Our Strategy

A Message from CEO Ramon Laguarta

Now more than ever, consumers are acutely aware of the interconnected nature of our global food system—its impact on our planet, its support for our communities and its ability to provide nourishment for billions of people across the world.

Unfortunately, the bonds holding this delicate ecosystem together are beginning to fray right in front of our eyes. First of all, climate change is endangering our natural resources. By one estimate, every degree of warming could reduce staple crop yields by 10%. What used to be hundred-year weather events are now happening every other year, and according to the UN, more than half the planet’s fertile topsoil is now degraded. This is reducing the soil’s potential to grow food and sequester carbon, increasing our vulnerability to extreme weather events, and impacting water quality and biodiversity. The COVID-19 pandemic has only exacerbated these challenges and highlighted the inequalities that underlie much of our food system and our society.

Such drastic shifts not only threaten the health of our planet and communities, they also present challenges for our business. As a company that sources crops from over 7 million acres of farmland in 60 different countries, PepsiCo has deep roots in the global food system. At the same time, our consumers are demanding new products that are more sustainable and made with minimal impact on the environment.

That is why we are working to transform the way we create shared value by operating within planetary boundaries and inspiring positive change for the planet and people. This will make us a Better company, with purpose more deeply integrated into our business strategy. It will also make us Faster and Stronger, enabling accelerated growth and continued investment in our people, business and communities. And we hope it will make us an example, for our partners and our peers.

With these goals in mind, we’re rethinking how we grow and source crops by:

• Sustainably sourcing 100% of our direct commodities in 28 countries, with nearly 87% of our direct commodities sustainably sourced globally as of 2020.
• Announcing a new Positive Agriculture ambition that, by working with farmers, will aim to spread regenerative practices across 7 million acres by 2030.
• Building on nearly a decade of progress with our Sustainable Farming Program, collaborating with farmers across 60 countries to adopt practices that cultivate resilience and improve and restore ecosystems.
• Improving the livelihoods of more than 250,000 people in our agricultural supply chain and communities by 2030.

We’re doing business in a way that’s more sustainable and inclusive by:

• Announcing plans to transition to 100% renewable electricity globally, after achieving 100% renewable electricity for our U.S. direct operations in 2020.
• Doubling down on our climate goal and setting a new target to reach Net Zero emissions across our global operations by 2040.
• Improving our operational water-use efficiency by 15% in high water-risk areas as of 2020.
• Continuing our efforts to help build a world where packaging never becomes waste, including offering products made from 100% rPET in 22 markets worldwide.
• Advancing our $570+ million Racial Equality Journey to elevate diverse voices within our company, our supply chain partners and communities, whilst helping to break down longstanding racial barriers.
• Working with The PepsiCo Foundation to invest more than $71 million globally in COVID-19 relief and provide over 145 million meals to hungry families impacted by the pandemic.

We’re also tapping into the power of our brands to encourage consumers to make positive choices for themselves and the planet by:

• Embracing platforms like SodaStream and SodaStream Professional that offer convenient, sustainable options, without single-use packaging.
• Expanding our portfolio to meet evolving consumer preferences, with options like Off The Eaten Path, bare, Hilo Life, Driftwell and bubly.
• Offering Pepsi Black (also known as Pepsi Zero Sugar or Pepsi MAX) in 118 global markets.
• Building on our progress in reducing added sugars, sodium and saturated fats across our portfolio.

As of 2020:

48% of our beverage portfolio has 100 Calories or less from added sugars per 12 ounce serving, an improvement of 8% over the past three years (goal is 67% by 2025).

64% of our foods portfolio contains 1.3 milligrams or less of sodium per Calorie, an improvement of 8% over the past three years (goal is 75% by 2025).

71% of our foods portfolio contains 1.1 grams or less of saturated fat per 100 Calories, an improvement of 10% over the past three years (goal is 75% by 2025).

As proud as we are of these achievements, we know there is still much to be done. We are particularly excited about the work underway in two areas: new forms of packaging and new, more sustainable product categories.

• When it comes to new packaging solutions, we are continuing to invest in strategies that go Beyond the Bottle through reusable platforms like SodaStream, which offers products in 45 countries.
  
  In 2020, we expanded the availability of PepsiCo-branded flavor options for SodaStream to now include Norway, Sweden, Australia, Germany and France – making it easier for consumers across the world to create their favorite beverages at home. SodaStream also made its debut in PepsiCo’s lineup of brands for our UEFA Champions League activation. And we launched SodaStream Professional, a mobile-enabled hydration platform that lets consumers digitally track how many plastic bottles they are saving.
  
  Ultimately, through continued growth of our SodaStream business, we expect an estimated 78 billion single-use plastic bottles will be avoided through 2025.
• When it comes to new categories, we are placing an emphasis on plant-based offerings. This has become a popular category recently, as consumers seek out products that support goals related to personal health and a more sustainable planet.
  
  PepsiCo now offers plant-based options through brands like Quaker, Off the Eaten Path, Sabra, Alvalle, Naked Juice, bare and Health Warrior. We’re also teaming up with Beyond Meat to launch The PLANeT Partnership, a joint venture to develop, produce and market innovative snack and beverage products made from plant-based protein.

In the coming months, you’ll hear even more about our sustainability ambitions and how we plan to achieve them. And by next year, we aim to combine all our ESG reporting – including sustainability, diversity & inclusion and human rights – into one report to further increase transparency and provide even greater clarity to our stakeholders.

Bottom line: We do not intend to proceed with business as usual. As one of the world’s leading food and beverage companies, we have the responsibility to take big, bold steps that catalyze positive change—change that will have an impact far beyond our company and outlast the current moment.

With help from partners, peers and local governments, we can adopt new ways of working and new ways of thinking, mindful of where our food comes from, the resources that go into its production and the people who make it all possible. Together, we can build more resilient communities and a more sustainable food system for all. I hope you’ll join us.

—Ramon Laguarta

PepsiCo Chairman of the Board of Directors and Chief Executive Officer