PepsiCo to Move to Regenerative Farming Practices for all its ingredients

PepsiCo, Inc. (NASDAQ:PEP) today announced a new, impact-driven Positive Agriculture ambition, anchored by a goal to spread regenerative farming practices across 7 million acres, approximately equal to its entire agricultural footprint.

The company estimates the effort will eliminate at least 3 million tons of greenhouse gas emissions (GHG) by the end of the decade. Additional 2030 goals within the agenda include improving the livelihoods of more than 250,000 people in its agricultural supply chain and sustainably sourcing 100% of its key ingredients.

PepsiCo Chairman and CEO Ramon Laguarta:

"Any plan to tackle the urgent challenges facing the global food system must address agriculture, the source of nourishment for billions of people and a key lever to address climate change and inequality. As one of the world's leading food and beverage companies, a resilient food system is essential to our business, and with our scale we have an opportunity and responsibility to drive meaningful change. "

"PepsiCo's Positive Agriculture agenda prioritizes investment, innovation, and robust collaboration with our farming partners to deliver impact around the world. Working together, we can reduce our collective carbon footprint, feed a rapidly growing population, and provide meaningful economic opportunities for more people."

PepsiCo's Positive Agriculture agenda aims to source crops and ingredients in a way that accelerates regenerative agriculture and strengthens farming communities, with a focus on:
 

• Spreading the adoption of regenerative farming practices across 7 million acres – approximately equal to 100% of the land used around the world to grow crops and ingredients for the company's products. These efforts are estimated to lead to a net-reduction of at least 3 million tons of GHG emissions by 2030.
  
  Furthering nearly a decade of progress with its Sustainable Farming Program (SFP), PepsiCo will continue to collaborate with farmers across 60 countries to adopt practices that build resilience and improve and restore ecosystems. In the U.S., for example, PepsiCo has worked with farmers to plant cover crops on over 85,000 acres and has seen up to a 38% net reduction in on-farm greenhouse gas emissions, including soil carbon sequestration.¹
  
  Through efforts with industry-leading partners, the company will expand regenerative agriculture programs to more than 500,000 acres of U.S. farmland by the end of 2021. PepsiCo will also continue to grow its global network of Demonstration Farms, which enable peer-to-peer learning and in 2020 grew to more than 350 farms with more than 80% adopting regenerative farming practices.


• Investments in innovative and sustainable agriculture solutions are being driven by PepsiCo's iconic brands, many of which have already embedded the company's Positive Agriculture approach in their lifecycle. For example, PepsiCo's Walkers brand in the UK worked with CCm Technologies to introduce new 'circular potatoes' technology that uses potato peelings to manufacture low-carbon, nutrient-rich fertilizer.
  
  Use of this fertilizer is expected to reduce Walkers' carbon emissions from growing potatoes by 70%. Additionally, Quaker has developed the "Opti-Oat" initiative, which uses over one million data points to guide farmers in how to grow the "perfect oat," improving yields and creating a more sustainable source of oats.


• Improving the livelihoods of more than 250,000 people in its agricultural supply chain and communities, including economically empowering women. PepsiCo will focus its work on the most vulnerable farming communities linked to its global value chain, including smallholder farmers and farm workers, women and minority farmers. The company will continue to advance this goal through diverse partnerships, including U.S. Agency for International Development, Inter-American Development Bank, CARE, National FFA Organization, and the National Black Growers Council.


• Sustainably sourcing 100% of key ingredients, expanding to include not only its direct-sourced crops (potatoes, whole corn, oats, and oranges), but also key crops from third parties, such as vegetable oils and grains. PepsiCo sources crops across 60 countries and supports over 100,000 jobs in the agricultural supply chain.
  
  As of the end of 2020, PepsiCo's direct-sourced crops are 100% sustainably sourced in 28 countries. Globally, nearly 87% of direct crops are sustainably sourced through PepsiCo's SFP. For example, 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, respectively.
  
  Additionally, PepsiCo achieved its goal to source 100% Bonsucro certified sustainable cane sugar globally by 2020 and achieved more than 99% physically certified palm oil by the Roundtable on Sustainable Palm Oil. PepsiCo has a strict commitment to no deforestation, no development on peat, and no exploitation of indigenous people, workers and local communities, and recently published its strengthened Global Strategy on Sustainable Palm Oil, with an increased focus on landscape programs and transformation of the palm oil sector.

Jim Andrew, Chief Sustainability Officer, PepsiCo:
 

"Through our Sustainable Farming Program and ongoing work with tens of thousands of farmers, we've seen first-hand the ability to drive solutions within our agricultural communities, resulting in nature-based outcomes."

"Today, we're accelerating our Positive Agriculture agenda because we know we have to do even more to create truly systemic change. By focusing on regenerative agriculture practices at the local level to improve soil health, we can build a stronger foundation for our products and help make the entire food system more sustainable."

PepsiCo advocates for the establishment of industry-wide regenerative agriculture standards and measurement. In the absence of such standards, the company will measure progress towards its Positive Agriculture goals by tracking acres and people engaged in the initiative and, over time, the impact toward five key outcomes, including: building soil health and fertility; sequestering carbon and reducing emissions; enhancing watershed health; increasing biodiversity; and improving farmer livelihoods.

PepsiCo is engaged with leading organizations like the World Wildlife Fund (WWF) to develop a method for setting science-based targets for water that consider the benefits of regenerative and resilient farming systems and practices on water quality and water quantity.

Sheila Bonini, senior vice president of Private Sector Engagement at World Wildlife Fund:
 

"Working across the supply chain is necessary if we are to transform the food system, reduce carbon emissions, support healthy watersheds, restore biodiversity, and improve livelihoods. It's encouraging that PepsiCo is announcing an approach to their agricultural supply chains that can be positive for both nature and people and WWF looks forward to partnering with PepsiCo on an ambitious and scaled regenerative agriculture agenda."

Leveraging innovation, including digital technology, and collaboration is central to PepsiCo's approach to catalyzing systemic change. Together with the World Economic Forum and others, PepsiCo recently launched the concept of Food Innovation Hubs to develop local food systems that are inclusive, efficient, sustainable, and nutritious.

 
The Positive Agriculture agenda is another step in the company's PepsiCo Positive journey and follows PepsiCo's recent announcement to double its science-based climate goal, targeting a reduction of absolute greenhouse gas emissions across its value chain by more than 40% by 2030, as well as pledging to achieve net-zero emissions by 2040.

¹For PepsiCo's corporate greenhouse gas footprint, the company follows the GHG Protocol framework where any sequestration is kept separate from the three scopes of emissions