Frontier's Sustainability Report sourcing

SOURCING

Our company sourcing objective is to use only sustainably sourced botanicals in our products.

We define sustainably sourced botanicals as those that are certified organic, Fair Trade certified, or sourced from our own Well Earth partners. We are committed to increasing the amount of certified organic, Well Earth, and Fair Trade crops we purchase every year. Agriculture has significant impact on the quality and availability of water, climate change, biodiversity and soil quality. There are also unfair farm labor practices and small farmers' rights problems around the world. We believe that organic and sustainable crop production are imperatives for creating a healthy, just, and balanced world.

  2009 2010 2011 2012 2013

Lbs Sustainably Sourced (millions)

3.0 3.4 4.0 4.6 5.5
% of Total Pounds Purchased 53% 53% 57% 57% 55%

Pounds of sustainably sourced botanicals have continued to increase steadily since 2009. As a matter of fact, our pounds of sustainably sourced materials have increased over 61% since 2009. As the table above shows we purchased over 5 million pounds of sustainably sourced materials in 2013. It has been a mixed bag though as our percentage of total pounds purchased has declined slightly from 2012. This is due to the rapid growth of our Aura Cacia business where products such as sea salt (used in bath salts for instance) cannot be classified as sustainably sourced under our current definition.

Well Earth®

Well Earth is our proactive program to find and develop ethical sources of high-quality botanical products.

well earthOur goals for this program are to:

• Get close to the source and learn from the farmers who grow the crops
• Cut out non-value-adding intermediaries and use the resulting savings to pay higher prices to the farmers while reducing our costs
• Improve the quality of our products
• Increase our in-stock ratesj
• Support small farmers around the world who are committed to sustainability
• Support the expansion of organic production
• Create long-term, mutually beneficial partnerships with suppliers, based on trust and respect

Our Well Earth program continues to benefit our farmer groups and ourselves. Focusing on what we term business building (improving suppliers’ infrastructure and product quality) and community building (investing funds in the suppliers’ communities in-country), we have provided more than $329,000 to fund projects. These include building and funding schools in Madagascar and Vietnam, bringing clean water to communities in Asia, and providing training to farmers and growers in the United States.

  2009 2010 2011 2012 2013
Well Earth Lbs Purchased (000's) 486 970 1,442 1,450 2,130
% of Total Purchases 9% 15% 20% 18% 22%

The Well Earth program provides benefits for farmers where they can enter into long term contracts with Frontier to confidently plan their production and sustainable operations. Furthermore, we invest in suppliers’ infrastructure as well. We’ve helped support their processing capabilities, helped them train staff and continue to support their growth in sustainable agricultural practices.

OUR CURRENT WELL EARTH PARTNERS

The Well Earth program is beneficial to Frontier as well. We receive higher quality products from our Well Earth vendors and since we are so close to the source we get to know our products even better and the conditions in which they are grown. This allows us to continue our passion of bringing our customers the highest quality products straight from the farm to their homes.

Fair Trade™

Fair Trade continues to be a focus of our product offerings as well and has seen substantial growth throughout the years on a pound-basis, but has decreased as an overall percentage of our pounds sourced. This is due somewhat to the uncertainty created in the trade in regards to FLO Europe and Fair Trade USA. Though we are committed to its principles and continue to support the program, other segments of our business – such as our Well Earth supplier materials – are growing faster.

  2009 2010 2011 2012 2013
Fair Trade Lbs Purchased (000) 416 386 442 398 516
% of Total Purchases 8% 7% 6% 5% 5%

OrganicOrganic

Certified organic products are the heart of our sustainable sourcing efforts — as they have been since the 1980s. We have used third-party certification for many years, and any of our products — Aura Cacia, Frontier or Simply Organic — that are sold as organic are third-party certified organic in compliance with the National Organic Standard (NOP). All new products added in our food and flavoring business must be certified organic, and certified organic ingredients are used whenever possible in new Aura Cacia products. Both our products and manufacturing facilities are certified organic by Quality Assurance International (QAI).

Organic Production 2009 2010 2011 2012 2013
Organic Lbs Purchased (000's) 2,986 3,665 4,035 4,487 5,308
Organic Pounds as % of Total Pounds 56% 55% 56% 55% 54%

Our total pounds of organic purchases have increased over 77% since 2009 even though as a percentage of total pounds purchased, it has decreased slightly to 54%. This is once again due to the growth of products that cannot be certified organic – such as sea salt.

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We believe that organic and sustainable crop
production are imperatives for creating a healthy, just, and balanced world.