Case Study PepsiCO - PepsiCo Way Traceability Program
"PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. Our main businesses – Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola – make hundreds of enjoyable foods and beverages that are loved throughout the world. PepsiCo’s people are united by our unique commitment to sustainable growth by investing in a healthier future for people and our planet, which we believe also, means a more successful future for PepsiCo. We call this commitment Performance with Purpose: PepsiCo’s promise to provide a wide range of foods and beverages for local tastes; to find innovative ways to minimize our impact on the environment by conserving energy and water and reducing packaging volume; to provide a great workplace for our associates; and to respect, support and invest in the local communities where we operate."
(Description according to PepsiCo standarts)
- Company name: PepsiCo
- Country: Ecuador, Colombia and Peru
- Sector: Food and beverage
- Name of Initiative: Pepsico Way Traceability Program (since 2011)
- Level of Engagement: Local
- Purpose: Discuss / Recommend / Advise / Provide assurance
- Approach: on-line consultations/partnership
- Type of stakeholders: hybrid
PepsiCo SACCAF sets annual targets for traceability and transparency of social and environmental performance of its potato supply chain. In order to achieve such targets, PepsiCo SACCAF decided to involve all actors across the potato supply chain as co-responsible for the provision of reliable information on their social and environmental footprints, according to international indicators and auditing standards. The PepsiCo Way Traceability Program was created in 2010 with the purpose of supporting the management and monitoring of social and environmental impacts of its potato supply chain in South America, with an initial focus on potato producers in Ecuador, Colombia and Peru.
The Traceability Program is divided into 3 main phases. First, an assessment process is conducted to assess the footprint of water use, soil quality, energy consumption, use of chemicals and working conditions in the agricultural practices of potato suppliers. Questionnaires are developed and applied by PepsiCo internal team in each participating country. At this stage, geo-referencing of growing areas is also performed.
The second phase is a field visit by the PepsiCo SACCAF team to verify agricultural practices of producers and also to promote sustainability education through training sessions that are provided to them.
The third phase of the project consists of training sessions focused on providing knowledge, tools and technical support for producers to quit small farming and become entrepreneurs capable of managing their business, facing challenges and identifying opportunities. The main topics covered by training are: administration of a rural enterprise, use of natural resources, calculation of operational costs and use of Program platform. PepsiCo SACCAF provides training for suppliers on the use of a software tool (platform) developed by PariPassu. Besides that, guides in printed version have been developed for those with no access to internet services. Program reports and management decisions taken by Pepsi SACCAF are based on the data collected by potato producers.
The key elements for the success of the Program are: engagement of potato producers; awareness of sustainability issues; capacity building on agricultural practices, business and entrepreneurship; and use of platform. These elements ensure that consistent information is collected by producers, thus allowing PepsiCo SACCAF and participants to monitor the social and environmental impacts of the potato supply chain over time. As a consequence, producers can improve their techniques and increase their production.
The criteria used to select the participating suppliers from the potato supply chain were: (a) importance for PepsiCo business (b) pilot project would be implemented in key countries and markets (c) capacity of suppliers to implement the program and manage the system. Currently, three countries are involved in the pilot project: Ecuador, Colombia and Peru.
The PepsiCo team has been engaged in the program development and implementation. PariPassu developed the Traceability Program platform, CaminusCautus developed the questionnaire applied at potato producers and PepsiCo Agricultural department is involved in visits to producers. Training sessions for the use and management of the Program platform are performed by PepsiCo SACCAF team members from the Sustainability Department.
Connection with company governance
The Traceability Program is part of a broader project focused on potato supply chain traceability that monitors social and environmental impacts from producers to consumers. From business perspective, traceability is a strategy adopted by PepsiCo SACCAF to guarantee sustainability and high quality products.
Outcomes and benefits
- The Traceability Program allows PepsiCo SACCAF to monitor and track social and environmental impacts of potato supply over time and perform comparative analysis that helps the company to make management decisions regarding potato supply chain and related business.
- The program also enhances producer’s knowledge regarding agricultural and production techniques and entrepreneurship.
- Through an engagement process, PepsiCo SACCAF builds trust-based relationships that are key for retaining potato producers that are more efficient and productive, with more competitive prices.
- During visits and training sessions, PepsiCo SACCAF is able to raise participant’s awareness regarding sustainability and social and environmental issues.
Potato producers will be certified in accordance with international standards and practices and this process adds value to their products.
In the long term, the Program ensures transparency about PepsiCo SACCAF products from the field to the consumer. The platform allows the gathering of data and the production of a report with participants’ information that will be used by PepsiCo to improve the management system of farms through data comparison and also to replicate this Program to other regions.
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