Performance with Purpose
PepsiCo Corporate Citizenship Report 2008
Creating a Better Tomorrow
for Future Generations
The Global Reporting Initiative (GRI) is a system of reporting on financial, social and environmental programs and progress.
Strategy and Analysis
GRI Indicator PepsiCo Location
1.1 Statement from the most senior decision maker of the organization (e.g., CEO, chair, or equivalent senior position) about the relevance of sustainability to the organization and its strategy.
> Letter from Indra Nooyi
1.2 Description of key impacts, risks, and opportunities. > Risk Management
> Corporate Governance
> Human Sustainability - Our Management
> Environmental Sustainability - Our Management
> Employee Learning and Development
> Expanding Opportunities through Diversity and Inclusion
Organizational Profile
GRI Indicator PepsiCo Location
2.1 Name of the organization. > PepsiCo, Inc.
2.2 Primary brands, products, and/or services. > Our Business
> Our Economic Impacts
2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.
> Our Business
2.4 Location of organization?s headquarters. > Purchase, New York, United States
2.6 Nature of ownership and legal form. > Form 10-K
2.7 Markets served (including geographic breakdown, sectors served, and types of customers/
beneficiaries).
> Our Operations
> Our Business
2.8 Scale of the reporting organization, including:
Number of employees
Net sales (for private sector organizations) or net revenues (for public sector organizations) Total capitalization broken down in terms of debt and equity (for private sector organizations) Quantity of products or services provided.
> Our Business
> Our Operations
> 2008 Annual Report
> Form 10-K
2.9 Significant changes during the reporting period regarding size, structure, or ownership including:
The location of, or changes in operations, including facility openings, closings, and expansions;
and
Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organizations).
> Our Business
> Our Operations
2.10 Awards received in the reporting period. > Awards and Recognitions – Select Listing
3.1 Reporting period (e.g., fiscal/calendar year) for information provided. > Fiscal year 2008
3.2 Date of most recent previous report. > 2007/2008
3.3 Reporting cycle (annual, biennial, etc.). > Annual
3.4 Contact point for questions regarding the report or its contents. > [email protected]
GRI Indicator PepsiCo Location
3.5 Process for defining report content. > Overview
3.6 Boundary of the report. > Overview
3.7 State any specific limitations. > Overview
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.
> Overview
3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report.
> Overview
3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such restatements (e.g., mergers/ acquisitions, change of base years/
periods, nature of business, measurement methods).
> Overview
3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.
> Overview
GRI Content Index
GRI Indicator PepsiCo Location
3.12 Table identifying the location of the Standard Disclosures in the report. > G3 Indicators
organization and the assurance provider(s).
Governance
GRI Indicator PepsiCo Location
4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.
> Corporate Governance
4.2 Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organization’s management and the reasons for this arrangement).
> Corporate Governance
4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.
> Corporate Governance
4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.
> Corporate Governance – Communications with the Board of Directors
4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance).
> Corporate Governance – Board and Executive Compensation
4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided.
> Corporate Governance – Board and Executive Compensation, Conflicts of Interest
4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization’s strategy on economic, environmental, and social topics.
> Corporate Governance – Board and Executive Compensation
> Human Sustainability – Introduction
> Environmental Sustainability – Introduction
> Talent Sustainability – Introduction
4.9 Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles.
> Risk Management
> Corporate Governance
4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.
> Corporate Governance – Annual Performance
> Evaluation of the Board
4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization.
> Human Sustainability
> Climate Change
> Risk Management
4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.
> Memberships and Partnerships
4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization:
Has positions in governance bodies;
Participates in projects or committees;
Provides substantive funding beyond routine membership dues; or Views membership as strategic.
> Memberships and Partnerships
4.14 List of stakeholder groups engaged by the organization. > Our Stakeholders
4.15 Basis for identification and selection of stakeholders with whom to engage. > Our Stakeholders
4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.
> Our Stakeholders
Economic Performance Indicators
GRI Indicator PepsiCo Location
EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.
> Our Economic Contributions
EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change.
> Risk Management
> Climate Change
EC3 Coverage of the organization’s defined benefit plan obligations. > Employee Benefit Programs
EC4 Significant financial assistance received from government. Our Economic Contributions > Our Economic Contributions
EC6 Policy, practices, and proportion of spending on locally based suppliers at significant locations of operation.
> Our Economic Contributions
> Agriculture
EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation.
> Talent Sustainability – Expanding Opportunities through Diversity and Inclusion
EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in kind, or pro bono engagement.
> The PepsiCo Foundation
> Human Sustainability – Leaving a Positive Footprint on Society
> Environmental Sustainability – Leaving a Positive Footprint on Society
> Talent Sustainability – Leaving a Positive Footprint on Society
EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.
> Our Economic Impacts
> Our Stakeholders
GRI Indicator PepsiCo Location
EN1 Materials used by weight or volume. > Packaging and Solid Waste – Global Packaging by Weight
EN2 Percentage of materials used that are recycled input materials. > Packaging and Solid Waste
EN3 Direct energy consumption by primary energy source. > Environmental Sustainability – Introduction
EN4 Indirect energy consumption by primary source. > Environmental Sustainability – Introduction
EN5 Energy saved due to conservation and efficiency improvements. > Environmental Sustainability – Introduction
EN7 Initiatives to reduce indirect energy consumption and reductions achieved. > Climate Change
EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.
> Climate Change - Green Building and Design
EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. > Agriculture – Biodiversity
EN16 Total direct and indirect greenhouse gas emissions by weight. > Climate Change
EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. > Climate Change
EN 26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.
> Environmental Sustainability
EN29 Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce.
> Climate Change – Fleet, Beverage Coolers and Vending Machines
GRI Indicator PepsiCo Location
LA1 Total workforce by employment type, employment contract, and region. > Our Business
> Our Operations
LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.
> Employee Benefit Programs
LA8 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.
> Talent Sustainability —Introduction by Greg Heaslip
> HIV/AIDS
> Health and Safety
LA10 Average hours of training per year per employee by employee category. > Employee Learning and Development
LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.
> Employee Learning and Development
LA12 Percentage of employees receiving regular performance and career development reviews.
> Talent Sustainability — Introduction by Leslie Teichgraeber
> Employee Learning and Development
LA13 Composition of governance bodies and breakdown of employees per category
according to gender, age group, minority group membership, and other indicators of diversity.
> Expanding Opportunities through Diversity and Inclusion
HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening.
> Human Rights
> Responsible and Sustainable Sourcing – Supplier Code of Conduct
HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.
> Human Rights
> Code of Conduct
GRI Indicator PepsiCo Location
SO3 Percentage of employees trained in organization’s anti-corruption policies andprocedures.
> Code of Conduct
SO4 Actions taken in response to incidents of corruption. > Code of Conduct
SO5 Public policy positions and participation in public policy development and lobbying.
Memberships and Partnerships.
> Memberships and Partnerships
SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.
> Our Economic Contributions and Contributions and Community
Product Responsibility Performance Indicators
GRI Indicator PepsiCo Location
PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.
> Human Sustainability
> Responsible and Sustainable Sourcing
> Environmental Sustainability – Monitoring
PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.
> Helping Consumers Make Better Choices with Nutrition Labeling
PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.
> Consumer and Customer Relations
PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.
> Engaging in Responsible Marketing and Advertising
PepsiCo offers the world’s largest portfolio of billion-dollar food and beverage brands, including 18 different product lines that each generate more than $1 billion in annual retail sales. As one of the world’s largest food and beverage companies, we recognize our responsibility to help make a positive contribution in a world that continues to experience unprecedented economic, environmental, and social challenges.
In this overview, we share our progress in addressing these challenges, identify where we believe we can have the most impact, and acknowledge our opportunities for continued improvement. We will continue to develop, improve, and report metrics to measure our global performance.
While this process will take time, we believe that it will help us both embed sustainability goals more fully into our operations and achieve demonstrable progress.
Our approach to sustainability remains grounded in our Performance with Purpose mission: a balance of achieving continued financial success while leaving a positive imprint on society. Specifically, we have defined three areas of influence: human, environmental, and talent sustainability.
This report provides a review of all three areas and offers a more in-depth look at our company’s efforts with respect to water, climate change, agriculture, packaging and waste.
We believe that the power of our global workforce, coupled with our operational capabilities and international reach, provide our company with a unique opportunity to have a positive impact on society. Our employees are committed to living PepsiCo’s sustainability vision, which is to continuously improve the world in which we operate, creating a better tomorrow for this generation, as well as future generations.
This report covers the 2008 fiscal year.
We have followed the G3 Guidelines of the Global Reporting Initiative. Our report includes PepsiCo operations that we own and operate. In the United States and in some other countries, independent franchise bottlers manufacture and distribute our beverage products. Our three largest bottlers in the U.S. are The Pepsi Bottling Group (PBG), PepsiAmericas, Inc., and Pepsi Bottling Ventures LLC. Our ownership of each of these bottlers is less than 50 percent, and because we do not control these bottlers, we do not consolidate their results or include their information in this report except as noted in the text.
Data is prepared following PepsiCo-established metrics and protocols, which often follow external methods. Comments on this Corporate Citizenship Report can be submitted to [email protected].
Human Sustainability
Nourishing our consumers through the products we offer—from treats to healthy eats—and through our efforts to encourage more active lifestyles
Environmental Sustainability
Protecting our natural resources and operating in a way that minimizes our environmental footprint
Talent Sustainability
Involving and empowering people,
helping them to realize their potential,
renew themselves, and achieve success
Dear Fellow Stakeholders,
Every day, PepsiCo earns its license to operate in the thousands of communities we serve.
As one of the world’s largest food and beverage companies, we have some distinct responsibilities. We have a responsibility to support economic development, to improve our
environmental footprint and to help work toward solutions to issues such as obesity and undernourishment. This report, called Performance with Purpose: Creating a Better Tomorrow for Future Generations, captures the progress we have made thus far and provides a map of where we intend to go.
Performance with Purpose is fundamental to our overall success. There’s no question that these are challenging times.
Like many companies, we’re facing headwinds such as rising costs, an uncertain economic outlook and shifting currency exchange rates. While we can’t control macroeconomic trends, we must adapt to the near-term challenges to deliver on our long-term growth plans.
But this cannot be an excuse to reduce our commitment to responsible business. Indeed, financial performance can and must go hand in hand with sustainability. Our performance and our purpose are not separate— each is knitted inextricably with the other. That relationship can be seen in the three areas that together comprise Performance with Purpose: Human, Environmental and Talent sustainability. These focus areas will guide the way we do business. They will continue to be shaped in dialogue with key stakeholders. In this way, we intend to maintain our long-term commitment to the overall sustainability of our company.
a responsible company, we recognize our part in helping to improve the well-being of populations in both developed and developing countries.
Our aim is to nourish consumers by developing products that satisfy the consumer’s changing preferences and that deliver exceptional taste and convenience. Increasingly, our product portfolio makes it more enjoyable to lead a healthy life. We’re changing because our consumer is changing and because the health of the world’s growing population demands it.
To meet this demand, we’ve appointed new leaders to our global R&D team, including world-renowned clinical scientists.
We have increased our R&D investment and dramatically expanded our capabilities. We have accelerated our innovation pipeline, acquired companies to extend our offerings of more nutritious products and actively cultivated partnerships to guide our work. We will use our influence to drive positive change in the food industry.
Environmental Sustainability
As a responsible company, we seek to continually drive environmental sustainability by abiding by applicable laws and regulations and, in certain instances where we believe the requirements may not be sufficiently advanced, we apply higher standards.
Recently, Bureau Veritas issued independent verification of our environmental data. We will continue to audit our performance, share our progress and actively lead and engage in private-public partnerships to spur action and solutions to address the world’s environmental issues.
But we want to go further than that. We have focused our environmental sustainability efforts on the areas where, because of our expertise, we can have the most impact:
water, climate change, agriculture and packaging. We are working hard to minimize our water footprint and improve public access to clean water through alliances with nonprofit groups such as The Earth Institute and Water.org. We are intent on mitigating climate change and continuing our efforts to reduce greenhouse gas emissions. After more than
Talent Sustainability
By valuing our employees, we are ensuring that PepsiCo is the kind of company where talented people of all backgrounds want to work.
We recognize our responsibility to take care of our employees and their families, especially during this global economic downturn. We remain committed to providing opportunities for our associates to acquire new skills, grow professionally and share in our company’s success. Our dedication to workplace safety is unwavering, and we offer health care benefits and wellness programs that enable our employees to live healthier lives.
We foster an inclusive workplace by increasing female and minority representation in management ranks, creating rewarding opportunities for people with disabilities and recognizing our employees for their contributions.
We are extending our human rights standards throughout our operations and encourage our suppliers and agricultural partners to uphold our commitment to sustainable
development.
Conclusion
I believe our Performance with Purpose mission defines our roles and responsibilities very clearly. It motivates our 198,000 employees to be leaders in social responsibility and helps each of us create a better tomorrow for future generations. We look forward to sharing our progress and I look forward to your feedback. I encourage you to share your comments on our corporate citizenship report at PerformanceWithPurpose@
pepsico.com.
Indra K. Nooyi
Chairman and Chief Executive Officer
Tough economic times raise tough questions. And sustainability features among these questions as never before. Should sustainability take a back seat while we sort out the global economy? Isn’t it just a luxury for the good times?
Management time and capital are in short supply. But forward-thinking companies recognise the importance of taking action now, in the midst of a downturn. In the short term, efficiency savings help the bottom line whilst factoring sustainability into the development of products and services builds longer-term strategic advantage.
At the Carbon Trust we have been working with PepsiCo since 2003 on its response to climate change. This started with energy efficiency projects across its sites but more recently led to groundbreaking work on product carbon footprinting and labelling. The Walkers brand was the first to carry our Carbon Reduction Label in the UK and Ireland.
Quaker Oats now carries the Label and Tropicana was the first US brand to disclose its certified footprint in March 2009.
PepsiCo has seen a range of benefits from this work including a better understanding of the business risks of climate change, energy cost reductions across the supply chain and enhanced relationships with staff, suppliers and customers. This all makes business sense,
as well as making a valuable contribution to their sustainability goals.
But maintaining global leadership on climate change mitigation is not easy. Global companies have to deal with increasingly complex supply chains, differing regulatory regimes in each market and varying levels of customer engagement around the world.
The companies that will succeed in this environment are those which bind their business objectives and sustainability goals into a single vision. It takes leadership from the top but also buy-in right across the organization.
And for leading brands, this means more than managing direct impacts — engaging and prompting action with suppliers and customers is where the real advances will be made in the future.
And for leading brands, this means more than managing direct impacts—engaging and prompting action with suppliers and customers is where the real advances will be made in the future.
Tom Delay
Chief Executive, The Carbon Trust
not-for-profit company that helps
businesses address climate change.
U.N. Millennium
Development Goals: Our Contribution
Established in 2000, the United Nation’s Millennium
Development Goals focus on eight global issues ranging from eradicating hunger to ensuring environmental sustainability. As governments, businesses, nongovernmental organizations and civil society join together in this mission, we are collectively committed to helping achieve the Goals by 2015.
As a global company that delivers strong financial performance and contributes to economic growth, we can play an
important role in supporting solutions. The most important contributions that we make address hunger, health and environmental sustainability.
Following are just a few examples of the actions we are taking to support the Goals:
Eradicate Extreme Poverty and Hunger
PepsiCo is working toward developing nutrition-based solutions to reduce hunger and malnutrition in select developing countries, particularly South Africa, India and in time, Nigeria. We will leverage our core competencies including R&D, product development, marketing, sales and distribution to launch a product with the necessary public and private partnerships to reach the target population and sustain its use.Achieve Universal Primary School Education
In China, PepsiCo supports literacy and education programs in communities near our operations. We’ve built libraries where our employees donate their time and skills to provide education to children. In Kashira, Russia, PepsiCo helps schools purchase computers and lab equipment.Promote Gender Equality and Empower Women
In 2008, PepsiCo launched the Female Talent Development program in our Middle East and Africa region to focus on workplace equality and increased recruitment of women.In addition, PepsiCo has a Global Diversity and Inclusion Governance Council comprised of internal and external thought leaders and co-chaired by our Chairman and global Chief Diversity Officer. Diversity and Inclusion Councils have been established in each of the regions in which we operate to develop and execute locally relevant diversity and inclusion strategies with a particular focus on women.
Reduce Child Mortality
The PepsiCo Foundation has committed a three-year, $5 million grant to Save the Children to support work to decrease child mortality and malnutrition in rural India and Bangladesh.
Improve Maternal Health
PepsiCo is participating in initiatives in developing countries to promote sanitation, hygiene and health education, all of which will help to improve maternal health. Among these initiatives is our partnership with The Energy and Resources Institute (TERI), an organization dedicated to improving clean water access, sanitation and hygiene, as well as health care facilities.
Combat HIV/AIDS, Malaria and Other Diseases
We have a global HIV/AIDS policy and are committed to addressing HIV/AIDS through an integrated approach that includes awareness, education and prevention; testing and treatment; and community and partner outreach. We have HIV/AIDS workplace programs in South Africa, China, Thailand, India, Russia and the United States.Ensure Environmental Sustainability
We established a Sustainable Agriculture Council to ensure that environmental impacts are considered in our agricultural research, development and management decision making.
In our own operations, we conserved more than 750,000 megawatt hours of energy and more than 7.5 billion liters of water as a result of gains in energy and water efficiency from the 2006 baseline. We have also committed to cutting company-wide water use by 20%, electricity by 20% and fuel by 25% by 2015, compared to 2006 usage levels. In addition, The Earth Institute at Columbia University and the PepsiCo Foundation entered into a $6 million, three-year partnership.
The program includes a series of community-based activities to address water, agriculture and climate issues.
Develop a Global Partnership for Development
Our leaders actively participate in global health and development initiatives where we partner with groups including the Global Alliance for Improved Nutrition (GAIN), Synergos, the World Health Organization, the Pan American Health Organization and Un Kilo au Yuda, among others.Human Sustainability
Nourishing our consumers through
the products we offer—from treats to
healthy eats—and through our efforts
to encourage more active lifestyles.
We Recognize Our Responsibility to Provide Balanced Nutrition
MEHMOOD KHAN, MD, Chief Scientific Officer As one of the world’s largest food and beverage companies, we believe it is our responsibility to understand the diet and nutrition needs of populations around the globe.
More than ever, consumers want products that are safe, affordable, great-tasting and healthy. They are increasingly looking closely at the nutritional content of the products they consume and purchase for their families, such as salt content and saturated fat, because they want to eat well and improve their overall health. They want options that offer nutritional benefits to meet the differing needs of various life stages, from childhood through late adulthood.
Consumers are also managing specific health conditions, such as diabetes and high cholesterol, and expect on- pack health claims to be grounded in credible science.
Understanding these health needs and attitudes is vital to our business, but the global market is even more dynamic and complex.
Today, more than one billion adults are overweight or obese while at the same time, more than one billion adults and children are undernourished — in both developing and developed countries. Often these overweight and under- nourished individuals live side by side in the same cities and communities, a paradox that has never been observed to this scale in the history of mankind. The projected rise of global obesity and global hunger presents a tremendous challenge to the health and viability of individuals and communities.
We’re mindful of the way the world is changing. How we choose to respond to these societal challenges is critical to the future of our business and to our planet. This is why we are changing the way we innovate at PepsiCo.
In 2008, we expanded our global research and develop- ment capability to address these challenges. Our network of senior leaders includes world-renowned clinical scien- tists and experts in science, technology, nutrition, food science and safety, public health, epidemiology, product development, behavioral medicine and health policy.
These experts give PepsiCo a unique understanding of individual human physiology and the nutrition needs of populations. These global R&D teams are developing products rooted in rigorous, science-based nutrition standards and produced to the highest standards of quality, with the promise of satisfying a diverse global palette.
The hub of this work is eight regional research centers, each focused on leveraging nutrition science and knowledge to develop convenient foods and beverages that can improve overall diets and positively impact health. Three centers are located in the United States: Valhalla, N.Y.; Plano, Tex.;
and Barrington, Ill. Other centers are in Leicester, United Kingdom; Monterrey and Mexico City, Mexico; Shanghai, China; and New Delhi, India; with “satellite” centers in Thailand, Brazil and Australia. In addition, we’re broadening our open innovation efforts through new research part- nerships with leading institutions, including: Yale University, Dresden University, Westfälische Wilhelms-Universität Münster, and several universities in India.
We’re introducing products with more whole grains, fiber, fruits and vegetables, and are reformulating some of our existing products by reducing trans fats to negligible levels while also reducing total fat, saturated fat, salt and added sugar. We’re dedicated to ensuring the integrity of our health claims, all of which are reviewed by qualified nutrition and regulatory experts following strict procedures and standards.
Across our global portfolio, we are offering consumers smaller portion sizes. In fact, in the United Kingdom, a greater proportion of our sales come from smaller portion sizes. Over 80% of Walkers Crisps sales are from 25 gram bags purchased in multipacks; 2% of sales are from 50 gram bags. Our goal is to continue to develop products that are affordable and accessible. We do not charge a premium for our zero sugar/zero calorie varieties, for instance.
We’re helping consumers make smart choices more easily by providing easy-to-understand nutrition labeling.
We also understand the importance of being a responsible marketer. PepsiCo believes that industry-wide voluntary action continues to be the best way to address our responsibilities. We endorse the International Council of Beverages Associations’ guidelines on marketing to children — a landmark industry initiative which does not permit marketing or advertising of beverages, other than water, fruit juice and dairy-based beverages, to children under 12 years old.
We are committed to helping reduce the terrible burden of hunger everywhere we do business. PepsiCo has efforts under way to help support the United Nations’ Millennium Development Goals, including the goal to eradicate extreme poverty and hunger by 2015. In addition to funding, we are providing experts who offer counsel in many areas—from product development to building distribution networks—in such countries as India, South Africa and Nigeria. In addition, we’ll have the opportunity to leverage any new discoveries to create affordable products for low-income consumers in developed coun- tries around the world.
We know the importance of establishing partnerships with key stakeholders to help make a positive contribution to the world’s nutrition needs. Our leaders contribute to initiatives led by the World Health Organization (WHO), the National Institutes of Health, Global Alliance for Improved Nutrition, the Pan American Health Organization and the Alliance for a Healthier Generation. For example, we are among the nine leading food and beverage com- panies to commit to the goals of the “Global Commitment to Action on the Global Strategy on Diet, Physical Activity and Health” and to report on our progress, annually, at the World Health Assembly. We intend to continue measuring and reporting on our progress so that our consumers and other industry leaders can share in the lessons we’re learning.
At PepsiCo, we’re privileged to use the lessons gained from our global vantage point not only to improve our business, but to contribute to our common goal of finding solutions to some of the world’s most persistent social challenges.
Every serving of SunBites contains more
than one-third of the suggested daily amount
of whole grains.
Members of the Walkers R&D team focus on science-based nutrition standards as they develop food and beverage products at the state-of-the- art Beaumont Park research and development facility in Leicester, U.K.
We’ve acquired a stake in JSC Lebedyansky,
the world’s sixth largest juice
manufacturer.
Our Management
PepsiCo continues to evolve its approach to systematically obtaining policy and scientific advice. An intensive review of PepsiCo’s external health and wellness advisory structure was completed in late 2008 by the University of Toronto’s McLaughlin-Rotman Centre for Global Health and Director of Ethics and Policy. Based on its recommendation, PepsiCo is refining its approach to policy, science and bioethics as follows:
The PepsiCo Blue Ribbon Advisory Board (BRAB) will be reshaped in 2009 to become the PepsiCo Policy Advisory Committee. Reporting to and appointed by the CEO, it provides high-level policy advice that is global in scope and addresses the diversity of health and environmental issues that impinge on PepsiCo’s work. Complementary policy advisory committees now exist in all regions and in most major markets and focus on issues of direct relevance to their regions. The regional committees report to the president of the regional and/or national business and will be represented in an annual global meeting to assure coherence of approaches.
In addition to our Human Sustainability Leadership Team, led by our CSO and leaders from R&D, Global Nutrition, Public Policy, Legal, Communications and Marketing, the Board of Directors, PepsiCo’s chairman and senior executive leaders are informed on health and wellness initiatives and issues on a quarterly basis.
Divisions of PepsiCo also leverage experts to help promote science-based understanding of food and beverage choices and their impact on health. For example: the Quaker/Tropicana Breakfast Research Institute (BRI) established in late 2006 is now a web-based institute devoted to promoting a science- based understanding of the role of breakfast in the diet and the health implications of its consumption as part of a healthy lifestyle. The BRI is comprised of scientists prominent in their fields, and is led by renowned cardiologist Dr. James Rippe.
> More information about the BRI
Internationally, advisory boards in China, the U.K., Mexico, Brazil and India help to guide our efforts in health and wellness, food safety, regulatory compliance and innovation.
The development of the Global R&D structure and appointment of our first CSO has led to an upgrading of our relationships with leading academic and research-based organizations on a global basis.
In addition to these experts, PepsiCo has created the International Food Safety and Nutrition Network (IFSAN).
This is a global network of PepsiCo R&D and food science professionals. They have established specific priorities and codes of practice for PepsiCo regarding such things as food safety policy and promotional insert policies. They also work with outside opinion leaders and agencies to provide advice and the PepsiCo perspective as needed.
Focus on Emerging Markets
PepsiCo focuses on keeping its brands strong and locally relevant in all of its markets. In emerging markets, PepsiCo has built innovation and R&D processes that have both local relevance and a global foundation. For example, PepsiCo has R&D centers in all the key regions of the world—Mexico, the U.K., China, Thailand and two “satellite” centers in Brazil and Australia, as well as the flagship R&D centers in the U.S. In markets around the world, our R&D teams support our growth by turning our global brands into local favorites. We work closely with local master chefs who understand the preferred tastes and consumption patterns of people in specific regions and cultures. These insights then inspire us to extend our existing brands and invent new categories and flavors.
In Asia, we learned that people strongly prefer beverages that contain natural ingredients. We responded by introducing Pepsi Raw with pure sugar cane. We also experimented with local flavor combinations to create Tropicana Guo Bin Fen, a new category of exotic mixed juices. This non-carbonated beverage, available in Honey Melon & Jasmine and Orange
& Honeysuckle, became PepsiCo International’s largest and most successful new product in 2008, and helped us grow
our market share in China’s major cities. The business dynamic is similar in other Asian markets as well, where we have reshaped our product portfolios significantly to address local tastes and needs.
In Latin America, we are adding capacity to our R&D centers in Mexico and Brazil, allowing for 70% to 80% more innovation utilization. We also launched new locally specific brands and flavors in 2008, including Passion Fruit H2Oh! in Brazil and watermelon flavored Be-Light (flavored water) in Mexico.
For our fountain beverages found in select restaurant chains, we will execute consumer trials for three new beverage flavors, Tamarind, Hibiscus and Lime. We are also increasing acquisitions in the region to add some locally relevant brands to our portfolio.
In Europe, we use local flavors like paprika, shashlik and red caviar. We have also developed local products; for example, Hrusteam is a bread-like product exclusive to Russia (Russian brand, Russian packaging, Russian flavor).
We’re making products that help our consumers live active, healthy lives.
Transformin g Our Portfolio
At PepsiCo, our aim is to continually develop products that satisfy consumers’ changing preferences, deliver exceptional taste and offer greater nutritional benefits. Increasingly, our portfolio of foods and beverages are part of a diet that is more enjoyable and supports a healthy lifestyle. We’re changing because consumers are changing and because the health of the world’s growing population demands it. Healthier eating is good for the well-being of our consumers and is good for business.
Innovating New Products
As a leading innovator in the food and beverage sector, our pipeline of products offers a diverse array of locally relevant tastes and enhanced nutritional benefits. Here are some examples:
ōIn Mexico, our Gamesa-Quaker business expanded its line of portion-controlled, oat-based cookies and snacks.
ōIn India, we’re making snacks with an ingredient very familiar to the local diet—lentils.
ōIn Brazil, we expanded our offerings of baked snacks; and we’ve introduced low-fat bread snacks in Chile, Puerto Rico, Spain, Turkey, Saudi Arabia and Russia.
ōPepsiCo and the Whole Earth Sweetener Company introduced a zero-calorie, all-natural sweetener derived from the stevia plant. It’s called PureVia and it was introduced in Peru in a new, nutritionally enhanced PepsiCo beverage called “SoBe Life.”
Enabling a Healthy Diet
Our commitment to improving our portfolio’s role in a diet includes reinforcing the basic rules of a healthy diet. This requires making changes that improve the nutrition content of each product. As a result, we continue to make every calorie count by reformulating some of our existing products by reducing trans fats to negligible levels, adding whole grains, and reducing added sugars. For example:
ōIn India, we’re using rice bran oil instead of palm oil, reducing saturated fats by 40%.
ōIn the United States, Tropicana Pure Premium Orange Juice has two servings of fruit in every 8-ounce serving and offers a juice variety with added calcium and Vitamin D.
ōIn the United Kingdom and Europe, we’ve introduced Walkers Baked and Baked Lay’s with 70% less total fat than regular crisps.
ōIn 2008, PepsiCo was the largest seller of nuts and seeds outside the United States.
> View a list of PepsiCo products that qualify under the school beverage guidelines
Expanding Through Strategic Acquisitions
As our business grows globally, key acquisitions have helped us expand our offering of products with improved nutritional profiles. The focus on more nutritious offerings started withthe acquisition of Tropicana in 1998 and the 2001 merger with Quaker Oats, including Gatorade. More recently, PepsiCo has acquired or purchased a major stake in: JSC Lebedyansky, Russia’s leading branded juice company and the world’s sixth- largest juice manufacturer; Sandora, a leading juice company in Ukraine; Naked Juice, a premium juice company in the United States; Spritz International Inc., the leading maker of sunflower and pumpkin seeds in Canada; and V Water in the United Kingdom.
Promoting Active, Healthy Lifestyles
We support programs that use simple steps to encourage people to get active:
ōIn Latin America, Vive Saludable Escuelas is a proven initiative that teaches children how to add physical activity to their daily lives. A physical education routine, designed by Mexico’s Sports Commission, is being used by teachers in participating schools. To date, the program has touched more than one million children in 4,000 schools.
ōIn India, our Get Active program reaches 70,000 students in 120 schools and promotes an active lifestyle through an energy balance curriculum.
ōIn the U.S., we continue to work with the YMCA, the largest provider of fitness programs, to support Activate America, a public health initiative that helps make healthy living a reality for millions of Americans.
ōIn Poland, we have collaborated with several multi-national food corporations and the Polish Government on a “Keep Fit” program for teens.
ōIn Canada, we’re working with the Canadian Association for Health, Physical Education, Recreation, and Dance to support a national initiative to educate children on simple ways to be more active and eat more healthfully.
ōIn South Africa, our Simba business supports physical activity and energy balance for a healthy lifestyle for children through its Ready, Steady, Go program at schools.
ōIn China, PepsiCo introduced a Sports and Music promotion to encourage people to participate in sports, and the U.S.- based Gatorade Sport Science Institute established a branch in China to help Chinese athletes improve performance
through scientific research.
Helping Consumers Make Better Choices with Nutrition Labeling
We care about the health of consumers. We want them to enjoy our products and we want to help make healthful food choices the easier choice.
product labeling
PepsiCo is committed to providing safe, wholesome products and to protecting equity in our brands, trademarks and goodwill. Our business divisions have implemented policies related to food safety, labeling, product integrity and quality.
PepsiCo complies with all legally required nutrition labeling.
Our policies cover food safety, sanitation, recalls and allergens, and require that our products are coded, labeled, identifiable, and traceable. PepsiCo is in full compliance with required nutrition labeling and has voluntarily led the industry in “full container labeling” on products where consumers may be reasonably expected to eat or drink the full container on one occasion.
Our compliance systems include website training, monitoring, preventative measures and readiness for corrective action.
We have regular management reviews of our procedures and activities regarding our products.
On a global basis, we label all ingredient information on the back of the product package and provide any other relevant nutrition information in compliance with local country guidelines. PepsiCo is committed to providing clear and useful nutrition labeling that helps consumers make nutritionally informed choices.
A key way we do this is through our own nutrition labeling.
In the U.S., we were the first in the industry to introduce a symbol that makes it easier for consumers to identify which of our products contribute to a healthier lifestyle. Our Smart Spot symbol—the symbol of Smart Choices Made Easy—is a simple labeling system that explains why each product is a smart choice.
PepsiCo is also a founding member of the U.S. Keystone Food
and Nutrition Roundtable, a multi-stakeholder group that seeks to drive improvements in the American diet.
The Keystone Roundtable is a consensus forum of industry, academia, the public health community and government, working collaboratively to create an easy-to-understand and uniform front-of-pack nutrition labeling program to help consumers make healthier choices among all packaged food and beverages products in the U.S.
In Europe, we introduced front-of-pack nutritional labeling across our brands in partnership with other food and beverage companies. The labels help consumers understand the percentage of the “Guideline Daily Amount” (GDA) of calories, sugars, saturates, fat and salt contained in a portion of food or drink. By year-end 2008, 100 percent of our snacks, foods, and beverages carried the GDA labeling on pack in the EU.
Daily Intake Guide (percent DI labeling) has been voluntarily introduced for our carbonated beverages, multi-pack snacks and larger “sharing” packs as part of the industry-wide food labeling changes in Australia and New Zealand. This labeling gives information on the calories and content of a range of key nutrients per serving to assist consumers in making informed food and beverage choices. It was rolled out across the entire product range in Australia and New Zealand.
One of the five Vive Saludable strategic pillars is the responsible selling and marketing of our products and the promotion of healthy lifestyles among consumers. This includes the clear and responsible labeling of ingredients and health benefits, the creation of an icon system to communicate and educate consumers on nutrition benefits, ensuring responsible communication and publicity of the health/ nutrition benefits of our products, and promoting active lifestyles and healthy eating among schools and consumers. The following countries currently have products with the Vive Saludable logo: Mexico, Guatemala, El Salvador, Honduras, Nicaragua, Panama, Chile, Argentina, Ecuador, and Peru.
On a global basis, we label all ingredient information on the back of the product package and provide any other relevant nutrition information in compliance with local country guidelines.
Engaging in Responsible Marketing and Advertising
We understand the importance of being a responsible marketer. We believe that industry-wide voluntary action continues to be the best way to address our responsibilities.
PepsiCo recognizes that, as a multinational food and beverage company with global brands that touch millions of consumers every day, our communications carry a special responsibility.
We are committed to responsible marketing practices, including changing the balance of foods and beverages advertised to children. We are also committed to ensuring that healthy choices are offered in schools. We believe this will help children, parents, and schools make their dietary choices that support a healthy lifestyle.
PepsiCo has already made several global, national, and sector- driven commitments regarding responsible marketing to children and product placement in schools.
We announced our full support of the International Council of Beverages Associations’ guidelines on marketing to children—a landmark initiative supported by industry. The guidelines permit no marketing or advertising of beverages,, other than water, fruit juice and dairy-based beverages,, to children under 12 years old. The guidelines were fully implemented on a global basis by January 2009. We were a founding member of a voluntary U.S. food and beverage industry initiative that redefined how the industry markets products to children under 12. Today, 100% of our advertising to children is devoted exclusively to products that meet defined nutrition criteria or provide a functional benefit. We have committed to similar guidelines in Canada, the European Union, Mexico, Thailand, South Africa, Australia and New Zealand.
Our global marketing policy is just the beginning of an ongoing effort to expand the commitment toward responsible marketing globally. PepsiCo has joined the food and beverage industry in adopting Pledges in Australia, Canada, the EU, South Africa, Thailand and the U.S., and work is under way to introduce similar pledge programs and/or self-regulatory initiatives in other countries and regions, including Brazil, Russia, Turkey, the Middle East, China, South Africa, the
Philippines, and Latin America.
PepsiCo has a long-standing policy on the kinds of television programs that can carry our advertising messages. We’re committed to high standards in all our advertising, including the environment in which our advertising appears. We avoid advertising during excessively violent programs, programs that may be distasteful as judged by contemporary society, and those that may be offensive to large groups of people.
We also attempt to avoid programs containing material inconsistent with or adverse to our products. We seek to avoid programs featuring exceptionally controversial or potentially inflammatory discussions. Children are a special audience, and we take particular care in developing marketing practices and evaluating programs that carry messages to children.
We joined with the Alliance for a Healthier Generation and other leaders in the U.S. food and beverage industries to adopt voluntary guidelines for the products we offer to grade schools in the U.S. As part of the commitment, we agreed to remove full-calorie soft drinks from K-12 schools over three years.
Since 2004, we have seen a nearly 60% drop in the calories of beverages shipped to these schools. We are the only food and beverage company to have signed both a beverage and snacks agreement for U.S. schools.
We’ve introduced Baked Walkers and Baked Lay’s with
70 %
less total fat than regular crisps, in the United Kingdom and Europe.
In the United States, Tropicana orange juice varieties include added calcium and vitamin D.
We’ve introduced low-fat bread snacks in Chile, Puerto Rico, Spain, Turkey, Saudi Arabia and Russia.
We’ve introduced a line of more healthful snacks in Mexico including Stila bars, made with
oats and real fruit.
Sabra hummus provides a healthier snack with zero trans fat and zero cholesterol per serving.
Old Fashioned Quaker Oats is made with
100 %
natural whole grain oats and can help reduce cholesterol.
Partnering for Change
We proactively lead and engage in private-public partnerships with key external experts and stakeholders in the global health policy and science/nutrition communities to help improve diets and deliver substantial improvements in our products. Our leaders actively participate in global health policy initiatives including those led by the World Health Organization, the National Institutes of Health, Wellcome Trust, the Pan American Health Organization and the Alliance for a Healthier Generation, among others.
We are among nine leading food and beverage companies to sign the “Global Commitment to Action on the Global Strategy on Diet, Physical Activity and Health,” a commitment addressed to the World Health Organization. We agreed to five key global commitments to action that will take place over the next five years. We will report our progress in delivering these goals at the annual World Health Assembly meeting.
We also support the Global Alliance for Improved Nutrition (GAIN), a Swiss foundation that seeks to fight malnutrition by mobilizing partners to deliver improved nutrition to vulnerable populations.
In the U.S., we’re working with the American Dietetic Association, the nation’s largest organization of food and nutrition professionals, to develop educational programs and engage in frequent dialogues that will make a positive difference in public health through improved product choices and adoption of active lifestyles.
PepsiCo also calls upon the strategic and practical insights of our health and wellness advisory boards comprised of top science, nutrition and policy experts in the U.K., U.S., and Brazil, among other countries.
Leaving a Positive Footprint on Society
The PepsiCo Foundation’s investment strategy in the global health portfolio is to protect and make available proper, nutritious food,; improve complete health,; and increase health-promoting behaviors through proper nutrition and energy balance.
save the children
Save the Children became one of PepsiCo Foundation’s newest grantees within the global health portfolio in November 2008 with a $5 million grant for a program aimed at decreasing newborn and child mortality and malnutrition in India and Bangladesh. Save the Children proposes to work with community health educators to provide thousands of families among these countries’ poorest with important information about health, nutrition, water, sanitation, and hygiene. The combined global resources of PepsiCo Foundation and Save the Children will help make a profound difference in the lives of 650,000 children under the age of five, along with mothers and pregnant and lactating women in these two countries.
oxford health alliance
The Oxford Health Alliance is a global organization that works to reduce the burden of chronic diseases in the United Kingdom, Mexico, China and India. Working with the PepsiCo Foundation, the Community Interventions for Health program was implemented to reduce chronic disease by targeting three risk factors: diet, physical activity level and tobacco use.
family health self-empowerment project The University of Florida and its Family Health Self-
Empowerment Project is a multiyear research and intervention program that investigates approaches to reduce the incidence of obesity in low-income and ethnic families.
world food programme (wfp)
Working with the PepsiCo Foundation Service Corps, this project will enhance the humanitarian aid capabilities of WFP and leverage the core competencies of PepsiCo in line with Performance with Purpose. The program will work to identify where PepsiCo?s performance culture and supply chain expertise can be applied to WFP logistical operations and will provide enhanced tools, metrics and training to facilitate this. As a result, WFP will be able to provide better and more efficient assistance to those at greatest risk of hunger and hunger-related diseases due to extreme poverty and natural and man-made disasters around the world.
Healthy Food, Healthy Moves: Chicago Communities in Schools and the Consortium to Lower Obesity in Chicago Children (CLOCC) are collaborating on the Healthy Food, Healthy Moves: Inform Chicago initiative to test and deliver a health promotion program in six Chicago schools. The three-year pilot project has mobilized a broad network of community organizations, government officials, educators, public health professionals and families in a citywide effort to raise awareness of how to achieve healthy lifestyles.
Food Safety, Genetically Modified Ingredients and Organic Foods
food safety
PepsiCo, like many consumer product goods companies, sources ingredients from around the globe to ensure that we use the freshest, best tasting, and highest quality ingredients available for our products. Food safety is at the top of our priority list as we select these materials, and we have an excellent record in providing safe, wholesome and nutritious products to our consumers. To ensure that PepsiCo provides safe products with the highest quality, we only use foods, ingredients, and packaging materials that have been deemed safe by scientific consensus and regulatory review. The health and safety of our consumers is of the highest importance to us.
PepsiCo shares and actively supports its customers’ interests in food safety, and believes customers have a right to relevant information about the food they buy so that they can make informed purchasing decisions. PepsiCo, however, believes that the U.S. Food and Drug Administration, and other national and international regulatory authorities who are charged with protecting the health and safety of the public and the environment, are the proper entities, rather than a manufacturer like PepsiCo, to evaluate and make judgments about the labeling and sale of genetically engineered products.
PepsiCo takes its lead from national and international food- safety and regulatory authorities, and supports their efforts to take whatever steps are necessary, based on sound scientific principles, to ensure that any new food technology is safe for consumers and the environment. While maintaining our own high internal food safety standards, PepsiCo complies with all government food labeling regulations.
genetically modified ingredients
PepsiCo is dedicated to producing the highest quality, greatest tasting food and beverage products in every part of the world.
PepsiCo ensures all products meet or exceed stringent safety and quality standards and uses only ingredients that are safe and approved by applicable government and regulatory authorities. Approval of genetically modified foods differs from country to country regarding both use and labeling. For this
reason, PepsiCo adheres to all relevant regulatory requirements regarding the use of genetically modified food crops and food ingredients within the countries in which it operates. Where legally approved, individual business units may choose to use or not use genetically modified ingredients based on regional preferences.
organic foods
In North America, PepsiCo currently offers certified organic products from Quaker. Two varieties of Quaker Instant Oatmeal are certified organic. Organic Quaker Instant Oatmeal is made with at least 95% organically produced ingredients.
Every ingredient in the Maple & Brown Sugar Quaker Organic Instant Oatmeal is natural, and is designated “100% Natural.”
Certification follows the USDA certification program known as the National Organics Program (NOP) and follows the National Organics Standards (NOS), established in October 2002. All PepsiCo certified organic products are certified by the USDA- accredited certifier Oregon Tilth.
Consumer and Customer Relations
PepsiCo serves the needs of two important groups:ōThe consumers who purchase and consume our products ōThe retailer and bottler customers who purchase and resell
these items
PepsiCo has several methods in place for measuring and improving consumer and customer relations.
consumers
Consumers are a key stakeholder for our business. All PepsiCo divisions conduct regular qualitative and quantitative research to understand our consumers’ needs. Our North America divisions conduct over 100 custom and standard studies per year. These studies range from small focus groups (to learn from individual consumers), to telephone or online surveys (to gain statistically significant insights). Consumer insights are translated into product improvements, new product ideas, and communication tactics.
In the U.S., our packages carry a toll-free number and web address to allow consumers easy access to PepsiCo if they have
questions or comments regarding the company or one of its products. Each business has a Consumer Relations Department that serves as the first point of contact for all communications and correspondence received from our consumers. Should consumers need to contact us after hours, they can dial our toll-free number and a message will be activated offering them an emergency line number. A special team of Consumer Relations professionals are available 24 hours a day, 7 days a week; and they can be contacted through our emergency line and will immediately return a call to a consumer or one of our field representatives.
In 2008, PepsiCo call centers measured consumer satisfaction and service levels across all of their North America businesses.
The tools used covered a range of key consumer metrics including response rate, representative knowledge/
professionalism, satisfaction with resolution, service level, and willingness to recommend products to family/friend.
For example, our Pepsi-Cola Company call center operates at an over 99% service level. This indicates that the center answers and handles calls to the toll-free number without hold time for over 99% of calls, well above industry standard.
When the consumer provides feedback or input via the call center, this input is funneled to the correct business owner and addressed as appropriate.
customers
PepsiCo’s key customers are retailers and bottlers. PepsiCo commissions retail customer surveys that measure customer satisfaction, including such things as target setting and strategic planning. Dedicated PepsiCo customer teams work across our divisions to provide the highest level of service to our major customers. These individuals work closely to assure that all customer feedback is understood and addressed as quickly as possible.
In addition to the day-to-day management of customer feedback, PepsiCo has established forums to solicit feedback.
One such forum is PepsiCo’s Innovation Summits, which are held annually with our major customers. These summits take place in the early spring to late summer and preview innovation for the following year and beyond. Customers are shown PepsiCo’s proposed new products and are
asked to provide verbal and written feedback. This feedback is forwarded to the R&D and commercialization teams, often resulting in changes to final product. In addition to Innovation Summits, PepsiCo will also be conducting Supply Chain Summits with our top customers to build a strategic agenda around in-store conditions, cost removal and sustainability.
PepsiCo has created Centers of Excellence (COEs) to ensure a high quality of customer service.
One of our most active COEs is focused on customer insights, helping to quantify and provide innovative solutions for our customer’s most challenging issues, including consumer shopping habits, macro consumption trends, and retailer competitive dynamics.
Additionally, PepsiCo has a COE dedicated to Customer Supply Chain and Logistics, and focused on go-to-market capabilities. It addresses customer supply issues and enables rapid resolution of situations as they occur. Ultimately, the COE enables a more flexible and adaptive supply chain for our individual retail customers. PepsiCo has also instituted a regular Supply Chain scorecard process. The scorecard sets targets and measures results on metrics such as on-time delivery and consistent service.
bottler engagement
In the U.S., our Pepsi-Cola businesses work closely with our independent bottlers to assure the seamless production and delivery of our products. There are several formal processes for soliciting bottler feedback. Strategic planning is conducted in collaboration with our largest bottlers, as well as an annual bottler meeting which communicates Pepsi’s Annual Operating Plan to the entire bottling system.
consumer privacy
Consumer privacy is important to PepsiCo, and we make every effort to ensure that consumers understand our policies. Each division maintains its own marketing website and these are accessible by consumers. Brand-specific websites and promotion-specific microsites are also maintained, where consumers can voluntarily provide personal information to participate in online programs and promotions. On each website, a privacy policy is conspicuously posted that outlines the types of information collected by each division on that site and how the information is used and protected. We comply with applicable laws, rules and regulations.
Also, personal information received through the Consumer Relations toll-free number is kept confidential.
Environmental Sustainability
Protecting our natural resources and operating in a way that minimizes
our environmental footprint.
We Recognize Our Responsibility to
Minimize Our Environmental Footprint
LESLIE STARR KEATING,
Senior Vice President, Frito-Lay Operations
Every day, we rely on the earth’s natural resources to run our businesses. Water is essential for all foods and our ability to enjoy them — from growing and washing to processing and cooking. It is the primary ingredient in our beverages.
Fuels, electricity and, increasingly, other forms of energy are indispensable to making, moving and selling our products.
As a company that is expanding across many developed and emerging markets, we are committed to minimizing the impact our business has on the environment with methods that are socially responsible, scientifically based and economically sound.
Our environmental sustainability efforts are primarily focused on water, climate change, agriculture and packaging — areas that are critical to our business and where we can make the biggest impact. We continuously improve our environmental programs and explore inventive solutions to the world’s challenges, in particular water scarcity and climate change. We look for ways to bring to scale the good ideas being imple- mented across our global business and to share this experience with our peers and supply chain. The following pages spotlight initiatives taking place around the world — in Mexico, India, the U.K. and the U.S. — and illustrate how we approach our commitment to sustainability.
Our ability to improve the effectiveness of our environmental sustainability initiatives has been strengthened by the creation of common, enterprise-wide metrics. This is helping us to better understand and track our comprehensive environmental footprint and to be more transparent in our reporting.
Our goal is to reduce water consumption by 20%, electricity consumption by 20%, and fuel consumption by 25%
per unit of production by 2015 as compared to our 2006 consumption. We’ve made notable progress in all three areas.
For the first time ever, Bureau Veritas issued a verification of our environmental data and we are reporting our results on the total business, rather than by operating division as in the past.
We are also keen to address other areas of opportunities, including gathering consolidated bottler data and continuing to embed our global sustainability strategies and goals within all our businesses for greater consistency.
PepsiCo’s sustainability efforts are guided by a dedicated Environmental Sustainability Leadership Team supported by an Environmental Council. Sustainability teams at our manufacturing facilities around the globe are at the front line of our efforts. Employee volunteer “Green Teams” operate at many U.S.-based businesses, including Quaker, Tropicana, Gatorade and Frito-Lay. An Environmental Management System framework, an Environmental Policy and external
Reduce water consumption by
20 %
Reduce fuel consumption by
25 %
Reduce electricity consumption by
