2020 Sustainability Report: Focus Areas
Agriculture is one of the greatest opportunities to address climate change, biodiversity loss and rising rural-urban inequality. Positive agriculture changes that are sustainable, resilient and inclusive have the potential to feed the world’s growing population while improving the global food system.
These changes will require partnership and commitment among global leaders, and PepsiCo is rising to meet that challenge. To demonstrate our leadership and build upon our progress, we announced a new impact-focused Positive Agriculture ambition in April 2021.
Meeting the global agriculture challenge
In recent years the resurgence of sustainable agricultural practices has shown that we have the ability to reimagine global agriculture to become a force that regenerates the earth. Encouraging proven techniques at the local level can have a significant impact on a global scale. It starts by looking at farms not as factories but as individual natural ecosystems. Simple and repeatable practices like using cover crops help to sequester carbon and build soil health. Similar examples in water-use efficiency and habitat conservation and restoration, adopted on a global scale, can make landscapes less drought and flood prone, increase biodiversity and improve the livelihoods of farmers throughout the world.
At its core, PepsiCo is an agricultural company. A steady, sustainable supply of crops is central to our business and we source crops across 60 countries and support over 100,000 agricultural jobs. So helping to meet the challenges of global agriculture is a key focus for us.
At PepsiCo, we’re doing more than just minimizing our own impact. We’re building on the progress we’ve made over many years and setting new goals designed to make a net positive impact in sustainable agriculture across our global value chain. In April 2021, we announced a new Positive Agriculture ambition, including a 2030 goal to spread regenerative farming practices across 7 million acres (approximately equal to our entire agricultural footprint). We estimate this effort will eliminate at least 3 million tons of greenhouse gas emissions (GHG) by the end of the decade. Additionally, by 2030, we aim to improve the livelihoods of more than 250,000 people in our agricultural supply chain, and sustainably source1 100% of our key ingredients2.
Learn more about PepsiCo’s comprehensive approach to agriculture
“Through the She Feeds the World program, CARE and The PepsiCo Foundation are working together to increase opportunities for women small-scale producers around the globe. Through this partnership and the engagement of like-minded leaders and partners, together, we can transform food systems and meet the needs of our growing world.”
President & CEO
See our agriculture goals & progress
Regenerative agriculture practices focus on improving soil health and better water management, promoting biodiversity and improving livelihoods of farming communities. Regenerative practices help to restore natural ecosystems by rebuilding organic matter, restoring biodiversity and sequestering carbon below the soil surface, which reduces overall CO2 emissions and increases water holding capacity.
PepsiCo actively supports the adoption of regenerative farming practices across our agricultural supply chains. PepsiCo is a founding member of the Midwest Row Crop Collaborative (MRCC), a diverse coalition of industry and nonprofit groups working to expand agricultural solutions that protect air and water quality and enhance soil health. We also work with leading organizations like the Science Based Targets Network and the World Wildlife Fund to advocate for industry-wide regenerative agriculture standards and measurement.
Our 2030 Positive Agriculture ambition includes collaborating with farmers to spread the adoption of regenerative farming practices globally. The effort builds on a decade of progress in our Sustainable Farming Program, which has helped farmers in 60 countries adopt practices that build resilience and improve and restore ecosystems. Through a rigorous set of social, environmental and economic criteria, PepsiCo works with suppliers and farmers to ensure continuous improvement.
PepsiCo’s Walkers brand recently introduced a new “circular potatoes” technology to improve soil health in the U.K. by using low-carbon and nutrient-rich fertilizer made from potato peelings. Launched in partnership with award-winning cleantech firm CCm Technologies, the program, once rolled out at scale, is expected to reduce Walkers’ carbon emissions from growing potatoes by 70%, against a 2019 baseline.
In the U.S., PepsiCo has helped farmers plant cover crops on nearly 85,000 acres. In 2020, the efforts led to an average 38% net reduction in on-farm greenhouse gas emissions, including soil carbon sequestration. Working with partners such as Practical Farmers of Iowa, Illinois Corn Growers and the Soil and Water Outcomes Fund, our goal is to expand regenerative agriculture programs to impact more than 500,000 acres of farmland by the end of 2021.
Next Generation Farming
Demonstration Farms show the way forward – PepsiCo is working with farmers around the world to show that sustainable technologies and practices can be more efficient and profitable.
In our network of Demonstration Farms, we work with farmers to identify and implement approaches that work best for their particular crops and geography. To promote widespread adoption, the farms share their results (such as more efficient water and fertilizer use, healthier soil and increased yields) with neighboring farmers at Demonstration Farm “Field Days.” The sharing of practices and technologies helps to drive positive impact on a greater scale.
In 2020, we expanded the number of Demonstration Farms to more than 350 globally. More than 80% of these farms are adopting regenerative farming practices. PepsiCo has plans to further expand the network and the number of farms showcasing these practices. See below to learn more about the local impact of our work.
At PepsiCo’s Demo Farms in Paraná and São Paulo, Brazil, where we source potatoes, recent growing seasons were characterized by challenging and unpredictable rainfall. We focused on water-use efficiency in combination with nutrient management with positive results. The Brazilian Demo Farms used a combination of drip irrigation and a mini sprinkler for potato fertigation, which infuses nutrients or fertilizer into the irrigation system, enabling precise nutrient management of the potato crop. With satellite imaging and high efficiency irrigation equipment, farmers can grow more while using fewer resources. Net yield increased by about 25% and 35% respectively, in the past two years, compared to rainfed plots.
From the small pilot of just six farms, PepsiCo’s Demo Farms in India have grown to 39 farms that are producing outstanding potato growing results. The 2019-2020 crop year, after controlling for outliers, saw a 7% advantage in average net yield of the demonstration plot over the control plot. For the farmers, in addition to a significant per acre income increase, per-ton GHG emissions were also reduced by an average of 16%.** Due to operational issues, cannot get the actual data pertaining to GHG emission calculation on one farm.
PepsiCo co-developed nine Demo Farms with smallholder growers in Mexico, with the objective of promoting more productive farms and sharing best practices with the surrounding communities. These Demo Farms have demonstrated an average productivity increase of 80% versus control fields and PepsiCo expects to continue to work with the growers to have additional impact.
The Demo Farms are one component of a collaborative initiative – Un Mexico palmero sustentable – which seeks to support the sustainable development of the Mexican palm oil sector, assuring a positive impact on communities, where human rights and biodiversity are respected. Helping smallholders implement sustainable techniques to increase crop yield, like efficient nutrient management, is essential to meeting a growing domestic demand for palm oil, while protecting biodiversity, and improving opportunities and livelihoods for small growers.
PepsiCo’s agro team in Pakistan has set an ambition to source 50% of the crops produced under High Efficiency Irrigation Systems within the next five years. The urgency stems from Pakistan being classified as water-scarce instead of water-stressed, which is directly affecting agricultural production systems. Efforts to improve production and potato quality, as well as reduce water usage at Demo Farms, include implementation of drip and sprinkler irrigation systems. Early results indicate strong performance of the demonstration plots.
PepsiCo is helping potato growers in Thailand who must cope with shorter growing windows and challenging climatic conditions. Several activities and partnerships have been implemented to help nearly 580 farmers improve both the production levels and quality of their crops, including management of pest control, implementation of drip irrigation and optimizing fertilizer. These programs and others have resulted in positive results for eight of nine Demo Farms in Thailand with income growth, and yield increases ranging from 5% to 56% versus control plots.
In Vietnam, training and technical support on efficient irrigation and fertilization offers potential for increasing yield, quality and profitability on the farm. This can have a huge impact on the quality of life of farmers and their families.
On average, the three potato farms for 2019-2020 showed an improved net yield of 4%, a 35% water saving.
Precision technology in the field
A significant part of the solution to address environmental impacts lies in “Precision Agriculture” – the idea of using state-of-the-art technology to grow more, with less. Through using the latest technology to gather data, farmers and growers can gain insights to help improve practices and increase the quality and yields of their crops while ensuring they apply the right amount of water and fertilizer to maintain soil quality. Harnessing data from precision agriculture technology will be a critical foundation to inform our regenerative agriculture practices.
We have been using our iCrop technology with farmers over the past number of years to capture data across 48,000 hectares of potato production in 16 markets in Europe. We track over one million crop data points and share this with our farmers to help them understand more about crop performance and the correlation between soil type, weather, irrigation and water usage. We have already seen some strong results. PepsiCo began using iCrop 2.0 in Spain and piloted combining it with irrigation scheduling technology, which led to water irrigation accuracy improving from 48% in 2017, prior to deployment, to 92% in the following growing season.
Cracking the Code with Oats
In 2020, PepsiCo partnered with Corteva Agriscience to sequence an entire oat genome for the first time, making it publicly available via an open source platform to continue the advancement of oat research. Oats are a highly nutritious product and an important rotating crop that can help drive a more sustainable food system. Farmers are being asked to produce food that’s better for consumers and the planet, and this genomic information is key to unlocking the oat’s full potential, allowing farmers to grow oats in a way that is most beneficial for agriculture, consumers and the environment. The genome has been accessed more than 5,000 times to date, fundamentally improving oat research globally and setting the stage for oat innovation for years to come.
Additionally, over the past five years, we’ve developed our “Opti-Oat” program, alongside a number of academic partners. Through the program, we’ve analyzed how to grow the “perfect oat” using over one million data points and developed the Oat Growth Guide. The guide is available to U.K. farmers free of charge and offers another way for our growers to optimize resources, therefore improving yields and creating a more sustainable source of oats.
Building a stronger, more diverse agricultural pipeline – Throughout the world, PepsiCo programs are supporting farm productivity, resiliency and economics. We’re helping to build a pipeline for the future by promoting greater diversity and inclusion in farm management.
PepsiCo is helping to drive economic and social development for underrepresented groups in our agricultural supply chain and communities. We’ve set a new goal of improving the livelihoods of more than 250,000 people in our agricultural value chain by 2030, including initiatives to economically empower women through agriculture.
Building on our existing partnership with the U.S. Agency for International Development (USAID), last year, the organizations embarked on a new, $20 million partnership to drive inclusivity in the food and beverage industry by supporting women-owned and women-led enterprises among PepsiCo suppliers in rural farming communities in Asia, the Middle East and Latin America. The programs will help to improve resiliency in these communities and show that inclusivity leads to better business results.
PepsiCo and The PepsiCo Foundation are also working with the Inter-American Development Bank on initiatives to generate solutions to challenges across the region. These programs include: safe water access with Aquafund in Colombia, Mexico, Peru and Honduras; inclusive recycling with Latitud R throughout Latin America; sustainable agriculture through the Next Generation Agro Fund in the Dominican Republic, Ecuador and Guatemala; and programs focused on economic recovery throughout the region. All programs will pay special attention to women’s empowerment.
Support for women farmers in West Bengal
Since 2019, PepsiCo India has been working with USAID to empower women farmers in West Bengal through education and training in sustainable farming practices, irrigation and crop rotation techniques. PepsiCo-supported financial literacy and entrepreneurship programs also help women become lead farmers on their own. Additional community initiatives are designed to support women in leasing land, educating men and women to support changes in gender norms, and engaging male champions to help design local approaches to more equitable and sustainable agriculture.
So far, PepsiCo India has provided potato production training for approximately 500 women and gender awareness training to PepsiCo India staff and partners, and also developed a training module to address gender-based violence. The West Bengal program is ultimately expected to reach more than 300,000 women through direct and community engagement. In addition to further expansion in West Bengal, the company plans to bring the program to other Indian states, beginning with Maharashtra.
She Feeds the World
The PepsiCo Foundation and CARE are working to provide support for female farmers and their families through the She Feeds the World (SFtW) program. The partnership aims to impact 5 million small-scale women producers and their families with education, resources and economic support to help them increase crop yields and incomes and improve family nutrition. Projects are active in Peru, Egypt and Uganda.
As of 2020, the program has provided more than 422,000 women small-scale producers and their families with the tools and training they need to foster sustainable, long-term growth in their communities.
SFtW achievements include:
In a clear result of changing gender norms and developing women’s leadership skills, more than 50 female SFtW participants ran in the 2021 general election, and for most, this was their first time running for public office.
1,800 women participated in education sessions on good nutrition habits and over 4,200 women were enrolled in more than 180 Village Savings and Loan Associations. The potato farmers’ productivity increased by 40% compared with the previous year and 88% of the crops were sold to PepsiCo’s Chipsy brand.
SFtW distributed farming assets, such as seeds and seedlings and breeding stock, to more than 1,860 small-scale farmers to help them maintain their businesses and feed their families during the pandemic.
Women, water and small farmers’ associations in Colombia
Since 2016, PepsiCo has worked with Reconciliacion, a nongovernmental organization in Colombia, to support women-led small farmers’ associations. Currently, the program is supporting two associations in Boyacá (in Toca with Asoagrotoca, and in Socará and Chivatá with Asoorquidea). The program helps local farmers to grow and sell potatoes with the highest standards and provides legal aid and skills training to create and manage the association and grow the crops. As of 2020, 40 families headed by women are now part of the program and 80% of the administrative roles are held by women.
Expanding agritech programs in Egypt and Sub-Saharan Africa
In Egypt, PepsiCo and USAID are continuing a partnership to help increase farm productivity and build a more transparent and sustainable potato supply chain. PepsiCo Egypt is also helping Egypt’s farming communities with initiatives such as its locally grown seeds program, which enables the company to produce 100% locally sourced potato chips.
In Egypt, potato farmer Faiza Owes Suleiman was among the most successful participants in our farming program in partnership with USAID.
Supporting economic development in South Africa
As part of its acquisition of Pioneer Foods, PepsiCo made public interest commitments to help drive economic growth, empowerment and inclusivity in South Africa. These include the establishment of a development fund to assist emerging farmers in boosting their capabilities and helping to increase opportunities to integrate into the value chain. The fund will allocate ZAR 300 million to agricultural development, focusing on innovative, market-based efforts with key partners, including building on Pioneer Foods’ existing Enterprise and Supplier Development initiatives and Simba’s agriculture program. The fund will also drive growth of South African emerging farmers through catalytic investments.
Promoting Diversity in Agriculture
PepsiCo and The PepsiCo Foundation have increased our efforts to encourage greater diversity in U.S. agriculture by joining the advisory board for the National Black Growers Council and providing support to the National Black Farmers Association. We have also partnered with Cargill to promote inclusivity in our supply chain.
Recognizing that the average age of farmers in the U.S. is nearly 60, PepsiCo also supports the National FFA organization in its mission to engage and prepare the next generation of agriculture leaders.
In South Africa, Pioneer Foods has a long-running collection of Enterprise and Supplier Development initiatives and continues to support majority black-owned commercial farming operations. These emerging farmers are mentored by established commercial farmers to help them increase yields and quality through sound agricultural practices.
Sustainably Sourcing our Products
Celebrating achievements in sustainable sourcing – Under our new Positive Agriculture ambition, we will continue to sustainably source our direct-sourced crops (potatoes, corn, oats and oranges), palm oil and cane sugar, and expand the scope of our work to include key crops from third parties, such as vegetable oils and grains.
In the U.S. specifically, 100% of the oranges purchased for Tropicana directly from Florida growers are sustainably sourced, as are 100% of the potatoes and oats for Lay’s and Quaker in North America.
1. “Sustainably sourced” refers to meeting the independently verified environmental, social and economic principles of PepsiCo’s Sustainable Farming Program, enabling continuous improvement for farmers, communities and the planet.
2. Key ingredients listed here.
3. Due to operational issues, cannot get the actual data pertaining to GHG emission calculation on one farm.