Vion Food Group

Vion Food Group
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Quick Facts
Type	Public (N.V.)
sector	Agriculture/Food Industries
Headquarters	Boxtel, The Netherlands
Year of Origin	2003
Emissions (All Scopes)	11.77 Megatons of CO2 (2019)
NCI assessment	Very low
Total Revenue	4.6 billion EUR
Stock Exchange	Bijv. Tokio, Amsterdam
Key People	Ronald Lotgerink (CEO), Theo Koekkoek (Chairman)
Number of Employees	12,281
Subsidiaries	Vion Food Group has 44 Subsidairies

Vion Holding N.V., stylized as Vion Food Group, was founded in 2003 when Dumeco, Hendrix Meat Group, Moksel, and Norddeutsche Fleischzentrale merged. Vion Food Group is an international producer of meat, meat products, and plant-based alternatives. The Company has production locations in the Netherlands, Germany, and Belgium and sales support offices in thirteen countries worldwide. The Vion Food Group Headquarters are located in Boxtel, The Netherlands. In February 2021 Vion Food Group announced their acquisition of Adriaens, a Belgian meatpacker. Through this acquisition, the company expanded its home-market operations to Belgium. Vion Food Group has one shareholder, Stichting Administratiekantoor SBT. Vion has a close relationship with farmers. The company is owned by the NCB - the investment fund of the ZLTO (Zuidelijke Land- en Tuinbouw Organisatie). The 15,000 members of the ZLTO, who are farmers, are the shareholders of Vion.

Vion Food Group has 12,281 employees. Vion Food Group is part of the top 100 largest global food companies. In 2021 the company had a revenue of 4.6 billion euros.

Company Structure

Vion has a two-tier board. The management board is responsible for managing the company. It is supervised and advised by the supervisory board. Both boards are accountable to Vion’s general meeting of shareholders. The management board is supported by the executive committee.

Management Board

Management Board and Executive Committee

Name	Function
Ronald Lotgerink	Chief Executive Officer
Tjarda Klimp	Chief Finanacial Officer
Binne Visser	Chief Human Resource Officer
David de Camp	Chief Operating Officer (Beef)
Simon Morris	Chief Operating Officer (Food Services)
John de Jonge	Chief Operating Officer (Pork)
Philippe Thomas	Chief Operating Officer (Retail)

There is no information available on the individual remuneration of the management board. The remuneration is decided based on the remuneration policy that was adopted by the company in 2017 . This policy makes sure the remuneration is based on performance by comprising the remuneration of: 1. a base salary, 2. a short-term cash incentive depending on the achievement of the performance targets, 3. pension contributions .

In 2020 the base salary of the management board is €1,200,000. The short-term cash incentive can range from 0% to 67% of the base salary.

Supervisory Board

Supervisory Board

Name	Function	Remuneration x1000 EUR
Theo Koekkoek	Chairman	75
Rogier Jacobs	Vice-Chairman	45
Marieke Bax	Member	40
Martine Snels	Member	40
Peter Broeckx	Member	40
Cis van Doninck	Member	40

Accountant

The auditor of Vion Food Group is Ernst and Young Accountants LLP. Ernst and Young have been the auditor for Vion Food Group since 2014. Nothing is mentioned about climate-change related risks in the independent auditor reports.

Main Activities

Vion is active in the production of meat products and plant alternatives. The company has four business units: Pork, Beef, Food Services, and Retail. Vion Food Group services over 100 million consumers per day. 55-60% of the Dutch pig farmers and 35-40% of german pig farmers get their animals slaughtered by Vion.

Government

Vion Food Group does not have royal status. Vion Food group has not received NOW support from the Dutch government.

Paris Agreement until Today

In 2019 Vion developed a new corporate strategy in order to create a demand-driving supply chain instead of a supply-driven commodity focus. The company created a roadmap for the years 2020-2024 called Building Balanced Chains (BBC). Vion acknowledges its key role in the food chain as they are the connection between the farmers and the customers. Vion has set three goals in order to create balanced food supply chains.

1. Farm Management optimization. Through this goal, Vion wants to make all relevant data available to the farmers which they can use to optimize their management.

2. Protein valorization. In this goal, Vion wants to create a range of options for valorization from head to tail.

3. Product Specialization. Produce unique concepts and product innovations that tap into prevailing consumer trends.

Financial Results since 2015

Financial situation

Year	Revenue	Profit (loss)	Dividend
2015	4,57 million EUR	22 million EUR	N/A
2016	4.76 million EUR	38.8 million EUR	N/A
2017	5,070 million EUR	21.8 million EUR	N/A
2018	4,670 million EUR	10.2 million EUR	N/A
2019	5,060 million EUR	26.6 million EUR	N/A
2020	4,901 million EUR	52.948 million EUR	N/A
2021	4.597 Billion EUR	(29.006) million EUR	N/A

Not much information on Vion's dividend payments is given. What is known is that the shareholder (NCB development, an investment fund of the ZLTO) received a dividend of 17.5 million euros in 2020.

Current Emissions

Total emissions 11.77 Megatonnes of CO₂ (2019)

Scope 1	Scope 2	Scope 3
0.0594 Megatonnes of CO2 (2020)	0.116 Megatonnes of CO2 (2020)	11.6 Megatonnes of CO2 (2020)

Scope 1

Total scope 1 GHG Emissions (Megatons of CO₂-eq)

Type	2019	2020
Own generation of electricity, heating, cooling and steam	0.047	0.046	0.0464
Transportation	0.0116	0.0125	0.012
Fugitive Emissions	0.0070	0.0083	0.0084
Total	0.0592	0.0594	0.0594

For the calculation of the scope 1 GHG emissions Vion took into account:

• Gas and fuel consumption
• Transportation of workers, animals, and products owned by Vion
• Methane emissions of the animals while at Vion
• Use of CO₂ to anesthetize pigs

Scope 2

Absolute indirect GHG emissions Scope 2 (Megatons of CO₂)

Type	2018	2019	2020	2021
Vion Total	0.1055	0.1053	0.1134	0.1166

Vion's scope 2 emissions are based on their purchased electricity consumption and location-based method. The consolidation approach is based on financial control. The sources of the CO₂ emission factors used to calculate the CO₂ equivalents are :

• For NL: https://co2emissiefactoren.nl/
• For Germany:https://www.umweltbundesamt.de/en/publikationen/CO2-emission-factors-for-fossil-fuels.

The Global Warming Potential (GWP) rates used are obtained from the IPCC and include feedback loops.

Scope 3

In their climate report, Vion fails to report their scope 3 emissions. In order to gain a better understanding of what Vion's scope 3 emissions are, the data provided by Milieudefensie in their report on The invisible polluters of the meat and dairy industry was used.

In this report, the CO₂-eq per kilo of meat is stated to be:

• 6.9 kg for pig meat
• 11.0 kg for dairy beef
• 39.9 kg for meat beef

In 2019 Vion produced 1.022 thousand tons of pig meat and 213 thousand tons of beef. Vion mostly slaughters dairy beef. Therefore, this report, states that 65% of the beef is from dairy beef and 35% comes from meat beef.

Using all this information the emissions of Vion's meat production come down to 7.1 Megaton of CO₂-eq from 1,022 thousand tons of pig meat and 4.5 Megaton of CO₂-eq for 213 thousand tons of beef. Coming down to a total of 11.6 megatons of CO₂-eq for Vion's scope 3 emissions.

Future Emissions

In the report, an estimate of Vion's future emissions is also made. According to Het planbureau voor de Leefomgeving (PBL), the amount of farmed pigs will decline between 2020 and 2030 by 7,4%. The number of cows kept for dairy will decrease by 7.1%. If the number of animals slaughtered will decrease according to these numbers, in 2030 Vion will be producing 946 thousand tons of pig meat and 198 thousand tons of beef. In 2050 this will be reduced to 779 thousand tons of pig meat and 175 thousand tons of beef.

As there is a lack of data about future emissions from livestock, the report assumes that the livestock industry manages to reduce emissions per kg meat by 1% each year. With this assumption. the total emissions from Vion in 2030 will be 9.7 Mton and in 2050 it will be 6.7 Mton.

Climate Policies and Plans

Vion has set different targets for 9 different CRS topics. 5 social topics, 3 environmental topics, and 1 economic topic. Each topic has its own KPI through which Vion measures their progress. For example, of the topics is 'water usage of processing'. The KPI of this topic is 'usage of municipal water per tonne sold', and the target for 2021 is <1.55 m3. Furthermore, Vion has selected 6 different Sustainable Development Goals that Vion considers to match their targets. The goals included are: Zero Hunger (2), Clean Water and Sanitation (6), Decent Work and Economic Growth (8), Responsible Consumption and Production (12), Climate Action (13), and Life on Land (15).

Vion has selected six CRS topics that they believe are most crucial for the day-today-success of the company.

These six are:

• Employment and working conditions
• Food Safety
• Traceability and product integrity
• Animal welfare
• Sustainable farming
• Fair pricing

Sustainable Farming

Vion states that the company is committed to putting food items with a lower carbon footprint than today on the market. Vion wants to make sure customers can make an informed choice based on scientifically justifiable data. To achieve this, Vion will develop a CO₂ label for their products based on the data from the supply chain. This label will allow the consumers to see the CO₂ equivalent of the product they want to buy. Vion aims to have the first products with CO₂ labels on the shelves in 2022.

In order to create this CO₂ label different supply chain partners will have to share their data concerning their footprint with each other. Vion states that a clear overview of this data will also help them get a better idea of where improvements can be made which can result in a reduction of the footprint. . In 2020, Vion measured the emissions of 15 farms, their goal for 2021 is to measure the emissions of approximately 160 farms

Carbon Footprint of Processing

In order to reduce their CO₂ emissions, Vion aims to reduce the non-renewable energy consumption per tonne sold from 810 MJ to a maximum of 810 MJ in 2021 and ultimately to 0 MJ in 2050.

Vion aims to reach this goal through several different plans. Firstly, measurements from partner factories will result in lower CO₂ emissions. For example, Vion Groenlo B.V. invested in a water-cooled cooling tower which replaced the old air-cooled condensers. This will reduce electric consumption by approximately 2,000 kWh a day. Secondly, Vion will roll out energy monitoring software to all production locations in Germany and the Netherlands. Thirdly. Vion wants to use their energy more efficiently for example through the use of heat challenging systems. These systems have already been installed in Emstek and Boxtel, these systems allowed Vion to reutilize 40% of the heat energy used when heating water to 60 degrees Celsius for the slaughter process. Fourthly, Vion aims to increase the number of electric charging points at their parking lot.

Scope 1

Vion has the ambition to operate at net-zero for scope 1 in 2045. In order to reach this goal a substantial amount of gas, used for disinfection of the carcasses, will have to be replaced by gas from renewable sources.

Scope 2

Vion's short term goal for scope 2 emissions is a share of 80% reduction and renewable electricity in 2025. Ultimately Vion aims to be net zero for scope 2 the latest by 2030.

Scope 3

In order to stay in line with <1.5degrees of global warming in 2050, Vion's scope 3 targets for 2030 should reach at least 32% physical intensity reduction compared to 2021 for pork and 26% for beef. Vion claims that all their plans will reach these goals. How exactly Vion aims to reach these goals is unclear from their CSR report.

Due Diligence

Due Diligence

Workers and salary

Around 70% of Vion's workers are flex workers. Often these flex workers are the ones that have to do the rough and hard work at the slaughterhouses. For this job, they receive minimum wage. In 2019 CEO Ronald Lotgerink made 1.3 million euros which is 65 times more than the minimum loan the average worker gets. The average worker at Vion makes about 20,160 euros a year of which at least 3.900 euros will be taken for housing. Often the flex workers at Vion are from Eastern-European countries such as Poland and Hungary. Vion states that they hire a high amount of flex workers because of their need for flexible work. As the work at Vion is not dependent on seasons, this statement does not explain the high level of flex workers. One of the workers at Vion, Alexandru, explained in an interview just how hard it is to work for this company. He states that 'it could get worse than at home'. Alex was fired from Vion after he got injured within a day and a half at work. Vion refused to pay him for this. Only after Sluit VION!, an activist group that aims to close Vion, got involved Vion paid Alex. In total Alex received 58 euros for 13 hours of work.

Covid-19

In June 2020 the GGD sampled workers at Vion's location in Boxtel to test them for covid. 1 out of 6 workers tested positive. A couple of weeks later 1 out of 3 workers tested positive. Within this period more than half of the covid cased in Boxtel could directly be traced back to Vion. Vion's location in Boxtel never closed, even with such high numbers. Whereas other slaughterhouses that had similar covid numbers did close.

Scandals and controversies

Every year many pigs are suffering from the intense heat on their way to the Vion slaughterhouses. Animal Welfare organization 'Eyes on Animals' did an inspection of Vion's slaughterhouse in Boxtel in 2016, and concluded that pigs have to wait for too long in hot trucks. When it is too busy at the slaughterhouse, trucks are advised to leave the premise and wait somewhere else in the shadow until there is more space for new pigs. Eyes on Animals measured the temperature in 20 of these waiting trucks and discovered that most of the temperatures were between 35-38 degrees with one outlier of 45 degrees. Pigs cannot deal with heat very well and show physical distress, in 80% of the trucks Eyes on Animals saw pigs that were suffering. In Vion's heat protocol there are no rules regarding the maximum temperature, as long as the outside temperature is below 35 all trucks can continue their transport. Besides this, the pigs that are slaughtered at Vion spend their entire life in closed-off cages.

Conclusion

Vion's goals are to report the GHG emissions from 160 farms in 2021 and to share this data with their partners to reduce CO₂. Furthermore, Vion aims to reduce the non-renewable energy consumption per tonne sold from 810 MJ to a maximum of 810 MJ in 2021 and ultimately to 0 MJ in 2050. Vion aims to reach these goals through different steps such as reusing heat from the systems and using their electricity more efficiently. Lastly, Vion states they will provide a CO₂-footprint equivalent label on their products so consumers have access to readable data on their food's footprint. With Vion's targets, it is unclear if the company will be able to meet the Paris Agreement and stay within 1.5 degrees. The targets are not focused enough on GHG reduction, and their current CO₂ measurements do not include scope 3 making it almost impossible to get the full overview of the company's climate impact without having to do calculations based on other data that is available.