Dive Brief:
- PepsiCo announced a series of sustainability and health-related goals with a self-imposed deadline of 2025 for most initiatives, according to a company news release.
- The company wants two-thirds of its beverage portfolio to consist of products containing 100 or fewer calories from added sugar per 12-oz serving by the deadline. Currently, less than 40% of its beverages reach that benchmark.
- PepsiCo plans to achieve 15% improvement in the water efficiency of its direct agricultural supply chain in high water-risk areas by 2025. The company also aims to reduce its greenhouse gas emissions by 20% across its value chain, including its agricultural supply, by 2030.
Dive Insight:
With this latest commitment, PepsiCo has outpaced its competitors in the race to cut added sugars from beverages. Given how much better-for-you products have contributed to offsetting sales declines in recent earnings reports, this sort of pledge is not surprising. Rival companies may not be far behind if PepsiCo can prove its reformulation strategies work better than the Diet Pepsi fiasco.
In late 2014, PepsiCo and rivals Coca-Cola and Dr Pepper Snapple Group committed as a group to reducing the number of sugary drink calories that Americans consume by 20% by 2025. This also included promoting smaller portion sizes, water and diet drinks. Initiatives like smaller can and bottle sizes have actually proven to be more profitable for these companies, proving that sustainability and public health commitments can be lucrative.
The sustainability-related pledges may directly impact consumers, the environment and the company's reputation. Water security and greenhouse gas emissions continue to be key issues for which environmentalists press manufacturers.
PepsiCo isn't the first to have made this sort of a pledge. Coca-Cola has already responded to these environmental concerns, making a commitment to improve water efficiency in operations by 25% compared to a 2010 baseline and to reduce its carbon footprint by 25%.