JDE Peet’s N.V.

Annual
Report 2021

Disclaimer — This copy of the annual report of JDE Peet’s N.V. for the year 2021 is not in the ESEF-format as specified by the European Commission in Regulatory Technical Standard on ESEF (Regulation (EU) 2019/815). The ESEF reporting package is available at www.jdepeets.com

Table Of Contents

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JDE Peet’s N.V.

Annual Report 2021

Introduction

JDE Peet’s N.V.

Annual Report 2021

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Key Highlights 2021

Financial

Sustainability

EUR 1.4bn

Free cash flow

88% 2

packaging designed to be reusable, recyclable or compostable

EUR 7bn

Total sales

EUR 1.3bn

Total Adjusted EBIT 1

EUR 1.1bn

Operating Profit

6.1%

1.5%

Organic Sales growth

Organic adjusted EBIT growth

4,500 cups

of coffee & tea served

every second

Decreased scope 1, 2 & 3
GHG emissions by 5%
versus 2020

470,000

smallholder farmers reached directly since 2015

50+ projects

active projects with smallholder farmers

+85,000

1     More information on the non-IFRS measures can be found in the ‘Non-IFRS Measures’ in the ‘Financial performance’ section. Further information on the definitions of these non-IFRS measures can be found in the ‘Glossary’ section.

2     Refer to the 'Improving our packaging' and 'About this report' section for more information on this target

5%

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JDE Peet’s N.V.

Annual Report 2021

Letter to our shareholders 

In 2021, the world again had to deal with a particularly challenging environment, impacted by government restrictions, unprecedented disruptions in global supply chains, and the onset of historically high inflation.  Amidst all this, our people worked extremely hard, and in a very agile way, to successfully unleash the possibilities of coffee & tea to create a better future. For us, a better future means protecting coffee and tea for generations to come. It also means empowering our employees and partners to do what they do best every day. And it means ensuring that everyone can enjoy the coffee and tea they love.

In 2021, we refocused on our founding entrepreneurial values. We set out our new strategic framework, reinvested in our powerful portfolio of brands and products, reinforced our operational discipline, stepped up our sustainability ambitions, and further strengthened our financial position.

Financial Performance

Despite the challenging operating conditions, we delivered a strong, broad-based set of results, driven by a new level of high quality revenue growth. All the newly defined priorities – related to geography, channel, brand and category - recorded a high-single-digit to double-digit organic sales growth level.

The ongoing disruption caused by the pandemic meant that many countries continued to advise people to work from home, while government measures around the world continued to lead to reduced activity levels in the Away-from-Home channels. However, we saw these levels begin to gradually recover during the year, as restrictions were lifted. As a result, In-Home performance remained strong while the results of the Away-from-Home businesses improved materially over the course of 2021.

As inflation started to rise across a variety of input costs during the year, we undertook a number of mitigating actions and set up a diligent and disciplined pricing plan for 2021 and 2022. This will help us protect profitability and our ability to continue to invest in innovation and future growth. At the same time, we invested an additional EUR 110 million in areas such as marketing, digital commerce, emerging market capabilities, and sustainability to support our long-term growth ambitions.

All this enabled us to generate EUR 7 billion in sales, EUR 1.1 billion of operating profit and a free cash flow of more than EUR 1.3 billion.

Strategy & Innovation

During the year, we concentrated on executing our new strategic framework, which is designed to generate sustainable, inclusive, and profitable growth. This strategy is centred around organic growth, driven by innovation across products, packaging, brewers and new business models. In 2021, for instance, L’OR launched a bio-organic range containing 100% organic coffee beans, while Moccona introduced our first range of plant-based offerings in specialty mixes for Australia. In China, Maxwell House and Moccona entered the growing Cold Brew Pure Instant segment, and in Eastern Europe, Jacobs launched a range of Origins and flavoured premium instants products. At Peet’s, we have launched a variety of flavoured K-cups, which have contributed to a meaningful share of the category growth since its introduction.

When it comes to brewers, the new Senseo Select machine offers very affordable café-style drinks at home, so that consumers can now choose from espresso to lungo or cappuccino. We also extended the L’OR Barista appliance range to include SUBLIME, to address the consumer preference for smaller, sleeker appliances, and we extended the geographical footprint of the system to a number of new markets. These innovations play an important role in delivering our long-term ambitions, and we are very pleased with the pace and pipeline of our innovations.

Alongside the further strengthening of our partnership with illy, through which we sell high-end premium aluminium capsules in 32 markets, we also ventured into a number of new strategic partnerships to drive profitable growth. For example, by supporting J.M. Smucker Co.’s ‘Smucker Away

From Home’ liquid coffee business with product development, production, and food service equipment innovation. We also partnered with Pret A Manger to expand into the self-serve coffee market launching 'Pret Express' in a range of locations across the United Kingdom, so that customers can enjoy organic coffees and teas in places where Pret Baristas are unable to operate. Together, these two new partnerships help us further expand our Out-of-Home footprint and brand portfolio reach. Additionally, we partnered with Pret A Manger to launch a new range of aluminium coffee pods, using Pret’s 100% organic coffee, enabling consumers to enjoy the company's coffee at home for the first time. This will help us increase household penetration in one of the fastest-growing coffee subcategories. 

And as part of our strategic drive to grow in markets such as the Asia-Pacific region, we acquired Campos Coffee in Australia. As a specialty coffee leader present across Australia in multiple channels, Campos Coffee is a first-class addition to JDE Peet's.

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Letter to our Shareholders (continued)

People

Our focus in 2021 remained on the well-being of everyone who works for or with us, maintaining additional health and safety standards at our manufacturing facilities, communicating constantly with farmers, suppliers and partners, and facilitating home-working for our office-based employees. Where safety and government measures allowed, we were quick to reopen our sites, including offices. However, we also believe that the COVID-19 pandemic has changed the way we communicate, collaborate and connect in the modern workplace.

We also took a number of significant steps to further embed DE&I in JDE Peet’s. To that end, we set up a dedicated DE&I Board and launched, among other things, a market activation toolkit that gives change makers, who are business leaders and champions across the company, a pragmatic and systemic approach on next steps, actions and behaviours linked to DE&I across our markets. Our inclusive culture capability programme also included the implementation of 50+ online DE&I courses within our Learning & Development platform. And in order to drive the DE&I agenda and raise awareness on topics which are globally relevant, we rolled out a global activation strategy across three events in 2021: International Women’s Day, Cultural Diversity Day and DE&I Week.

Engagement remains a crucial aspect of ensuring our people are satisfied working at JDE Peet's, which is why we again carried out an engagement survey. The results showed that engagement levels are similar to those seen in our most recent pre-COVID-19 survey. We believe this highlights both employees' resilience and our efforts to create an environment where our people feel connected with the company.

Sustainability

customers, we also further expanded our recycling initiatives for some of our single-serve offerings, such as Podback in the UK and the Aluminium Capsule Recycling Alliance in France. Overall, we increased the share of packaging designed to be reusable, recyclable or compostable to 88% and achieved 40% recycled content in our packaging, reaching this target well ahead of time. In addition, our entire European manufacturing network plus five other manufacturing sites reached zero-waste-to-landfill status and we managed to reduce overall manufacturing waste by 15%.

Finally, we are very pleased that our climate strategy was approved by the Science Based Targets Initiative (SBTi). This involves the commitment to reduce our absolute greenhouse gas emissions for scope 1 & 2 by 25% and scope 3 by 12.5% by 2030 compared to our 2020 base year. In 2021, we decreased our GHG emissions related to scope 1, 2 & 3 by 5%.

Financing

We significantly optimised our financial position and capital structure in 2021, as we substantially reduced our leverage and average cost of debt and significantly extended our weighted average maturity through a successful refinancing and subsequent bond issuance at very compelling terms.

Outlook

In a year in which the world again faced a challenging environment, we made solid progress in 2021, and strengthened the company in many areas. And while we do not expect the uncertainty and volatility around us to disappear anytime soon, we remain confident and committed to our long-term algorithm of targeting 3 to 5% organic sales growth, mid-single digit organic adjusted EBIT growth, a free cash flow conversion of around 70%, and stable dividend flows which we expect to sustainably grow over time.

For 2022, the unprecedented level of inflation across many input costs and the related volatility and uncertainty that comes with it, will be our biggest challenge. With this in mind, we expect to deliver double-digit organic sales growth, as we will be disciplined on price, and aim for a stable level of absolute gross profit compared to 2021. We will also continue to increase investments in our strategic growth opportunities, keep a tight focus on other cost items, and aim to deliver free cash flow of at least EUR 1 billion.

Our sustainability strategy spans our entire value chain, and aims to ensure we source our raw materials responsibly, minimise our footprint, and engage our own employees as well as all the communities and partners in our entire ecosystem. As we believe this is vital to the long-term success of the company, we worked hard on its execution throughout the year, engaging with stakeholders along the entire supply chain and stepping up our level of ambition for the short and long term.

Under the Common Grounds programme, we launched 10 new projects globally in partnership with suppliers, NGOs and others to address key sustainability challenges in the countries from which we source our coffee, tea and other agricultural ingredients. Under this programme, we have now reached over 470,000 smallholder farmers through more than 50 collaborative projects across 18 countries.

We made good progress in reducing our environmental footprint. In partnership with

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Annual Report 2021

Letter to our Shareholders (continued)

Thank you

We have come out of 2021 as a nimbler global coffee & tea pure player with stronger fundamentals. Everything we achieved during the year was made possible with the support of our stakeholders. Our teams, who realise our ambitions and work hard every day to ensure our great products are available across our markets. Our customers and consumers, who continue to purchase and enjoy our products, whether at home or elsewhere. Our smallholder farmers, who grow high-quality coffee and tea for us, and our suppliers and other partners who make sure everything reaches our manufacturing facilities. NGOs and governmental bodies, who work with us to improve the livelihoods of smallholder farmers and make a difference to the environment. Industry partners, who join with us on industry groups around the world. And our shareholders, who support us and take an ongoing interest in our performance and growth, as we work towards creating long-term value in one of the most attractive and resilient categories in the food & beverage industry.

We would like to thank them all for their agility, resilience and support, and we look forward to working with everyone at JDE Peet's and along our value chain to make 2022 another successful year.

Sincerely,

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Annual Report 2021

JDE Peet's at a glance

JDE Peet's 2021 Annual Report provides an overview of our main business activities and achievements throughout the year. Following the Integrated Reporting Framework for the International Integrated Reporting Council (IIRC) when possible, it focuses on our strategy, governance, performance and outlook, and aims to explain how we create value for our stakeholders in the short, medium and long term.

43 markets

in CPG and OOH Where we are the
#1 or #2 player

78%

of sales generated in these Markets

19,000+

employees

90+

Nationalities

43 facilities

Manufacturing facilities

24 countries

worldwide

100 markets

where we are active

5 segments

cultural & geographical

18 countries

worldwide

50+ projects

active projects with smallholder farmers

Sales by segment

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Annual Report 2021

Our Business

JDE Peet’s is the world's leading pure-play coffee & tea company. We provide customers and consumers with coffee & tea in more than 100 markets through a portfolio of over 50 brands, including L’OR, Peet’s, Jacobs, Senseo, Tassimo, Douwe Egberts, OldTown, Super, Pickwick and Moccona. In 2021, our more than 19,000 employees helped us serve around 4,500 cups of coffee or tea per second and generate total sales of EUR 7 billion.

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Annual Report 2021

Business overview

2021 YEAR IN REVIEW

Here is a selection of our most important milestones in 2021:

Q2

Q1

JDE Peet's published its inaugural Annual Report.

To offer our consumers the same homely feeling as in their homes and a place to meet people, Douwe Egberts opened another three D.E Café’s in the Netherlands, totalling 12, under licensing agreement.

JDE Peet’s became the first company to use the new supply chain sustainability solution SourceUp, as part of its commitment towards 100% responsibly sourced coffee by 2025. Coffee farmers who form part of this landscape programme in Vietnam use 20% less water, 14% less chemical fertiliser, use no banned pesticides and saw their income increase by 20% compared to farmers outside the programme.

We expanded our Instant portfolio into the indulgent space with the launch of Jacobs Flavours, targeting younger consumers by offering them the high quality Jacobs Instant they love, infused with the most popular flavours such as caramel and chocolate.

We extended our focus on beans with the launch of the Farmer’s Initiative in France and later in Norway, a range of high-quality certified coffees from single origins, where for every pack a donation is made to projects to improve social and environmental conditions on coffee farms.

Staying healthy has taken on a vital and pressing meaning during the pandemic. Pickwick Tea launched its Superblends range, with added vitamins, winning the Best Product of the Year 2021/2022 award in the Netherlands.

Moody’s Investors Service and S&P Global Ratings assigned investment grade ratings to JDE Peet's. These ratings reinforce the commitment JDE Peet's made at the time of the IPO to further improve the company's credit profile, underscoring its operating strength, strong financial discipline, and continued progress.

JDE Peet’s acquired Campos Coffee, a speciality coffee leader in Australia, available in over 600 cafés and present in multiple channels including direct-to-consumer, retail, and its own flagship cafés.

We successfully completed a EUR 6.5 billion refinancing transaction, including EUR 2.5 billion of new investment-grade facilities that are connected to our sustainability ambitions.

The J.M. Smucker Co. and JDE Peet’s announced a strategic partnership which will allow JDE Peet’s to support the Smucker Away From Home liquid coffee business with product development, production and food service equipment innovation.

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Annual Report 2021

Q4

JDE Peet's signed a new multi-year agreement with the Sustainable Trade Initiative and Cargill to support independent smallholder farmers in Indonesia move towards sustainable palm oil production. This partnership and the continued cooperation with key stakeholders in the palm oil supply chain is an

JDE Peet's highlighted its recent successful entry of Maxwell House and Moccona into the growing Cold Brew Pure Instant segment in China as part of the company’s reignited global innovation agenda. These types of innovations enable us to continue building our credentials while blurring the lines between traditional Single Serve and Instant coffee and creating exciting new coffee experiences for the next generation of coffee consumers.

Q3

We partnered with Pret A Manger to launch a new range of aluminium coffee pods, using Pret’s 100% organic coffee, enabling consumers to enjoy the company's coffee at home for the first time.

We extended the L'OR Barista appliance range to include SUBLIME, a more compact and modem application to address the consumer need for smaller,

L'OR partnered with World Coffee Research (WCR) to enrich the diversity of coffee varieties from around the world and the lives of passionate farmers who grow it, with the launch of L'OR limited edition creations from estates where WCR grow new coffee varieties. 

Business Overview (continued)

We successfully completed two additional bond issuances totalling EUR 1.1 billion which further improve our cost of debt and debt maturity profile.

Pret A Manger and JDE Peet’s announced plans to expand into the self-serve coffee market with the launch of “Pret Express". Pret Express will be introduced in convenience stores, forecourts, universities, healthcare facilities and workplaces across the United Kingdom, offering the same favourite organic coffees and teas consumers enjoy in Pret shops in places where Pret Baristas are not able to operate.

On the Professional side, we launched Tea Master Selection, a range of worldly teas in sustainable composition (certified blends, sustainable packaging, country of origin) without compromising on taste and quality.

sleeker appliances, and extending the geographical footprint of the system in two new markets.

important milestone for JDE Peet’s' commitment towards 100% responsibly sourced coffee, tea and palm oil by 2025.

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Business Overview (continued)

OUR STORY

A long and rich coffee & tea tradition which can be traced back more than 265 years.

In 1753 in Joure, the Netherlands, Egbert Douwes founded his first coffee outlet. Over a century later in 1895, Johann Jacobs opened his first grocery business in Bremen, Germany. Then, in 1966, in Berkeley, California, U.S., Alfred Peet opened his first Peet's coffee store. Today, we are the world’s leading pure-play coffee & tea company by revenue, operating in more than 100 markets globally.

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Business Overview (continued)

Our Purpose

At JDE Peet's, we unleash the possibilities of coffee & tea to create a better future. We collaborate with members of the industry to improve the livelihoods of every community in which we operate from farmers and suppliers, to our talented employees and the local communities in which our consumers enjoy millions of cups of our coffee & tea every day. We play our part to create a better future.

Our purpose is much more than a sustainability promise. It guides our strategic choices. For us, a better future means protecting coffee & tea for generations to come. It also means empowering our partners and employees to do what they do best every day. And it means ensuring that everyone can enjoy the coffee and tea they love.

With the pace of life always seeming to increase, we firmly believe our coffee & tea products play an important role in maintaining connection and unleashing everyone's true potential.

Our Purpose

We unleash the possibilities of
coffee & tea to create a better future

Our Vision

A coffee & tea
for every cup

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We stay focused on what matters and build our mastery when we do the right things in the right way

We choose the most straightforward paths to achieve our desired outcomes

Together we make a bigger difference, building trust and unity around shared interests

We take responsibility for our actions and ownership of our results

Ensures we win the freedom to create and pursue more opportunities by staying agile, moving fast and resisting unnecessary bureaucracy

Our Values

THAT DRIVE OUR BEHAVIOUR

Business Overview (continued)

Our Belief

It’s amazing what can happen over a cup of coffee or tea

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Business Overview (continued)

1753

1853

1895

1923

1937

1960

1966

1978

1987

1992

1995

1996

1999

1999

2014

2001

2004

OUR BRAND PORTFOLIO

Our strong portfolio of global, regional and local brands has been built upon a rich history and heritage and these brands are deeply rooted in the diverse coffee & tea cultures in which we operate. Our portfolio allows us to cover the category landscape, ensuring we can offer a coffee & tea to everyone, no matter who they are, where they are, or what their preferences are.

We use a distinctive brand building model to develop meaning and communication for our brands, so that they meet the needs of our local consumers. Our brands bring people together, creating moments of connection and enjoyment and providing energy and sensory experiences. They give people the freedom to express their individuality and the power to transform themselves because we know amazing things can happen over a cup of coffee or tea.

Our global brands are large players operating in multiple markets, with one meaning and one global execution.

Our regional heroes have an international footprint with local nuances. These local nuances are based on cultural drinking habits, the stage of category development, and brand heritage.

Our local jewels are iconic in their local market. These brands leverage local culture and heritage, and are of true significance in their home country.

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An Uplifting sense of possibilities

Rich and strong heritage since 1895

Coffee drinkers have trusted the JACOBS brand and its magical pampering aroma for 125 years. This trust enabled JACOBS, as the leading coffee brand from Germany, to establish itself in 42 markets. Thanks to innovative products in filter coffee, coffee pods, whole beans, dissolving coffee and specialities, there is something for everyone.

JACOBS drives growth in emerging markets by focusing on local drinking preferences with its extended portfolio of Instant Mixes and Instant Cappuccinos.

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A 55-year obsession:
the pursuit of better coffee

Alfred Peet introduced craft specialty roasting to the United States in 1966. We continue to drive premium quality distinction through selective sourcing, hand roasting, artisan blending and superior freshness.

Peet’s coffee also continues to expand its presence by offering café quality in China. In 2021, the number of Peet's coffee stores in China increased by 37 to 70 stores.

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Delivering ultimate pleasure through taste experience & coffee expertise

Created in France in 1992, the ambition for L’OR has always been to offer the best coffee in the world. In 2016, it transformed the market with its high-quality aluminium capsules and exquisite blends. Today, the unequalled quality of L’OR coffee continues to seduce connoisseurs all over the world.

L'OR has also responded to coffee drinkers' demand for a high-quality coffee experience at home, with the launch of the L'OR BARISTA brewer, offering a range of coffee creations at home.

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Douwe Egberts,
a true icon and leading coffee brand with a cup for everyone bringing people closer together

Douwe Egberts was founded in 1753 in Joure, the Netherlands, where Egbert Douwes and his wife Akke Thijsses opened a grocery selling tea and coffee. Today, the brand is represented in 7 markets and holds strong leading positions in the Netherlands and Belgium, where it is omnipresent; from retail to offices, universities, and in D.E Café’s. The brand is all about bringing people closer together and stands symbol for warm moments of

connection in people’s live. In 2021, Douwe Egberts opened another 3 D.E Café’s in The Netherlands offering our consumers the same homely feeling as in their homes and a place to meet people. The great quality coffee we offer out of home, we now also offer in retail through our new and award winning (Wheel of Retail, Food Award and Best Innovation GFK) D.E Café range of beans and capsules.

Douwe Egberts is committed to contributing to the community through initiatives like ‘D.E Neighbours day’, a yearly country-wide event to make neighbourhoods in the Netherlands more sociable, but above all: get to know your neighbour over a good cup of coffee. In 2021, Douwe Egberts reinforced their Coffee for Everyone Program in Belgium via collaborating with retailers to donate over 8.5 million cups of coffee to food banks.

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Delivers coffee enjoyment on demand

An impressive range of innovative coffee shop style drinks and varieties from loved brands

The smartest brewing system for the highest convenience

Creamy latte, delicious cappuccino, intense espresso or even a hot chocolate. TASSIMO brews it at the simple touch of one button thanks to our INTELLIBREW™ Barcode Technology. Perfect, easy, every time.

The right brew through our intuitive appliances

Through our appliance partnership with BOSCH, we ensure the quality delivery of our drinks across all our appliances.

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Inspiring people to make choices that matter for 20 years

Senseo began by bringing the first single serve offering to everyone, and has grown to become, the leading system in Western Europe delighting 15 million households every day. Today, Senseo is the only appliance offering affordable sustainable cups of coffee, with fully compostable pads.

The new Senseo Select machine has responded to consumer trends offering café style drinks at home so that consumers can now choose from espresso to lungo or cappuccino.

Offers a range
of drinks

Is sustainable

Is affordable

Works at the
touch of a button

The Senseo Select machine:

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Inspiring everyday moments of pleasure

Moccona's belief is that a life well lived is one where we take the time to pause and appreciate the countless moments of beauty that exist in the world, all ready to be enjoyed.

Moccona was established in 1743 in the small Dutch village of Joure. Moccona's european charm and superior taste made it a household name in Australia. Today, it continues to provide an elevated coffee experience to consumers in the Asia Pacific region, building a premium positioning around its distinctive glass jar.

Moccona has portfolio presence in all key coffee segments across retail and Out-of-Home with new offerings such as a range of plant-based specialty coffee and cold brew single-serve pure instant.

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A powerful tea brand that
inspires you to take time
for yourself and others

The rich history of Pickwick started more than 260 years ago in the Netherlands. The brand has expanded since then to 8 markets across Europe.

Pickwick delivers uplifting moments every day for those who thrive on caring for themselves and others. We believe that everyone can create daily moments that simply make them feel better by offering a portfolio based on pure taste and natural aromas.

Keeping consumers' health at the heart of product development, we have launched a range of herbal blends with added vitamins: Pickwick herbal super blends. A delicious cup of tea made of the finest herbal ingredients, but with a little extra to enhance your radiant self.

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SUPER fuels the
everyday change makers

SUPER is the pioneer of coffee mixes, driven by the vision to make coffee universally liked and accessible in tea-loving Asia. By combining a perfect balance of coffee, creamer and sugar, coffee was customised to suit the Asian palate and popularised throughout the region.

Today, SUPER is found in 25 markets globally and is present in the coffee, tea, cereal and soy category.

In 2021, SUPER launched a range of healthier beverage mixes ranging from a zero-sugar coffee, a low-sugar milk tea, and a plant-based wholegrain range with freeze-dried fruit.

Please send highres background for Super. Alternative would be to use the image of last year

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OldTown is the heart of authentic cultural experiences

In a fast-paced era, traditional culture and craftsmanship can gradually lose its relevance. OldTown seeks to appease an ultra-connected and curious generation by sharing our heritage and know-how in ways that are cool and progressive.

OLDTOWN is the No. 1 White Coffee brand in the world. Its signature taste is attributed to its 3-bean blend of Arabica, Robusta and Liberica.

Riding the wave of the coffee & tea culture in Asia, OldTown expanded in 2021 with the opening of eight new restaurants and four express counters. Menus at these outlets feature local, all-time favourites as well as new, trendy creations that capture a crowd of all ages.

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Business Overview (continued)

OUR APPROACH

Consumer packaged goods

High quality coffee & tea experience at home

Our consumer-packaged goods (CPG) business offers a complete range of coffee & tea products to meet consumer preferences and price partitions, including:

•instant coffee (pure and mixes)

•various single-serve formats

•roast whole beans

•roast and ground

•ready-to-drink coffee beverages

•variety of loose leaf and packaged tea products.

Our CPG business focuses on hypermarkets, supermarkets, traditional trade markets and, in markets where they operate, buying groups.

Out-of-Home

Unique coffee solutions for every occasion

Through our Out-of-Home coffee solutions we sell or rent a complete range of professional solutions and complementary coffee systems across the B2B sector, from offices, universities and hospitals to restaurants, airports and sports venues. These include:

•proprietary liquid coffee concentrate technology

•multi-serve coffee (roast & ground and whole beans)

•single-serve and double-shot coffee capsules

•pads and pods

•instant pure and instant mixes

•ready-to-drink coffee beverages

•variety of professional tea products

Strategic partnerships with Pret A Manger and The J.M. Smucker Co. will enable us to further explore this sales channel.

Coffee stores

Introducing new product offerings through coffee stores

At year-end, we operated 505 coffee stores under leading brand names including Peet's, Intelligentsia, Stumptown, OldTown, and 12Oz in the United States, China, Malaysia, and Italy. Our coffee stores play an important role in serving consumers high-quality fresh coffee & tea, while enabling them to try new product offerings.

Online sales channels

Convenience, choice and world class innovation

The sale of coffee & tea through online sales channels experienced another year of strong growth in 2021, driven by the pandemic. In recent years, we have invested heavily in this fast-developing channel, and we now offer a wide portfolio direct to consumers through branded webshops and leading third-party e-tailers.

We believe that coffee & tea make the world go round, and every day, millions of people enjoy coffee & tea products supplied by JDE Peet’s. Because customers and consumers want to access our products in ways that align with how they live, it

is vital that we connect with them through as many channels as possible. This is why we sell our full product range through a go-to-market approach that covers the entire spectrum of sales channels.

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Business Overview (continued)

OUR SUPPLY CHAIN

8%

of the world's coffee

<1%

of the world's tea

43 facilities

Manufacturing facilities

24 countries

worldwide

As a global business, we rely on a global supply chain. We source approximately 8% of the world's coffee and under 1% of the world's tea from more than 30 countries. Most of our non-coffee & tea, direct material supplier base is concentrated in packaging materials. Marketing and media make up the majority of our total spend on indirect materials and services.

Our coffee & tea products are primarily manufactured at our 43 manufacturing facilities across 24 countries.3 Our manufacturing

facilities are distributed globally, including operations in North and South America, Europe and Asia. This includes facilities for high-volume production, flexible production and new coffee & tea product and technology launches, as well as local manufacturing facilities that respond rapidly to local consumer preferences and tastes.

3     As at 31 December 2021; two manufacturing facilities closed during 2021

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Continues on next page

Agriculture

Suppliers

Production

Packaging

Distribution

We source coffee, tea and other agricultural products from more than 30 countries. We also engage with many of our farmers through our Common Grounds responsible sourcing programme.

We manufacture our coffee & tea products primarily at 43 manufacturing facilities in 24 countries, ensuring consistently high product quality while carefully managing the use of resources.

We work with more than 900 direct material suppliers across 83 countries. They are important to sustain our business, and some play an important role in helping us achieve our sustainability goals.

We work with our third-party logistics partners to reliably distribute our coffee & tea products to customers across the world in a manner that ensures the products’ freshness and quality and minimises our environmental footprint.

The packaging of our products is critical to ensure great taste, freshness and safety. But we recognise that packaging becomes waste and that its lifecycle must be managed to limit the environmental impact.

Sustainable packaging

Page 68

Common Grounds

Page 56

Minimised Footprint

Page 66

Business Overview (continued)

Our value chain - from bean to cup

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Consumers

End of life

Channels

CPG customers

Our coffee & tea products are sold through hypermarkets, supermarkets and traditional trade markets.

Out-of-home customers

We offer a full range of professional solutions to, amongst others, offices hospitals, universities, hotels and restaurants.

Coffee stores

Our 505 coffee stores play an important role in serving consumers high-quality fresh coffee & tea and new product offerings.

Online sales

Increasingly, consumers are turning to our branded webshops and leading third-party tailers.

Our multiple partnerships allow consumers to more easily return their used coffee pods into recycling streams.

Our mission is to delight our consumers with every cup through our wide portfolio of brands and product choices accessible wherever the consumer is, in any format/taste they prefer, at different price points.

Our brand portfolio

Page 15

Engaging our stakeholders

Page 43

Our approach

Page 26

We sell our full product range through a go-to-market approach that covers the entire spectrum of sales channels.

Business Overview (continued)

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Business Overview (continued)

OUR BUSINESS STRUCTURE

Sales by segment

While we are a global business with a global supply chain reaching over 100 markets, we can only succeed by working at a regional and local level. This is how we truly understand the needs of our customers and consumers, and meet or surpass their evolving expectations. Our business is organised across five commercial segments, taking into account coffee & tea cultures across different geographies:

1.CPG Europe

2.CPG LARMEA (Latin America, Eastern Europe, Middle East and Africa)

3.Peet’s (predominantly United States)

4.Out-of-Home (Europe)

5.CPG APAC (Asia-Pacific)

In 2021, the company's sales by segment comprised:

•51% CPG Europe (2020: 52%)

•16% CPG LARMEA (2020: 15%)

•10% CPG APAC (2020: 10%)

•13% Peet's (2020: 13%)

•10% Out-of-Home (2020:10%).

The remaining sales are unallocated and primarily represent income generated from selling licensed products and renting available production facility space to third-party businesses.

Unallocated sales are not included in one of the five operating segments as the company does not engage any business activities therein.

100 markets

Global reach

5 segments

cultural & geographical

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Our strategy

We operate in categories that impact almost every market in the world, all of which have their own traditions, trends and tastes, making the coffee & tea categories fascinating, complex and fast-moving.

Serve
more cups

Attract consumers
relentlessly

Master
execution

Fuel the growth from quality and discipline

Grow
together

Champion an
inclusive ecosystem

Penetration

Premiumisation

Globalisation

Quality

Efficiency

Operational leverage

Talent

ESG

Partner of choice

We believe it is vital that we respect this endless diversity by both responding to external trends and working to proactively shape consumer tastes and habits, where possible.

To achieve this, we have put in place a strategic framework designed to generate sustainable, inclusive, and profitable growth in the global coffee & tea categories in developed and emerging markets. We believe that such growth will help us create long-term value for the company and our stakeholders.

Our strategic framework is built on three pillars:

•Serving more cups through a relentless focus on attracting customers

•Master execution which fuels our growth from quality and discipline in everything we do

•Growing together by championing an inclusive ecosystem

Our Strategic Framework

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Our Strategy (continued)

Serving more cups

We are focussed on attracting new consumers by increasing penetration in fast-growing markets and subcategories, by premiumising across categories and geographies, and by increasing our global footprint organically or through partnerships and acquisitions.

To achieve this, our growth strategy targets four areas of opportunity:

1: Increasing the household penetration of the fastest growing coffee subcategories

2: Increasing exposure to, and driving growth in, emerging markets

3: Building direct consumer relations through our own Direct-to-Consumer channels

4: Capturing attractive opportunities in the Out-of-Home sales channel

The single-serve, whole beans and premium instant subcategories are the fastest-growing segments of the coffee category, but we have yet to exploit their full potential globally. This is why we are making substantial investments to expand our manufacturing capacity of aluminium capsules and freeze-dried instants. Such investments demonstrate our intent to pursue growth opportunities through various offerings and product innovations in both existing and new markets, at different price points and across multiple brands. We will achieve this by building on the strength of our current brand portfolio which enables us to be active in many different markets and to serve the entire spectrum of consumers.

Emerging markets have seen significant growth in recent years and we expect this trend to continue in a post-COVID environment. We believe that changing consumer trends and preferences in these markets, including an increase in the consumption of coffee & tea and the premiumisation of the coffee & tea categories, present significant growth opportunities. Our growth strategy includes the expansion of sales in existing and new markets. JDE Peet’s has been active in Brazil, Eastern Europe and South Africa for many years, while in recent years we have expanded our footprint in the Asia Pacific region through the acquisitions of Super Group in Singapore and OldTown in Malaysia.

The ongoing pandemic continues to influence consumers' online purchasing behaviour, a trend we expect will continue to grow in the coming years. In many regions we have seen a substantial rise in the number of people working from home, and a subsequent increase in In-Home coffee & tea consumption. Consequently, we are serving more consumers through our proprietary Direct-to-Consumer channels such as peets.com, tassimo.com and lorespresso.com. The growth in direct relationships with our consumers has and will continue to enable innovative new connections and the creation of more personalised offerings.

We have a solid position across the Out-of-Home sales channel and are well positioned to capture new opportunities as the coffee category continues to evolve in the wake of the pandemic. We intend to seize these opportunities by offering full coffee & tea solutions to our customers. This applies particularly to non-commercial customers where coffee solutions are provided as a service. At the same time, we will leverage our portfolio of brands (including Peet's, L'OR and Jacobs), our direct go-to-market approach, and our ability to enhance customer experiences and operational efficiencies through our IT platforms. In 2021, we formed new partnerships with Pret A Manger (Capsules and Espresso Stations) and The J.M. Smucker Co. (Liquid Coffee) to further expand our Out-of-Home footprint and brand portfolio reach.

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Our Strategy (continued)

Master execution

Master execution is the second pillar of our strategy and it will fuel our growth through quality, efficiency and discipline in-store and along our supply chain. Our aspiration is to provide sustainable and agile supply.

Our supply chain organisation is working to anticipate emerging challenges as global supply chains change faster than ever before. We optimise our manufacturing operations' network to adapt to consumer preferences, which results in ongoing capex investments in our manufacturing facilities and wider network to support our growth.

Current priorities for this strategic pillar include:

4     See 'Growing together' below

Delivering excellence in service across channels

Due to changing consumer trends, and shifts between different channels, JDE Peet’s is constantly focussed on delivering excellent service in all channels. To be able to achieve excellent service in all markets and channels, we continuously focus on further strengthening and optimising our operational network. In addition, our supply chain and operations teams have a strong focus on ensuring business continuity.

Minimising the environmental footprint of our operations and supply chains.4

At JDE Peet’s, we consider mastering execution in a responsible and minimised environmental footprint a key priority. We aim to source, operate and manage our supply chain in a sustainable way.

Not compromising on product quality

Our consumers appreciate our strong brands, relying on the consistent high quality that we deliver. At JDE Peet’s we make a promise not to compromise on product quality. We also don’t compromise on our performance and continue to operate with financial discipline to protect our margin and cash flows.

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Our Strategy (continued)

Growing together

Our priority topics6

Responsible sourcing: As a pure-play coffee & tea company, the primary focus of our sustainability strategy is to contribute to prosperous, nature-positive agricultural value chains through responsible sourcing and supplier engagement. This focus is also reflected in our materiality assessment. Three of the seven topics that are most material to our external stakeholders and the company’s business success - responsible supplier

labour practices, supply chain transparency and sustainable agriculture - fall within this area, as do farmer livelihoods, which ranks highly in the second tier of material topics. We group these four topics under our commitment of working towards 100% responsibly sourced coffee, tea and palm oil by 2025.

Climate action: Climate change mitigation is another of our most material topics and is also closely linked to biodiversity protection, which falls within the second tier of material topics. We are committed to climate action that reduces our environmental impact across our value chain. In addition, we adopt the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and assess how climate change may

Our sustainability strategy spans our entire value chain and focuses on those sustainability topics that are most material to our business and where we can have the greatest impact.

The third pillar of our strategy champions an inclusive ecosystem, where all ideas, perspectives and backgrounds are considered. This extends from our internal talent to all of our partners along the value chain. Coffee & tea create possibilities for farmers and their families, our suppliers, customers, consumers and our employees. By working together, we believe that our entire ecosystem can benefit and create a better future for all.

Our 7 most material topics:5

•Climate change mitigation

•Ethics and governance

•Product quality

•Responsible supplier labour practices

•Supply chain transparency

•Sustainable agriculture

•Sustainable packaging

impact our business. We recently formalised our commitment to climate action by setting a science-based target to reduce absolute scope 1 & 2 GHG emissions by 25% and to reduce scope 3 value chain GHG emissions by 12.5% by 2030 versus a 2020 baseline. 

Sustainable packaging: We make every effort to tackle this material topic, address the waste challenge and provide customers and consumers with responsibly packaged products. That's why by 2025, we will design all our packaging to be reusable, recyclable or compostable and increase the share of recycled content in our packaging.

Diversity, equity & inclusion: We are committed to an environment in which the unique voice of every country, culture and individual is heard. Our commitment to gender-balanced representation is a priority within our overall sustainability strategy.

Ethics & governance: Each day across JDE Peet’s, we strive to embody and live up to the values and principles-based culture which is at the core of our organisation. Our commitment to ethical behaviour is an indispensable part of our business performance.

Product quality: At JDE Peet’s, product safety and product quality are our primary priorities. Our mission is to delight our customers and consumers with every cup while delivering safe, high-quality products. This applies to our entire portfolio, and to all our systems and services.

5     We conducted our last comprehensive materiality assessment in 2020. More details on this can be found on the JDE Peet's website. We intend to refresh our materiality assessment in the 2022/23 period.

6     More details on the scope of our commitments and activities for each of our priority topics can be found in the 'Our Performance' section below.

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Our Strategy (continued)

The 3 pillars of our sustainability strategy

The core of our sustainability strategy comprises three thematic pillars aimed at ensuring we source our raw materials responsibly, take good care of the environment and engage our own employees and communities, all underpinned by our commitment to operate responsibly across our operations and value chain.

The UN SDGs

We are proud to embrace the UN Sustainable Development Goals (SDGs). We operate in, and source raw materials from, many developing and emerging markets, and we are committed to their socio-economic development. Our focus on the impact we make along the entire value chain has led us to concentrate on the following SDGs:7

common grounds

minimised footprint

connected people

Fostering thriving agricultural supply chains

Reducing our environmental impact step-by-step

Engaging our employees
and our communities

Material topic

Responsible Sourcing

Select KPI:

100% responsibly sourced green coffee, tea and palm oil by 2025

Material topics

Climate Action

Sustainable Packaging

Select KPI:

25% reduction of our Scope 1&2 GHG emissions by 2030 vs. 2020 baseline

All of our packaging designed to be reusable, recyclable or compostable by 2025

Material topic

Diversity, Equity & Inclusion

Select KPI:

Gender-balanced representation

7     Additional information on how we determine our contribution and on each SDG that we contribute to, can be found on the JDE Peet's website.

Good Governance, Ethics & Partnerships

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Our Strategy (continued)

a B Corporation, exactly? Run by B Lab, a B Corp is a certifiable commitment to consider all parties involved in a business.

B Corp measures social and environmental performance - it provides a framework to formally consider our employees, our communities, the environment and our governance. The certification builds on values Stumptown has long held dear, including an employee-driven culture, Direct Trade coffee sourcing, affordable access to health care,

working to reduce its environmental footprint and simply doing things the Stumptown way.

The assessment isn’t easy, however, and it takes time to complete. It reaches into all areas of a company, evaluating how the business is run and the impact it has on workers, the environment and the communities where it operates and where it sources coffee from around the world.

While the Stumptown team was extremely proud to be certified, the assessment process also highlighted many areas where Stumptown still fell short of its aspirations. The process taught the team that they needed to get better at setting goals, tracking progress and communicating what they’re up to.

So, every three years Stumptown now completes the B Corp Impact Assessment to evaluate its operations and re-certify the business.

Since 1999, Stumptown Coffee Roasters has been serving up the highest quality coffees, roasted daily. In June 2018, it became a certified B Corp. That same year, Stumptown registered its business as a benefit corporation.

Established in Portland, Oregon, Stumptown has always been home to bike-commuting, kerbside composting people who care about sustainability and our communities, so going down the path of B Corp certification felt like a natural step. But what is

Case study: Stumptown's B Corp commitment

In 2021, Stumptown achieved B Corp re-certification and improved its qualifying score by almost 10 points - no small feat. The improvement was due primarily to better tracking and reporting around the company's environmental efforts.

Moving forward, Stumptown is expanding its verification of coffee supply chains, continuing to invest in Stumptown's talented employees and vital communities, and getting serious about aggressively tackling its greenhouse gas (GHG) emissions. A commitment to being a B Corp means a commitment to constant improvement. Stumptown is on that path, and committed to engaging and sharing progress with stakeholders – consumers, employees, the producers who grow the beans and the communities where Stumptown roasts, brews and serves up the best coffee on the planet.

Stumptown's B Corp commitment

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What we employ

Inputs

Financial

EUR 21.6 bn total assets in 2021
EUR 255 mln capex in 2021

Infrastructure & Technology

43 manufacturing facilities globally

Operating across all coffee & tea technology platforms

Materials

8% of the world’s coffee
<1% of the world’s tea

Packaging which maintains the freshness and quality of coffee & tea

Portfolio of Brands

Owner of the largest portfolio
of coffee & tea brands with
products across multiple price points

78% of revenue from 43 markets
with a #1 or #2 position in CPG
and Out-of-Home

Go-to-Market

Distribution across all channels

Active in more than 100 markets
around the world

Talent

A global team of 19,000+ employees, comprising more than 90 nationalities

What makes us special

Activities

Our Value Creation Story

What guides us

Our Purpose

The value we create

Outputs

Financial

EUR 7 bn total sales

EUR 1.3 bn total adjusted EBIT

EUR 1.4 bn free cash flow

Products

4,500 cups of coffee & tea served every second

Wide portfolio of brands and product choices that is accessible wherever the consumers are, through whatever channels they buy, in any formats/tastes they prefer, at different price points

Customers & Consumers

Organic sales growth:
In-Home 5.0%
Away-from-Home: 11.5%

Talent

Employees engaged and inspired by development and growth opportunities

An inclusive, diverse work environment

A resilient team adapting to global changes

We uniquely combine category focus and scale

Offering the widest portfolio of coffee & tea products on the market across technologies and brands

Through a differentiated consumer reach model that covers all channels

Carrying out our growth priorities in a disciplined way

Led by an experienced team of entrepreneurs and long-term shareholders

Driven by our passion for coffee & tea, our respect for the environment and our responsibility for people

Our Strategy

Page 31

Our Values

Page 14

Serve
more cups

Attract consumers
relentlessly

Master
execution

Fuel the growth from quality and discipline

Grow
together

Champion an
inclusive ecosystem

We unleash the possibilities of coffee & tea to create a better future.

Our priorities

Business performance

Financial performance

Product quality

Ethics & governance

Common Grounds

Responsible sourcing

Minimised Footprint

Climate action

Sustainable packaging

Connected People

Diversity, Equity & Inclusion

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Our value creation story (continued)

Business Performance

        Financial performance

        Product quality

        Ethics & governance

Shareholders and investors, customers and consumers, industry

2021 KPIs

and progress vs.
2025/2030 targets

Material topic

Key Related Risks

Stakeholders concerned

SDGs

Common Grounds

        Responsible sourcing

Smallholder farmers, suppliers, industry,
NGOs, governments

Minimised Footprint

        Climate action

        Sustainable packaging

Customers and consumers, industry, governments

Connected People

        Diversity, Equity & Inclusion

•Key talent risk

•Discontinuity in our manufacturing and distribution facilities

•Food safety and packaging compliance

•Failure to comply with ESG standards

•Insufficient supply of quality and sustainable coffee & tea

•Failure to comply with ESG standards

•Intense competition and strong buying powers from retailers

•Changing distribution channels and consumer tastes

•Volatile commodity pricing

•Legal and regulatory requirements

Employees

6.1%

Organic sales growth

EUR 1.4 bn

Free cash flow

88%

PACKAGING DESIGNED TO BE REUSABLE, RECYCLABLE OR COMPOSTABLE

40%

RECYCLED CONTENT
IN OUR PACKAGING

72%

RSPO-certified
palm-based oils

470,000

Smallholder
farmers reached

30%

Certified/verified Coffee

32%

Certified/verified tea

3%

Scope 1& 2 GHG emission reductions  vs. 2020

6%

Scope 3 GHG
emission reductions  vs. 2020

Target: 3-5%

Target: 100% by 2025

Target: 35% by 2025

Target: 100% by 2025

Target: 500,000 by 2025

Target: 100% responsibly
sourced by 2025, thereof
40% certified/verified

Target: 100% responsibly
sourced by 2025

Target: 25% reduction by 2030

Target: 12,5% reduction by 2030

Target: mid-single-digit

1.5%

Organic adjusted EBIT growth

37%

SHARE OF WOMEN on the Global Leadership Team

Target: gender balance representation

On/ahead of track to achieve target

Some progress towards target

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External trends

In recent years, the coffee & tea categories have been in a state of change, largely due to a shift in consumer tastes and behaviours. However, the pandemic that has continued since 2020, has had a short-term impact, and accelerated a number of longer-term trends. Within this ever-changing situation, JDE Peet’s has identified several key trends to which we are responding with a combination of innovation, expertise and agility.

A sustainable consciousness

Through our sustainability strategy, we directly respond to the growing focus on sustainability.

Consumers are increasingly aware of the impact their choices have on the environment and the well-being of others, leading them to select options that are more sustainable. This can include ethically sourced and fair trade coffees & teas, environmentally friendly packaging, and products with a reduced carbon footprint or that are carbon neutral. At the same time, governments are progressively looking at policy initiatives to address these topics, particularly regarding greenhouse gas emissions.

A sustainable consciousness

Consumers abandon the middle ground

Café culture is
here to stay

Emerging markets, emerging growth

E-commerce and coffee go hand-in-hand

Better data for a better experience

Consumers abandon the middle ground

Consumer fragmentation is increasing across the coffee & tea categories, with trends such as growing numbers of consumers seeking premium products running parallel to more people seeking value product propositions. Caught in the middle is a declining, mid/mass market. The result is a divergence in pricing opportunities as both premium product propositions (such as traceable and organic beans) and value products (such as instant coffees with creamer) become more prominent.

Reinforcing this fragmentation is the rise of millennials as a dominant consumer class. This generation's tastes and expectations are distinctly different from their parents’, with millennials consuming more coffee on-the-go and paying more attention to innovation and product quality.

In response to this emerging trend, we have tailored our growth strategy to expand our single-serve and whole-bean coffee subcategories.

Healthy opportunities

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Café culture is here to stay

E-commerce and coffee go hand-in-hand

The café culture has undergone a global expansion in recent years, which has not only increased the consumption of coffee & tea, but also created new consumer touch points. We are utilising these touch points to introduce consumers to new and different tastes, textures and concepts, expanding brand awareness and building stronger consumer relationships. This can lead to consumers purchasing additional products through different channels, such as their favourite coffee chain branded beans online.

As part of our growth strategy, we have successfully increased the household penetration of Peet's in the United States.

Emerging markets, emerging growth

As global prosperity continues to improve, consumers in emerging markets are developing a taste for the coffee experience. The total spend on coffee is accelerating and we expect this to continue, driven by increased coffee consumption overall and an increased share of the Away-from-Home business. There is every chance this shift will attract large coffee chains to urban areas in these markets.

We are increasing exposure to, and driving growth in, emerging markets as part of our growth strategy, directly capitalising on this emerging trend.

Selling coffee online started growing even before the pandemic, but an increased demand for anything online also means an increase in online coffee sales. E-commerce allows consumers to find speciality and premium coffee products that they might not otherwise have access to. With the pandemic prompting people to enjoy coffee at home as oppose to restaurants, e-commerce is able to fill the gap.

Through e-commerce we are increasing the number of cups we serve, bringing our coffee to everyone at home.

External trends (continued)

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Better data for a better experience

Access to consumer data delivers a competitive advantage in consumer product categories. Combined with AI-driven models and other data analytics techniques, we are able to perform real-time mapping and identify shifts in consumer behaviour. We can then respond with more streamlined and efficient operations that deliver faster and more targeted innovation, resulting in greater consumer loyalty.

As part of our growth strategy, we want to build direct consumer relations through our own Direct-to-Consumer channels.

Healthy opportunities

There is growing consumer focus on a healthy lifestyle, which impacts the products they consume. Drinking coffee & tea in moderation is part of a balanced diet and healthy lifestyle.

Consumer trends increasingly favour new beverage segments that are viewed as being nutritious, with fats and sugar facing greater consumer and governmental scrutiny. In response, many countries have introduced a sugar tax.

Through our Healthy Indulgence Programme, we continue our heritage of keeping consumer health at the heart of product development.

External trends (continued)

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Engaging our Stakeholders

We have a broad range of stakeholders, ranging from the farmers who grow the coffee & tea used in our products, to our customers and consumers, our employees, our shareholders and credit rating agencies. While each stakeholder interacts with JDE Peet’s in a different way, they all bring a unique perspective to the company.

We identify stakeholders with expertise across our business and value chain and engage with them on many levels, both within our organisation and along our value chain. Having regular, ongoing interaction with all of them enables us to draw on their expertise to improve and set priorities for long-term value creation, and to better anticipate risks.

Forms of engagement include regular stakeholder dialogues, participation in events and meetings, and engagement by members of our Executive Committee.

To enhance our societal impact, we actively engage with organisations such as the Global Coffee Platform, the Sustainable Coffee Challenge, the European Coffee Federation, the Rainforest Alliance, World Coffee Research, the Ethical Tea Partnership, CEFLEX, RECOUP or the One Planet Business for Biodiversity (OP2B) coalition. These partnerships are central to our stakeholder engagement, helping us effectively address the broader industry and sustainability challenges which go beyond our immediate supply chain.

In the next section, we provide a more detailed outline of our engagement with the nine stakeholder groups we have identified as critical to our future success. Additional information on how we respond to stakeholders' needs and concerns on specific topics can be found in the 'Our performance' chapter.

Consumers

How we engage

We interact with our consumers across multiple platforms and channels. We need to be where our consumers are, which is why we consider the impact and role of each channel along the consumer decision journey to create meaningful interactions. Through our consumer carelines, we have around 300,000 interactions every year through calls, emails, letters, social media and web chats. We also engage with consumers through our brands' marketing campaigns, including awareness on sustainability topics and recycling opportunities. In addition, we also use standard industry sources of research and consumer insight data to inform our understanding of consumer trends. Doing so, we unleash the power of our consumers.

Main interests in 2021

While consumers continue to look for quality coffee & tea products across a range of formats and price points, they increasingly also look for more sustainable choices, and demand less packaging and waste. We believe that brands that demonstrate a meaningful purpose create brand loyalty, particularly among younger consumers.

Our response

On packaging and waste, we further expanded our initiatives across a number of markets in 2021 to facilitate the recycling of our single-serve products. In addition, we established four Consumer Connection Communities (explained below) in France, Germany, Poland and the Netherlands.8 

Case example

Each of our four Consumer Connection Communities is an online and mobile group of about 1,500 engaged consumers. By interacting with them, we gain invaluable insights enabling us to further innovate and develop communications, strengthening our consumer offerings.

8     Australia to follow in 2022.

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Smallholder farmers

Customers

How we engage

We engage with smallholder farmers through our Common Grounds responsible sourcing and supplier engagement programme, which provides farmer training and other support programmes, mostly through partners such as our direct suppliers or non-profit organisations. Since 2015, we have reached more than 470,000 smallholder farmers through Common Grounds, and we aim to have reached 500,000 by 2025. The farmer training programmes are designed in collaboration with our partners who align and work towards local priorities in a structured, action-oriented way to drive continuous improvement in the supply chain.

Our response

In 2021, the COVID-19 pandemic continued to impose restrictions on how we and our partners could engage with smallholder farmers. Nonetheless, we were able to grow the number of farmers we reached, including through 10 new projects. Farmer training programmes continued

to be delivered in smaller groups by following careful social distancing procedures. Whenever possible, we used mobile phone-based solutions where the project agronomists would call or text farmers when farm visits and farmer trainings could not take place. In many of our projects we were quick to develop radio messages, posters and information bulletins to advise farmers and their communities on Health and Safety measurements.

Case example

In addition to expanding coffee projects in our key origins, we also launched three new projects in our supply chains in Indonesia, Malaysia and the Philippines, which address key challenges faced by smallholder palm and coconut farmers.

How we engage

We actively manage our customer relationships through our key account teams. Our main engagement with our retailer customers is through annual Customer Planning Days where we align on plans for the year ahead. In addition, retailers increasingly host sustainability webinars to brief suppliers on their priorities.

Our response

In 2021, we continued to strengthen our corporate and brand-specific sustainability strategies to take up and address the concerns of our customers and their consumers on topics such as packaging and climate change. We work closely with a number of our customers across geographies on their sustainability initiatives. In partnership with customers, we also further expanded our recycling-initiatives for some of our single-serve offers, such as Podback in the UK and the Aluminium Capsule Recycling Alliance in France.

Main interests in 2021

Many smallholder farmers still earn low incomes, driven by a combination of low farm productivity and small farm sizes. The COVID-19 pandemic has only added to the economic pressure for many of them. In addition, climate-related changing weather patterns and natural hazards are already impacting farmers in many countries. As a result, sustainable agriculture and good agricultural practices continue to be important topics for the smallholder farmers supplying our coffee & tea, as are agricultural incomes and better opportunities for women and youth.

Main interests in 2021

The constantly evolving regulatory framework as well as engagement from consumer associations are bringing environmental, good health and societal topics to the forefront of our retail partners and our e-commerce and out-of-home customers. This means as their suppliers, we are increasingly engaging with them on topics such as packaging sustainability (for example, the removal of hard-to-recycle materials and the removal of excess packaging) or customers' GHG emission reduction or carbon neutrality commitments.

Engaging our Stakeholders (continued)

Case example

JDE Peet's France, Nespresso France and Nestlé France have created the Alliance for Aluminium Capsule Recycling with the objective of recycling 100% of aluminium capsules on the French market. The Alliance works with customers to develop the collection of capsules in the selective sorting bins, increase the number of collection points and inform the general public about the correct sorting process so that each capsule is disposed of in the right place by consumers.

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Employees

Suppliers & business partners

Case example

We held our first Supplier Innovation Day with some of our key packaging suppliers, focussing on sustainability.

How we engage

Employee engagement is a key enabler of our business success and we engage with our employees in multiple ways and through various channels, with a strong increase in the use of online collaboration tools. Our regular engagement survey keeps track of employee concerns and engagement, while ongoing meetings and town hall meetings keep employees up to date with key issues and developments. Our learning platform supports our employees’ development plans, which are steered in conjunction with employees during three checkpoints throughout the year.

Our response in 2021

In 2021, our engagement survey was fully digital for the first time, with more than 12,636 employees responding. We also invested heavily in technology solutions to allow a seamless connection between remote and on-site teams. Above all, the health and safety of our employees remained our guiding principle, applying a

test, learn and evolve mindset for office-based work. We also launched a robust online mental fitness academy to support the well-being of our employees during the pandemic. More information on our engagement survey can be found in the 'Connected People' section.

Case example

The UK team is at the forefront of JDE’s HealthyYou (well being) agenda. In 2021, they made further steps again by integrating employee engagement feedback with the external best practices. For example, to foster healthy minds, they partnered with Mental Health First Aid England to train internal volunteers to become Mental Health First Aiders (MHFA) at work. Through this blended learning program, MHFAs from across factory, office and field teams are now qualified to provide a first line of support to their colleagues on mental health topics. To build healthy bodies, the team launched the wellbeing app WellSpace for all their people, enabling everyone to monitor and manage their own physical health indicators.