PepsiCo seeks performance with a purpose

by Eric Schroeder
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PepsiCo details its progress against strategic goals in its new sustainability report.

PURCHASE, N.Y. — PepsiCo, Inc. has a vision to create products that consumers are eager to buy and employees are proud to sell. According to the company’s most recent sustainability report issued Sept. 24, headway is being made on that vision, but additional work is required.

Indra Nooyi, chairman and c.e.o. of PepsiCo.

“PepsiCo looked out across the food and beverage landscape nearly a decade ago and charted a new course,” Indra Nooyi, chairman and chief executive officer, wrote in a letter included in the sustainability report, titled “Performance with Purpose.” “We recognized a simple truth: there is profit in purpose. Sustainability is not something to support with the profits we make, but rather a path to delivering profitability. Weaving sustainability into the very fabric of our organization is a way to help future-proof our business for the changing world around us.”

In the report, PepsiCo says one of its 10 key goals is to “continue to refine our food and beverage choices to meet changing consumer needs by reducing sodium, added sugars and saturated fats, and developing a broader portfolio of product choices.”

By 2020, the company said it hopes to reduce the average amount of sodium per serving in key global food brands in key countries by 25%, compared to a 2006 baseline. In 2014, all 10 key countries (Brazil, Canada, China, India, Mexico, Russia, Saudi Arabia, Turkey, the United Kingdom and the United States) achieved sodium reductions, and China and the United Kingdom already have met the 25% reduction target.

“On a global average per serving basis, we reduced sodium by more than 10% and removed more than 1,800 metric tons from key global food brands in key countries in 2014, compared to 2006,” PepsiCo said in the report. “Advances in manufacturing technology and recipe innovation have helped us maintain the taste our consumers expect while reducing sodium content. Our primary challenge in meeting this goal is consumer acceptance of reduced-sodium products in countries like the U.S. and Saudi Arabia, and we continue to prioritize its reduction in our flavored chips, as some seasonings can be high in sodium. We will continue to invest in R.&D. toward sodium reductions to help people achieve levels recommended by public health experts, such as the W.H.O.”

PepsiCo also set out to reduce the average amount of added sugars per serving in its beverages in key countries by 25% by 2020. The company said 7 of the 10 key countries it tracks for this goal reduced added sugars in 2014, and 2 of the 7 countries — the United States and Canada — reported removing approximately 434,000 tonnes of added sugars from the total beverage portfolio, up from 402,000 tonnes in 2013. But despite the progress in the United States and Canada, PepsiCo said it saw a net increase in tonnes of added sugars in 2014.

“In certain key countries, while there have been some successful products with reduced added sugars, the original versions of our products are growing at faster rates due in part to consumer preference,” PepsiCo said. “This increases the average added sugars per serving and thereby impacts the aggregated average. Our greatest challenges in meeting this goal will be our performance in India and China, where the markets are growing so rapidly that it is more difficult to predict sales and consumer acceptability. We are accelerating R.&D. investments to uncover and develop great-tasting sweeteners and flavors that are inherently low in calories and that we believe will enable us to make progress toward this goal.”

PepsiCo has set a goal of reducing the average amount of saturated fats per serving in key global food brands in key countries by 15% by 2020. So far, 5 of the 10 countries it measures against this goal have met the 15% target, and Turkey removed 35% of the saturated fats from its key brands in 2014. On a global average per serving basis, PepsiCo said it reduced saturated fats by a little more than 2% and removed 1,600 tonnes of saturated fats in 2014.

“Higher volume growth in markets where healthier oils are less accessible has proven to be a challenge for us, and we continue to actively seek opportunities to reduce saturated fats and use healthier oils in our products,” the company said.

In addition to cutting back on sodium, added sugars and saturated fats, PepsiCo has a goal to broaden its portfolio to include healthier products. In 2014, the company said approximately 20% of its net revenue came from its nutrition businesses.

“We plan to further expand our more nutritious portfolio by building on our expertise in dairy, hummus and baked grain snacks, as well as leveraging our brands, including Quaker, Tropicana, Gatorade, Naked Juice Emerging Brands and Wimm-Bill-Dann,” the company said.

Another one of PepsiCo’s 10 goals is to “continue to provide clear nutrition information on our products, and sell and market them appropriately to our consumers, including children, in line with our global policies and accepted global standards.”

Back in 2010, PepsiCo voluntarily committed to display calorie count and key nutrients on packaging for all products in key countries by the end of 2015. Through 2014, the company said it had achieved 92% compliance with the commitment. Also during the year, PepsiCo said it made significant improvements in its methodology for monitoring compliance with its labeling policy.

For the full report, click here.
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