Since 2007, PepsiCo has taken a proactive stance on environmental and sustainable practices. The company has significantly reduced waste and water use in its manufacturing and distribution processes. Additionally, PepsiCo has worked with its suppliers to promote sustainable agriculture. As a result, PepsiCo has seen increased profits and improved customer satisfaction.
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PepsiCo Sets Ambitious Goals
In 2007, PepsiCo set several goals, all with the purpose of improving environmental and sustainable practices in its supply chain. By 2010, the company had met its original goals, and PepsiCo wanted to take things to the next level. On World Water Day in 2010, PepsiCo set 10 new ambitious goals to improve company practices in terms of sustainability. Now, in 2015, PepsiCo has reached or surpassed all of these 2010 goals.
In 2010 Walter Todd, Vice President of Sustainability at PepsiCo, told the Guardian, “One of the ways that we have triggered innovation is by setting big hairy audacious goals. This forces us to look at every area of our operations and encourages ideas to bubble up.” Todd went on to say that he doesn’t understand why companies don’t see the benefits. After all, as new sustainable practices are implemented, companies can take advantage of clear cost savings and benefit from improved brand awareness.
PepsiCo’s Environmental and Sustainable Practices
Between 2010 and 2014, PepsiCo saved more than $375 million thanks to its environmental and sustainability programs. The savings were a result of the company’s waste reduction initiatives, water management, energy, and sustainable packaging. Since 2010 PepsiCo has achieved the following major milestones:
- Reduced water usage by 23 percent, exceeding the original target goal of 20 percent by 2015.
- Eliminated warehouse space constraints to allow for larger inventory levels.
- Maintained greenhouse gas emissions since 2008, even though production volume has significantly increased.
- Invested in greener fleet initiatives, such as electric vehicles and other alternative fuel sources.
- Improved its energy efficiency as an overall company.
- Reduced waste by recycling and reusing 90 percent of production waste.
- Decreased the amount of packaging used in distribution by switching to recycled polyethylene terephthalate packages and bottle.
- Started its Sustainable Farming Initiative (SFI), which helps suppliers achieve more sustainable agricultural practices through training, support, and other resources.
- Launched the website howwillwe.com to share ideas about relevant sustainability ideas.
What Other Companies Can Learn from PepsiCo
While PepsiCo certainly cares about the environment, other motivating factors prompted the company to change its environmental and sustainable practices. The biggest is a reduction in procurement, manufacturing, and distribution costs. After all, less waste means smaller landfill fees, less water means smaller water bills, and improved supplier practices mean less procurement hassle.
Many of the company’s competitors are also seeing the benefits of implementing environmental and sustainable practices. Coca-Cola has made similar changes to its operations, and as leaders in the beverage industry, both PepsiCo and Coca-Cola are setting a good example for other companies. By 2020, more and more companies will see the benefits of going green in their own supply chains.[/show_to]
