Goal: Continue to support sustainable agriculture by expanding best practices with our growers and suppliers.
Whether oats for Quaker, potatoes or corn for Frito-Lay, or oranges
for Tropicana, PepsiCo is a company that depends on agriculture across our food and beverage businesses. The majority of our raw materials, in terms of dollar spend, come directly from agriculture.
At PepsiCo, sustainable farming is a major focus to help secure our supply chain into the future, manage volatility, address the growing level of regulation and legislation facing our business, and identify good practices, innovation and technology that can increase efficiency and allow us to grow more with less.
The PepsiCo Sustainable Farming Initiative (SFI) was launched to encourage both PepsiCo and our growers to operate in ways that reduce environmental and social impacts while maintaining economic viability at the farm level.
The SFI was developed as a standard to guide our suppliers in sustainable practices and provide them with resources, training and support to meet our standard across the three pillars of sustainability: social, economic and environmental.
DID YOU KNOW
PepsiCo and Walmart are partnering to promote sustainable agriculture practices across the companies’ supply chains.
The SFI is unique in covering all three pillars, as many standards focus solely on environmental issues. We have worked with industry partners Validus, LLC and Business for Social Responsibility to collaborate on a standard that works for any farm, any crop, anywhere. We also have made the guidelines easy to use, and importantly, are working with other companies to cross-honor each other’s standards, recognizing that time needed to fill out paperwork is time away from farming.
The initiative was piloted in 2011 and 2012 across 14 countries and officially rolled out in 2013 across the United States, the United Kingdom, Brazil, Chile, Argentina and Mexico.
It has currently been deployed across 300,000 acres in North America, encompassing our potato and corn suppliers. Our partnership with Walmart, our largest customer, is to extend SFI in North America to reach 500,000 acres by the end of 2016.
The SFI will continue to expand into PepsiCo’s ever-growing agricultural-based supply chain. For example, a Dairy Sustainable Farming Initiative is under development for use on farms within our dairy supply chain. We intend to launch this program in 2015. 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
Sustainable Agriculture’s Benefits to PepsiCo
The Sustainable Farm Initiative and the continued implementation of best practices for sustainable agriculture will add value to PepsiCo’s business in the following areas:
- Security of Supply: PepsiCo and our growers will be increasingly confident that we can continue to grow and purchase agriculture crops into the future.
- Risk Management: To manage volatility, PepsiCo and our growers look for solutions from the experts on weather volatility, alternative energy, input costs, etc.
- Regulation and Legislation: SFI provides PepsiCo with a framework within which to better manage the growing level of regulation and legislation that is facing our businesses.
- Productivity and Increased Efficiency: Perhaps the greatest lever to use in sustainability — growing more with less. We continue to identify.
where good practices, innovation and technology can increase efficiency.
Using Technology to Grow More With Less
i-cropTM is a revolutionary technology from PepsiCo UK and Ireland that helps farmers produce more crops per drop by helping them reduce their overall water usage
Energy and Greenhouse Gas
Our "50 in 5" ambition, lead by PepsiCo UK, is to make a 50% reduction in carbon and water usage in water stressed areas to grow our key crops by the end of 2015. We're working on this with our growers and with Cambridge University.
We've developed i-crop - an innovative system of sensors measuring soil moisture levels and crop water requirements. By the end of 2013, we had cut our carbon footprint by 38% and water usage in water stressed areas by 31%. Droughts and floods made 2013 challenging however, we still achieved a 5% increase in crop yield for 49% less irrigation water in our drop irrigation trails.
Around the world, we are looking at ways to reduce the environmental impact of fertilizer use by the farmers that supply us.
In Belgium, the Netherlands, France and Germany, we are using organic fertilizers, when appropriate, to reduce carbon emissions. For example, slurry from Dutch and Belgian dairy and pig farms is placed directly into the soil as a natural fertilizer. This cross-farm cooperation helps dairy and pig farmers reduce their waste and reduces our growers’ carbon emissions as it reduces the use of traditional fertilizers. It also improves our products’ environmental performance, since 40 to 50 percent of the carbon produced per ton of our potatoes is from fertilizers.
We have also adopted a fertilizer strategy with other growers in our potato supply chain in Europe and the orange supply chain in Florida to reduce a key environmental impact and cost for farmers.
Waste to Fertilizer
PepsiCo Turkey is turning waste into fertilizer that reduces by 40 percent the amount of chemicals applied to potato fields.
Potatoes at the Amasya farm in Turkey.
Across our operations in Europe, we are helping our growers get “more crop from every drop.” In Turkey, we have worked with some of our 500 farmers to reduce water usage by 34 percent in 2012, compared to 2010. We did this by increasing the use of drip irrigation and mini sprinkler systems and boosting yields. As a result, we have saved around 10 million tons of water — enough to fill approximately 4,000 professional-sized swimming pools.
We are also working with Greek and Bulgarian potato growers to use water more efficiently by rolling out learnings from i-crop and putting in place drip irrigation. Most of our farms in Bulgaria use drip irrigation, resulting in 40 percent less water use per hectare, as compared to other irrigation methods, and increased yields of 5 percent.
Drip irrigation trials that Walkers conducted with its growers in the United Kingdom resulted in an increase in yield of 5 percent, and a 38 percent reduction in irrigation water per metric tonne of potatoes in 2013, the third year of the trials.
Agrochemicals and Nutrients
PepsiCo supports sustainable practices that substitute natural controls for agrochemicals, foster ecosystem balance and reduce crop losses.
Sustainable protection of plants against pests includes prevention and monitoring of pest problems, using control methods only when necessary, and targeting only the pests that cause crop production problems.
PepsiCo aims to follow procedures that assure safe use of plant protection products, and expects the same of its growers. These procedures begin with making sure that all protection products are registered or permitted by the appropriate governmental agency in both the country of production and the destination country.
Furthermore, under these procedures, we safely manage agrochemicals by selecting the correct agrochemicals and properly storing them on site. By working to ensure the proper security, handling, transport and application of plant-protection products, we reduce any potential negative effects on people and the environment.
Soil Conservation and Preservation
Sustaining, retaining and improving the soil and its organic matter are a high priority for PepsiCo and we are implementing long-term solutions that can preserve and conserve soil.
Our solutions range from using global positioning system (GPS) technology to guide tractors in order to increase land utilization in Australia to employing contour furrow technology in the high mountains of Ecuador and Thailand to reduce the impact of water erosion during periods of heavy rain.
PepsiCo has also promoted “no till,” a system for planting crops without plowing, in order to reduce soil erosion and preserve soil nutrients as a cultivation practice in the production of oats for use in the Quaker business.
PepsiCo Agriculture Initiatives Benefit Communities in Colombia
In 2008, we began a supply program aimed at increasing our direct purchases from farmers. We believe that by breaking commercialization chains and working directly with smallholder farmers, we have an opportunity to benefit local communities. In Colombia, we use this direct purchase program when sourcing plantains for the production of Natu chips. This program has provided security for local farmers, employment for 65 to 70 women in the preparation plant and work opportunities for vulnerable 20- to 25-year-old men.
From the farms where our raw materials are grown to the suppliers who help us create a superior product, managing our supply chain is critical to the success of our business. At PepsiCo, we use our relationships within our global supply chains to ensure that those we work with operate ethically and responsibly. Learn more about our responsible sourcing at PepsiCo.
We work to lessen the risks of biodiversity loss by maintaining healthy and balanced ecosystems. As a result, PepsiCo is engaging in industry- and farm-based initiatives to highlight the importance of ecosystem services. For example, as a member of the Sustainable Agriculture Initiative platform, a global food and drink industry initiative for sustainable agriculture, PepsiCo is jointly working to define the scope and suitable metrics for measuring and improving biodiversity in arable crops using a recognized global standard. In the United States, we have improved waterfowl and wildlife habitat by placing select Gold Dust potato fields under a flood/fallow program. Biodiversity is also a key SFI indicator.