Supplier diversity is a critical business advantage because it ensures we are seeking out nimble, innovative suppliers who challenge how we think. This helps us deliver on our bottom line while building a supplier base that mirrors the diversity of our employees, customers, consumers and communities where we operate.
To the World:
The global economy is dependent on the buying and selling of goods and services, regardless of race, sexual orientation, gender identity, disability or veteran status. When we intentionally or unintentionally inhibit equal economic participation, we weaken the entire economy by not giving everyone equitable access to contribute. Supplier diversity helps to reduce inequality by supporting diverse business owners who employ a diverse workforce, which in turn creates stronger communities and bolsters the development of generational wealth.
Building a more Positive Value Chain is an important part of realizing our pep+ (PepsiCo Positive) ambitions. This includes increasing inclusiveness in our supply chain. To support this goal, we look to purchase from a supplier base whose diversity is representative of our employees, consumers, retail customers and communities. Developing relationships with diverse suppliers helps us build the world-class supplier base we need to succeed by aiming to create mutually beneficial relationships that expand PepsiCo's sphere of activity. Our approach should help to build stronger community infrastructure by providing employment and training while creating role models and promoting buying from other diverse-owned businesses.
PepsiCo strives to develop a robust supplier base that includes diverse-owned businesses that provide quality goods and services. We remain focused on the goal of increasing our spend with business enterprises across all diverse cohorts. These cohorts include, but are not limited to, ethnic and racial minorities, women, differently-abled, U.S. veterans and LGBTQ+ suppliers.
Under the guidance of our Racial Equality Journey commitments (announced in 2020), we aim to leverage our scale and influence across our suppliers, marketing agency partners and customer base to increase representation and strengthen Black-owned and Hispanic-owned businesses in the United States and work towards removing barriers to economic advancement for historically disenfranchised groups. That means step changes in our spending and approach to our supplier relationships.
We plan to more than double our spending efforts with Black-owned suppliers with an incremental spend of $350 million by 2025; expanding the supplier pipeline through advocacy and outreach; and building supplier capability, targeting growth across services, agriculture, sustainable packaging and operations.
We will build on our existing investment in Hispanic-owned businesses, including:
- Building mentoring relationships between Hispanic-owned businesses and PepsiCo;
- Investing $50 million by 2025 to strengthen Hispanic-owned business capabilities by supporting development tools and providing access to capital not available through traditional sources;
- Using our scale to increase Hispanic representation across our suppliers, marketing agencies and professional service providers; and
- Building Hispanic-owned supplier capability in areas such as agriculture and sustainable packaging.
We encourage certified, diverse suppliers who can bring innovation and value to our supply chain to register in the supplier portal. This portal also serves as a way for the Supplier Diversity team to review the capabilities of registered suppliers and reach out to them directly. In addition, PepsiCo leverages its membership advocacy groups to seek out and meet prospective diverse suppliers.
2022 marked the 40th anniversary of our Supplier Diversity Program. The anniversary commemorates a tremendous milestone for the company, from an initial spend of $5 million in 1982 to nearly $30 billion spent over the past 40 years across PepsiCo's entire value chain.
In 2022, our diverse supplier spend was more than $1 billion in the United States. This includes Tier 2 diverse supplier spend1 reported by non-diverse suppliers, further demonstrating PepsiCo's commitment to expanding engagement of diverse suppliers in our supply chain.
In pursuing supplier diversity, we have made progress, yet face challenges along the way.
In June 2020, Chairman and CEO Ramon Laguarta announced our Racial Equality Journey ambitions, and it was just the beginning of our work to impact structural change across all the diverse communities we serve.
Many diverse suppliers continue to face systemic business barriers, from accessing funding to complying with onerous requirements.
As part of our Racial Equality Journey, we have worked to strengthen relationships with Black- and Hispanic-owned businesses and suppliers in the U.S. In 2022, we spent more than $435 million with Black- and Hispanic-owned suppliers. To learn more about our progress, please go to our Racial Equality Journey Year in Review.
In 2022, we expanded our internal Supplier Diversity team, who work with cross-functional teams, including marketing and procurement teams across the globe, to identify and on-board diverse suppliers. We also continued embedding economic inclusion in our corporate culture by rolling out a supplier diversity e-learning module for all procurement associations worldwide.
To better understand how our spend with diverse suppliers strengthens the communities in which we operate by causing job growth, increasing local business support and expanding the tax base, we launched an economic impact report last year. Through this, we identified that impact of our diverse supplier spend helped to unlock $600 million in GDP impact and employ over 6,000 people.
In 2022, we also launched Juntos Crecemos (Together we Grow), a $50 million platform aiming to target Hispanic-owned small businesses, including restaurants, bodegas and carnicerías. The program is designed to help these small businesses address fundamental business challenges, like marketing and logistics, and drive business growth over the next five years.
PepsiCo develops and maintains strong partnerships with advocacy organizations that identify and develop diverse suppliers. These organizations include:
- National Minority Supplier Development Council (NMSDC)
- Women’s Business Enterprise National Council (WBENC)
- US Hispanic Chamber of Commerce (USHCC)
- US Pan Asian American Chamber of Commerce (USPAACC)
- The National LGBT Chamber of Commerce (NGLCC)
We are a national Sustaining Member of the National Black Growers Council (NBGC) whose mission is to improve the efficiency, productivity and sustainability of Black row crop farmers.
We are constantly evaluating and evolving opportunities to grow and continue our work with advocacy groups and look forward to enhancing our relationships with these organizations as we seek to further the capacity building and development of diverse-owned businesses.
In the coming year, our supplier diversity program will continue to focus on building a Positive Value Chain through the following efforts:
- Maintaining engagement and expanding leadership positions with our supplier diversity advocacy partners
- Hosting a supplier diversity summit at the Frito-Lay headquarters in Plano, Texas. The summit will bring together PepsiCo’s Supplier Diversity team, procurement teams and diverse suppliers. We’re aiming to improve relationships with diverse suppliers and provide opportunities for our team to get our initiatives in front of a new group of suppliers.
- The PepsiCo Foundation will open up funding applications for its IMPACTO Hispanic Business Accelerator program in summer 2023 in participating cities.
June 29, 2023