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Energy

We implement capital improvements and plant assessments to meet our energy-reduction goals.

The goal at Hormel Foods has been to reduce our energy consumption by 10 percent for all locations over a five year period starting in 2008. From fiscal year 2007 to fiscal year 2008, energy consumption increased by 0.24 percent. Production also increased 2.5 percent during the same period. We have implemented energy projects including substantial capital improvements and plant assessments and continue to do so. The results from many of these projects have not fully matured, but we expect to see the benefit of these energy projects in the coming year.

Capital Improvements

In July, we broke ground on a new food processing facility in Dubuque, IA. The plant is designed to incorporate substantial energy and water savings systems. Once the construction is finished, we expect to meet Leadership in Energy and Environmental Design (LEED) certification requirements. LEED is a rating system developed by the U.S. Green Building Council to promote the design and construction of high-performance green facilities. Visit our Living Our Principles section to learn more about this project.

In the same manner, a 38,000-square-foot plant expansion to the company’s Dan’s Prize Plant in Browerville, MN, was designed to reduce the consumption of electricity, natural gas and water. Technical system upgrades were made throughout the plant’s systems, including water supply and distribution, energy management and refrigeration processes that reuse waste heat.

Assessments

As part of our ongoing efforts to reduce energy consumption, we have applied for additional assistance from the U.S. Department of Energy (DOE) to conduct audits at our manufacturing facilities to evaluate lighting, compressed air systems and hot water systems. In May 2008, the DOE conducted a three-day energy-management assessment at the Rochelle Foods Plant in Rochelle, IL, which focused on the plant’s compressed air system. This was our third DOE energy assessment in three years. The DOE offers excellent technical assistance on a wide range of energy areas.

Energy Initiatives

Recent projects to reduce energy consumption have included:

• Replacing the primary air compressor at the Hormel Foods plant in Stockton, CA, with energy-efficient equipment in August 2008. The projected annual energy savings is more than 90,000 kWh, which will reduce greenhouse gas (GHG) emissions by 30 metric tons; and
• Lighting retrofits at the Hormel Foods plants in Beloit, WI, and Stockton, CA, the Osceola, IA, distribution center, and the Swiss American Sausage Company in Lathrop, CA, were completed during fiscal year 2008. We upgraded outdated lighting systems with new energy-efficient equipment. Annually, this saves 2.75 million kWh and reduces GHG emissions by 1,658 metric tons — the equivalent of taking 304 cars off the road for the year.¹

At our 41 U.S. manufacturing facilities, our direct energy consumption, which is the amount of natural gas, fuel oil and propane used, decreased from 4.31 million MMBTUs in 2007 to 4.28 million MMBTUs in 2008. Our indirect energy consumption, which is the amount of electricity we use, increased from 692 million kilowatt hours (kWh) in 2007 to 705 million kilowatt hours (kWh) in 2008.

¹Number of cars taken off the road based on the U.S. Environmental Protection Agency Greenhouse Gas Equivalencies Calculator.