2018 Annual Report - Equitable Food

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Forging CollectiveImpact to Transform theProduce Industry2018 Annual Report

InsideFrom the Executive Director3From the Executive Director4EFI’s 2025 Vision6Becoming the Backbone Organization forTransforming the Produce Industry9Creating Equity Through a Changing Power Dynamic10EFI’s Reach & Impact13Driving Behavior Change on Farms14Creating a Culture of Continuous Improvement15Generating Shared Value Across the Supply Chain162018 Financials182018 LeadershipPhoto by Shiloh StrongDear Friends,Equitable Food Initiative has completed its fourth year as an independentsocial enterprise after spinning off from Oxfam America in early 2015. But 2018marked a decade since the launch of our multistakeholder dialogue to align theinterests of growers, farmworkers, retailers and consumers and create win-winopportunities to raise the bar on both compliance and business performance inthe fresh produce industry.EFI’s formula for labor-management collaboration to drive continuous improvement is gaining tractionat an opportune moment. Produce recalls were headline news over the last year, underscoring theimportance of engaging farmworkers in identifying and addressing threats to food safety at the point ofproduction. And in July 2018, the two largest U.S. produce trade associations released an Ethical Charteron Responsible Labor Practices, signaling an important new commitment to respectful workingconditions throughout the international supply chains that bring fresh produce to American consumers.EFI is well-positioned to help leading produce suppliers demonstrate their compliance with theEthical Charter — and to encourage others to adopt more responsible labor practices. The EthicalCharter specifically calls for labor-management communication, management systems for continuousimprovement, ethical recruitment and responsible purchasing practices. These are areas in which EFI hasunique expertise, and in which the produce industry has few current tools or resources.About EFIEquitable Food Initiative (EFI) is a nonprofitskill-building and certification organizationfor the fresh produce industry that bringstogether everyone in the supply chain totransform agriculture and create a safer,more equitable food system.EFI-certified farms meet rigorous standardsfor labor practices, food safety and pestmanagement. They commit to a cultureof worker engagement and continuousimprovement to provide Responsibly Grown,Farmworker Assured fruits and vegetables.MissionEquitable Food Initiative brings togethergrowers, farmworkers, retailers andconsumers to transform agriculture and thelives of farmworkers.Over this past year we built exciting new funding partnerships with the Walmart Foundation, NorthwestArea Foundation, Silicon Valley Community Foundation and Humanity United to embrace growthopportunities. Ten years into our quest for a collective impact greater than any of our stakeholdermembers could achieve alone, we also applaud and thank those donors whose early grants pavedthe way for the progress we have made. Their willingness to invest in dialogue and planning built thefoundation from which EFI was able to bring training and improved working conditions to some 30,000farmworkers in the United States, Mexico and Canada by the end of 2018.People often ask me who came up with the idea of Equitable Food Initiative. They usually imagine somebrilliant social entrepreneur with the vision and charisma to align our stakeholder groups in a masterplan. But the real beauty of EFI’s evolution over the past decade is that none of our achievements can betraced to any single person. True collective impact emerges from the willingness of multiple leaders torecognize a potential “whole” greater than the sum of the individual parts.On behalf of EFI’s multistakeholder board and staff, I thank you for your support of our collaborativeefforts throughout 2018. And I invite you to join us in moving forward to achieve our goal of changing thelives of hundreds of thousands of agricultural workers across the Americas.Sincerely,Peter O’DriscollExecutive DirectorEFI 2018 Annual Report 3

EFI’s 2025 VisionAlignment to the Produce Industry’s Ethical CharterDuring 2018, EFI board members and staff worked together to create metrics and a plan outliningmilestones, opportunities and major strategies to drive EFI’s work and fulfill the mission of transformingagriculture and improving the lives of farmworkers.As EFI was crafting its plan, the produce industry was completing a two-year process of creating theEthical Charter on Responsible Labor Practices. The release of the Ethical Charter was an importantsignal that labor conditions have been elevated to the same critical level as food safety for the industry.The Ethical Charter outlines three areas within its guiding principles: respect for laws at work, respectfor professional conduct and respect for human rights. The sections on legal compliance and humanrights are very much in line with existing codes of conduct. But the charter’s principles for professionalconduct — covering dialogue with workers, inclusive management systems and a culture of continuousimprovement — break new ground for the industry.While the Ethical Charter offers guidelines and principles to be followed on growing operations aroundthe world, it does not identify mechanisms for enforcement or verification. This is a void that EFI canhelp fill for the fresh produce industry. EFI’s compliance model takes a transformative and collaborativeapproach by engaging all levels of the produce supply chain in learning, problem-solving and businessperformance. Its skill-building approach has raised food safety and labor standards while helpingfarming operations run more effectively.EFI’s 2025 vision is to improve the lives of 250,000 agricultural workers across the Americas througha proven model that drives compliance and business performance. Certification can be used as themeasure by which the fresh produce industry holds itself accountable to the Ethical Charter. EFI workswith the leading suppliers in the industry who have invested in their workers andlaunched a culture of collaboration and continuous improvement. Retail buyersshould recognize these leaders as preferred suppliers, creating an incentivefor the entire industry to improve labor standards in order to remaincompetitive.“We care more about problems and getting involved.Being a part of the EFI Leadership Team makes me feelmore confident, as I am the voice of my peers. It makesme feel . happy.”LEADERSGROWERCATEGORIESCompanies that abide by theEthical Charter and investin their workforce. Leaderspresent low supply chain riskto their customers and arecandidates for EFI certification.EFI believes that producegrowers fall into one of threerisk categories, based ontheir attitude toward workerengagement:STRIVERSCompanies that recognizethe value of workforcedevelopment but still needsupport and materials tocomply with the EthicalCharter. Strivers present amedium risk to their retailbuyers.LATE ADOPTERSCompanies that ignoredemands to raise laborstandards and will not investin engaging their workers untilthe market requires it. LateAdopters present the highestrisk to retail buyers.In addition to offering retail buyers a means by which to evaluate supply chain risk across their suppliers,EFI’s model helps growing operations become employers of choice in an ever-tightening labor market.EFI-certified growers report easier recruitment and better retention rates because workers can choosewhere they work based on how they are treated and the opportunities offered to them.As EFI moves toward its 2025 vision, it will continue to:l Offer a comprehensive solution for industry labor and food safety challenges.l Provide the backbone organization for collective impact in the industry by convening growers,workers, retail buyers and consumers.l Develop an industry culture of collaboration and problem-solving with a commitment to continuousimprovement.l Create shared value for everyone in the supply chain.l Build a system by which retail buyers can measure and compare suppliers.l Support growers with resources and materials to help reach higher standards and provide pathwaysfor professional development to workers.l Reduce the audit burden on growers through a “one-stop shop” certification by which they candemonstrate to customers that they meet the highest labor, food safety and pest managementstandards in the industry.EFI will continue to attract leaders who are looking for workforce development solutions to improve theirgrowing operations. EFI will encourage the broader produce industry to recognize and reward leaderswho abide by the Ethical Charter by prioritizing purchases from suppliers with the best labor practices.Female Worker4 EFI 2018 Annual ReportEFI 2018 Annual Report 5

Becomingthe BackboneOrganization forTransformingthe ProduceIndustry“The impact of the EFI Leadership Team training on personal and professional growth is amazingto watch. Many of our workers started the weeklong training timid and unsure. They remainedquiet and were hesitant to make eye contact. By the end of the 40-hour training, they were excitedabout the work, participating in dialogue and eager to show everyone what they had learned. Itwas wonderful to be part of something that created lifelong change for members of our team.”Kristin Kershaw, Domex Superfresh GrowersEquitable Food Initiative has succeeded in forming vibrant and unique partnerships across businessesand organizations representing diverse interests in the fresh produce value chain. Having agreed to acommon objective represented by the EFI Standards, the multistakeholder group has a strong sharedpurpose to protect farmworkers, consumers, future generations and the long-term viability of the freshproduce industry.Investment to Develop the ModellThe Atlantic Philanthropies (2012–17)Defining a Common AgendalBroad Reach Fund (2012–present)A group of unlikely allies (farmworker unions, civil society organizations, retailers, scientific institutions,consumer groups and growers) first came together in 2008 through the leadership and vision of UnitedFarm Workers, Costco Wholesale and Oxfam America. After three years of facilitated dialogue, the grouparrived at a shared vision and common agenda. Participants realized they would have to approachthe complex problems of the global produce marketplace in new ways and think differently and morebroadly about the whole system. This acknowledgement and respect for each actor’s role helped thegroup identify mutually beneficial outcomes and come together around labor practices, food safety andpest management.lThe California Endowment (2012–13)lThe California Wellness Foundation (2013–15, 2018)lCedar Tree Foundation (2015–17)lColumbia Foundation (2012–14)lCostco Wholesale (2018–present)lFood System 6 (2016)lMacArthur Foundation (2012–17)Incubating the Idea and Testing the ModellMoon Drunk Fund (2014)By 2012, the group was ready to test the four-part program it had jointly developed: rigorous standardscovering labor practices, food safety and pest management; on-farm training in continuous improvementproblem-solving and communication skills; third-party audit and certification to ensure standards aremet; and continuous worker verification of compliance with the standards. The program was piloted andrefined on farms in the United States, Canada and Mexico. The group learned and adapted through thesepilots, and Equitable Food Initiative was launched in 2015 as an independent nonprofit to serve as thebackbone organization for the distinct actors to fulfill their shared agenda.lNorthwest Area Foundation (2018–present)lOxfam America (2008–18)lPublic Welfare Foundation (2011–13)lRosenberg Foundation (2011–15)lSilicon Valley Community Foundation (2018–present)lWallace Genetic Foundation (2014)Continuous Communication and LearninglThe Walt Disney Company’s Supply Chain InvestmentProgram (2015–17)lWilson Sonsini Goodrich & Rosati (2013–present)Collective impact requires a collaborative problem-solving process, and EFI creates a respectful spacewhere diverse interests can be shared. Stakeholders are committed to listening so as to continuouslylearn, adapt and improve. The commitment remains and grows because each industry sector hasbeen able to identify and achieve tangible, mutually beneficial outcomes. Each actor within the valuechain recognizes that, by understanding and involving all the differing perspectives and priorities,fragmentation can be eliminated and collective endeavors launched. To have reached this understandingwith the inclusion of worker voices has truly broken new ground in the fresh produce industry.6 EFI 2018 Annual ReportThe following organizations have provided financial andin-kind support to launch EFI as a backbone organizationfor collective impact in the produce industry:EFI 2018 Annual Report 7

Creating EquityThrough aChanging PowerDynamicGiving Voice and Agency toFarmworkersThe EFI Program fosters a culture of collaboration andrespect and has been evaluated as a successful modelto drive worker engagement and improve workingconditions. Qualitative research over the past threeyears has shown that the EFI Program eliminates sexualharassment, creates equality for female and minorityworkers and drives worker satisfaction overall. TheLeadership Team model gives voice and agency toworkers on EFI-certified farms.“Food safety starts one step back. It’s not onlythe grower’s responsibility but everyone’s.From the person that designs the deep-waterwell to the producer. We are all responsible forthe product that consumers are going to buy,for their health, and we have that weight onourselves. We have to assure that our product isgood. That when you consume it the only thingthat happens is that you want to go back to thesupermarket to buy it again.”Jorge Guerra, Food Safety OfficerOptimal BerryLeadership Teams provide a space for workers toengage directly with management to share theirthoughts, concerns and solutions. Workers andsupervisors applaud the removal of fear and languagebarriers, allowing workers to speak up and engagein real issues. Workers receive information frompeers they trust. The organizational trust continuesto grow as management acts on issues brought toLeadership Teams, and workers at all levels experienceimprovements. Communication dynamics are greatlyenhanced across organizations, and relationshipsare strengthened as people connect beyondestablished work hierarchies and powerdynamics.EFI Leadership TeamsProvide a Place and a VoicePurposeLeadership Teams are tasked withunderstanding the EFI Standards,identifying problems that affectcompliance, proposing potentialsolutions and communicating withthe broader workforce about EFI soeveryone can share insight and ideasfor complying with the standards.CompositionEach EFI Leadership Team is composedof 8–20 people (depending on size ofthe farming operation) who representboth management and labor from allthe different work functions of eachfarming operation. Teams have genderand regional balance that accuratelyreflects the demographics of theworkforce.TrainingLeadership Team members receive aminimum of 40 hours of training fromEFI’s workforce development facilitatorson effective problem-solving processes,data gathering, communicationand conflict resolution. The populareducation model used in the trainingillustrates the human-centereddesign that EFI strives tobring to entire farmingoperations.“EFI has brought very good things:transparency at every level, andeverybody is happy because we arebeing heard. Issues are being resolvedas soon as possible, like a well-runmachine.”Female Worker8 EFI 2018 Annual ReportEFI 2018 Annual Report 9

Grower SummitEFI’sReach & ImpactEFI brought representatives fromeach of its active farming operationstogether for a two-day event togather feedback on the EFI Programand share resources aroundvalues-based marketing and crisiscommunications.(as of December 31, 2018)29Farming OperationsCertified (active)18Additional Certificationsin Progress1,30830,536Workers on Farms WithTrained Leadership TeamsLeadership Team MembersCertifiedInternal TrainerCertification CourseIn response to customerdemand, EFI developed a courseto train and certify staff trainersat certified farms to provideongoing training support andreinforcement to LeadershipTeams. The program was pilotedin early 2018 and will be refinedand expanded in early 2019.10 10 EFI EFI20182018AnnualAnnualReportReportIndustry OutreachEFI staff continued to increaseoutreach to the fresh produceindustry by attending tradeshows and meeting with industrypublication editors and writers.EFI 2018 Annual Report 11

Sharing EFI’s Story & ImpactEFI staff traveled the world in 2018 to share the learnings andsuccesses of the EFI model — from Hong Kong to discuss endingmodern-day slavery in the recruitment of workers to Silicon Valleyto share the ideas behind EFI with potential funders.Driving BehaviorChange onFarms“When they train us together, we meet allies. Welearn something about each topic — from plantingto the final product. And we observe things thathappen that we didn’t notice before. Now we ask,‘Why is this happening?’”Male Supervisor“Now We Ask: Why?”As communication and collaboration increase following EFILeadership Team training, shifts in mindsets, attitudes andbehaviors begin to drive effective leadership, teamwork andproblem-solving. These changes in mindsets and behaviors havelarge and small impacts across farming operations and result inmore employees asking “why” and respecting when othersask “why.” 6 MillionGenerated in WorkerBonuses4Countries With ActiveCertificates — Canada,Guatemala, Mexico andUnited StatesSowing the Seeds of ChangeEFI was featured in the article “Sowing the Seeds of Change,” published inthe peer-reviewed journal New Directions for Adult and Continuing Education(no. 159, Fall 2018, Wiley Periodicals), where the author concluded, “Wesee how EFI, by attending to deep divides in social relations and offeringnew structures and cultural tools to help people get above concrete safetyand labor problems and think about them in new ways, is transformingthe culture of agriculture and the lives of farmworkers.” The full article isavailable online at onlinelibrary.wiley.com.12 EFI 2018 Annual ReportWhen the members of Leadership Teams come together forEFI training, it is often the first time that representatives fromacross operations have interacted or been exposed to a crossorganizational view. The cross-level approach and the commitmentto develop a respectful culture result in the workforce:lletting go of resistance and entrenched practices, as managersand farmworkers become allies who commit to make changehappen.ldeveloping a greater understanding of health and safety,labor practices, food safety and pest management, as workersengage in continuous improvement, monitoring and innovation.The shared understanding and respect that results from the EFIProgram leads managers and supervisors to value employeeswho want to understand the rationale behind tasks and to seethe importance of answering their questions. Leadership Teamsare tasked with providing explanations for wearing protectiveequipment, washing hands or taking off jewelry, and managersand supervisors reinforce the reasoning behind the policies.The collaboration, respect, knowledge and understandingfostered by the EFI training and carried out by Leadership Teamrepresentatives and management result in behavior changesacross farming operations. From ending harassment to sharing the“why” behind the policies, numerous behaviors and attitudes shiftin permanent ways.EFI 2018 Annual Report 13

Creating a Cultureof ContinuousImprovementGenerating SharedValue Across theSupply ChainFostering Trust & Collaboration“If we want to improve,we need to do it as ateam, and as a team weunderstand that we needto produce somethingof high quality so thatour buyers are pleasedwith the product andthat consumers enjoy theproduct. If we make ourbuyers happy with ourquality, there will be moresales and we all benefit.”Continuous improvement has been an integral part of the EFIProgram from its inception. Transforming the produce industryrequires big changes but committing to continuous improvementallows everyone in the supply chain to make progress.A commitment to continuous improvement signals somethingunique to each stakeholder in the food supply chain. To workers,it shows that their insights are welcomed and that innovation isvalued. To retail buyers, it shows a commitment to continuallymeeting the next level of standards and expectations. To growers,it shows that their operations will benefit from efficiencies andother operational improvements.Luis Octavio Lopez Calzada,Leadership Team Member, JVSmith CompaniesDedication to continuous improvement requires trust. The EFImodel enhances trust by encouraging and allowing employeeparticipation, defining spaces for representation and input, andsharing information more widely for informed decision-making.Farmworkers report feeling an increased sense of motivation to bepart of the team, and the “us versus them” mentality is replacedwith an understanding that all can benefit from collaboration.Recognition ofFarmworkerRights,Dignity andValuec tinve CommunicatonsparencyTraAlignment&Tru&Collabona tiroEffe14 EFI 2018 Annual ReportOverall, the EFI model has shown thatproperly trained and engaged workerswith the right incentives create valuefor the farming operation and forsociety as a whole. In addition, theinterconnectedness of food safety,employee well-being and workerengagement is recognized across thesupply chain. Each actor within thesystem receives benefits.lPremium bonusespaid by retailerslWorking conditionsimprovedlProfessionaltraining and growthopportunitiesdevelopedlRespectful, safeand harassmentfree workplacesensured“There is a responsibility fromboth the producer and the workersto make a constant and bettersupply chain, where everyone hasa responsibility to produce thebest possible product for humanconsumption.”José Quezada, General Manager,Importaciones Mundiales for AlpineFresh, Inc.GROWERSBENEFITlRecruitmentchallenges reducedand retention ratesincreasedlWorkforcecollaboration forinnovation andproblem-solvingattainedlCommunicationsand work processesstreamlinedlAmbitious newon-farm standardsand practicesconsistently andenduringly executedRETAILERSBENEFITllstThe EFI training embeds the necessary trust and collaboration forthe team to engage around the constant monitoring of health andsafety, labor and food safety issues and to provide theinnovative thinking required for continuous improvement.In fact, effective Leadership Teams have been found toachieve faster response times to issues and toaccelerate improvement plans. With a model thatinvolves participants from management to workers,it is easier to achieve buy-in, accelerate action andcommit to continuous improvement.For the multistakeholder approach ofEFI to be successful, every actor acrossthe supply chain must benefit from thevalue of the shared agenda. In fact, toachieve success, everyone must offersomething (resources, brand equity,trust, additional effort, willingness toset aside self-interest), and everyonemust find benefit. The carefully achievedbalance of this model brings aboutequity.FARMWORKERSBENEFITFood safetyprotocols andrespectful workingconditions assuredConsumer demandfor sociallyresponsiblebusiness practicesmetlSocially responsiblevendors screenedand identifiedlProduceprotected fromcontamination,risks reducedfor recalls andfoodborne illnessCONSUMERSBENEFITlRisks of foodborneillness reducedlValues-basedpurchasing offeredby easily identifiable,responsible retailersEFI 2018 Annual Report 15

2018 FinancialsStatement of ActivitiesStatement of Financial PositionYear Ended December 31, 2018Year Ended December 31, 201820182017Cash and cash equivalents 295,679 313,913Grants and accounts receivable, net1,047,8532,016,51720,4279,5996,6258,375 1,370,584 2,348,404ASSETSPrepaid expensesDepositsTOTAL ASSETSLIABILITIES AND NET ASSETSDeferred revenueTotal Liabilities 149,137 132,04012,5007,596161,637139,636NET ASSETSWithout donor restriction(84,728)279,063With donor restriction1,293,6751,929,705Total Net Assets1,208,9472,208,768 1,370,584 2,348,404TOTAL LIABILITIES AND NET ASSETS16 EFI 2018 Annual ReportWith DonorRestriction2018Total2017TotalContributions and grants 1,000 631,485 632,485 1,961,376In-kind ,3601,273-1,2731,879Net assets released from restrictions1,267,515(1,267,515)--Total Revenue and 10-1,430,1101,540,766Management and 9,56679,154Total Expenses2,158,515-2,158,5151,866,383Change in Net 29,7052,208,7681,815,283 (84,728) 1,293,675 1,208,947 2,208,768RevenueProgram incomeOther IncomeExpensesLiabilitiesAccounts payable and accrued expensesWithout DonorRestrictionProgram serviceNet Assets, Beginning of Year RestatedNet Assets, End of YearEFI 2018 Annual Report 17

2018 LeadershipThank You2018 DonorsBoard of DirectorsErik Nicholson, Chair (term ended October 2018)National Vice President, United Farm WorkersErnie Farley, Chair (term began October 2018)Partner, Andrew & Williamson Fresh ProduceMaisie Ganzler, Vice-Chair (term ended October 2018)Chief Strategy and Brand Officer, Bon Appétit ManagementCompanyCarol Schrader, Vice-Chair (term began October 2018)Independent ConsultantPreston Witt, SecretaryDirector, Supplier Code of Conduct Compliance, CostcoWholesale CorporationBruce Goldstein, TreasurerPresident, Farmworker JusticeKathryn AultVice President, Customer Solutions, NatureSweet TomatoesMichael ConroyIndependent ConsultantThomas GremillionDirector of Food Policy, Consumer Federation of AmericaMartin GuerenaSustainable Agriculture Specialist, National Center forAppropriate TechnologyRamón RamírezPresident and Co-Founder, Pineros y Campesinos Unidos delNoroesteStaffLilian AutlerSenior Facilitator, Workforce DevelopmentKevin BoyleDirector, Business & New ProductDevelopmentRebecca CastrejónDigital & Communications AssociateNorthwest AreaFoundationStar HuffOperations ManagerOxfam AmericaAlice LinsmeierSenior Facilitator, Workforce DevelopmentSilicon ValleyCommunityFoundationCandace MickensChief Financial OfficerPeter O’DriscollExecutive DirectorGretta SiebentrittDirector, Workforce Development18 EFI 2018 Annual ReportWilson SonsiniGoodrich & RosatiDiona MonroeOperations AssociateMinor SinclairDirector, U.S. Regional Office, Oxfam AmericaBaldemar VelasquezPresident and Founder, Farm Labor Organizing CommitteeCostco WholesaleKenton HarmerDirector, Certification & ImpactLeAnne RuzzamentiDirector, Marketing CommunicationsSarah SorscherDeputy Director of Regulatory Affairs, Center for Science inthe Public InterestThe CaliforniaWellness FoundationAlexandra DeGrandchampSenior Impact & Information ManagementOfficerMargaret ReevesSenior Scientist, Pesticide Action Network North AmericaVictor SmithChief Executive Officer, JV Smith CompaniesBroad Reach FundCertifying BodiesSCS Global ServicesUnderwriters Laboratories“EFI encourages each employee to understand all aspects of our everchanging business. This increased knowledge along with the increasedtrust and accountability gives employees the voice and space to executegoals and allows them to find roles to grow into. That benefits both ourcompany and the employee, and without EFI, we might not have otherwiseidentified the talent and opportunities.”Pete Donlon, Vice President, MisioneroEFI 2018 Annual Report 19

1875 Connecticut Avenue NW, 10th FloorWashington, DC 20009202.730.6672www.equitablefood.org

brilliant social entrepreneur with the vision and charisma to align our stakeholder groups in a master plan. But the real beauty of EFI’s evolution over the past decade is that none of our achievements can be traced to any single person. True collective impact emerges from the willingness of multiple leaders to

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