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Environment Sustainability

 Environment Sustainability

"Frito-Lay uses the energy from the sun in so many ways. Many of our products are distributed through our Phoenix, Arizona distribution center, where we have solar panels on the roof that generate electricity; and we are installing solar collectors at our plant in Modesto, California to provide up to 75% of the thermal energy the plant uses to make SunChips snacks in that location. As a six-year member of the Frito-Lay sales organization, I’m glad to work for a company that is finding many ways to use renewable energy."
— Carrie Carroll, National Account Manager, Frito-Lay North America
2007 PepsiCo President’s Ring of Honor Recipient for Top Sales Performance

We strive to replenish the resources we’ve used, where possible, as part of our commitment to being an environmentally responsible corporate citizen. Our associates are passionate about this vision and continue to drive programs to reduce our energy and water consumption, invest in new energy research and improve our packaging sustainability.

We have proven that extraordinary results are possible. Frito-Lay has reduced per-pound water use by more than 38%, manufacturing fuels by more than 27% and electricity by more than 21% since 1999; and our Quaker, Tropicana and Gatorade businesses have reduced manufacturing fuels by 26%, electricity by 24% and water by 12% in the last three years.

We’re achieving similar results in markets outside the United States. In Mexico, our Sabritas team has cut per-unit electricity use by more than 9% over the past five years, and water use by 26%. In China, our bottling plants have reduced water consumption by 40% and energy consumption by 38% over the past three years.

Throughout the world, we have similar stories that demonstrate how we are taking this responsibility seriously, because it is the right thing to do, but also because it’s the smart thing to do for more efficient use of energy, water and packaging in our business operations.

Walkers is the first major food brand in the world to display a carbon footprint/reduction logo on its packs. The label was developed by the Carbon Trust, a U.K.-government-funded independent organization that works to accelerate the move to a low-carbon economy. Walkers has had a partnership with the Trust since 2001 and has reduced energy use per pack by a third and water use by almost half. One step in reducing carbon was sourcing the potatoes domestically to reduce the transport miles. The Walkers advertising campaign highlights that the brand now uses 100% Great British potatoes.

Conserving Energy and Harnessing Renewable Resources

2007 was a year of considerable progress for PepsiCo, beginning with external partnerships and programs focused on renewable energy and strategies to reduce greenhouse gas emissions.

PepsiCo joined the U.S. Environmental Protection Agency (EPA) Climate Leaders, a voluntary partnership program that works to develop comprehensive climate change strategies, including supporting reduction in greenhouse gases. And we were the first consumer products company to join with other concerned companies and non-governmental organizations in the U.S. Climate Action Partnership to encourage the federal government to enact climate legislation. These programs make good commercial sense for us and help us use our resources well.

We are also proud of PepsiCo’s landmark purchase of renewable energy certificates. This financial instrument stimulates and supports the development of renewable electricity, and our investment matches the purchased electricity, used by all of PepsiCo U.S.-based manufacturing facilities, headquarters, distribution centers and regional offices. Our three-year purchase of more than one billion kilowatt-hours annually is the same amount of electricity needed to power nearly 90,000 average American homes annually, as estimated by the U.S. EPA based on national averages.

We are already implementing many of our own renewable energy operations. In 2007, we announced major renewable energy projects including plans for our "net zero" plant in Casa Grande, Arizona. With plans to run almost entirely on renewable fuels and recycled water, this plant is scheduled to begin production by 2010.

Frito-Lay North America flipped the switch last year on the largest business-owned, photovoltaic power system in Arizona. Producing no emissions, the system captures the energy of one of Arizona’s abundant natural resources — turning the power of the sun into electricity. It incorporates a 201-kilowatt photovoltaic array covering 27,000 square feet of roof space at the company’s service center in Phoenix. PepsiCo has already installed photovoltaic systems in six other distribution centers, from California to New York.

Our bottlers are also sourcing power from the sun. In 2007, The Pepsi-Cola Bottling Company of Eugene installed a 250-kilowatt solar electric system in their Oregon facility, which is now the second-largest photovoltaic system in the Pacific Northwest. The renewable energy generated from this system is the equivalent to the average annual energy consumption of approximately 21 Eugene homes and has a regional carbon dioxide offset of about 140 tons per year.

Projects in other regions went live last year as well. PepsiCo India launched our first remote wind turbine, harnessing one of the most efficient, clean and renewable sources of energy. This turbine is connected to the public electricity grid with sufficient power to meet more than 75% of the electricity needs of the company’s local Mamandur plant, and it directly offsets up to 7% of our company-owned bottling operations’ power requirements for 2008. The initiative is estimated to help reduce carbon emissions by more than 3,500 tons annually, with the potential to offset 70,000 tons of carbon emissions over its entire 20-year life cycle.

PepsiCo has seven photovoltaic-powered distribution centers.

Improving Access to Water

PepsiCo is addressing the world’s water challenge at all levels of our influence.

In 2007, we announced support for global initiatives that seek to improve access to water. These include the CEO Water Mandate, a partnership with the international community to address water issues both in our own operations and our supply chain. We also affirmed support for the UN Millennium Development goals, which have wide-ranging ramifications for water programs.

In China and India, the PepsiCo Foundation is helping to change the lives of an increasing number of people through our support of organizations that are focused on building sustainable water practices, including the Chinese Women’s Development Foundation and The Energy and Resources Institute in India.

In early 2008, PepsiCo announced a partnership between the PepsiCo Foundation and the Earth Institute at Columbia University, one of the world’s premier institutions dedicated to global sustainable development. And the company announced a commitment to H2O Africa, a foundation focused on clean water initiatives in Africa.

Building a Lifecycle of Environmentally Responsible Packaging

We have formed a Sustainable Packaging Council to develop a roadmap that will guide us toward achieving packaging systems that are environmentally responsible throughout their entire lifecycle.

Although beverage containers like ours are the most recycled consumer packaging in the United States, and they are designed for recycling, we continue to look for ways to reduce the amount of packaging used for our products. And we are achieving success. For example, Pepsi’s soft drink bottles contain 10% recycled content, the weight of a two-liter polyethylene terephthalate (PET) soft drink bottle has been reduced by 39% since 1980, and our Aquafina 500 ml PET bottle weight has been reduced by more than a third since 2000.

We also team with business and community partners to encourage reuse and recycling.

We continued our partnership for a second year with Sam’s Club and Keep America Beautiful to "Return the Warmth," collecting and recycling over 70 million PET bottles via schools, and giving away over 25,000 backpacks made from recycled PET.

PepsiCo put a spotlight on recycling at the Live Earth New York concert by making it easy for people to recycle their bottles and cans and by offering information about how they can make recycling a part of their everyday lives. Our commitment to environmental responsibility extends across the globe. One highly successful program is our PepsiCo India partnership with Exnora International, an environmental non-governmental organization, to manage domestic solid waste. The program was recognized by UNICEF as a model project and as a center for international learning.

Looking into the future, PepsiCo teams are developing innovative packaging solutions which include cutting-edge technologies for even more environmentally friendly packaging.

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