“Pep+ is the future of our company – a fundamental transformation of what we do and how we do it to create growth and shared value with sustainability and human capital at the center. It reflects a new business reality, where consumers are becoming more interested in the future of the planet and society,” says Ramon Laguarta, PepsiCo’s chairman and CEO.
“Pep+ will change our brands and how they win in the market,” he continues. “For example, imagine Lay’s will start with a potato grown sustainably on a regenerative field, and then be cooked and delivered from a net-zero and net water-positive supply chain, sold in a bio-compostable bag, with the lowest sodium levels in the market.”
“Now, imagine the scale and impact when applied to all 23 of our billion-dollar brands.”
Pep+ drives action and progress across three key pillars, bringing together several goals under a comprehensive framework.
Under the first pillar, “Positive Agriculture,” PepsiCo is working to spread regenerative practices to restore the Earth across land equal to the company’s entire agricultural footprint (approximately seven million acres), while sustainably sourcing key crops and ingredients.
These goals are currently being brought to life in Europe through the company’s use of precision agriculture technology and innovation in fertilizer.
PepsiCo in the UK is trialing technology to convert waste potato peelings from making PepsiCo’s Walkers crisps into low-carbon, nutrient-rich fertilizer. An initial pilot resulted in a 70% reduction in emissions from growing potatoes and so in 2022, PepsiCo will broaden its trials across more European markets.
Under PepsiCo’s second pillar, “Positive Value Chain,” the company aims to achieve net-zero emissions by 2040, become net water-positive by 2030, and introduce more sustainable packaging into the value chain including a new global goal to cut virgin plastic per serving by 50% across its food & beverage portfolio by 2030.
In line with this pillar, the company has introduced a new global workforce volunteering program, One Smile at a Time, to “encourage, support and empower” each of its 291,000 employees to make positive impacts in their local communities.
A critical focus of driving a positive value chain has been on building a circular economy for packaging in Europe. Denmark and Finland recently announced they will join another nine Europe markets to switch to 100% recycled plastic bottles for brand Pepsi by 2022.
This follows a similar move for other brands last year, including Lipton Iced Tea and is backed by the company’s support for Deposit Return Schemes in many European markets, to enable over 90% collection of beverage packaging.
PepsiCo is also continuing to drive toward a circular economy for flexible packaging through a series of collaborations and investments. This includes PepsiCo’s participation in various sorting and recycling technologies, including the next phase of the Holy Grail digital watermarks initiative, with trials taking place on PepsiCo’s food packaging in France and Germany in 2022.
The company also continues to invest in flexible packaging recycling infrastructure through Extended Producer Responsibility schemes in different markets, as well as direct investment in schemes like the Flexible Packaging Fund in the UK.
Reducing sugar and sodium
Under its third pillar, “Positive Choices,” PepsiCo is evolving its portfolio of F&B products so that they incorporate more diverse ingredients in both new and existing food products, which are more sustainable and nutritious – prioritizing chickpeas, plant-based proteins and whole grains.
The company is expanding its position in the nuts & seeds category, where PepsiCo holds leadership positions in Mexico, China and several Western European markets.
PepsiCo is also accelerating its reduction of added sugars and sodium through the use of science-based targets across its portfolio and cooking its food offerings with healthier oils.
In its beverage portfolio, PepsiCo Europe is reducing the average level of added sugars by 50% and to build a US$1 billion portfolio of foods rated Nutri-Score B or better by 2030.
The F&B giant is also looking to scale new beverage business models that require little or no single-use packaging, including its global SodaStream business. SodaStream is bringing PepsiCo flavor options like Pepsi Zero Sugar, Lipton and bubly to 23 markets. Its new SodaStream Professional platform will expand into functional beverages and reach more than ten additional markets by the end of 2022.
In other moves relevant to this third pillar, the company also recently announced its participation in the front-of-pack environmental scoring project led by Foundation Earth. The project is aimed at assessing the ability of different labeling schemes to promote more sustainable buying choices for consumers, as well as driving environmental progress for food producers.
“This is a major transformation for our business. It is the right thing for our planet and for people as we evolve our portfolio and provide positive choices for consumers. This requires long-term investment, new ways of engaging across our value chain and a culture shift to do things differently,” says Silviu Popovici, PepsiCo Europe’s CEO.
“However, making these changes alone won’t be enough. We need to collaborate with governments and other stakeholders to help us go faster and ensure we have the right infrastructure and eco-systems to succeed as we reimagine the way food is grown, made and enjoyed.”