PepsiCo Sustainable Food Production

Mark Pettigrew Food Matters November 2015

1

Why agriculture is important for PepsiCo

• We source the raw ingredients

for our products from many

European countries.

• We buy more than:

> 1 million tonnes of potatoes

> 120,000 tonnes of oats

> 70,000 tonnes of corn

> 30,000 tonnes of apples

> 2,000 tonnes of nuts

• We work with more than 2,500

farmers across Europe.

2

But the agricultural sector is facing strong headwinds

Farming is becoming an increasingly challenging business

More More mouths to feed with less: 9 billion by 2050 globally

Changing climate: severe weather events more frequent

Challenging economic outlook: volatile commodity prices

3

The future of the farming sector is based on

sustainable farming practices.

Varieties

• Better yields

• Better quality

• Disease / Water

Precision

Innovation

Low Carbon

• More efficient use of resources

• Accurate prediction of crop availability

• Use of organic fertilizers

• Use of innovative irrigation systems

• Collaborative ICT projects to measure, monitor and reduce GHG emissions

4

We need to help farmers to be sustainable and

successful.

Knowledge

Technology

Partnerships

• With farmers and rural communities

• Among all actors

• Fairness and trust

• Best practice

• Training

• Collaboration with academia

• Innovation

• Access

• Uptake

CFT – Cool Farm Tool

• The tool is designed to be simple to use, but scientifically robust. The CFT has been tested by

PepsiCo and we are using it to work with our suppliers to measure, manage, and reduce

greenhouse gas emissions in the effort to mitigate global climate change

• ADAS in UK commissioned to work with growers to complete CFT and create a Carbon

Management Plan

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

Pesticide

production

Fertiliser

production

Mechanical

operations

Field

emissions

Washing Storage Distribution

kg

CO

2e

/kg

po

tato

es

• 2010 Baseline – *123 kg CO2e / tonne

• 2013 Crop – *81 kg CO2e / tonne

0

10

20

30

40

50

60

70

80

90

100

110

120

130

2010 2013

Em

iss

ion

s (

kg

CO

2e

/t)

Source Verified

reduction

from 2010

Total CFT return 34%

Fertiliser

manufacture

19%

Storage energy 8%

Fertiliser

application

5%

Other 2%

Green energy tariff 7%

Low Carbon Farming - UK

• 2010 Baseline – *123 kg CO2e / tonne

• 2013 Crop – *81 kg CO2e / tonne

0

10

20

30

40

50

60

70

80

90

100

110

120

130

2010 2013

Em

iss

ion

s (

kg

CO

2e

/t)

Source Verified

reduction

from 2010

Total CFT return 34%

Fertiliser

manufacture

19%

Storage energy 8%

Fertiliser

application

5%

Other 2%

Green energy tariff 7%

Low Carbon Farming - UK

43% Carbon

saving 2014

Crop! ADAS Interim

Report

73kg

Co2e

PepsiCo Sustainable Food Production

Transport

1%

Grading, cooling,

and storage

17%

Residue

management

3%

Background soil

N2O

5%

Fertiliser induced

field emissions

22%

Irrigation energy

1%

Field Energy Use

(excluding

irrigation)

15%

Crop protection

products

10%

Fertiliser

manufacture

18%

Seed production

8%

Optimise

•Soil Testing

•Variety Specific Agronomy

•Response Curves

Abated

•Big Impact

•Available

•Practical

Organic

•Holland

•Big Impact

•Naturalis

•Needs Validation

Advantaged

•Greater accuracy

•Conventional & Organic

•Precision Agriculture

•Sensors / satellite

•Engages growers

•Highlights hotspots

•Allows comparison

•Demonstrates continuous

improvement

• Develops Low carbon Farming

Fertiliser – Strategy

Best way to lower carbon footprint

PepsiCo Sustainable Food Production

• i-Crop

• Smartphone app

• Cool Farm Tool

• Satellite images

Farmers

Industry

Civil Society

Consumers

Policymakers

NGOs

Scientific community

Others...

Less Water: 300Ha

Drip Irrigation trials

Less Carbon: 6 Scale

Fertilizer trials

Partnership is key to delivering sustainability