Sustainability is a significant trend in every industry. How does PepsiCo implement it globally, particularly in the Asia Pacific region? Today, we will discuss how PepsiCo, one of the world’s largest food and beverage companies, implements its sustainability strategies. Joining us to talk about this topic is Mr. Ashley Brown, PepsiCo’s VP for Technical Service and Sustainability in Asia Pacific.
ASIA PACIFIC BUSINESS: Ashley, please introduce PepsiCo Positive (Pep+) and tell us more about this initiative.
Ashley Brown: At PepsiCo, we all know that a better food system leads to better outcomes for both people and the planet. When we launched pep+ (PepsiCo Positive) in September 2021, we aimed to establish a strategic end-to-end transformation process centered on sustainability. Our focus is on creating growth and value by operating within planetary boundaries and inspiring positive change for all. It’s our roadmap for becoming a global leader in the convenience foods and beverages industry and playing a leading role in transforming the global food system. Since the launch of Pep+ (PepsiCo Positive), we have accelerated our efforts to make the food system more sustainable, regenerative, and inclusive. This includes how we source our ingredients, produce, and sell our products sustainably, and inspire consumers through our iconic brands to make better product choices. We also support communities and improve livelihoods throughout our supply chain.
Looking specifically at PepsiCo’s Asia Pacific business, we have implemented several tailored initiatives that focus on the geographies and markets where we operate, from Mongolia down to New Zealand. We have also identified projects throughout the APAC region that will help us achieve our targets. We have shared the pep+ initiative and our plans with all our partners, including bottlers, raw material vendors, potato suppliers, and customers.
ASIA PACIFIC BUSINESS: That’s very impressive. As we all know, PepsiCo has a diversified portfolio of food and beverage products, and almost all of these products come from agriculture. Can you share with us your company’s experience and practices regarding supply chain and sustainable agricultural production?
Ashley Brown: The pep+ framework consists of three pillars: Positive Agriculture, Positive Value Chain (how we make and move), and Positive Choice. Focusing on Positive Agriculture, we have three main aims: 1) source sustainable products, 2) promote regenerative practices that restore the earth, and 3) improve livelihoods. PepsiCo’s global agricultural footprint spans approximately 7 million acres, and we aim to enable regenerative practices that allow us to source our key crops and ingredients from these areas sustainably. We engage with around 250,000 farmers worldwide to inform them about what needs to be done to restore the planet and make farming operations more profitable.
Since the launch of pep+, our initial target has been to source ingredients sustainably, and we’ve made significant progress in this area over the past few months. In the Asia Pacific, we are committed to reducing our greenhouse gas (GHG) footprint through partnerships. In Australia, for example, we have partnered with the Cool Soil Initiative, which helps us engage farmers in adopting more sustainable practices, from the farm to the final product. We support these producers by testing and validating different management practices on the farm aimed at reducing greenhouse gas emissions and promoting sustainability, profitability, and productivity.
Globally, we actively support our farmers with technical solutions, financial opportunities, and social support to facilitate the adoption of regenerative practices that restore the earth across our entire agricultural supply chain. A typical example is our co-payment support for growers who use cover crops to protect and enhance the land after potato harvests, sharing the burden of that expense.
ASIA PACIFIC BUSINESS: Sustainable & Eco-friendly food packaging is also a big trend. Will that be a big challenge to achieve sustainability in packaging, given the super large size of PepsiCo?
Ashley Brown: We wholeheartedly embrace the challenge of sustainable and eco-friendly food packaging, recognizing our pivotal role in reducing packaging waste and promoting the use of recycled materials. Our commitment to making a difference is unwavering as we acknowledge the substantial work necessary to progress toward a circular economy.
In the Asia-Pacific (APAC) region, we have already implemented recycled PET usage in four of our markets, with plans to expand further. We aim to reduce virgin plastic use per serving by 50% by 2030, compared to our 2020 baseline. We are also concentrating on growing our SodaStream business, which aids in minimizing plastic servings.
Forging partnerships and fostering innovation are crucial components of achieving a circular economy. We collaborate with partners to improve infrastructure, advocate for cutting-edge policies with governments, and advance sustainable packaging innovations. This year, we introduced the Greenhouse Accelerator Program in the APAC region, teaming up with startups to generate a positive impact on our business, consumers, communities, and the environment.
We are steadfast in our efforts to reduce plastic use in our beverage and snack businesses significantly. For example, we have developed lightweight PET bottles to decrease virgin plastic content. In our snacks business, we investigate technologies to minimize packaging, such as charge compaction, which allows us to use less packaging per gram of product. Having successfully implemented this strategy in our North American business, we plan to extend it across our APAC operations.
Lastly, we are devoted to reinforcing the circular economy by constructing closed loops within various countries across the APAC region. This approach involves harnessing renewable, plant-based materials to ensure their retention within the supply chain and prevent them from becoming pollutants.
ASIA PACIFIC BUSINESS: There are indeed a lot of innovations. And you mentioned there are four markets in Asia Pacific that has launched the recycled PET packaging, which four markets in APAC? Are you going to launch this in other markets?
Ashley Brown: We have successfully implemented recycled PET usage in four key markets: Japan, Vietnam, Australia, and New Zealand. We have prioritized markets where recycled PET is readily available, embarking on this journey as the supply chain allows. Our goal is to introduce this sustainable initiative in every market we operate in.
As the supply chain continues to evolve and more recycled PET becomes accessible, we will diligently activate this sustainable packaging solution in each respective market. Our commitment to sustainability remains steadfast, and we will persistently work towards reducing our environmental footprint across all our operations.
ASIA PACIFIC BUSINESS: PepsiCo is certainly a pioneer in sustainability. What are some of the latest sustainability or ESG trends of the F&B industry that you’ve been observing across markets that you’d like to highlight?
Ashley Brown: I want to highlight three primary initiatives that demonstrate our dedication to embracing innovative technologies and minimizing our environmental impact across our operations.
- Development of compostable and bio-based materials: We are researching various cutting-edge technologies within the PepsiCo system, focusing on creating compostable and bio-based materials for snack packaging. For instance, we have developed a fully compostable bag for our North American product, ‘Off The Eaten Path.’ Our objective is to maintain product quality while adopting sustainable packaging solutions.
- Transition to renewable energy and electrification: Our commitment to sustainability includes a shift toward renewable energy sources, such as green electricity, and the adoption of electric vehicles and trucks. We have launched pilot programs in several Asia-Pacific markets, including China, Thailand, Australia, and New Zealand, significantly reducing our carbon emissions and contributing to our overall sustainability objectives.
- Implementation of waste reduction technologies: We are exploring innovative solutions to minimize waste generation in our snack production facilities. These solutions include biomass technology, which converts waste into energy, and biogas facilities that transform the organic matter from wastewater into gas, subsequently converted into electricity. We are also investigating ways to utilize residual materials as fertilizers, further amplifying our commitment to sustainability. We promote a circular economy by repurposing waste and recycling it within our facilities.
Through the execution of these initiatives, we aim to establish a more sustainable and eco-friendly business while preserving the highest quality standards for our consumers.
ASIA PACIFIC BUSINESS: Ashley, now you are the APAC VP in charge of Sustainability & Technical Service, we’re very curious to learn how does PepsiCo combine innovation and sustainability?
Ashley Brown: In our commitment to sustainability, we have integrated eco-friendly considerations into the core aspects of our business, from product development to market launch. Our stage gate process assesses each product’s viability, profitability, market demand, and consumer likability, and we have incorporated sustainability into this process through our ‘Sustainable from the Start’ program.
‘Sustainable from the Start’ ensures that each new product undergoes a comprehensive sustainability assessment, evaluating its potential greenhouse gas emissions, water consumption, and packaging recyclability. By embedding circularity into our product design from the outset, we provide our commercial team with sustainable products that make their lives easier and contribute to our overall objectives. If a project fails to meet our design standards, we halt its progress and redirect the team to develop solutions that align with our sustainability goals.
By prioritizing sustainability in all aspects of our operations, we strive to establish a greener, more responsible business for the benefit of our consumers and the planet. Furthermore, we continue to scale business models that require minimal or no single-use packaging. For example, SodaStream is an innovative solution currently operating in over 40 markets, with the ambitious goal of helping consumers avoid more than 200 billion plastic bottles by 2030.
ASIA PACIFIC BUSINESS: Innovation is risky. So, what’s the biggest challenge when you launch these kinds of innovations?
Ashley Brown: As a responsible business, we prioritize sustainability and strive to minimize our environmental impact across all operations. The core criteria we focus on include reducing greenhouse gas emissions, water consumption, and virgin plastic usage. Additionally, we evaluate several other factors to ensure our initiatives align with our sustainability goals.
When developing new solutions and innovations, we diligently assess these criteria and determine whether our approach satisfies our sustainability standards. Suppose the science behind a proposed resolution has yet to reach a point where it adequately addresses our concerns regarding water, greenhouse gases, and plastic. In that case, we will defer the innovation until we can develop a solution that aligns with our sustainability objectives.
By rigorously evaluating our initiatives against these criteria, we maintain a steadfast commitment to eco-friendly practices and contribute to the ongoing global effort to protect our planet for future generations.
ASIA PACIFIC BUSINESS: Ashley, I know you are a veteran with decades of food industry experience, please tell us more about yourself, your personal experience. Can you also talk about your current role as the Chief Sustainability Officer, APAC in PepsiCo?
Ashley Brown: My journey with PepsiCo began in 1999, and over the years, I have gained diverse cultural experiences through my work in various locations, including Cape Town, Johannesburg, Lahore, Riyadh, and Australia. Even before the launch of our PepsiCo Positive strategy, PepsiCo has always been dedicated to resource conservation. Having witnessed the severe water crisis in Cape Town in 2018, I am deeply committed to sustainability and ensuring our planet’s and its people’s well-being.
As the Chief Sustainability Officer, my role has evolved beyond traditional responsibilities such as regulatory compliance, ESG monitoring, and sustainability project management. Today, I work on embedding sustainability into our core processes, ensuring it is a central aspect of our business and strategic planning.
For example, we conduct complete sustainability assessments for new factory proposals, focusing on emissions and water availability. These capital requests require approval from the global CSO, demonstrating how sustainability is integrated into the core of our business operations.
Our focus also extends to enabling change, communicating purpose, and driving transformation, as well as supporting the development of new capabilities within our organization. We are continuously upskilling our associates and fostering collaboration with external ecosystems, such as our Greenhouse Accelerator program. This initiative allows us to scout for innovative sustainability technologies and solutions while partnering with emerging startups to make a meaningful difference across the APAC region.
ASIA PACIFIC BUSINESS: You were appointed to the CSO last year. So it’s your first year as the role of CSO. Do you have any target in mind for next year?
Ashley Brown: Our organization remains steadfast in driving toward our 2030 commitments. These global and external commitments encompass various aspects of our value chain, including agriculture, water, and greenhouse gas emissions. Additionally, our responsibilities extend to product choices, focusing on our ongoing efforts to reduce sugar, sodium, and unhealthy oils in our offerings.
We will persistently work towards these targets, maintaining a solid commitment to our pep+ agenda and ensuring that our organization contributes positively to the health of our consumers and the environment. Our unwavering dedication to these goals will help drive our progress and ultimately lead us to fulfill our 2030 commitments.