Regenerative Farming & Circularity: PepsiCo's ESG Efforts

Food systems are imperative in upholding global nutrition and economic stability, but the process of getting food to people’s plates can be complex and lead to various environmental impacts.

The World Economic Forum says that US$300bn of investment is needed into the broader transformation of the global food industry to support the climate transition. 

Many processes within the food industry may be subject to change in order to meet figures that are outlined in the Paris Agreement. 

As one of the biggest food and beverage businesses on the planet, PepsiCo’s pep+ (PepsiCo Positive) strategy is making an impact.

How is PepsiCo approaching regenerative farming?

In 2024, the company spread the adoption of positive agricultural practices across 3.5 million acres.

PepsiCo also sustainably sourced nearly 70% of its key ingredients, progressing towards its goals laid out for 2030.

In order to reach these goals, the company is collaborating with suppliers to support the adoption of plant cover crops and implementation of regenerative practices.

PepsiCo has also implemented the reduction of tillage to maintain soil health, alongside encouraging livestock integration and crop diversity.

It has improved watershed health by supporting farmers with partnerships, targeted training and programmes, as well as replenishing 75% of the water it used in high risk areas.

PepsiCo says that there are three key components in supporting the regenerative agriculture transition, including providing economic support, helping with community engagement and providing the tools to scale regenerative practices. 

Working within these core components, PepsiCo has supported initiatives such as a multi-year partnership with Practical Farmers in Iowa, awarding US$6.7m to fund innovative agriculture projects and provided farmers with crop nutrition programmes.

Anne Tse, CEO of APAC Foods at PepsiCo, says: “We’ve expanded regenerative practices across millions of acres, strengthened our approach to water stewardship, advanced sustainable packaging and accelerated climate action. 

“Alongside these efforts, we’ve refined our goals to reflect today’s realities while keeping our long-term ambition firmly in view.”

What is PepsiCo doing to transform its portfolio?

PepsiCo says it is moving towards creating more positive choices for customers including producing products that have reduced added sugar, sodium and saturated fats. 

It has made progress within several of its reduction goals, including:

• Reducing added sugar in 67% of beverages within the company’s portfolio 
• Ensuring sodium per calorie does not exceed 1.3mg in 77% of its convenient foods sector
• Reducing 81% of its products to no longer exceed 1.1 grams of saturated fats per 100 calories.

Currently, the company provides 69 billion portions of diverse ingredients in its global convenient foods portfolio every year.

To reach these reduction figures, the company reformulated existing products alongside innovating new ones.

The company uses nutrition scientists, seasoning specialists and chefs, combining their expertise to create great flavours that contain less sodium.

Anne says: “At the heart of pep+ is also the transformation of our portfolio. We’re bringing consumers products that reduce added sugars, sodium and saturated fats, while expanding choices with functional benefits and diverse ingredients. 

“This shift is resonating strongly in markets across the globe, underscoring the role our brands can play in supporting better choices every day.”

PepsiCo's circular economy efforts

In 2024, the company saw a 93% increase in reusable, recyclable and compostable packaging alongside a reduction of 5% in year-over-year in absolute tonnage of virgin plastics. 

To cut down on its use of virgin plastics, PepsiCo has reduced the weight of its bottles and other packaging materials, as well as pre-settling food in order to use a smaller container for the same amount of product.

PepsiCo says that moving towards a circular economy is reliant on several external factors, with significant changes needing to be made to recycling infrastructure.

Some examples of changes the company has made include:

• To fit with Pakistan's recycling standards, changing its Mountain Dew bottle colour from dark green to light green
• In China, moving from whole bottle labels to partially wrapped bottles for Pepsi
• Introducing the first 100% rPET carbonated beverage bottle in Taiwan.

Alongside making big manufacturing changes, the company participates in initiatives such as the EPR program in Thailand for the collection and recycling of flexible packaging.

It is also working on implementing AI to identify materials and guide users to correct bins.

Jim Andrew, Executive Vice President and Chief Sustainability Officer at PepsiCo, says: "Our progress in 2024 shows that when we embed sustainability into the heart of our company, we not only help strengthen our communities and our planet, we also make our business more resilient."