Approach

Packaging plays an essential role in safely delivering our products to customers and consumers. PepsiCo designs our packaging materials to balance several critical criteria, including compliance with food safety regulations, maintaining freshness and quality of the product, environmental sustainability, affordability, and consumer preferences, including convenience. Our sustainable packaging efforts support our PepsiCo Positive ambition in two ways: we are striving to build a more circular and inclusive Positive Value Chain by contributing to a more sustainable supply chain for our packaging; and we are also continuing to evolve our portfolio of food and beverage products by providing Positive Choices for our consumers with innovative packaging solutions.

We recognize and share the concern that some packaging, when disposed of improperly after a product has been consumed, may become waste in the marine environment or on land. We are working on a broad set of initiatives to ensure appropriate end-of-life solutions, improve the carbon footprint of our packaging, as well as other environmental impacts, and ensure protection of human rights especially in the informal recycling sector.

Packaging plays a key role in our overall sustainability agenda with strategic oversight provided by PepsiCo’s executive leadership and input from a multi-functional group of senior experts from Public Policy and Government Affairs, Research and Development (R&D), Supply Chain, and the Office of Sustainability, among others. Our dedicated cross-functional team monitors and evaluates packaging issues on an ongoing basis, including progress against our goals. The following goals make up our PepsiCo Positive sustainable and innovative packaging solution agendas:

• By 2025:
  • Strive to design 100 percent of our packaging to be recyclable, compostable, biodegradable, or reusable
  • Invest to increase recycling rates in key markets
• By 2030:
  • Cut virgin plastic from non-renewable sources per serving across our food and beverage portfolio by 50 percent^[1] through:
    • Scaling new business models that avoid or minimize single-use packaging materials (e.g., models that reuse, refill, prepare at home, utilize concentrates like powders, drops, etc.)
    • Reducing our absolute tonnage of virgin plastic from non-renewable sources by 20 percent, including by:
      • Using market-leading bio-based and renewable materials
      • Using 50 percent recycled content in our plastic packaging
  • Develop and deploy disruptive sustainable packaging materials and new models for convenient foods and beverages (e.g. SodaStream, powders, bio-based materials, reusable or low/no package models)

We aim to achieve these goals by: fostering cross-industry and public-private partnerships; advocating for improved recycling, composting, broader waste management infrastructure and regulatory reform; supporting the advancement of new materials, enhanced recycling technologies, and alternative delivery models; collaborating with suppliers and partners; and helping to increase consumer education and acceptance, all of which are considered necessary.

To ensure transparency, PepsiCo is committed to publicly disclosing key packaging metrics and progressing towards our goals. In addition to the information below and our Sustainability Report, we report annually through the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment Progress Reports. We also included key highlights in the company’s 2020 Annual Report to Shareholders.

Constructive Policy Engagement and Advocacy

PepsiCo recognizes the need for public private partnerships to improve waste management while promoting the efficient use of valuable resources. In addition to the broad set of actions and investments we are making on sustainable packaging, we believe it is critical for PepsiCo and other industry members to engage proactively and constructively in policy discussions. We actively support policy proposals that are broad based, deliver strong environmental outcomes, provide incentives for sustainability, and allow us to contribute to the design and implementation of the programs.

We actively support different policies used to promote a more sustainable, circular economy for packaging, including well designed Extended Producer Responsibility (EPR) programs. EPR, if properly designed and funded, can provide meaningful support for recycling, particularly when the right conditions are in place for a given market. PepsiCo has extensive experience participating in EPR programs in different parts of the world, and we use our experience and insights to deliver constructive recommendations when such programs are being pursued or developed.

Our vision, A World Where Packaging Never Becomes Waste, demands action and investment from all stakeholders—citizens, local, state, and national governments, and participants across the industry supply chain. Our view is that EPR programs are best served when input, cooperation, and funding come from all of these key stakeholders.

We actively engage with industry to develop useful guidance on best in class designs of effective EPR programs, such as the guidance put forward by the Consumer Goods Forum Coalition of Action on Plastic Waste. We also collaborate with a broad range of key stakeholders around the world, including NGOs and other industry actors, to promote a better understanding of where and how EPR may work best.

Our Sustainable Packaging Vision

We use a variety of packaging materials and, as part of our Sustainable from the Start program, emphasize sustainability in all of our packaging. We also recognize that plastic packaging in particular has caused significant concern among stakeholders.

PepsiCo’s sustainable packaging vision is to build a world where packaging never becomes waste. Our strategy is based on three inter-connected pillars: reduce, recycle, and reinvent. Through each of these three pillars, PepsiCo strives to lead change through active partnerships and stakeholder engagement.

Reduce the plastic that we use

Reducing packaging supports our climate ambition and decreases the amount of plastic we put on the market. To achieve reduction we will utilize several levers including designing packaging to minimize the use of materials, switching to alternative, environmentally friendly materials, and working to reinvent packaging to reduce the need for single use plastics through reusable or low/no package models. For example, to reduce plastics across primary, secondary and tertiary packaging, we have light-weighted our bottles, reduced thickness of our films, and cut down on shipping and other packaging materials. Our R&D teams are developing new technology that will pre-settle our snacks products in order to use a smaller bag for the same amount of product, further reducing our use of plastic.

Recycle: support a circular economy for plastic

We recognize that, while we cannot change recycling and recovery rates around the world on our own, we have a role to play in supporting recycling systems through our investments and partnerships. For example, together with peer companies, through the American Beverage Association, non-profit partners WWF and The Recycling Partnership, and local governments, we launched an initiative called Every Bottle Back to invest in recycling infrastructure upgrades, expand access to recycling and support community education efforts in the United States.

Increasing collection and recycling rates supports a circular economy by ensuring the materials we put to market are recovered, their value is preserved, and they do not end up as litter or in landfills. We seek to improve collection and recycling infrastructure through policy and programs as well as consumer education and engagement. PepsiCo has endorsed the Consumer Goods Forum EPR position paper to support constructive policy engagement to improve recycling infrastructure across the globe. Throughout all of these efforts we are striving to promote a safe and inclusive waste management system for those working informally in the sector.

Demand for recycled materials is important to increase material value and create a pull in the market to further increase supply. This is why PepsiCo is seeking to increase the amount of recycled content in our packaging by identifying new suppliers for recycled PET, the main plastic used to make beverage bottles, (rPET) and investing in new technologies.

Reinvent: improve the packaging and plastic that we use

PepsiCo’s reinvention efforts focus on improving the environmental impact of our packaging by developing plastics from non-food, plant-based sources and exploring biodegradable or compostable options. We’re also transforming our offerings to deliver high quality beverages and snacks without the need for single-use packaging. We are developing and helping to provide new business models and solutions for consumers, including through offerings such as SodaStream, SodaStream Professional, powders, and concentrates.

PepsiCo is a member of several consortia and partnerships to develop innovative packaging solutions. These include the NaturALL Bottle Alliance, a research consortium to accelerate the development of packaging made with sustainable and renewable resources, and Danimer Scientific who we are working with to develop biodegradable film resins to be used for next-generation snacks packaging.

Progress

In 2020, we used approximately 2.4 million metric tons of plastic to package products throughout our food and beverage portfolio, including primary, secondary, and tertiary packaging.

We highlight the following areas of progress within each pillar of our sustainable plastics vision.

Reduce The Plastic That We Use

In 2020, we reduced the virgin plastic footprint of our beverage portfolio by 3 percent against our 2018 baseline.

In 2020, PepsiCo joined Pulpex Limited to further develop and scale the world’s first recyclable paper bottle, initially developed by Diageo and Pilot Lite. We also phased out all plastic packaging from for our bubly brand and piloted molded pulp fiber and paperboard replacements for our plastic 6-pack carriers in the U.S. Lessons from these pilots will inform initiatives in other regions.

Recycle: Support A Circular Plastic Economy for Plastics

We estimate that in 2020, approximately 87 percent of our packaging worldwide was fully recyclable, compostable and biodegradable. While we phase out materials that are problematic in the recycling process, such as non-recyclable labels, we continue searching for solutions to improve the recyclability of flexible snacks packaging and to increase consumer access to recycling for materials like shrink wrap, which present a challenge to PepsiCo and the industry overall.

In 2020, our investment partner, Circulate Capital Ocean Fund, invested US$19 million in four leading companies in India that are using technology and innovation to scale and transform India’s waste management and recycling value chain. In early 2021, we launched a new partnership with Facebook and The Recycling Partnership, Communities for Recycling, to provide consumers in the U.S. with real time, localized recycling information through Facebook Messenger. We also introduced a consumer awareness campaign in Latin America in partnership with National Geographic called Planet Love, to educate and inspire audiences to contribute to a more sustainable world by starting with the responsible use and disposal of plastic.

Across our global company-owned and franchise beverage operations in 2020, PepsiCo used 5 percent recycled plastic in its plastic packaging. We are transitioning several brands to 100 percent rPET across 22 global markets. These efforts include eliminating all virgin plastic from key Pepsi-branded^[2] beverage bottles sold in eleven European Union markets by 2022 and from all Pepsi-branded beverage bottles sold in the U.S. by 2030.

Reinvent: Improve Packaging and Plastics

PepsiCo is continuing to grow our portfolio of Beyond the Bottle beverages. In 2020, the SodaStream brand expanded to release SodaStream Professional, a mobile-enabled platform that allows people to customize their water away-from-home, including offices, colleges and airports, with reusable bottles. This model will expand to reach more than 10 additional markets by the end of 2022. SodaStream also announced that it will switch all of its flavors from virgin plastic to alternative materials including metal and rPET, which will avoid nearly 200 million virgin plastic bottles over the next five years in addition to the more than 200 billion plastic bottles the brand will help consumers avoid by 2030.

In our foods business, we are striving to reinvent our snacks packaging to go Beyond Film. In 2020, in partnership with UK retailer, Asda, we launched a trial to reduce plastics and explore refillable options in their Sustainability Store. Additionally, with the French retailer Franprix, we launched a pilot to distribute our nut product Bénénuts in bulk version. Learnings from these pilots will inform future innovation. 

Strategic Partnerships

To build a circular economy for packaging, it is important that all actors in the packaging value chain, including packaging producers, retail and sales outlets, waste management and recycling industries, governments, and consumers, work together to collectively drive change. To this end, PepsiCo engages in a variety of programs and initiatives that bring stakeholders together to create broad solutions in order to shift the whole system in a more sustainable direction. Due to the breadth of our global, regional, and local partnerships, we cannot list every initiative in all markets and focus here on a representative sample of our work and commitment to collaboration.

What's Next?

In 2021, PepsiCo is looking to further several key initiatives as we work towards a Positive Value Chain and help consumers make Positive Choices:

• We will continue to accelerate investments in recycling infrastructure and explore partnerships to empower waste collectors in those markets.
• We are continuing to develop the supply chain to bring compostable, renewable, bio- and paper-based materials, and reusable packaging solutions to scale.
• We will expand our portfolio options to provide consumers more sustainable packaging solutions.
• We will continue to build coalitions and collaborate in support of smart policies that enable the circular use of materials and to build partnerships to empower our consumers to make sustainable choices through education.