We're working across our agricultural supply chain to ensure our practices are efficient and sustainable. Because agriculture is one of the biggest parts of our environmental footprint, we continually strive to improve our agricultural processes.
As a leading food and beverage company, agriculture is central to our business. Because of the critical importance of growing crops to PepsiCo, we are working to incorporate in our operations the best thinking, practices and technology to support sustainable agriculture. In addition to increasing the resiliency of our supply chain, we are pursuing opportunities-often through stakeholder partnerships across the public, private, NGO, nonprofit and academic sectors-to reduce on-farm water use and GHG emissions as well as to improve to farmer livelihoods.
In 2012, we launched our Sustainable Farming Initiative (SFI). The SFI is a comprehensive program with application to potato, citrus, oats, rice and corn crops and to growers of all sizes in developed, developing and emerging markets. It enables PepsiCo to measure the environmental and local economic impacts associated with our agricultural supply chain.
By the end of 2012, we completed 36 SFI pilot programs in 14 countries. In January 2013, we launched SFI in the North American market for Frito-Lay North America potato growers. We plan to continue to expand SFI, throughout 2013 and beyond, across global markets for crops key to our business in order to drive continued improvement in our agricultural operations.
Sustainable Farm Initiative: Global Indicators
The SFI provides a framework with nine environmental, four social and three economic sustainability indicators with detailed criteria and global standards.
- Greenhouse Gas (GHG)
- Management Practices
- Commercial Relationships
- Employment conditions
- Employment Practices
- Health, Wellness and Safety
Farm Foundation Indicators
- Handling and Transport
In China, we operate eight demonstration farms with the Ministry of Agriculture. These farms, which use the most advanced irrigation, fertilization and crop management techniques, are designed to spread the best ideas across China's farming system to improve yields and increase the farmers' income.
Soil Conservation and Preservation
We preserve topsoil in unstable, erosion-prone agricultural areas whenever possible. For example, including cover crops in a rotation reduces soil erosion and makes the land more sustainable. Longer-term solutions include windbreaks to provide protection from the wind in frequent storms. The way crops are cultivated can also protect soil. Our solutions range from using global positioning system (GPS) technology to guide tractors to increase land utilization in Australia to employing a unique technology in Ecuador and Thailand to reduce the impact of water erosion caused by excessive rain. We also promote a cultivation practice that enables crops to be planted without plowing to reduce soil erosion and preserve soil nutrients when producing oats for use in the Quaker business.
Agrochemicals and Nutrients
We actively support the trial use of new fertilizers to promote sustainability. We have also directly invested in developing new potato varieties and introducing the latest breeding technologies to improve the quantity and quality of crop yields.
Our agriculture team in our foods business in Turkey has pioneered a new way to reduce CO2 emissions by producing fertilizer from what would otherwise be discarded as manufacturing waste. This fertilizer is now being used by PepsiCo potato growers, which is helping to reduce CO2 emissions by up to 19 percent versus CO2 emissions resulting from the use of inorganic fertilizers.
As part of our search for more effective and efficient ways to farm, we developed "i-crop," a precision-farming technology and web-based tool, in conjunction with the United Kingdom's Cambridge University. i-crop enables PepsiCo's farmers to monitor, manage and reduce their water use and carbon emissions while maximizing potential yield and quality.
iCrop enables PepsiCo's farmers to monitor, manage and reduce their water use and carbon emissions while maximizing potential yield and quality.
In initial trials across 46 of PepsiCo's U.K. potato farms, i-crop has helped increase crop yields by 13 percent and reduced water usage by 8 percent.
We believe third-party certification can help encourage sustainable practices. For example, in Chile, 100 percent of farmers that produce potatoes used in food products and 100 percent of seed producers have earned rainforest certification. In Brazil and Argentina, we have introduced Global Good Agricultural Practice (GAP) certification to PepsiCo suppliers. In Brazil, three growers are now Global GAP-certified and five more are completing the process. Eight growers have achieved certification in Argentina.
Environmental Supplier Outreach
Whenever possible, we work with our suppliers to improve sustainability in their agricultural practices. PepsiCo Mexico has worked with small scale producers to promote the production of high-oleic sunflowers to produce oil with healthier fats. To accelerate the project and provide benefits to the small and medium producers, PepsiCo Mexico partnered with the Inter-American Development Bank to develop a long-term collaboration model comprising technical assistance, training, financial support, education and cultural transformation. As part of this program, PepsiCo Mexico commits to buy the sunflower harvest.
Sustainable Palm Oil
While we are working in a number of regions to convert to oils that are low in saturated fat, in some parts of the world, palm oil is often our only option. When we do purchase palm oil, we look for suppliers that operate responsibly and in a sustainable manner. That's one reason PepsiCo is a member of the Roundtable on Sustainable Palm Oil (RSPO), which was founded in 2004 to increase the supply of sustainable palm oil products. Through the RSPO, we have committed to purchase exclusively 100 percent certified sustainable palm oil for our products by 2015. We are also a member of the Consumer Goods Forum (CGF), a manufacturing and retail industry group that has adopted a resolution concerning deforestation.