® brand
customer retention rate. We tripled our exceeded $3 billion in annual sales for
digital sales in 2020, reflecting proactive the first time. We saw 20% growth in
investments in our network and our our premium culinary brand, Private
team’s ability to move quickly to meet Selection®, while our Simple Truth Plant
customers’ demands for safe, low-touch Based® platform launched 53 new items
and contact-free shopping options. last year and continues to resonate
with customers.
Kroger ESG Report & Resources18 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Customer Insights 84.51° data science and tools—also inform partnership with Ocado, one of the world’s Associate health and safety in our retail
Kroger’s Net Promoter Scores®, which improvements in service, product quality largest online grocery retailers, Kroger is stores, corporate offices, manufacturing
measure customer and stakeholder and item assortment. We apply customer bringing fresh food to current and new plants and distribution centers follows our
approval, continue to improve, both for equity capabilities to understand how customers in select markets. This strategic established management approach:
in-store shopping and pickup services, our customers perceive Kroger relative to partnership leverages advanced robotics • Safety Training and Resources (STAR)
reflecting ongoing improvements in what our competitors, and we continue to see technology and a seamless fulfillment Safety 360 teams
customers care most about, including improvement in areas like digital, fresh system for customers across the U.S. To
• Department-specific safety requirements
wait times, items in stock and friendly items and personalization. date, Kroger has named nine locations for
new Customer Fulfillment Centers featuring • Associate training and education
associates. New social listening capabilities
Kroger Delivery the Ocado Smart Platform. The first two • Injury analysis and corrective action
help us monitor how customers talk about
Kroger in social media channels across a Our seamless strategy includes a facilities—in Monroe, OH, and Groveland, FL through a centralized Enterprise
wide range of topics. Satisfaction surveys new game-changing online shopping —opened in spring 2021. Compliance Management System
and purchasing insights—using proprietary experience for our customers. Through our • Safety observations and peer feedback
Associate Health & Safety
Protecting our associates and customers Added Measures
is always critical but, during the COVID-19 Early in 2020, we recognized our
pandemic, health and safety has taken on responsibility to keep stores open to
even greater importance. provide continued access to food and
We believe our leading safety results other essentials. We quickly implemented
make our stores, manufacturing plants additional measures to help protect our
and distribution centers among the safest associates’ and customers’ safety, such as
places to work in the U.S. We follow safety partitions, enhanced cleaning and
established policies and standards to sanitation protocols, customer capacity
meet or exceed relevant Occupational limits and more.
Safety and Health Administration We also required associates to wear masks
(OSHA) requirements, including a hazard and asked customers to do the same. We
communications plan, emergency encouraged associates to monitor their
evacuation guidelines and PPE guidelines. health, provided free COVID-19 testing
Kroger has detailed requirements based on medical need, and offered paid
and processes to prevent, review and sick leave to help associates and their
address safety concerns. Through clearly families comply with quarantines. For
communicated expectations, routine additional details on these measures,
monitoring and regular safety training, we please see Kroger’s COVID-19 overview.
focus on reducing the number of injuries As COVID-19 vaccines became available,
and accidents across our workplaces. we also provided early access to
Dedicated on-site safety teams meet associates where possible and offered
routinely to review recent injuries, audit a $100 payment for every associate
results and resolve any issues. who received the manufacturer-required
number of doses.
Kroger ESG Report & Resources19 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
In 2020, Kroger created Sharing What unique local needs. Leaders often serve as
We’ve Learned: A Blueprint for Businesses, non-profit board members and volunteer
a comprehensive resource for businesses time in ways that align with our mission.
of all sizes and sectors of the economy. Please find additional details in our
This 80-page guide is designed to help Community Engagement Policy.
businesses navigate different phases of the In 2020, critical product donations were
pandemic with recommendations, insights, supplemented by increased corporate
best practices and downloadable assets to donations and grants from Kroger, The
advance workforce safety for all. Kroger Co. Foundation, our private
Kroger’s company-wide OSHA injury foundation, and The Kroger Co. Zero
rates for 2020 were affected by increased Hunger | Zero Waste Foundation, a
hiring and turnover, and by increased registered public charity. We strategically
hours worked in all facilities to keep gave more to organizations and partners
stores open and stocked during the providing meals and nutrition during this
pandemic. Kroger actively monitored time of increased need.
COVID-19 cases and case rates among We continue to offer our customers and
our associates, which were generally well other partners easy ways to give back by
below our surrounding communities. A few rounding up their purchase to the nearest
Kroger‑operated facilities experienced brief dollar to benefit The Zero Hunger | Zero
temporary closures to comply with local Waste Foundation when they shop, or by
public health regulations and complete donating directly in store or online.
deep‑cleaning procedures.
Earlier this year, Kroger helped motivate
Kroger-operated food processing facilities more Americans to get the COVID-19
also implemented new processes to protect vaccine to better protect communities
associates in 2020. Through a continued across the country. Through a Community
partnership with Safety in Motion®, Inc., Immunity Giveaway, Kroger Health offered
the manufacturing team achieved a 12% associates and customers the chance to
reduction in the number of general injuries win one of five $1 million prizes or one of
last year. Our team of safety specialists 50 prizes of free groceries for a year.
developed online training for OSHA safety
requirements to enable associates to
complete required training virtually due to
restrictions on classroom-style learning.
For more details on our
Please see more details about our safety philanthropic grant-making,
performance in the appendix. please see The Kroger
Co. Foundation’s 2021
Community Engagement Report and The Kroger Co.
Kroger’s goal is to be a trusted and Zero Hunger | Zero Waste
welcome partner in the communities we Foundation’s 2021 Report.
call home. Our business and Corporate
Affairs leaders proactively engage
public officials and other community
stakeholders to understand priorities,
listen to concerns and help address
Kroger ESG Report & Resources20 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Just & Inclusive Economy
Material Topics Our Impact in Numbers 2020 Demographics All Associates
• Diversity, Equity More than 100,000 jobs 96% of leaders completed Full Time Part Time Total 2019 2020
& Inclusion filled in the early days of Unconscious Bias training
the pandemic, including Women 83,250 133,912 217,162 White Women 32.5% 31.6%
0% of store leaders first
7
• Talent Attraction temporary hires from other joined Kroger as part-time Men 87,952 121,617 209,569 Women of Color 18.7% 19.3%
& Retention sectors associates
More than $2.5 billion verage wage for hourly
A
Total 171,202 255,529 426,731 White Men 31.2% 30.6%
• Labor Relations invested to support our associates is more than Men of Color 17.7% 18.5%
associates during the $15.50/hour in Kroger-
pandemic, including $1 billion operated stores
to better secure pensions
Average wage for hourly
for over 30,000 associates
store associates is more
$7 million in emergency than $20/hour, including
financial assistance for comprehensive benefits
associates through our
Helping Hands Fund
Public discourse on social justice in 2020 reflects the As a national grocery retailer with local Kroger publicly affirmed our commitment
reach, Kroger strives to reflect the with our Framework for Action: Diversity,
continuing need for racial equity and inclusion around the communities we serve and foster a culture Equity & Inclusion, which features
world, in the U.S. and in our neighborhoods. These principles that empowers everyone to be their true both immediate and longer-term steps
have been among Kroger’s long-standing Values for decades; self, offers opportunities to grow and developed in collaboration with associates
advance, and fulfills Our Purpose—to Feed and leaders to accelerate and promote
however, it’s clear that everyone must do more to address
the Human Spirit. greater change in the workplace and in
inequities in the systems designed to meet the most basic the communities we serve. This framework
human needs. Diversity, Equity & Inclusion outlines five focus areas: Create More
The events of 2020 tested our collective Inclusive Culture, Develop Diverse Talent,
resolve to address critical social issues, Advance Diverse Partnerships, Advance
particularly how we advance diversity, Equitable Communities, and Deeply Listen
equity and inclusion among our associates. and Report Progress.
Kroger’s Chief People Officer leads Human The Kroger family of companies provides
Resources & Labor Relations, which inclusion training for leaders, including
includes our Diversity, Equity and Inclusion Unconscious Bias training. In 2020, 96%
team. This function—with human resources of all leaders completed this development
professionals in place across our lines of course. Inclusion training extends to all
business and retail divisions—advocates associates in 2021. Most work locations
Contributing to the SDGs
for and fosters an associate experience also have an inclusion-focused team, called
that reflects our Values of Diversity and an Our Promise team. These teams seek
Inclusion. It also monitors and measures direct input from associates; recommend
progress on current goals and identifies ways to improve diversity, equity and
potential opportunities for improvement. inclusion; and facilitate communications on
business priorities.
Kroger ESG Report & Resources21 2021 Kroger ESG Report Introduction Our Approach People Planet Systems Appendix
Enabling Connections Workplace Equity
To promote ongoing dialogue, we also Kroger strives to attract, retain and develop Framework for Action: Diversity, Equity & Inclusion
hosted associate listening sessions across leaders and associates to best reflect the
the company and shared Allyship Guides, communities we serve. We offer accessible
which aim to help leaders and people of employment for a wide range of people
C
reate More Develop Advance
all backgrounds move from awareness across the country. Because of our unique
Inclusive Diverse Talent Diverse
to advocacy. We also launched a new business model, we help unlock economic
Culture Partnerships
internal Diversity, Equity & Inclusion opportunity for nearly half a million
Advisory Council made up of leaders people of all ages and aspirations, from 1. C
reate a DE&I 3. Improve diverse 5. Increase spend
from across the organization. The new those wanting an entry-level part-time Advisory Council talent recruiting with diverse
Council works closely with senior officers job to graduate-degree specialists across to advance our by partnering suppliers from
and leaders across our business to corporate functions. long-term DE&I with Historically $3.4 billion to
identify opportunities and action steps for To achieve our goals, Kroger strategically commitments, Black Colleges & $10 billion by 2030.
improvement. We also formed an Associate invests in our associates’ growth and reporting to senior Universities and 6. E
nsure our media
Influencer Group comprised only of hourly movement across levels, lines of business leadership. community colleges. partners align
associates to help ensure representation and geographies. Our goal is to shift the 2. Provide Unconscious 4. Establish two- with Our Values
from all levels of the company. demographic representation of women and Bias training to way mentorship and that we
Kroger also operates 12 Associate people of color at the local and company- every leader in 2020 and advocacy reach diverse
Resource Groups (ARGs), or affinity wide levels to reflect our changing country, and DE&I training program between customers through
groups, for our people with chapters communities and local neighborhoods. for every associate high potential our marketing
across the organization. These groups The Diversity, Equity & Inclusion Advisory in 2021. diverse talent and spend, partners
enable connections across our family of Council is currently engaging senior leaders senior leaders. and strategy.
companies, influence business decisions, and associates to define our aspirations.
lift up shared experiences, encourage As part of Kroger’s Framework for Action,
cross-ARG membership for awareness, and we also announced the first community-
promote personal and professional growth. based grantees for The Kroger Co.
Kroger leaders sponsor and personally Foundation’s Racial Equity Fund earlier Advance Deeply Listen
engage with the ARGs. this year. Equitable and Report
Communities Progress
Learn more in The Kroger Co.
Foundation report. 7. D
eploy funds to 9. E
ngage external
support impactful stakeholders to
Reflecting Our Communities
approaches to seek perspective
U.S. Population Kroger Operating Total Kroger advance racial equity and co-create more
2018* Area Population Associates with community just and equitable
2018* 2020** partners. communities.
White or Caucasian 63% 59% 64%
8. Encourage associates 10. Provide associates
to vote and provide with platforms to
voter registration/ continue sharing
Hispanic or Latino 17% 19% 13%
ballot applications their stories and
in stores. feedback with
Black or African American 12% 13% 15% our leaders.
Asian or Asian American 5% 6% 3%
Other 3% 3% 5%
*U.S. census estimate data
**Kroger data
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