Our Shared Journey of Continuous Improvement - Cameron Bruett, Head, Corporate Affairs, JBS USA & Pilgrims and President of the Roundtable for Sustainable Beef, from the 2015 Animal Agriculture Alliance Stakeholders Summit, The Journey to Extraordinary, May 6 - 7, 2015, Kansas City, MO, USA. More presentations at http://www.trufflemedia.com/agmedia/conference/2015-the-journey-to-extraordinary

1. 14th Annual Stakeholders Summit
May 6, 2015
Kansas City, Missouri
SUSTAINABILITY
Our Shared Journey of
Continuous Improvement

2. FOUNDED
1 9 5 0 s
B R A Z I L
IPO
2 0 0 7B R A Z I L
200,000
T E A M M E M B E R S
W O R L D W I D E
307PRODUCTION
CONTINENTS
UNITS ON 5
2014 Revenues: $50 Billion+
JBS S.A. At a Glance

3. 1
st
L A R G E S T
GLOBALP RO D U C E R
BEEF & LAMB
L A R G E S T
GLOBALCATTLE FEEDER
1
st
L A R G E S T
GLOBALLEATHER PROCESSOR
1
st
L A R G E S T
GLOBALCHICKEN PRODUCER
1
st
L A R G E S T
P O R K
P R O D U C E R
3
rd
Global Market Leader

4. Rank Global Food Companies 2013 2012 2011
1 Nestle SA 70,044 66,923 66,700
2 JBS SA 43,216 38,902 37,024
3 PepsiCo 34,534 33,400 31,921
4 Tyson Foods Inc 34,374 33,055 32,266
5 Unilever NV 30,278 31,079 31,733
6 Mondelez International 29,469 29,172 29,753
7 Danone SA 28,290 26,834 26,898
8 General Mills Inc 17,909 17,774 16,657
9 ConAgra Foods Inc 17,702 15,426 13,367
10 Kraft Foods Group Inc 15,537 15,553 15,649
TopGlobalFoodCompaniesBySales($Million)
Source: Bloomberg
Recognized GLOBAL Leader

5. “SUSTAINABILITY”

6. The Consumer’s View

7. The Consumer’s View

8. 8
IF We Don’t Define It…

9. 9
IF We Don’t Define It…

10. 10
IF We Don’t Define It…

11. 11
Perspective Matters

12. 12
Disconnect from Modern
Agriculture
There are over 313,000,000 people living in the
United States. Of that population, less than 1%
claim farming as an occupation (and about
2% actually live on farms).

13. “We’re inside of
corporate
boardrooms across the
country HELPING
major food retailers
implement policies to
eliminate gestation
crates from their supply
chains.”
Paul Shapiro
Vice President
Farm Animal Protection
HSUS
Activist Pressure

14. “We’re inside of
corporate
boardrooms across the
country HELPING
major food retailers
implement policies to
eliminate gestation
crates from their supply
chains.”
Paul Shapiro
Vice President
Farm Animal Protection
HSUS
Activist Pressure

15. 15
I n c r e a s e d C o n s u m e r A c c e s s
t o “ I n f o r m a t i o n ? ”

16. 16
I want local and natural because it’s better for the environment and my health
(But there is no health benefit difference and those systems cannot be scaled
to meet the environmental and food security challenges of future generations)
I don’t want food from conventional, BIG AG because it’s bad for the environment
and my health
(But modern agriculture represents the most efficient, safest, affordable,
seasonally-independent and globally dispersed food supply in the history of
mankind)
Consumer Confusion

17. “Both humanity’s capacity to innovate and the
incentives to innovate are greater today than at
any other time in history.”
- Ben Bernanke,
Former Chairman of the U.S. Federal Reserve
Innovation is the Key –
But Can We Use It?

18. 18
“GOOD FOOD” Vs.
What Exactly?
A Poor Place From Which To
Begin A Conversation

19. 19
Small; But MIGHTY influence
48% under 35 years old
62% Female
46% Parents
Income WELL
above average
Concerns of the Full
Stomach

20. 20
Perspective Matters

21. Commercial Res pons e =
“Sus tainable Sourcing ”
• McDonald’s sourcing “verified sustainable
beef” beginning in 2016
21

22. • WALMART announced “standard of excellence
program” that will touch at least 50% of the cattle
industry by the close of 2016.
• Beef pilot program that includes environmental
criteria and 15% of their beef supply will be
sourced under
this criteria
by 2023.
22
Commercial Res pons e =
“Sus tainable Sourcing”

23. 23
U.S. Government Response
Production intensity and emission intensity are inversely
related though some promote less intense systems as more
“sustainable.”
There is no agreed upon definition for sustainability nor
a common methodology by which to measure
sustainable outcomes.
Excludes lean meat; Allows for
moderate alcohol consumption

24. 2050 GLOBAL TRENDS
• Global Income
• Global Population
• Global Consumption
3 Billion in Middle Class Growth
• Currently consume 1.5x Planet’s Available Resources
• By 2050,Will Need 70% More Food
• Consuming 3x the Planet’s Available Resources

25. 25
Climatic Changes &
Impacts on Agriculture

26. 26
Water, Water and LESS
Water

27. 27
HOW DO WE MEET THE
CHALLENGE?

28. U.S. Beef Sustainability:
The Real Story

29. U.S. Beef Sustainability:
The Real Story

30. 30
From 1959 to 2009, U.S. Pork Producers Significantly Reduced
Their Environmental Impact
U.S. Pork Sustainability:
5 0 Y e a r s o f I m p r o v e m e n t

31. 31
I t ’ s A l l A b o u t t h e E n v i r o n m e n t ,
R i g h t ?
Many people assume
that the term
sustainability only relates
to “preserving the
environment.”
This is not true.
Sustainability is a much
broader discipline that
involves improving short-
and long-term
profitability by managing
economic, societal, and
environmental factors to
meet the challenges of
tomorrow.

32. 32
Responsibly meeting the needs of the present
while improving the ability of future generations
to responsibly meet their own needs…
SUSTAINABILITY
Simply Defined

33. L i m i t T h e S c o p e ; L i m i t
O p p o r t u n i t y
33
SOCIAL PILLAR:
Addressing animal welfare,
worker safety, human rights,
community involvement,
property rights, beef safety,
beef quality, consumer trust
and food waste.
ECONOMIC PILLAR:
Addressing profitability,
shareholder return, capital
investment, food
affordability, license to
operate, efficiency and
innovation.
ENVIRONMENTAL PILLAR:
Addressing water, air
quality, deforestation,
conservation, land
management, waste,
energy, greenhouse gas
emissions and biodiversity.
Limited Focus
If your sole focus is on one pillar or
only on environmental metrics on
the farm, you negate the shared
responsibility of and the shared
opportunities for the entire global
beef value chain.
This holistic approach to
sustainability forces stakeholders to
view the beef value chain
comprehensively rather than
focusing on their “issue du jour.”

34. 34
34Source: Schlange & Co.Copyright BASF
Relevanceofissuesfrom
externalstakeholders’perspective
1 2 32,51,5
2
1
3
2,5
1,5 medium
high
A
C
B
D
E
A
C
B
D
A
CB
D
E
F
A
C
B
D
G
E
Relevance of issues from the company’s perspective
Economic issues
A Business ethics & business integrity
B Community investment
C Company transparency
D Compliance with law
E Local sourcing
Product responsibility issues
A Consumer health & safety
B Consumer information & education
C Technology in agriculture
D
Value chain transparency
(traceability)
Social issues
A Animal health & welfare
B Human rights
C Impact on community
D Labor rights
E Workers’ health & safety
Environmental issues
A Biodiversity
B Emissions to air
C Emissions to water
D Energy use
E Land management
F Waste
G Water use
M A T E R I A L I T Y : R a n k i n g t h e
H O T S P O T S

35. Global Reporting Initiative (GRI)
Categories
These are the traditional categories
most people associate with
sustainability

36. Global Reporting Initiative (GRI)
Categories
The social pillar is
critically important.
Within this pillar
arguably lies the
greatest opportunity to
demonstrate and align
our values with those of
the consumer.

37. 37
• All systems can
be sustainable
• Continuous Improvement
• Consumer choice
• Convey sustainable
message to consumer
• Consumer wants license to feel
good about products already
enjoy
• Successfully intensified production over
time BUT
• Aging producer base
• Supply constraints
• Producing out-of-spec
• Regulatory pressure
• $$ barriers to entry
• Technology an option?
Sustainable Challenge –
More with Less?
Sustainable Protein?
• 7.18 B Global Consumers. 9+ B by 2050;
• 2B in the middle class; 4.9B by 2030;
• Consumption of animal protein to
increase;
• 99% want choice;
• Food evangelists: 22%
• 1% vocal radical –reduce choice.
• Want to make supply chain claims;
• Make sustainable supply chain demands
on immediate supplier;
• React to 1% pressure.
• Packer/Processor sits between
retailer & producer;
• Animal Welfare responsibility;
• Food safety responsibility;
• Labor, Worker Safety responsibility;
• Technology user;
• Low margin operator.
• Make demands on retailers and farm
operations – land management
• Cannot influence 7.18 B consumers
but influence more than 1%
• Cannot influence the millions of
family farmers and growers;
• Can leverage vulnerabilities of large
entities in middle;
• Make unrealistic demands that
prevent us from meeting the global
challenge
Global Consumers
Retailers
Packers/Processors/Integrators
NGOs/Activists
Producers/Growers/Feeders
• Focus of many supply chain demands;
• Environmental responsibility;
• Technology user;
• Used by corporations as best message
vehicle for consumers.
C u r r e n t P l a y i n g F i e l d – R i s k o r
O p p o r t u n i t y

38. 38
GRSB Has Chosen A
Different Approach

39. 39
Many Knights; No Head

40. 40
Original NGO paradigm:
Convince large European and U.S. multinationals to make market-
based decisions to adopt eco-labels, standards or certifications as a
means to address environmental concerns like climate change and
sustainability; and socioeconomic issues such as trading conditions
for farmers and slave labor.
Roundtables as a Means for
Market Transformation

41. 41
A History of Roundtables
1988 (Europe) –
Coffee, Cocoa, Sugar,
Tea, Bananas, etc.
2006 (Netherlands) –
Global Standard,
certification audit,
5 Principles, 90+ indicators
2004 (Europe) –
Global Standard,
Certification audit,
8 Principles, 130+ indicators
2008 (Europe) –
Global Standard,
Certification audit,
6 Principles, 55+ indicators
2005 (Europe) –
Standard System,
Self-assessment, audits,
6 Principles, 45 criteria
2013 (Switzerland) –
Global Definition,
No Global Standard or
Certification,
5 Principles, 45 criteria,
0 Global Indicators???

42. 42
Roundtables = Marketing
Original Roundtable paradigm:
Corporations, in their zeal to proclaim their product offerings as
“sustainable,” would leverage Roundtable certifications, seals,
standards, etc. to market their products as environmentally friendly
and socially responsible.
Have we lost focus on our ultimate goal in the process?

43. 43
What Are We Creating?
Competitive Niche?
Or Precompetitive Norm?

44. 44
Sustainable Baseline
P r e c o m p e t i t i v e Vs . D i f f e r e n t i a t i o n
Commercial Differentiation
Opportunities for Innovation &
Product Differentiation
beyond GRSB baseline
Precompetitive Sustainable Beef
Demonstrated Commitment & Performance
based on GRSB Principles & Criteria

45. 45
A n E n t i r e S U S TA I N A B L E M E AT C A S E
R a t h e r t h a n S u s t a i n a b l e & N o t S u s t a i n a b l e
T r a d e - O f f s

46. 46
Are We Moving the Curve?
Innovators will
readily adopt
sustainability
measures based on
market opportunity
But how do we get average to low-
performing producers to improve
performance? With 100 KPIs required
for certification in a “no premium”
context?

47. 47
Are We Meeting the Key
Challenges?
“Warren Buffett found it 'extraordinary' that academics studied
such things. They studied what was measurable, rather than what
was meaningful. 'As a friend said to him, ‘To a man with a hammer,
everything looks like a nail.’ ”
Roger Lowenstein, Buffett:
The Making of an American Capitalist
“If a measurement matters at all, it is because it must have some
conceivable effect on decisions and behavior. If we can’t identify a
decision that could be affected by a proposed measurement and how
it could change those decisions, then the measurement simply has
no value.”
Douglas W. Hubbard
“We tend to OVERVALUE the things we can measure and
UNDERVALUE the things we cannot.”
John Hayes

48. 48
1 out of 3 Calories
WASTED
1,160 Pounds of Annual Average Food Loss for a U.S. Family of Four

49. 49
No One Wants
to “Certify Poverty ”
By some estimates, less than HALF of
certified sustainable agricultural
products are SOLD as certified
sustainable products.

50. 50
Simplicity & Focus
Focus on Performance not
Prescriptive Practices
Promote Innovation over
Compliance
Communicate, Communicate
& Communicate
Prioritize the Challenges &
Create & Measure Impact

51. 51
Global Roundtable for
Sustainable Beef

52. 52
The Global Roundtable for Sustainable
Beef (GRSB) is a global, multi-stakeholder
initiative with a mission to
advance continuous
improvement in the
sustainability of the global
beef value chain through
leadership, science and
multi-stakeholder
engagement and collaboration.
Who We Are

53. 53
“A top-down, corporate fascist regime controlling
every entity in the beef supply chain, including
and specifically targeting
cow-calf
producers….”
Who We Are NOT

54. 54
VISION
We envision a world in which all aspects
of the beef value chain are
environmentally sound, socially
responsible and economically viable.

55. CIVILSOCIETYCOMMERCE&PROCESSING
RETAIL
PRODUCER
OBSERVING
ROUNDTABLES
Dr. Judith
Capper
Dr. Holly Gibbs
Dr. Kate Varela
Jack Hanson, Willow Creek Ranch
Tom Hogan, Snappy Jack Cattle
Dr. Sandra Jepcott
Dr. Laurie Marker,
Elandsvreugde
Mt. Brisbane Pastoral Company
PRODUCER
MULTI - STAKEHOLDER
MEMBERSHIP

56. 56
What Are We Trying to
Accomplish?
A balanced, science-based
approach to beef
sustainability that
empowers rather than
punishes and stimulates
innovation and adoption
of best practices.

57. Global
Roundtable
established
2011 2012
Legal
Registration
GRSB
Mgmt Structure
& TWG
operational
2010 2013 2014
Principles &
Criteria
Finalized
Articles &
Bylaws Revised
for new
governance
structure
2015
GRSB TIMELINE
PLANET, PEOPLE, ANIMALS & PROGRESS
Release of
FIRST GLOBAL
DEFINITION
for Sustainable Beef

58. 58
2 0 1 4 G l o b a l C o n fe r e n c e o n
S u s t a i n a b l e B e e f
The 2014 Global
Conference on Sustainable
Beef was held November 2-
5, 2014 in São Paulo,
Brazil.
Nearly 300 participants
from 21 different Nations
attended.
96%+ approval rate from
membership.
Adoption of Global
Definition

59. 59
Global Definition in
Summary
We define sustainable beef as a socially responsible,
environmentally sound and economically viable product
that prioritizes Planet, People, Animals and Progress.

60. 60
Five Principles for
Sustainable Beef
GRSB has worked hard to
combat the notion that
technology CANNOT be a
part of the solution to the
sustainability challenge.

61. 61
L o c a l S o l u t i o n s ;
G l o b a l I m p a c t
Global
Definition
Regional
Application

62. 62
Re cognizing & Ce le brating
Progress
PLANET, PEOPLE, ANIMALS & PROGRESS
Promoting Consistency &
Transparency in GRSB’s
Recognition of Successful Regional
Applications of the Global
Definition
Regional Roundtables remain
empowered to achieve sustainable
outcomes leveraging GRSB
Principles & Criteria based on their
system’s specific challenges

63. 63
USRSB Membership (65)
Blythe
Family
Farms, LLC
Great Plains Cattle
Feeders
Tejas Feeders
Ltd.

64. 64
Responsibly meeting the needs of the present
while improving the ability of future generations
to responsibly meet their own needs…
Staying Focused on the
Sustainable Challenge

65. 65
These wonderful people could be our customers, but
they are not our sole customers
Sustainable Product &
Sustainable Systems for All
These wonderful people also need to eat. Both groups
deserve sustainable choices more than sustainable marketing.
Will the decisions we make as sustainable beef roundtables
make sustainable beef accessible to all or promote the
creation of another unscalable niche?

66. 66

67. 67
www.grsbeef.org

68. www.jbssa.com