Product safety and quality

Why it matters

Approach

Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and foods, serving customers and consumers in more than 200 countries and territories. Fundamental to our mission is our promise to deliver trusted brands and consumer smiles with consistent safety and high quality.

We expect that our ingredient suppliers will achieve certification to a Global Food Safety Initiative (GFSI)-recognized standard, including Good Agricultural Practices (GAP) for agricultural commodities, or demonstrate equivalence through a PepsiCo pre-approval audit scheme. We continue to work with suppliers to increase the proportion of GFSI certifications worldwide. We aim to achieve or maintain GFSI certification at all PepsiCo-owned manufacturing facilities globally.

Governance

Our governance structure connects regions and global functional stakeholders and ensures robust food safety and quality oversight and controls across the enterprise. Food safety is a top priority for PepsiCo, guided by PepsiCo Food Safety & Quality Assurance (FSQA). All our employees, including frontline and site management, play an important role in ensuring compliance with standards and policies. Management reviews of performance trends, escalations and priorities take place regularly at the region level and twice a year globally. Senior executives review policy compliance, strategic priorities and mitigation of potential risks through participation in region and global Executive Product Integrity Council (EPIC) meetings two times each year. Targeted horizon scanning task forces are established to identify and manage core issues.

The safety of our products and ingredients is of utmost importance to PepsiCo. Design and management of systems relating to food safety and quality programs are housed within the Research and Development (R&D) function. Within R&D, the Compliance team is composed of representatives from FSQA, Scientific Affairs and Regulatory Affairs, supported with input from many other functions. Our Scientific Affairs team is comprised of qualified toxicologists with expertise to assess ingredient, product, and supply chain safety.

The R&D Compliance team’s remit is to support product safety and oversee compliance with both external regulations and internal standards that may extend beyond local regulations. Its responsibilities include proactively monitoring emerging science and policies in their respective fields; reviewing and analyzing relevant third-party research; and developing, completing and publishing new research. We evaluate the rigor of emerging research to help ensure we put appropriate context to applicable studies based on the weight of evidence and to provide, as necessary, risk assessment based on relevant research related to ingredients or products in PepsiCo’s food and beverage portfolio. We may also conduct research to address potential gaps in research and collaborate with third-party experts to advance our knowledge in the field.

A comprehensive governance structure supports connectivity across sector and global functional stakeholders, ensuring strong food safety, quality and compliance oversight and controls are in place across our enterprise.

• All our employees, including frontline and site management, play an important role ensuring compliance with standards and policies.
• Management reviews of performance trends, escalations and priorities take place regularly at the region level and twice a year globally.
• Both scientific and regulatory horizon scanning programs are established to identify and manage emerging issues. This includes proactively assessing evolving science where relevant and reliable and executing change management where new evidence or regulations necessitate.
• Senior executives review policy compliance, strategic priorities and mitigation of potential risks through participation in region and global Executive Product Integrity Council meetings twice each year.
• PepsiCo tracks and reviews food safety strategy and performance with its PepsiCo Risk Committee and with its Board of Directors at least annually.

These ongoing reviews and assessments help to identify key areas of potential intervention in our operations to drive continued product safety and quality across the entire manufacturing process. Based on these, PepsiCo has identified key focal points for ingredients and product manufacturing that may impact food safety, including, but not limited to, the need to manage (as applicable) microbiological risks, and potential risks related to allergens, chemical contaminants and foreign materials. We mitigate these risks with robust systems and processes, designed in alignment with stringent internal and external food safety standards.

Risk management

We actively manage risks associated with food safety. PepsiCo tracks and reviews food safety strategy and performance with its PepsiCo Risk Committee and with its Board of Directors twice annually. Food safety risks are formally reported into PepsiCo’s enterprise risk management (ERM) system twice-yearly through structured risk submissions.

These ongoing reviews and assessments help to identify key areas of intervention in our operations to drive continued product safety and quality across the entire manufacturing process. Based on these, PepsiCo has identified key food safety focal points, including allergens, microbiological risks, chemical contaminants and foreign materials. We mitigate these risks with robust systems and processes, designed in alignment with stringent internal and external food safety standards.

Risk based controls are fundamental to PepsiCo’s food safety management systems and are designed to mitigate potential hazards and risks. These controls are critical to our manufacturing and support processes. Our products are traceable; meaning we are able to trace one step backward to identify components (i.e., ingredients, processing aids, packaging) and one step forward to identify initial point of distribution of the finished product. This enables us to quickly investigate and address any potential concerns in the marketplace.

In addition to closely following scientific and regulatory developments, PepsiCo actively monitors potential reputational risks related to our food and beverage portfolio (whether or not scientifically-based) through daily media (traditional and social) reporting to inform our strategy. We assess current reputational risks and incorporate predictive analytics to help inform our risk mitigation efforts. We also work with a third party to develop detailed, regular reporting to help monitor reputation among the general public on a global scale and provide both a global and market-level view of our reputational standing across a variety of factors including product quality.

Strategy

Food quality and safety standards

PepsiCo has established strong global quality and food safety standards. We use qualified, safe ingredients and approved suppliers, and follow all applicable regulations issued by regulatory authorities. Our manufacturing locations have traceability systems to trace incoming materials, primary packaging and products, which enable us to quickly investigate and address any potential concerns in the marketplace.

Consumer complaints

PepsiCo maintains a comprehensive management system for tracking, reporting and remediating consumer complaints. We make channels available for consumer contact, including on-pack phone, email or website information, which directs complaints either to PepsiCo or to our third-party franchisees and other business associates as relevant. On the rare occasions when incidents occur, we strive to take quick action, conduct robust investigations, implement corrective actions and share learnings across the system.

Product development

Product development follows our technical stage-gate process to ensure that the design is rigorously vetted, products are made and sold in conformance with stringent internal standards and compliance with all applicable regulations is achieved.

Generally Recognized as Safe (GRAS) Ingredients

In the U.S., GRAS provides a regulated premarket pathway to establish that an ingredient is generally recognized as safe by qualified experts under the conditions of its intended use. The safety standard for GRAS is the same as for a food or color additive petition. All relevant information to determine a substance is GRAS must be publicly available, further increasing transparency into the process. The U.S. Food and Drug Administration (“FDA”) has provided guidance over the years to strengthen the program. PepsiCo has high standards for the utilization of ingredients based on GRAS determinations – all uses of ingredients based on GRAS determinations will meet or exceed the FDA’s standards for use and will be informed by all associated FDA guidance. Our policy is that any ingredient used by our product developers that relies upon a GRAS determination – FDA-notified or self-determined – must be shared with PepsiCo’s Scientific Affairs team of toxicologists for review and alignment before entering the marketplace. Additionally, PepsiCo includes its own self-GRAS determinations in the American Beverage Association’s publicly-available ingredient transparency website, goodtoknowfacts.org.

Metrics framework

PepsiCo has established verification systems to monitor performance, including quality control evaluations, audits (internal and third-party) and food safety and quality programs. We evaluate product safety and quality at key points in the product lifecycle, namely design, manufacture, trade and consumption, to improve our processes, performance and culture.