Sprouts Farmers Market : 2023 Impact Report

2023 IMPACT REPORT

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	2
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

DEAR STAKEHOLDERS,

The Sprouts story began at a small fruit stand in Southern California in 1943. A man named Henry Boney would visit farmers markets across the region and bring a bounty of fresh produce back to his community in San Diego.

When Henry opened his first store

• small and easy to shop - he put produce in the center, he sourced unique items from local vendors that couldn't be found at any other grocer, and curated a vitamin and supplement department that filled a need in his community for wellness products. This blueprint was visionary.

When Shon Boney, Henry's grandson, founded Sprouts in 2002, he rooted the business in a legacy of providing access to fresh, healthy, innovative products and doing things differently than anyone else. That heritage runs deep throughout our company today, 80 years later.

Since joining Sprouts in 2019, I've been consistently moved by the commitment and passion our team members have for what makes Sprouts special. They care about what products we sell and where

those products come from. They treat the business like it's their own, always looking for new ways to do things, new ways to be different. They work hard every day to help our customers and make a positive impact on the communities we serve.

In 2023, for the first time in our company's history, we attempted to put into words that special feeling, that distinctive motivation, that extraordinary "why" behind the energy that has propelled our business and made it so unique for so long. For the first time, we wrote down what is in our DNA, we wrote down our purpose:

To help people live and eat better.

Simple. Straightforward. Real. Exactly who we are and what we do.

In this report, you'll read about some of the ways our 32,000 team members make our purpose come alive every day. We're sourcing more innovative products that are healthy, attribute- based, and have a lower environmental impact and higher societal benefit.

We're reducing waste and donating more meals to those in need than any year in our company's history. And we're making meaningful strides in fostering our culture of caring and inclusion while also investing heavily in team members development and well-being.

We are all stewards of Sprouts for a short while. I am incredibly proud of the work the teams across the business are doing to further our purpose of helping people live and eat better, and I hope you find that this report reflects the care our team members have for one another, our customers and communities, our suppliers, and our planet.

Jack Sinclair

Chief Executive Officer

CONTENTS

Who We Are	4
Impactful Products	9
Thriving Planet	22
Purposeful People	30
Healthy Communities	38
Responsible Business	42
Appendix	48

This Impact Report (this Report) contains information about Sprouts' Environmental, Social and Governance (ESG) strategy and performance. In addition to the information found in this Report and on sprouts.com, we externally report on our sustainability strategy, programs and progress toward our goals in Sprouts' Annual Report on Form 10-K,and Proxy Statement. All financial figures indicated in this Report are in U.S. dollars, unless otherwise noted.

This Report contains "forward-looking statements" that reflect our current views about future events and involve known risks and uncertainties that may cause our actual results to be materially different from those expressed by the forward-looking statements. Unless otherwise indicated, information included in this Report is as of our 2023 fiscal year ended December 31, 2023. All references to "Sprouts" in this Report are to Sprouts Farmers Market, Inc., a Delaware corporation, and its consolidated subsidiaries.

Cover photo: Eco Farms provides Sprouts with healthy
and nutritious California grown avocados.	Blueberry plants at Wish Farms, our local blueberry supplier in Florida

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	4
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

WHO WE ARE

Our Story	5
Our Purpose & Values	6
Our Long-Term Growth Strategy	7
Materiality	8

Sprouts Healthy Communities Foundation garden workshop at Manzo Elementary School in Tucson, AZ

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	5
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

OUR STORY

We're one of the largest and fastest growing natural and organic specialty grocers in the country, providing the communities we serve access to healthy, innovative products in an easy to shop small-store format. Our purpose- driven people are passionate about helping our customers discover wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based, and gluten-free. Headquartered in Phoenix, Arizona, we employ 32,000 team members and operate more than 400 stores in 23 states nationwide.

I love having Sprouts near my home. It's convenient, has fresh organic produce and unique items I can't find anywhere else. It has a small town feel and I love that!

Lynn H.

Colorado Springs, CO

2023 HIGHLIGHTS

$6.8B			$3.3B
30	27%	in sales of products
in sales	with a social or
	environmental
	new stores	of total sales from	attribute
	opened	organic products

3,000	7,100
new and
new jobs	differentiated
	products

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	6
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

OUR PURPOSE & VALUES

We believe the most successful and impactful companies are motivated not solely by profits, but by improving lives and the planet we all share. Our purpose at Sprouts, the reason we exist, is to help people live and eat better. Our 32,000 team members work every day to bring our Purpose to life by providing access to healthy food and wellness products with clean ingredients that are sourced responsibly. We consistently seek to operate our business with the goal of minimizing our impact on the environment by improving the soil, advancing animal welfare practices, and ensuring fair and proper treatment of workers in our supply chain. These efforts are designed to improve the lives of people in our communities. We are not perfect, but we are getting better every day.

Our values were created with input from team members across the company and these values guide the decisions we make and create a culture of inclusion and belonging.

Sprouts is my go to store for organic produce, grass-fed beef, and pasture-raised eggs. If I need help with an item, there's always a friendly team member willing to assist. I'm grateful you are here!

We care for each other, our customers and our planet.

We work as a team to deliver excellence in all we do and celebrate our success.

Alexia H.

Naples, FL

Our diverse team members and products

create a unique experience for our customers.

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	7
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

OUR LONG-TERM GROWTH STRATEGY

Inspire & Engage	Winning with our	Updated Format	Create an	Refined
our Talent to Create	Target Customers	and Expand in	Advantaged Fresh	Marketing
a Best Place to Work	Encouraging healthy living	Select Markets	Supply Chain	Digital
Developing our culture of	and wellness through	Smaller format with	Increasing freshness,	customized
caring and inclusion with	innovative products and	less carbon intensive	reducing food waste, and	customers'
diverse talent and rewards	supplier partnerships	operations, taking	lowering transportation	lifestyle
	that are better for the	advantage of infill	miles	reduces
	environment	expansion efficiencies

$19.68/HR	$3.3B	25%	80%	26M
average pay rate for store	in sales of products with	carbon emissions	of our stores are within	followers across all
team members	a social or environmental	reduction target per	250 miles of a distribution	social platforms
	attribute	square foot by 2033	center

75%	$100M	30	120M	$1.3B
of promotions were from	in sales of products from	new stores opened	pounds of recyclables	in Sprouts Brand sales
female and/or racially/ethnically	diverse, minority, and	in our smaller more	recovered through our	delivering on health, quality,
diverse team members	women-owned suppliers	efficient format	reverse logistics program	innovation, and sustainability

815K	3M	10	170	19%
training hours completed	students participating in school	locations retrofitted with	local farmer	of transactions linked to
	garden education programs	lower global warming	relationships	a Sprouts account
	supported by the Sprouts Healthy	potential refrigeration
	Communities Foundation

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	8
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

MATERIALITY

In 2023, we worked with a third-party ESG advisor to engage with our various stakeholders to understand what areas they believe are material to our business. The stakeholder groups included Sprouts leadership and Board of Directors, team members, customers, investors, suppliers, non-governmental organizations, sustainability professionals, and academics. Our approach to assessing materiality also consisted of benchmarking peers, and leading ESG ratings systems and frameworks such as SASB, MSCI, ISS ESG, and Sustainalytics. In total, more than 150 metrics were evaluated and 15 key areas were of most importance to our stakeholders. We have categorized these topics into three groups to be transparent with our stakeholders about where we plan to prioritize investing our resources.

CORE TO

SPROUTS

Foundational areas at the heart of what we do - non-negotiables

• and governance items required for a responsible business.
• • Food Quality & Safety
  • Healthy Food & Transparency
  • Ethics & Integrity
  • Board Composition & Independence
  • Data Privacy & Security
  • Board Oversight of ESG

PRIMARY AREAS OF FOCUS

Actively invest and drive excellence with intentionality.

• Sustainable & Responsible Sourcing
• Team Member Engagement & Retention
• Team Member Recruitment, Training, & Development
• Diversity, Equity, & Inclusion
• Community Engagement

OTHER KEY FOCUS AREAS

Continue to address and make progress over time.

• Waste Management
• Climate Change & GHG Emissions
• Energy Management & Usage
• Water Management

I visited my local Sprouts store and received excellent help from a gentleman named Michael who was working in the bulk section. I had come from a vision appointment and had my eyes

dilated, so I wasn't seeing clearly. Michael assisted me with several products and labeled them for me. He even offered to help me out with the groceries. He was super kind, as well as knowledgeable, and I was very appreciative! Please pass along my praise.

Peggy T.

Brandon, FL

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	9
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

IMPACTFUL

PRODUCTS

Health & Wellness	10
Innovation	11
Sprouts Brand	12
Responsible Sourcing	13
Food Quality & Safety	21

Bates County Produce in Rich Hill, Missouri, grows watermelons naturally without the use of motorized equipment or electricity.

2023 IMPACT REPORT	LETTER FROM	WHO WE ARE	IMPACTFUL	THRIVING	PURPOSEFUL	HEALTHY	RESPONSIBLE	APPENDIX	10
	THE CEO		PRODUCTS	PLANET	PEOPLE	COMMUNITIES	BUSINESS

HEALTH & WELLNESS

Our target customers are mindful of and connected to the food they eat, how it makes them feel, how it's grown or raised, how it's processed and where it comes from. We take great care in curating an assortment that meets their different preferences, needs, and lifestyles - whether it's locally sourced produce, gluten-free cereal, grass-fed beef, oat milk yogurt, wild caught fish, humanely raised chicken, seaweed-based face cream, or collagen powder coffee creamer. Our customers do research and look for inspiration. We are proud to be on the forefront of healthy and sustainable food innovation and to continue paving the way for natural food trends that support our customers on their well-being journey.

$2.3B

in sales of products

with a health or

nutrition attribute

19%

of total sales from healthy fruits and vegetables

4,000

vitamins and other wellness supplements to support health & well-being

Sprouts is my go-to grocery store for accessible wholesome and healthy products. As someone who loves fresh, local, and organic goods, I love the variety!

Theresa H.

Denver, CO