Sustainable Sourcing

SUBWAY® restaurants are known for serving fresh, great tasting food and good nutritional choices to millions of customers around the world every day. Our, franchisee owned, Independent Purchasing Cooperatives or Companies (IPCs) are responsible for procuring our delicious products and ingredients as well as the equipment, supplies and services used in our restaurants.

 

Together with the IPCs, we are dedicated to supporting SUBWAY® franchisees in the most environmentally sustainable manner possible. From streamlining our supply chains, using sustainable sourcing practices to ensuring our high food quality and food safety standards are met, we not only help reduce energy, water usage and waste but we’re taking care of the environment too. Ultimately the health of our population depends on the health of the planet.

In the past three years, our sustainability efforts in the US & Canada have significantly cut our resource consumption and reduced our greenhouse gas emissions by 292,936 metric tons of CO2 (which is equivalent to 57,244 passenger cars not driven for a year) even as we grew by 12%. We have focused on five key areas:

• Food Quality & Food Safety
• Sustainable Sourcing Practices
• Local Sourcing
• Florida Tomato Growers
• Animal Welfare
• Forced Labor and Human Trafficking
• Streamlining Supply Chain
• Non-GMO Products

Food safety and food quality are our top priorities. Our goal is to serve food that consistently meets the highest quality and safety standards – from the time it is grown, harvested or caught to when it is put into a sandwich or salad in our restaurants.

To ensure that the food we serve is always fresh and sustainably produced, we have stringent audit processes that we enforce throughout our supply chain as well as require that our suppliers’ employment practices meet our Supplier Code of Conduct and Supply Chain Employment Practices Policy

Our high standards for food safety ensure that our customers are getting the quality the SUBWAY® brand expects from us. It begins with setting detailed product specifications followed by inspection of samples pulled from distribution to ensure that specifications are being met. All approved facilities that supply food to SUBWAY® restaurants, undergo a rigorous third-party audit for food safety, HAACP (Hazard Analysis and Critical Control Point) and GMPs (Good Manufacturing Practices). In addition, our auditing process ensures that good agricultural and harvesting practices (GAP’s and GHP’s) are used by the ranches and farms that supply produce to us. The auditing bodies vary by country. For instance, in the United States we use the USDA to audit to this standard.

The SUBWAY® brand’s Office of Food Safety and Quality Enhancement team reviews all our food safety and quality programs and recommends improvements as needed. This team works together with our vendors to achieve our food safety and quality improvement goals. For instance, they identified high pressure pasteurization (HPP) as a way to improve freshness and food safety while eliminating the dependence on other preservatives.

Food safety is of paramount importance in our restaurants too! Sandwich Artists™ are required to always follow strict hand washing procedures and proper glove usage for all food handling processes. All products are monitored throughout the day to ensure proper holding temperatures (cold food kept cold and hot food kept hot). To further ensure freshness, all prepared food is managed via strict shelf life dating procedures. Our food safety policies are at least as stringent as the guidelines for both the FDA’s Food Code and The National Restaurant Association's Serve Safe® program. Whenever a local code differs from these guidelines, our policy is that the restaurant must always follow the most stringent policy. We provide training for franchisees and their staff on the importance of food safety. Every restaurant throughout the world is evaluated for compliance of policies and procedures every month. If our food safety, product temperature and pest control standards and policies are not adhered to at the restaurant level, it is grounds for franchisee termination.

Sustainable sourcing extends to all aspects of our supply chain, from the farm to the sandwich. Animal husbandry, fair labor practices as well as sustainable agricultural & manufacturing practices and packaging are all considered. We fully support the principles of responsible farming and fishing and want to do our part to help ensure the long - term sustainability of the earth’s natural resources.

Our vendors commit to complying with fair labor and proper animal husbandry practices, maintaining Good Agricultural Practices and Good Manufacturing Practices audits for food safety, as well as adhering to our Gold Standard Food Safety and Quality Policy. We use a combination of internal and external third party audits to ensure our standards are met and to protect our suppliers, distributors, restaurant operators and most importantly our customers.

Working with the IPCs, the Subway® brand looks for suppliers who share our values and commitment to environmental and social responsibility and continually work with them to improve the sustainability of our products. Our purchasing strategy includes female and ethnic minority suppliers, wherever possible, in all aspects of the supply chain. In the U.S., we purchase over $100 million of products from minority suppliers annually.

Working with our franchisee-owned Independent Purchasing Cooperatives, the Subway® brand looks for vendor partners who share our values and commitment to environmental and social responsibility and continually work with them to improve the sustainability of our products. While we know we have more to do, we’re proud of the practices that have been put in that make our restaurants & operations more sustainable. Some examples include:

While we know we have more to do, we’re proud of our efforts to make our restaurants & operations more sustainable. Some examples include:

• A number of suppliers domestically and internationally also grow tomatoes in controlled green house environments.
• Many of our farmers are committed to reducing emissions by using fuel-efficient vehicles, and are adopting low and no-till farming strategies to reduce tractor trips through the fields. One of our leading tomato suppliers, Procacci Brothers, installed solar power to “green” their operation based on our commitment to sustainability.
• We support our tomato growers in Florida by paying their migrant workers an additional $.01 per pound above their regular salary.
• Providing a safe, positive working environment for their employees is one way the CTF (California Tomato Farmers) sustain their farming operations and our communities. In addition, many of our farmers are charitable anchors and very active in their communities.
• One of our pickle suppliers, Hausbeck Pickle Company, has helped turn landfill waste into energy. Years ago, as part of their manufacturing process, they sent their pepper stem waste – about 80 truckloads - to a landfill. But now the pepper stems go to a dairy farm. The dairy farm uses a bio-digester that captures the methane produced when cow manure is mixed with the pepper stems. The methane burned in their generator creates electricity used to power their farm. Excess energy is sold back to the grid.

Not only do our vendors work to improve the nutritional aspect of our food, but they are committed to putting processes in place that improve the sustainability of our supply chain. For example:

• One of our poultry suppliers built the first facility in the US to convert poultry waste into certified organic fertilizer.
• One of our chicken suppliers has created a 50 acre wetlands habitat with rapid infiltration beds, which effectively treats the discharge water produced in their facility. The filtration system provides a high level of waste water treatment for low operational costs and very low energy usage. It also sustains a wide variety of wildlife species.

The SUBWAY® brand recognizes the vital importance of sustainable fishing - both commercially and ecologically. Our long-term goal is to work with the industry to move to more sustainable practices worldwide including: sourcing our seafood from independently certified sustainable fisheries, supporting protected areas and changing our specifications. We have already taken significant steps toward achieving this goal.

We believe in the need to maintain sustainable fish stocks and we support the use of independently assessed responsible fishing practices worldwide. We are working with our vendors and suppliers to source the seafood we serve in our restaurants as sustainably as possible today and into the future. We support the establishment of marine reserves, specifically in the Pacific Commons, and actively advocate a ban on the purchase of fish from illegal, unregulated and unreported (IUU) vessels.

Tuna is the only seafood sandwich that is on the SUBWAY® restaurants’ menu worldwide. We only sell skipjack tuna, considered by the International Union for Conservation of Nature (IUCN) Red List as a species of least concern. It is sourced from fisheries with non-threatened stock levels.

Our suppliers only purchase from certified non-IUU boats on the Earth Island Institute approved supplier list. Multiple catch methods are employed, including purse seine and pole and line, depending sustainability needs of the fishery. We are concerned about the levels of by-catch (the catch of unintended and even endangered species) associated with purse seine nets and will continue to support efforts to reduce or eliminate it.

We require our suppliers to only source our tuna from fisheries that use responsible management practices based on independent scientific evidence. These practices include the enforcement of seasonal fish aggregating device (FAD) bans and using improved catch methods to reduce and eliminate juvenile catch and by-catch as well as improving the traceability and verification of our tuna supply.

We support the work of the Marine Stewardship Council (MSC) and will source only from MSC (or equivalent) certified sources in the longer term. In our ongoing efforts to source sustainably, we are working with the MSC, and others, to develop a commercially feasible transition plan to more sustainable tuna.

We have also taken steps to integrate certified seafood into our menu in the following ways:

• Certified Dolphin Safe
• Earth Island complaint
• Non-IUU certified fish
• Seafood Sensation™, currently sold in the US, is fortified with Omega 3 and is sustainably sourced from a responsibly managed fishery under the Alaska Responsible Fisheries (RFM) seafood certification program
• As of June 2012, all other seafood sandwiches served in our restaurants as a local offering or a limited time offer (LTO) are made with certified sustainable seafood.

The SUBWAY® brand will continue to work with our suppliers and organizations such as the Marine Stewardship Council, the Earth Island Institute, the Blue Ocean Institute, the Monterey Bay Seafood Watch, and the Institute for Sustainable Seafood to continually improve the sustainable sourcing of our seafood.

• One of our bread suppliers, Southwest Bakeries, installed solar panels which will generate 479,880 kWh annually.

Responsible Palm Oil Sourcing

• Palm oil is used as an ingredient in a few SUBWAY® products due to its high quality, desired baking characteristics and because it supports our initiative to eliminate added Trans fats. We believe that best practice today is to source palm oil from RSPO members (Roundtable on Sustainable Palm Oil). We endorse the RSPO as the primary sustainability standard for palm oil products.

Over the past several years we worked with our approved suppliers to improve the sustainability of the palm oil used in our products and/or eliminating it from recipes where feasible. Today, all of our approved suppliers globally, with the exception of one, have represented that they purchase the palm oil used in our products from RSPO members. While we believe we have made good progress in affecting responsible palm oil sourcing within our supply chain, we will continue to work with our approved suppliers to improve the sustainability of the palm oil used in our products.

Our Commitment

• To encourage practices that support sustainable palm oil including the growing, processing and transportation processes that will stop deforestation while continuing to support the communities which rely on its production including the palm oil used in our products will:

• To continue to work with our partner manufacturers to ensure our palm oil purchasing commitments are upheld and to improve the sustainability of the palm oil used in our products with a goal is that all approved SUBWAY® products that use palm oil as an ingredient will use certified sustainable palm oil by the end of 2017. For example:

• To continue to work with our partner manufacturers to improve the traceability and transparency of the palm oil sourcing for our products. Some of the palm oil suppliers in our supply chain have already begun this process. In fact last year, one palm oil supplier had a combined average traceability to mill and estate of 93% and 38% respectively. Also two palm oils suppliers have a documented grievance process, methodology for monitoring and engaging with palm oil suppliers and Initiatives with smallholders as well as external initiatives that support sustainable palm oil. We developing a mechanism to report of the progress within our supply chain.
• In the UK & Ireland, our restaurants serve only Rainforest Alliance certified coffee & tea.

Although the SUBWAY® brand benefits from the efficiencies of a centralized distribution network, we know our customers are increasingly interested in locally sourced products that help support local businesses as well as reduce the carbon footprint of the supply chain. Knowing this, our non-profit, franchisee owned, Independent Purchasing Cooperative (IPC) tries to incorporate locally sourced products where ever possible provided they meet our stringent specification and are cost effective. For instance:

• In the U.S., 100% of the standard beverages, salty snacks, beef, pork, poultry, cheese, eggs, sauces & dressings, soup, yogurt packaging paper and cleaning chemicals used in our restaurants are produced in the U.S.
• Throughout the year, we buy produce from all over North America, from tomato farmers in Ohio and Arkansas, bell pepper growers in Florida and Canada to cucumber growers in Georgia. No matter where we buy from, we ensure that the growers have met our strict food safety. The following chart illustrates the many growing regions that our tomatoes alone are sourced from throughout the year.

Florida tomato growers are committed to sustained farming practices. They do this through responsible farming that is efficient, precise and thoughtful. Some of the sustainable farming practices they use include:

• Efficient use of water resources

Water is a vital resource to Florida’s tomato farmers. Most of Florida farm acreage is drip and micro-irrigated, minimizing the use of water. Drip irrigation in our farming practices reduces water consumption by 70%. With drip irrigation delivering water directly to the plant, weed populations are also greatly reduced.

Farmers also use computer technology to establish fertilization programs that nourish the plants based upon specific environmental factors. Computer technology in conjunction with drip irrigation ensures the tomato plant uses the least amount of water possible while retaining the health of the plant.

• Planting cover crops and using land rotation

Florida tomato growers care for the soil and make it possible to farm the same land for several generations. Cover crops are planted primarily to manage soil fertility, soil quality, water, weeds, pests, diseases, biodiversity and wildlife in agro-ecosystems. Many cover crops improve the sustainability of agricultural ecosystems and may also indirectly improve qualities of neighboring natural ecosystems. An example of an important cover crop is growing sorghum. This organic matter is folded back into the ground, helping to reduce weed production, while also improving soil quality.

• Using Integrated Pest Managment (IPM)

IPM allows growers to use good bugs to control pests that threaten our crops rather than chemical applications. Disease forecasting models can also eliminate the need for chemical applications.

• Using fuel-efficient vehicles and adopting low-till farming

These strategies reduce tractor trips through the fields; Florida tomato growers are committed to reducing emissions.

• Employing recycling programs

Ensures cardboard and plastic materials are recycled throughout the year, and using bio-degradable products whenever possible.

• Investing in seed research

To grow varieties of tomatoes that require fewer inputs.

• Using Integrated Pest Management (IPM)

Helps sustain their farming operations and their communities. Many of them are also charitable leaders within their communities.

• In the U.S., we are working with the USDA to increase the number of local farms that meet our quality and audit standards so that they can be included in our supply chain.

Some examples of products that are sourced locally in other regions include:

• In the UK, pork sausage sold is from 100% British pork.
• 50% of the turkey sold in Great Britain is from Great Britain.
• In the European Union (EU), ham and produce is sourced within the in the EU
• All produce is locally sourced in Australia and New Zealand.

We are committed to providing our customers with safe, affordable, and sustainable food. We believe that safe food comes from healthy animals that are well cared for. We support the highest standards of animal welfare practices available as well as the advancements that come from continued scientific research. We fully support our suppliers’ commitment to animal well-being and their practice of the best animal welfare programs based on scientific research and the recommendations of animal welfare experts in the industry.

We support the Five Freedoms principle proposed by the Farm Animal Welfare Council (FAWC) on the protection of animals kept for farming purposes. The five freedoms are:

• Freedom from hunger
• Freedom from discomfort
• Freedom from pain, injury and disease
• Freedom to express normal behaviors
• Freedom from fear and distress

We are committed to continuing to work with our vendors to improve the animal welfare practices used in our supply chain and give purchasing preference to suppliers with a demonstrated commitment to these values.

For instance:

• Our suppliers ensure legal compliance on animal welfare standards is maintained at all times and quality assurance schemes are supported. For example, in Europe, we are working closely with our meat suppliers to ensure that in the long term, they source from farms which adhere to the national farm assurance schemes applicable to each species to ensure the health and welfare of animals throughout our supply chain. Examples of these schemes are: Chicken Farmers of Canada, Red Tractor in the UK, Bord Bia in Ireland, IKB in the Netherlands and GlobalGap.
• By 2024 or sooner, starting in the US and Canada, 100% of our chicken products will be produced in alignment with GAP standards for breed with improved welfare, living environments (including lighting, litter and enrichment), activity levels and optimized stocking density based on scientific research and processed using controlled or low atmospheric stunning. Our suppliers’ animal welfare practices will be third party audited and updates will be communicated annually. We will continue to explore and implement other approaches that are deemed to provide better health and welfare outcomes for the animal based on proven scientific research, and veterinarian approved best practices and oversight. We are committed to working with our suppliers to continuously improve the welfare of the chicken used in our products through many avenues such as breeding, bird activity, housing environments and harvest methods.
• Alternative Breeds. Although the health and welfare of conventional broiler chicken breeds has improved over the past two decades, our supply chain is committed to continual improvements based on scientific research. Our suppliers are evaluating alternative breeds with the objective of further improving the welfare of the animal during its lifecycle while still delivering safe, quality, great tasting food our customers demand in a way that minimizes the environmental impact. However, we continue to work closely with our suppliers to identify an alternative breed that can be incorporated into our supply chain. Just as important, we expect to improve the welfare of our existing breeds through changes in their environment, activity levels and handling practices that will be phased in as they are proven.
• Improved Housing. Our suppliers are raising broiler chickens so they are kept comfortable in a controlled, cage-less environment that protects them from the elements. They have room to move and constant access to a nutritionally complete diet as well as to water, fresh air ventilation, and periods of light and dark. Also, birds in the US are fed 100% vegetarian diet free of animal by-products. Our suppliers already have in place or are implementing enhancements to birds’ living environment and activity i.e., improved lighting, litter management and added enrichments such as perches and hide boxes. They are always researching and evaluating other best practices. Broiler chicken in Canada are already raised at a reduced density of approximately 6lbs/ft² and one of our major suppliers in the US has already provided increased space per bird. The housing elements, proven to improve bird welfare in a holistic way, will be phased in over time.
• Improved harvest methods We support humane animal husbandry and harvest methods. All our suppliers use industry standard harvest methods. By 2024, our broiler chicken in North America will be processed using controlled or low atmospheric stunning or controlled atmospheric killing as well in Canada. One of our suppliers will begin to transition to controlled atmospheric stunning (CAS) in 2017. However, our suppliers are also evaluating alternatives intended to enhance animal welfare to the CAS approach.
• 3rd Party Verification. Third party verification is already in place in Canada. Today in the U.S., our meat suppliers are audited by PAACO (Professional Animal Auditor Certification Organization) certified auditors to ensure they meet animal welfare standards. Also, all our chicken products come from chickens raised without antibiotics (RWA) which will be USDA Processed Verified in 2017. This verification will be expanded to include the continuous improvements in animal welfare practices outlined in ISO 34700 as they are implemented.
• We support various layer hen housing approaches. In Europe, our breakfast omelette and 100% of eggs used as ingredients in SUBWAY® branded products are from free range hens. We were the proud recipients of a Compassion In World Farming Good Egg Award in Europe for our commitment to using only eggs from free range hens in our products. In addition, Australia transitioned to eggs from cage free hens in 2014. More than 2 years ago, we committed to transitioning to eggs from cage free hens in North America and we have made great progress. Due to the limited supply at present, 10% of the eggs served in the U.S. and 6% in Canada are from cage free hens. We will continue to increase our percentage of eggs from cage free hens annually with a goal is to transition North America and Latin America to 100% eggs from cage free hens by 2025. Also, we are committed to monitoring best practice research for future solutions that are best for the animals, the farmers that take care of them and the environment.
• We support the elimination of crate style housing for gestation sows and the system has been phased out in our pork suppliers in Europe. Also, our pork suppliers in the U.S. have made progress transitioning group housing and anticipate having this process completed in the US by 2022 and Latin America by 2025. We will continue to work with suppliers who share our commitment to phasing out gestation stalls as quickly as possible, putting traceability systems in place and using the best animal welfare and handling practices.
• Our milk supplier in the U.S. has high quality standards and measures in place to ensure optimal animal care, including participation and adherence to the principals and guidelines set forth by the National Milk Producers Federation (NMPF) and The National Dairy Farm Program: Farmers Assuring Responsible Management. In addition, the cows are never treated with the supplemental growth hormone, rBST.
• Any meat, dairy, poultry, fish or egg derived from a cloned animal, including subsequent generations, must not be used in SUBWAY® branded products.
• Mutilations of animals must be avoided. Where specific operations are required such as castration or tail docking, these procedures must be carried out in a way that ensures no pain or distress are caused to the animals.
• Our goal is to reduce and eliminate the use of antibiotics in the food we serve. Elimination of antibiotics use in our supply chain will take time, but we are working diligently with our suppliers to find quality solutions that also ensure our high quality and food safety standards are upheld and not compromised in any way. Our plan is to eliminate the use of antibiotics in phases with the initial focus on the poultry products that we serve in the U.S. The transition to chicken products made from chicken raised without antibiotics was completed in 2016. The transition to turkey products made from turkey raised without antibiotics was started in 2016 and is expected to take 2-3 years. Supply of pork and beef products from animals raised without antibiotics in the U.S. is extremely limited. We expect our transition to take place by 2025. That said, we recognize that antibiotics are critical tools for keeping animals healthy and that they should be used responsibly to preserve their effectiveness in veterinary and human medicine. Our policy is that antibiotics can be used to treat, control and prevent disease, but not for growth promotion of farm animals. Accordingly, we are asking our suppliers to do the following:

• Adopt, implement and comply with the U.S. Food and Drug Administration’s (“FDA’s”) guidance for industry 209 and 213, which requires that medically important antibiotics not be used for growth promotion. Visit the FDA site to learn more.
• Assure that all antibiotics use is overseen, pre-approved and authorized by a licensed veterinarian before they are administered to any animal.
• Keep accurate and complete records to track use of all antibiotics.
• Adhere at all times to all legal requirements governing antibiotic withdrawal times. This assures that antibiotics have been eliminated from the animals’ systems at the time of slaughter.
• Actively encourage, support and participate in research efforts focused on improving animal health while reducing antibiotics use.

We expect that the suppliers to our system follow the standards that we have established in our Vendor Code of Conduct which is posted on subway.com. Our code of conduct prohibits forced labor/slavery as well as establishing our expectations for employment, workplace practices, compensation and benefits, discrimination, health and safety. We are working towards making the safeguards of our supply chain more robust. We are also working with our suppliers to ensure compliance to these standards and to ensure that none of our products are directly or inadvertently associated with human trafficking or slave labor.

Team members have participated in anti-human trafficking and slavery workshops and seminars as part of our education process. We intend to further this process by educating our organization, as well as our suppliers, particularly those associated with product and ingredient procurement on this topic. We recognize the contribution and value of each of the individual workers who support our supply chain throughout the world.

With tens of thousands of restaurants throughout the world, our supply chain needs to be as efficient and sustainable as possible. On a global basis, many of our vendors and suppliers have worked with us to add or move locations closer to our distributors and we have established re-distribution centers, thus reducing shipping costs and emissions. We have a Distribution Operational Efficiency program that looks for ways to ensure all travel routes and driving techniques are optimized and trucks are shipped full to further reduce mileage.

In 2007, we introduced a process in the U.S. that consolidates all equipment orders into one shipment for new and remodeled restaurants, eliminating excess packaging and unnecessary waste at the building site. It has now been expanded to Latin America.

We have been doing a lot of work to improve and enhance our menu. We have removed some ingredients (azodicarbonamide, High Fructose Corn syrup), added some fortifiers (like more whole grain and vitamin D in our bread) and continue to research and roll out more improvements over time. We have verified with all our suppliers that our apple slices, avocado, banana peppers, cucumbers, green peppers, jalapeno peppers, lettuce, mushrooms, pickles, red onions, shredded carrots, spinach and tomatoes, Cheddar, Monterey Cheddar Blend, Parmesan, Pepperjack, Provolone and Swiss cheeses are all non-GMO products.

We will continue on our journey to provide our customers with many choices that fit their lifestyles.