Approach

To distribute our products, we utilize our operating subsidiaries and a complex network of fleet operations. Our distribution approach varies country-to-country, with the predominance of company-owned vehicles operating in North America. We also partner with third parties to distribute products in most markets. To decarbonize our fleet operations, we are striving to (i) improve the efficiency of our vehicles, routing, and driving; (ii) use cleaner fuels; (iii) transition to zero-emission vehicles; and (iv) develop and share best practices with third-party partners to encourage them to do the same.

Progress

In 2022, our company-owned fleet accounted for approximately 30% of our global Scope 1 and 2 emissions. In 2022, this global fleet traveled approximately 1.3 billion miles and consumed over 19 million Gigajoules of fuel, of which approximately 2% was from renewable sources.

Efficiency

In 2022, we continued to optimize and right-size our PepsiCo Beverages North America (PBNA) delivery vehicles by reducing the weight of the tractor and trailer specification to help us transport more product without increasing miles. PBNA is also accelerating deployment of its Geo Box delivery system, which replaces bay delivery trucks with specially designed trailers that are pre-loaded at the warehouse. This ensures the right quantity and assortment of product reaches our retail customers in a more efficient and timely manner. Load optimization reduces the number of vehicles, miles driven and ultimately fuel used.

PepsiCo Foods North America (PFNA) introduced tractors with liftable tandem axles which deploy or lift the second axle as required by the weight of the load, resulting in reduced rolling resistance, reduced tire and brake wear and an expected improvement to miles per gallon (MPG). PFNA also purchased 30' box trucks which have 25% more cargo volume and improved MPG when compared to the 24' box trucks they are replacing. This, combined with additional drop frame trailers that optimize available trailer volume, is expected to reduce the total number of miles required to deliver the same amount of product.

We also invest in energy saving technology and advanced aerodynamic devices, use low rolling resistance tires, reduce weight, and improve powertrain efficiency in our new equipment.

We continue to make improvements in fleet efficiency through Advanced Driver Assist Systems, more efficient routing, and driver training that encourages fuel conservation. Our drivers are trained to practice gentler acceleration and the importance of avoiding unnecessary braking and idling. Safety features like collision mitigation, adaptive cruise control, blind spot monitoring and lane keep assist are being deployed to keep our drivers and communities safer while improving efficiency.

As we work to transform the goods movement industry, we intend to demonstrate the viability of a sustainable future with zero- and near-zero emission technologies at scale. We have made progress but have faced challenges along the way.

Cleaner fuel sources

Our PFNA class 8 tractor fleet is comprised of over 700 CNG vehicles, and in 2022, the CNG fleet drove approximately 44 million miles. We continue to increase the use of natural gas sourced from renewable sources, comprising 80% of CNG purchased for our PFNA fleet in 2022. We are establishing fueling contracts in an effort to ensure that all future fleet natural gas will be from renewable sources. Operating CNG tractors in 2022 resulted in approximately 65,000 metric tons of GHG reduction compared to using diesel vehicles.

Decarbonization

To date, the equipment and infrastructure in place at our Modesto facility includes nearly 60 tractors, box trucks, yard trucks, or forklifts powered by electric, lithium-ion technologies or natural gas with renewable attributes. Infrastructure to support the project incorporates an adjacent natural gas station with renewable attributes, as well as solar carports, battery storage, truck charging systems and employee electric vehicle charging stations.

In 2022, we continued transforming our Frito-Lay facility in Modesto, California into a role model for end-to-end sustainability. The facility uses 100% sustainably sourced electricity and has achieved a 91% reduction in greenhouse gas emissions from direct fleet operations by switching to zero emission and near-zero emission vehicles—including the world’s first fleet of electric semi-trucks from Tesla. We also built a fueling and charging infrastructure for the new fleet, with on-site renewable energy generation and storage.

In December 2022, we took delivery of the first all-electric Tesla semi trucks in production. The trucks, part of a larger order to be deployed across both our snacks and beverage businesses, will allow us to explore emerging technologies that will position us for the future. Additionally, Frito-Lay will deploy electric vans in North America in 2023 to evaluate how best to leverage electric vehicles and technologies moving forward.

Strategic partnerships

We believe it is important to engage in and support multi-stakeholder alternative energy initiatives. We are an original signatory of the Sustainable Fuel Buyers’ Principles. These Principles, developed by the non-governmental organization Business for Social Responsibility (BSR), encourage accelerating the transition to sustainable, low-carbon fuel and related technologies.

In the U.S., PepsiCo is a certified member of the U.S. Environmental Protection Agency’s SmartWay initiative, formed to improve fuel efficiency and the environmental performance of goods-movement supply chains.

What's next?

In the coming year, we expect to continue our transition to a cleaner, advanced, more efficient fleet increasingly powered by renewable sources. We will continue our investments and initiatives that focus on:

• Safety: Leveraging advanced technologies that improve the safety performance of our fleet operations;
• Connectivity: Utilizing data and technologies that improve efficiency; and
• Electrification: Increasingly deploying electric vehicles to reduce emissions.