Three-quarters of CEOs say sustainability is a major initiative for their organization, according to research from Deloitte, and 20% said they’re investing to “significantly improve” sustainability. PepsiCo is making significant strides in its sustainability efforts by focusing on a “relentless modernization” of the value chain, from product sourcing to the stores.
“I’m glad to have the opportunity to discuss sustainability at this important moment in time,” said Steven Williams, CEO of PepsiCo Foods North America during a keynote at the NRF Big Show on Jan. 14. “It’s important, frankly, not just for the business but for all of our future. The license to operate relies on a sustainable, resilient supply chain and food system.”
As CEO of PepsiCo Foods North America, Williams oversees a $21 billion enterprise that consists of brands including Frito Lay and Quaker Foods. From corn chips to oatmeal, the PepsiCo Foods portfolio is vast. Yet all brands are centralized by one mission: to create more smiles with every bite. Williams explained that sustainability “threads its way through the company” to reflect on this vision, and to be “the consumer’s choice.”
“It’s not just about saving the world; we’re a consumer obsessed company,” Williams said. “It’s about doing the right thing for people and the planet.”
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Setting Measurable Goals
While PepsiCo has made “good progress” over the past decade on sustainability, the company has “chartered a more accelerated course,” driving change and positive action for people and the planet with pep+. Williams explained that pep+ is the company’s roadmap for building a more sustainable future for the planet, people and business.
PepsiCo’s most significant sustainability goal is to be a net-zero emissions company across the entire value chain by 2040 — undoubtedly a vast undertaking for a business with such a large footprint. With a presence on the shelves and in the cupboards of 94% of U.S. households, PepsiCo North America has to coordinate a lot of moving parts and use a lot of resources. The company has 40manufacturing sites that make 6 billion pounds of food a year; drives 150 million miles annually; and services 315,000 stores a week with its direct-to-store delivery system.
Two critical focus areas for PepsiCo today are a renewable energy transformation of facilities and sustainable sites. The company was able to reach its renewable energy goals for operational facilities the U.S. and is looking to scale its North Star model for facility transformation at its Frito Lay facility in Modesto, Calif.
“You pull up and it looks like Star Wars,” Williams said. “The parking lot is solar fields, big Tesla batteries and Tesla trucks. It’s wonderful and it’s doing the job it needs to do.”
Thanks to the project, which was supported by the California Climate Investments (CCI) initiative in conjunction with the San Joaquin Valley Air Pollution Control District (SJVAPCD) and the California Air Resources Board (CARB), PepsiCo was able to bring emissions down by 90% at the site.
Driving Impactful Change Through Partnership
Williams emphasized that achieving sustainability goals requires a “significant collective effort” among suppliers, retailers, farmers and other partners to build a more sustainable food system.
“We have to be shoulder to shoulder with partners,” Williams said, which is why PepsiCo shares capabilities and lessons learned with partners via Partners for Tomorrow, a “one stop shop” learning vehicle to share relevant information and insights upstream and downstream. “We know that success isn’t possible without having everybody at the table.”
Williams noted that retail partners in particular play a critical role, given their deep understanding of market trends, emerging technologies and consumer behaviors.
“We’re proud of the relationships we have with retail partners. It goes beyond just product, just service and just price,” he said. “We know it’s important to build relationships on things that are important; that includes building a more sustainable food system.”
Walmart in particular has been a key partner for PepsiCo as it aims to identify and invest in new solutions to provide fresh, high-quality food to customers. That’s why the companies announced a strategic partnership in which they would invest $120 million in regenerative agriculture practices on more than 2 million acres of farmland in the U.S. and Canada.
PepsiCo Foods North America has focused on educating partners on the company’s mission and driving alignment around implementing more ethical and sustainable farming, product development and delivery practices.
“When we really started dialing up intensity and discussing it with partners, we were lucky to have partners that have the very same commitment, including how to support our farmers,” Williams said. “We don’t talk a lot about farmers, we talk about products, but our positive agriculture agenda is a great example of how we’re leveraging our retail partnerships. Those delicious Tostitos are made from corn that comes from the field right in the midwest…so bringing our farming partners along with us is super important.”
