Pepsico 2008 Sustainability Report

1 PepsiCo Corporate Citizenship Report 2008
Performance
with Purpose
PepsiCo Corporate Citizenship Report 2008
Creating a Better Tomorrow
for Future Generations
Global Reporting Initiative Index
The Global Reporting Initiative (GRI) is a system of reporting on nancial, social and environmental programs and progress.
Strategy and Analysis
GRI Indicator PepsiCo Location
1.1 Statement from the most senior decision maker of the organization (e.g., CEO, chair, or
equivalent senior position) about the relevance of sustainability to the organization and its
strategy.
> Letter from Indra Nooyi
1.2 Description of key impacts, risks, and opportunities. > Risk Management
> Corporate Governance
> Human Sustainability - Our Management
> Environmental Sustainability - Our Management
> Employee Learning and Development
> Expanding Opportunities through Diversity and Inclusion
Organizational Prole
2.1 Name of the organization. > PepsiCo, Inc.
2.2 Primary brands, products, and/or services. > Our Business
> Our Economic Impacts
2.3 Operational structure of the organization, including main divisions, operating companies,
subsidiaries, and joint ventures.
> Our Business
2.4 Location of organization?s headquarters. > Purchase, New York, United States
2.5 Number of countries where the organization operates, and names of countries with either
major operations or that are specically relevant to the sustainability issues covered in the
report.
> Our Operations
2.6 Nature of ownership and legal form. > Form 10-K
2.7 Markets served (including geographic breakdown, sectors served, and types of customers/
beneciaries).
> Our Operations
> Our Business
2.8 Scale of the reporting organization, including:
Number of employees
Net sales (for private sector organizations) or net revenues (for public sector organizations)
Total capitalization broken down in terms of debt and equity (for private sector organizations)
Quantity of products or services provided.
> Our Business
> Our Operations
> 2008 Annual Report
> Form 10-K
2.9 Signicant changes during the reporting period regarding size, structure, or ownership
including:
The location of, or changes in operations, including facility openings, closings, and expansions;
and
Changes in the share capital structure and other capital formation, maintenance, and
alteration operations (for private sector organizations).
> Our Business
> Our Operations
2.10 Awards received in the reporting period. > Awards and Recognitions Select Listing
3.1 Reporting period (e.g., scal/calendar year) for information provided. > Fiscal year 2008
3.2 Date of most recent previous report. > 2007/2008
3.3 Reporting cycle (annual, biennial, etc.). > Annual
3.4 Contact point for questions regarding the report or its contents. > PerformancewithPurpose@pepsico.com
Report Scope and Boundary
3.5 Process for dening report content. > Overview
3.6 Boundary of the report. > Overview
3.7 State any specic limitations. > Overview
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations,
and other entities that can signicantly affect comparability from period to period and/or
between organizations.
> Overview
3.9 Data measurement techniques and the bases of calculations, including assumptions and
techniques underlying estimations applied to the compilation of the Indicators and other
information in the report.
> Overview
3.10 Explanation of the effect of any re-statements of information provided in earlier reports,
and the reasons for such restatements (e.g., mergers/ acquisitions, change of base years/
periods, nature of business, measurement methods).
> Overview
3.11 Signicant changes from previous reporting periods in the scope, boundary, or
measurement methods applied in the report.
> Overview
GRI Content Index
3.12 Table identifying the location of the Standard Disclosures in the report. > G3 Indicators
3.13 Policy and current practice with regard to seeking external assurance for the report. If not
included in the assurance report accompanying the sustainability report, explain the scope and
basis of any external assurance provided. Also explain the relationship between the reporting
organization and the assurance provider(s).
> Environmental Sustainability Statement from Bureau Veritas
Governance
4.1 Governance structure of the organization, including committees under the highest
governance body responsible for specic tasks, such as setting strategy or organizational
oversight.
4.2 Indicate whether the Chair of the highest governance body is also an executive ofcer
(and, if so, their function within the organizations management and the reasons for this
arrangement).
4.3 For organizations that have a unitary board structure, state the number of members of the
highest governance body that are independent and/or non-executive members.
4.4 Mechanisms for shareholders and employees to provide recommendations or direction to
the highest governance body.
> Corporate Governance Communications with the Board of Directors
4.5 Linkage between compensation for members of the highest governance body, senior
managers, and executives (including departure arrangements), and the organizations
performance (including social and environmental performance).
> Corporate Governance Board and Executive Compensation
4.6 Processes in place for the highest governance body to ensure conicts of interest are
avoided.
> Corporate Governance Board and Executive Compensation, Conicts of Interest
4.7 Process for determining the qualications and expertise of the members of the highest
governance body for guiding the organizations strategy on economic, environmental, and
social topics.
> Corporate Governance Board and Executive Compensation
4.8 Internally developed statements of mission or values, codes of conduct, and principles
relevant to economic, environmental, and social performance and the status of their
implementation.
> Mission, Values, and Guiding Principles
> Code of Conduct Code and our Policies
> Human Sustainability Introduction
> Environmental Sustainability Introduction
> Talent Sustainability Introduction
4.9 Procedures of the highest governance body for overseeing the organizations identication
and management of economic, environmental, and social performance, including relevant
risks and opportunities, and adherence or compliance with internationally agreed standards,
codes of conduct, and principles.
> Risk Management
4.10 Processes for evaluating the highest governance bodys own performance, particularly
with respect to economic, environmental, and social performance.
> Corporate Governance Annual Performance
> Evaluation of the Board
4.11 Explanation of whether and how the precautionary approach or principle is addressed by
the organization.
> Human Sustainability
> Climate Change
> Risk Management
4.12 Externally developed economic, environmental, and social charters, principles, or other
initiatives to which the organization subscribes or endorses.
> Memberships and Partnerships
4.13 Memberships in associations (such as industry associations) and/or national/international
advocacy organizations in which the organization:
Has positions in governance bodies;
Participates in projects or committees;
Provides substantive funding beyond routine membership dues; or
Views membership as strategic.
4.14 List of stakeholder groups engaged by the organization. > Our Stakeholders
4.15 Basis for identication and selection of stakeholders with whom to engage. > Our Stakeholders
4.16 Approaches to stakeholder engagement, including frequency of engagement by type
and by stakeholder group.
> Our Stakeholders
4.17 Key topics and concerns that have been raised through stakeholder engagement, and
how the organization has responded to those key topics and concerns, including through its
reporting.
> Our Stakeholders
> Carbon Trust Letter
Economic Performance Indicators
EC1 Direct economic value generated and distributed, including revenues, operating costs,
employee compensation, donations and other community investments, retained earnings, and
payments to capital providers and governments.
> Our Economic Contributions
EC2 Financial implications and other risks and opportunities for the organizations activities
due to climate change.
> Risk Management
> Climate Change
EC3 Coverage of the organizations dened benet plan obligations. > Employee Benet Programs
EC4 Signicant nancial assistance received from government. Our Economic Contributions > Our Economic Contributions
EC6 Policy, practices, and proportion of spending on locally based suppliers at signicant
locations of operation.
> Our Economic Contributions
> Agriculture
EC7 Procedures for local hiring and proportion of senior management hired from the local
community at locations of signicant operation.
> Talent Sustainability Expanding Opportunities through Diversity and Inclusion
EC8 Development and impact of infrastructure investments and services provided primarily for
public benet through commercial, in kind, or pro bono engagement.
> The PepsiCo Foundation
> Human Sustainability Leaving a Positive Footprint on Society
> Environmental Sustainability Leaving a Positive Footprint on Society
> Talent Sustainability Leaving a Positive Footprint on Society
EC9 Understanding and describing signicant indirect economic impacts, including the extent
of impacts.
> Our Economic Impacts
> Our Stakeholders
Environmental Performance Indicators
EN1 Materials used by weight or volume. > Packaging and Solid Waste Global Packaging by Weight
EN2 Percentage of materials used that are recycled input materials. > Packaging and Solid Waste
EN3 Direct energy consumption by primary energy source. > Environmental Sustainability Introduction
EN4 Indirect energy consumption by primary source. > Environmental Sustainability Introduction
EN5 Energy saved due to conservation and efciency improvements. > Environmental Sustainability Introduction
EN7 Initiatives to reduce indirect energy consumption and reductions achieved. > Climate Change
EN12 Description of signicant impacts of activities, products, and services on biodiversity in
protected areas and areas of high biodiversity value outside protected areas.
> Climate Change - Green Building and Design
EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. > Agriculture Biodiversity
EN16 Total direct and indirect greenhouse gas emissions by weight. > Climate Change
EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. > Climate Change
EN 26 Initiatives to mitigate environmental impacts of products and services, and extent of
impact mitigation.
> Environmental Sustainability
EN29 Signicant environmental impacts of transporting products and other goods and
materials used for the organizations operations, and transporting members of the workforce.
> Climate Change Fleet, Beverage Coolers and Vending Machines
Social Performance Indicators
LA1 Total workforce by employment type, employment contract, and region. > Our Business
> Our Operations
LA3 Benets provided to full-time employees that are not provided to temporary or part-time
employees, by major operations.
> Employee Benet Programs
LA8 Education, training, counseling, prevention, and risk-control programs in place to assist
workforce members, their families, or community members regarding serious diseases.
> Talent Sustainability Introduction by Greg Heaslip
> HIV/AIDS
> Health and Safety
LA10 Average hours of training per year per employee by employee category. > Employee Learning and Development
LA11 Programs for skills management and lifelong learning that support the continued
employability of employees and assist them in managing career endings.
LA12 Percentage of employees receiving regular performance and career development
reviews.
> Talent Sustainability Introduction by Leslie Teichgraeber
LA13 Composition of governance bodies and breakdown of employees per category
according to gender, age group, minority group membership, and other indicators of diversity.
> Expanding Opportunities through Diversity and Inclusion
HR1 Percentage and total number of signicant investment agreements that include human
rights clauses or that have undergone human rights screening.
> Human Rights
> Responsible and Sustainable Sourcing Supplier Code of Conduct
HR3 Total hours of employee training on policies and procedures concerning aspects of human
rights that are relevant to operations, including the percentage of employees trained.
> Human Rights
> Code of Conduct
Society Performance Indicators
SO3 Percentage of employees trained in organizations anti-corruption policies and
procedures.
> Code of Conduct
SO4 Actions taken in response to incidents of corruption. > Code of Conduct
SO5 Public policy positions and participation in public policy development and lobbying.
Memberships and Partnerships.
SO6 Total value of nancial and in-kind contributions to political parties, politicians, and
related institutions by country.
> Our Economic Contributions and Contributions and Community
Product Responsibility Performance Indicators
PR1 Life cycle stages in which health and safety impacts of products and services are assessed
for improvement, and percentage of signicant products and services categories subject to
such procedures.
> Human Sustainability
> Responsible and Sustainable Sourcing
> Environmental Sustainability Monitoring
PR3 Type of product and service information required by procedures, and percentage of
signicant products and services subject to such information requirements.
> Helping Consumers Make Better Choices with Nutrition Labeling
PR5 Practices related to customer satisfaction, including results of surveys measuring customer
satisfaction.
> Consumer and Customer Relations
PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing
communications, including advertising, promotion, and sponsorship.
> Engaging in Responsible Marketing and Advertising
Overview
PepsiCo offers the worlds largest portfolio of billion-dollar food and beverage brands, including 18 different product lines that each generate more
than $1 billion in annual retail sales. As one of the worlds largest food and beverage companies, we recognize our responsibility to help make a
positive contribution in a world that continues to experience unprecedented economic, environmental, and social challenges.
In this overview, we share our progress in addressing these challenges, identify where we believe we can have the most impact, and acknowledge
our opportunities for continued improvement. We will continue to develop, improve, and report metrics to measure our global performance.
While this process will take time, we believe that it will help us both embed sustainability goals more fully into our operations and achieve
demonstrable progress.
Our approach to sustainability remains grounded in our Performance with Purpose mission: a balance of achieving continued nancial success
while leaving a positive imprint on society. Specically, we have dened three areas of inuence: human, environmental, and talent sustainability.
This report provides a review of all three areas and offers a more in-depth look at our companys efforts with respect to water, climate change, agriculture, packaging and waste.
We believe that the power of our global workforce, coupled with our operational capabilities and international reach, provide our company with a unique opportunity to have a positive impact on
society. Our employees are committed to living PepsiCos sustainability vision, which is to continuously improve the world in which we operate, creating a better tomorrow for this generation, as
well as future generations.
This report covers the 2008 scal year.
We have followed the G3 Guidelines of the Global Reporting Initiative. Our report includes PepsiCo operations that we own and operate. In the United States and in some other countries,
independent franchise bottlers manufacture and distribute our beverage products. Our three largest bottlers in the U.S. are The Pepsi Bottling Group (PBG), PepsiAmericas, Inc., and Pepsi Bottling
Ventures LLC. Our ownership of each of these bottlers is less than 50 percent, and because we do not control these bottlers, we do not consolidate their results or include their information in this
report except as noted in the text.
Data is prepared following PepsiCo-established metrics and protocols, which often follow external methods. Comments on this Corporate Citizenship Report can be submitted to
PerformanceWithPurpose@pepsico.com.
Human Sustainability
Nourishing our consumers through
the products we offerfrom treats to
healthy eatsand through our efforts
to encourage more active lifestyles
Environmental Sustainability
Protecting our natural resources and
operating in a way that minimizes our
environmental footprint
Talent Sustainability
Involving and empowering people,
helping them to realize their potential,
renew themselves, and achieve success
Dear Fellow Stakeholders,
Every day, PepsiCo earns its license to operate in the thousands
of communities we serve.
As one of the worlds largest food and beverage companies,
we have some distinct responsibilities. We have a responsibility
to support economic development, to improve our
environmental footprint and to help work toward solutions
to issues such as obesity and undernourishment. This report,
called Performance with Purpose: Creating a Better Tomorrow
for Future Generations, captures the progress we have made
thus far and provides a map of where we intend to go.
Performance with Purpose is fundamental to our overall
success. Theres no question that these are challenging times.
Like many companies, were facing headwinds such as rising
costs, an uncertain economic outlook and shifting currency
exchange rates. While we cant control macroeconomic trends,
we must adapt to the near-term challenges to deliver on our
long-term growth plans.
But this cannot be an excuse to reduce our commitment to
responsible business. Indeed, nancial performance can and
must go hand in hand with sustainability. Our performance
and our purpose are not separate each is knitted inextricably
with the other. That relationship can be seen in the three areas
that together comprise Performance with Purpose: Human,
Environmental and Talent sustainability. These focus areas
will guide the way we do business. They will continue to be
shaped in dialogue with key stakeholders. In this way, we
intend to maintain our long-term commitment to the overall
sustainability of our company.
The world today faces many public health challenges and, as
a responsible company, we recognize our part in helping to
improve the well-being of populations in both developed and
developing countries.
Our aim is to nourish consumers by developing products that
satisfy the consumers changing preferences and that deliver
exceptional taste and convenience. Increasingly, our product
portfolio makes it more enjoyable to lead a healthy life. Were
changing because our consumer is changing and because the
health of the worlds growing population demands it.
To meet this demand, weve appointed new leaders to our
global R&D team, including world-renowned clinical scientists.
We have increased our R&D investment and dramatically
expanded our capabilities. We have accelerated our innovation
pipeline, acquired companies to extend our offerings of more
nutritious products and actively cultivated partnerships to
guide our work. We will use our inuence to drive positive
change in the food industry.
As a responsible company, we seek to continually drive
environmental sustainability by abiding by applicable laws
and regulations and, in certain instances where we believe
the requirements may not be sufciently advanced, we apply
higher standards.
Recently, Bureau Veritas issued independent verication
of our environmental data. We will continue to audit our
performance, share our progress and actively lead and engage
in private-public partnerships to spur action and solutions to
address the worlds environmental issues.
But we want to go further than that. We have focused our
environmental sustainability efforts on the areas where,
because of our expertise, we can have the most impact:
water, climate change, agriculture and packaging. We are
working hard to minimize our water footprint and improve
public access to clean water through alliances with nonprot
groups such as The Earth Institute and Water.org. We are
intent on mitigating climate change and continuing our
efforts to reduce greenhouse gas emissions. After more than
a decade of action, we continue to form partnerships with
key stakeholders such as the Carbon Trust to provide us with
additional insights, expertise and knowledge.
By valuing our employees, we are ensuring that PepsiCo is the
kind of company where talented people of all backgrounds
want to work.
We recognize our responsibility to take care of our employees
and their families, especially during this global economic
downturn. We remain committed to providing opportunities
for our associates to acquire new skills, grow professionally
and share in our companys success. Our dedication to
workplace safety is unwavering, and we offer health care
benets and wellness programs that enable our employees to
live healthier lives.
We foster an inclusive workplace by increasing female and
minority representation in management ranks, creating
rewarding opportunities for people with disabilities and
recognizing our employees for their contributions.
We are extending our human rights standards throughout
our operations and encourage our suppliers and agricultural
partners to uphold our commitment to sustainable
development.
Conclusion
I believe our Performance with Purpose mission denes our
roles and responsibilities very clearly. It motivates our 198,000
employees to be leaders in social responsibility and helps each
of us create a better tomorrow for future generations. We
look forward to sharing our progress and I look forward to
your feedback. I encourage you to share your comments on
our corporate citizenship report at PerformanceWithPurpose@
pepsico.com.
Indra K. Nooyi
Chairman and Chief Executive Ofcer
Tough economic times raise tough questions. And
sustainability features among these questions as never
before. Should sustainability take a back seat while we
sort out the global economy? Isnt it just a luxury for
the good times?
Management time and capital are in short supply. But
forward-thinking companies recognise the importance
of taking action now, in the midst of a downturn. In the
short term, efciency savings help the bottom line whilst
factoring sustainability into the development of products
and services builds longer-term strategic advantage.
At the Carbon Trust we have been working with PepsiCo
since 2003 on its response to climate change. This started
with energy efciency projects across its sites but more
recently led to groundbreaking work on product carbon
footprinting and labelling. The Walkers brand was the rst
to carry our Carbon Reduction Label in the UK and Ireland.
Quaker Oats now carries the Label and Tropicana was the
rst US brand to disclose its certied footprint in March
2009.
PepsiCo has seen a range of benets from this work
including a better understanding of the business risks
of climate change, energy cost reductions across the
supply chain and enhanced relationships with staff,
suppliers and customers. This all makes business sense,
as well as making a valuable contribution to their
sustainability goals.
But maintaining global leadership on climate change
mitigation is not easy. Global companies have to deal
with increasingly complex supply chains, differing
regulatory regimes in each market and varying levels of
customer engagement around the world.
The companies that will succeed in this environment
are those which bind their business objectives and
sustainability goals into a single vision. It takes leadership
from the top but also buy-in right across the organization.
And for leading brands, this means more than managing
direct impacts engaging and prompting action with
suppliers and customers is where the real advances will
be made in the future.
And for leading brands, this means more than
managing direct impactsengaging and prompting
action with suppliers and customers is where the real
advances will be made in the future.
Tom Delay
Chief Executive, The Carbon Trust
PepsiCo is a proud partner with the
Carbon Trust, a U.K.-based, independent,
not-for-prot company that helps
businesses address climate change.
The most important contributions that we make address hunger, health and environmental sustainability.
These are just a few examples of the actions we are taking to support the Millennium Development Goals
U.N. Millennium
Development Goals: Our
Contribution
Established in 2000, the United Nations Millennium
Development Goals focus on eight global issues ranging from
eradicating hunger to ensuring environmental sustainability. As
governments, businesses, nongovernmental organizations and
civil society join together in this mission, we are collectively
committed to helping achieve the Goals by 2015.
As a global company that delivers strong nancial performance
and contributes to economic growth, we can play an
important role in supporting solutions. The most important
contributions that we make address hunger, health and
environmental sustainability.
Following are just a few examples of the actions we are taking
to support the Goals:
Eradicate Extreme Poverty and Hunger
PepsiCo is working toward developing nutrition-based
solutions to reduce hunger and malnutrition in select
developing countries, particularly South Africa, India and
in time, Nigeria. We will leverage our core competencies
including R&D, product development, marketing, sales and
distribution to launch a product with the necessary public and
private partnerships to reach the target population and sustain
its use.
Achieve Universal Primary School Education
In China, PepsiCo supports literacy and education programs
in communities near our operations. Weve built libraries
where our employees donate their time and skills to provide
education to children. In Kashira, Russia, PepsiCo helps schools
purchase computers and lab equipment.
Promote Gender Equality and Empower Women
In 2008, PepsiCo launched the Female Talent Development
program in our Middle East and Africa region to focus on
workplace equality and increased recruitment of women.
In addition, PepsiCo has a Global Diversity and Inclusion
Governance Council comprised of internal and external
thought leaders and co-chaired by our Chairman and global
Chief Diversity Ofcer. Diversity and Inclusion Councils have
been established in each of the regions in which we operate
to develop and execute locally relevant diversity and inclusion
strategies with a particular focus on women.
Reduce Child Mortality
The PepsiCo Foundation has committed a three-year, $5
million grant to Save the Children to support work to decrease
child mortality and malnutrition in rural India and Bangladesh.
Improve Maternal Health
PepsiCo is participating in initiatives in developing countries to
promote sanitation, hygiene and health education, all of which
will help to improve maternal health. Among these initiatives is
our partnership with The Energy and Resources Institute (TERI),
an organization dedicated to improving clean water access,
sanitation and hygiene, as well as health care facilities.
Combat HIV/AIDS, Malaria and Other Diseases
We have a global HIV/AIDS policy and are committed to
addressing HIV/AIDS through an integrated approach that
includes awareness, education and prevention; testing and
treatment; and community and partner outreach. We have
HIV/AIDS workplace programs in South Africa, China, Thailand,
India, Russia and the United States.
Ensure Environmental Sustainability
We established a Sustainable Agriculture Council to ensure
that environmental impacts are considered in our agricultural
research, development and management decision making.
In our own operations, we conserved more than 750,000
megawatt hours of energy and more than 7.5 billion liters
of water as a result of gains in energy and water efciency
from the 2006 baseline. We have also committed to cutting
company-wide water use by 20%, electricity by 20% and fuel
by 25% by 2015, compared to 2006 usage levels. In addition,
The Earth Institute at Columbia University and the PepsiCo
Foundation entered into a $6 million, three-year partnership.
The program includes a series of community-based activities to
address water, agriculture and climate issues.
Develop a Global Partnership for Development
Our leaders actively participate in global health and
development initiatives where we partner with groups
including the Global Alliance for Improved Nutrition (GAIN),
Synergos, the World Health Organization, the Pan American
Health Organization and Un Kilo au Yuda, among others.
Nourishing our consumers through
the products we offerfrom treats to
healthy eatsand through our efforts
to encourage more active lifestyles.
We Recognize Our Responsibility
to Provide Balanced Nutrition
MEHMOOD KHAN, MD, Chief Scientic Ofcer
As one of the worlds largest food and beverage
companies, we believe it is our responsibility to understand
the diet and nutrition needs of populations around
the globe.
More than ever, consumers want products that are safe,
affordable, great-tasting and healthy. They are increasingly
looking closely at the nutritional content of the products
they consume and purchase for their families, such as salt
content and saturated fat, because they want to eat well
and improve their overall health. They want options that
offer nutritional benets to meet the differing needs of
various life stages, from childhood through late adulthood.
Consumers are also managing specic health conditions,
such as diabetes and high cholesterol, and expect on-
pack health claims to be grounded in credible science.
Understanding these health needs and attitudes is vital to
our business, but the global market is even more dynamic
and complex.
Today, more than one billion adults are overweight or
obese while at the same time, more than one billion adults
and children are undernourished in both developing and
developed countries. Often these overweight and under-
nourished individuals live side by side in the same cities and
communities, a paradox that has never been observed to
this scale in the history of mankind. The projected rise of
global obesity and global hunger presents a tremendous
challenge to the health and viability of individuals and
communities.
Were mindful of the way the world is changing. How we
choose to respond to these societal challenges is critical
to the future of our business and to our planet. This is why
we are changing the way we innovate at PepsiCo.
In 2008, we expanded our global research and develop-
ment capability to address these challenges. Our network
of senior leaders includes world-renowned clinical scien-
tists and experts in science, technology, nutrition, food
science and safety, public health, epidemiology, product
development, behavioral medicine and health policy.
These experts give PepsiCo a unique understanding of
individual human physiology and the nutrition needs
of populations. These global R&D teams are developing
products rooted in rigorous, science-based nutrition
standards and produced to the highest standards of quality,
with the promise of satisfying a diverse global palette.
The hub of this work is eight regional research centers, each
focused on leveraging nutrition science and knowledge to
develop convenient foods and beverages that can improve
overall diets and positively impact health. Three centers are
located in the United States: Valhalla, N.Y.; Plano, Tex.;
and Barrington, Ill. Other centers are in Leicester, United
Kingdom; Monterrey and Mexico City, Mexico; Shanghai,
China; and New Delhi, India; with satellite centers in
Thailand, Brazil and Australia. In addition, were broadening
our open innovation efforts through new research part-
nerships with leading institutions, including: Yale University,
Dresden University, Westflische Wilhelms-Universitt
Mnster, and several universities in India.
HUMAN SUSTAINABILITY
Were introducing products with more whole grains, ber,
fruits and vegetables, and are reformulating some of
our existing products by reducing trans fats to negligible
levels while also reducing total fat, saturated fat, salt and
added sugar. Were dedicated to ensuring the integrity of
our health claims, all of which are reviewed by qualied
nutrition and regulatory experts following strict procedures
and standards.
Across our global portfolio, we are offering consumers
smaller portion sizes. In fact, in the United Kingdom,
a greater proportion of our sales come from smaller
portion sizes. Over 80% of Walkers Crisps sales are from
25 gram bags purchased in multipacks; 2% of sales are
from 50 gram bags. Our goal is to continue to develop
products that are affordable and accessible. We do not
charge a premium for our zero sugar/zero calorie varieties,
for instance.
Were helping consumers make smart choices more easily
by providing easy-to-understand nutrition labeling.
We also understand the importance of being a responsible
marketer. PepsiCo believes that industry-wide voluntary
action continues to be the best way to address our
responsibilities. We endorse the International Council of
Beverages Associations guidelines on marketing to
children a landmark industry initiative which does not
permit marketing or advertising of beverages, other than
water, fruit juice and dairy-based beverages, to children
under 12 years old.
We are committed to helping reduce the terrible burden
of hunger everywhere we do business. PepsiCo has efforts
under way to help support the United Nations Millennium
Development Goals, including the goal to eradicate
extreme poverty and hunger by 2015. In addition to
funding, we are providing experts who offer counsel in
many areasfrom product development to building
distribution networksin such countries as India, South
Africa and Nigeria. In addition, well have the opportunity
to leverage any new discoveries to create affordable
products for low-income consumers in developed coun-
tries around the world.
We know the importance of establishing partnerships
with key stakeholders to help make a positive contribution
to the worlds nutrition needs. Our leaders contribute
to initiatives led by the World Health Organization (WHO),
the National Institutes of Health, Global Alliance for
Improved Nutrition, the PanAmerican Health Organization
and the Alliance for a Healthier Generation. For example,
we are among the nine leading food and beverage com-
panies to commit to the goals of the Global Commitment
to Action on the Global Strategy on Diet, Physical Activity
and Health and to report on our progress, annually,
at the World Health Assembly. We intend to continue
measuring and reporting on our progress so that our
consumers and other industry leaders can share in the
lessons were learning.
At PepsiCo, were privileged to use the lessons gained
from our global vantage point not only to improve
our business, but to contribute to our common goal of
nding solutions to some of the worlds most persistent
social challenges.
Every serving of
SunBites contains more
than one-third of the
suggested daily amount
of whole grains.
Members of the Walkers R&D team focus on science-based nutrition
standards as they develop food and beverage products at the state-of-the-
art Beaumont Park research and development facility in Leicester, U.K.
Weve acquired
a stake in
JSC Lebedyansky,
the worlds
sixth largest juice
manufacturer.
Our Management
PepsiCo continues to evolve its approach to systematically
obtaining policy and scientic advice. An intensive review
of PepsiCos external health and wellness advisory structure
was completed in late 2008 by the University of Torontos
McLaughlin-Rotman Centre for Global Health and Director of
Ethics and Policy. Based on its recommendation, PepsiCo is
rening its approach to policy, science and bioethics as follows:
The PepsiCo Blue Ribbon Advisory Board (BRAB) will be
reshaped in 2009 to become the PepsiCo Policy Advisory
Committee. Reporting to and appointed by the CEO, it
provides high-level policy advice that is global in scope and
addresses the diversity of health and environmental issues that
impinge on PepsiCos work. Complementary policy advisory
committees now exist in all regions and in most major markets
and focus on issues of direct relevance to their regions. The
regional committees report to the president of the regional
and/or national business and will be represented in an annual
global meeting to assure coherence of approaches.
In addition to our Human Sustainability Leadership Team, led
by our CSO and leaders from R&D, Global Nutrition, Public
Policy, Legal, Communications and Marketing, the Board of
Directors, PepsiCos chairman and senior executive leaders are
informed on health and wellness initiatives and issues on a
quarterly basis.
Divisions of PepsiCo also leverage experts to help promote
science-based understanding of food and beverage choices
and their impact on health. For example: the Quaker/Tropicana
Breakfast Research Institute (BRI) established in late 2006 is
now a web-based institute devoted to promoting a science-
based understanding of the role of breakfast in the diet and
the health implications of its consumption as part of a healthy
lifestyle. The BRI is comprised of scientists prominent in their
elds, and is led by renowned cardiologist Dr. James Rippe.
> More information about the BRI
Internationally, advisory boards in China, the U.K., Mexico,
Brazil and India help to guide our efforts in health and
wellness, food safety, regulatory compliance and innovation.
The development of the Global R&D structure and
appointment of our rst CSO has led to an upgrading of
our relationships with leading academic and research-based
organizations on a global basis.
In addition to these experts, PepsiCo has created the
International Food Safety and Nutrition Network (IFSAN).
This is a global network of PepsiCo R&D and food science
professionals. They have established specic priorities and
codes of practice for PepsiCo regarding such things as food
safety policy and promotional insert policies. They also work
with outside opinion leaders and agencies to provide advice
and the PepsiCo perspective as needed.
Focus on Emerging Markets
PepsiCo focuses on keeping its brands strong and locally
relevant in all of its markets. In emerging markets, PepsiCo
has built innovation and R&D processes that have both local
relevance and a global foundation. For example, PepsiCo has
R&D centers in all the key regions of the worldMexico, the
U.K., China, Thailand and two satellite centers in Brazil and
Australia, as well as the agship R&D centers in the U.S. In
markets around the world, our R&D teams support our growth
by turning our global brands into local favorites. We work
closely with local master chefs who understand the preferred
tastes and consumption patterns of people in specic regions
and cultures. These insights then inspire us to extend our
existing brands and invent new categories and avors.
In Asia, we learned that people strongly prefer beverages that
contain natural ingredients. We responded by introducing
Pepsi Raw with pure sugar cane. We also experimented with
local avor combinations to create Tropicana Guo Bin Fen,
a new category of exotic mixed juices. This non-carbonated
beverage, available in Honey Melon & Jasmine and Orange
& Honeysuckle, became PepsiCo Internationals largest and
most successful new product in 2008, and helped us grow
our market share in Chinas major cities. The business dynamic
is similar in other Asian markets as well, where we have
reshaped our product portfolios signicantly to address local
tastes and needs.
In Latin America, we are adding capacity to our R&D centers in
Mexico and Brazil, allowing for 70% to 80% more innovation
utilization. We also launched new locally specic brands and
avors in 2008, including Passion Fruit H2Oh! in Brazil and
watermelon avored Be-Light (avored water) in Mexico.
For our fountain beverages found in select restaurant chains,
we will execute consumer trials for three new beverage
avors, Tamarind, Hibiscus and Lime. We are also increasing
acquisitions in the region to add some locally relevant brands
to our portfolio.
In Europe, we use local avors like paprika, shashlik and red
caviar. We have also developed local products; for example,
Hrusteam is a bread-like product exclusive to Russia (Russian
brand, Russian packaging, Russian avor).
Were making products that help our consumers
live active, healthy lives.
Transformin g Our Portfolio
At PepsiCo, our aim is to continually develop products that
satisfy consumers changing preferences, deliver exceptional
taste and offer greater nutritional benets. Increasingly, our
portfolio of foods and beverages are part of a diet that is more
enjoyable and supports a healthy lifestyle. Were changing
because consumers are changing and because the health of
the worlds growing population demands it. Healthier eating
is good for the well-being of our consumers and is good for
business.
Innovating New Products
As a leading innovator in the food and beverage sector, our
pipeline of products offers a diverse array of locally relevant
tastes and enhanced nutritional benets. Here are some
examples:
In Mexico, our Gamesa-Quaker business expanded its line
of portion-controlled, oat-based cookies and snacks.
In India, were making snacks with an ingredient very
familiar to the local dietlentils.
In Brazil, we expanded our offerings of baked snacks; and
weve introduced low-fat bread snacks in Chile, Puerto
Rico, Spain, Turkey, Saudi Arabia and Russia.
PepsiCo and the Whole Earth Sweetener Company
introduced a zero-calorie, all-natural sweetener derived
from the stevia plant. Its called PureVia and it was
introduced in Peru in a new, nutritionally enhanced PepsiCo
beverage called SoBe Life.
Enabling a Healthy Diet
Our commitment to improving our portfolios role in a diet
includes reinforcing the basic rules of a healthy diet. This
requires making changes that improve the nutrition content of
each product. As a result, we continue to make every calorie
count by reformulating some of our existing products by
reducing trans fats to negligible levels, adding whole grains,
and reducing added sugars. For example:
In India, were using rice bran oil instead of palm oil,
reducing saturated fats by 40%.
In the United States, Tropicana Pure Premium Orange Juice
has two servings of fruit in every 8-ounce serving and offers
a juice variety with added calcium and Vitamin D.
In the United Kingdom and Europe, weve introduced
Walkers Baked and Baked Lays with 70% less total fat than
regular crisps.
In 2008, PepsiCo was the largest seller of nuts and seeds
outside the United States.
> View a list of PepsiCo products that qualify under the
school beverage guidelines
Expanding Through Strategic Acquisitions
As our business grows globally, key acquisitions have helped
us expand our offering of products with improved nutritional
proles. The focus on more nutritious offerings started with
the acquisition of Tropicana in 1998 and the 2001 merger
with Quaker Oats, including Gatorade. More recently, PepsiCo
has acquired or purchased a major stake in: JSC Lebedyansky,
Russias leading branded juice company and the worlds sixth-
largest juice manufacturer; Sandora, a leading juice company
in Ukraine; Naked Juice, a premium juice company in the
United States; Spritz International Inc., the leading maker of
sunower and pumpkin seeds in Canada; and V Water in the
United Kingdom.
Promoting Active, Healthy Lifestyles
We support programs that use simple steps to encourage
people to get active:
In Latin America, Vive Saludable Escuelas is a proven
initiative that teaches children how to add physical activity
to their daily lives. A physical education routine, designed
by Mexicos Sports Commission, is being used by teachers
in participating schools. To date, the program has touched
more than one million children in 4,000 schools.
In India, our Get Active program reaches 70,000 students
in 120 schools and promotes an active lifestyle through an
energy balance curriculum.
In the U.S., we continue to work with the YMCA, the
largest provider of tness programs, to support Activate
America, a public health initiative that helps make healthy
living a reality for millions of Americans.
In Poland, we have collaborated with several multi-national
food corporations and the Polish Government on a Keep
Fit program for teens.
In Canada, were working with the Canadian Association
for Health, Physical Education, Recreation, and Dance to
support a national initiative to educate children on simple
ways to be more active and eat more healthfully.
In South Africa, our Simba business supports physical
activity and energy balance for a healthy lifestyle for
children through its Ready, Steady, Go program at schools.
In China, PepsiCo introduced a Sports and Music promotion
to encourage people to participate in sports, and the U.S.-
based Gatorade Sport Science Institute established a branch
in China to help Chinese athletes improve performance
through scientic research.
Helping Consumers Make Better Choices with
Nutrition Labeling
We care about the health of consumers. We want them to
enjoy our products and we want to help make healthful food
choices the easier choice.
raonuc1 tAaetNo
PepsiCo is committed to providing safe, wholesome products
and to protecting equity in our brands, trademarks and
goodwill. Our business divisions have implemented policies
related to food safety, labeling, product integrity and quality.
PepsiCo complies with all legally required nutrition labeling.
Our policies cover food safety, sanitation, recalls and allergens,
and require that our products are coded, labeled, identiable,
and traceable. PepsiCo is in full compliance with required
nutrition labeling and has voluntarily led the industry in full
container labeling on products where consumers may be
reasonably expected to eat or drink the full container on one
occasion.
Our compliance systems include website training, monitoring,
preventative measures and readiness for corrective action.
We have regular management reviews of our procedures and
activities regarding our products.
On a global basis, we label all ingredient information on the
back of the product package and provide any other relevant
nutrition information in compliance with local country
guidelines. PepsiCo is committed to providing clear and useful
nutrition labeling that helps consumers make nutritionally
informed choices.
A key way we do this is through our own nutrition labeling.
In the U.S., we were the rst in the industry to introduce a
symbol that makes it easier for consumers to identify which of
our products contribute to a healthier lifestyle. Our Smart Spot
symbolthe symbol of Smart Choices Made Easyis a simple
labeling system that explains why each product is a smart
choice.
PepsiCo is also a founding member of the U.S. Keystone Food
and Nutrition Roundtable, a multi-stakeholder group that
seeks to drive improvements in the American diet.
The Keystone Roundtable is a consensus forum of industry,
academia, the public health community and government,
working collaboratively to create an easy-to-understand and
uniform front-of-pack nutrition labeling program to help
consumers make healthier choices among all packaged food
and beverages products in the U.S.
In Europe, we introduced front-of-pack nutritional labeling
across our brands in partnership with other food and beverage
companies. The labels help consumers understand the
percentage of the Guideline Daily Amount (GDA) of calories,
sugars, saturates, fat and salt contained in a portion of food or
drink. By year-end 2008, 100 percent of our snacks, foods, and
beverages carried the GDA labeling on pack in the EU.
Daily Intake Guide (percent DI labeling) has been voluntarily
introduced for our carbonated beverages, multi-pack snacks
and larger sharing packs as part of the industry-wide food
labeling changes in Australia and New Zealand. This labeling
gives information on the calories and content of a range of key
nutrients per serving to assist consumers in making informed
food and beverage choices. It was rolled out across the entire
product range in Australia and New Zealand.
One of the ve Vive Saludable strategic pillars is the
responsible selling and marketing of our products and the
promotion of healthy lifestyles among consumers. This includes
the clear and responsible labeling of ingredients and health
benets, the creation of an icon system to communicate and
educate consumers on nutrition benets, ensuring responsible
communication and publicity of the health/ nutrition benets
of our products, and promoting active lifestyles and healthy
eating among schools and consumers. The following countries
currently have products with the Vive Saludable logo: Mexico,
Guatemala, El Salvador, Honduras, Nicaragua, Panama, Chile,
Argentina, Ecuador, and Peru.
On a global basis, we label all ingredient information on the
back of the product package and provide any other relevant
nutrition information in compliance with local country
guidelines.
Engaging in Responsible Marketing and
Advertising
We understand the importance of being a responsible
marketer. We believe that industry-wide voluntary action
continues to be the best way to address our responsibilities.
PepsiCo recognizes that, as a multinational food and beverage
company with global brands that touch millions of consumers
every day, our communications carry a special responsibility.
We are committed to responsible marketing practices,
including changing the balance of foods and beverages
advertised to children. We are also committed to ensuring that
healthy choices are offered in schools. We believe this will help
children, parents, and schools make their dietary choices that
support a healthy lifestyle.
PepsiCo has already made several global, national, and sector-
driven commitments regarding responsible marketing to
children and product placement in schools.
We announced our full support of the International Council of
Beverages Associations guidelines on marketing to childrena
landmark initiative supported by industry. The guidelines
permit no marketing or advertising of beverages,, other than
water, fruit juice and dairy-based beverages,, to children under
12 years old. The guidelines were fully implemented on a
global basis by January 2009. We were a founding member
of a voluntary U.S. food and beverage industry initiative that
redened how the industry markets products to children under
12. Today, 100% of our advertising to children is devoted
exclusively to products that meet dened nutrition criteria or
provide a functional benet. We have committed to similar
guidelines in Canada, the European Union, Mexico, Thailand,
South Africa, Australia and New Zealand.
Our global marketing policy is just the beginning of an
ongoing effort to expand the commitment toward responsible
marketing globally. PepsiCo has joined the food and beverage
industry in adopting Pledges in Australia, Canada, the EU,
South Africa, Thailand and the U.S., and work is under way
to introduce similar pledge programs and/or self-regulatory
initiatives in other countries and regions, including Brazil,
Russia, Turkey, the Middle East, China, South Africa, the
Philippines, and Latin America.
PepsiCo has a long-standing policy on the kinds of television
programs that can carry our advertising messages. Were
committed to high standards in all our advertising, including
the environment in which our advertising appears. We avoid
advertising during excessively violent programs, programs
that may be distasteful as judged by contemporary society,
and those that may be offensive to large groups of people.
We also attempt to avoid programs containing material
inconsistent with or adverse to our products. We seek to avoid
programs featuring exceptionally controversial or potentially
inammatory discussions. Children are a special audience, and
we take particular care in developing marketing practices and
evaluating programs that carry messages to children.
We joined with the Alliance for a Healthier Generation and
other leaders in the U.S. food and beverage industries to adopt
voluntary guidelines for the products we offer to grade schools
in the U.S. As part of the commitment, we agreed to remove
full-calorie soft drinks from K-12 schools over three years.
Since 2004, we have seen a nearly 60% drop in the calories of
beverages shipped to these schools. We are the only food and
beverage company to have signed both a beverage and snacks
agreement for U.S. schools.
Weve introduced
Baked Walkers and
Baked Lays with
70%
less total fat than regular
crisps, in the United
Kingdom and Europe.
In the United States,
Tropicana orange juice
varieties include added
calcium and vitamin D.
Weve introduced
low-fat bread snacks
in Chile, Puerto Rico,
Spain, Turkey, Saudi
Arabia and Russia.
Weve introduced a line
of more healthful snacks
in Mexico including
Stila bars, made with
oats and real fruit.
Sabra hummus provides a
healthier snack with zero
trans fat and zero
cholesterol per serving.
Old Fashioned Quaker
Oats is made with
100%
natural whole grain
oats and can help
reduce cholesterol.
Partnering for Change
We proactively lead and engage in private-public partnerships
with key external experts and stakeholders in the global health
policy and science/nutrition communities to help improve diets
and deliver substantial improvements in our products. Our
leaders actively participate in global health policy initiatives
including those led by the World Health Organization,
the National Institutes of Health, Wellcome Trust, the Pan
American Health Organization and the Alliance for a Healthier
Generation, among others.
We are among nine leading food and beverage companies
to sign the Global Commitment to Action on the Global
Strategy on Diet, Physical Activity and Health, a commitment
addressed to the World Health Organization. We agreed to
ve key global commitments to action that will take place over
the next ve years. We will report our progress in delivering
these goals at the annual World Health Assembly meeting.
We also support the Global Alliance for Improved Nutrition
(GAIN), a Swiss foundation that seeks to ght malnutrition by
mobilizing partners to deliver improved nutrition to vulnerable
populations.
In the U.S., were working with the American Dietetic
Association, the nations largest organization of food and
nutrition professionals, to develop educational programs
and engage in frequent dialogues that will make a positive
difference in public health through improved product choices
and adoption of active lifestyles.
PepsiCo also calls upon the strategic and practical insights of
our health and wellness advisory boards comprised of top
science, nutrition and policy experts in the U.K., U.S., and
Brazil, among other countries.
Leaving a Positive Footprint on Society
The PepsiCo Foundations investment strategy in the global
health portfolio is to protect and make available proper,
nutritious food,; improve complete health,; and increase
health-promoting behaviors through proper nutrition and
energy balance.
sAve 1ue cutnaeN
Save the Children became one of PepsiCo Foundations newest
grantees within the global health portfolio in November 2008
with a $5 million grant for a program aimed at decreasing
newborn and child mortality and malnutrition in India
and Bangladesh. Save the Children proposes to work with
community health educators to provide thousands of families
among these countries poorest with important information
about health, nutrition, water, sanitation, and hygiene. The
combined global resources of PepsiCo Foundation and Save
the Children will help make a profound difference in the lives
of 650,000 children under the age of ve, along with mothers
and pregnant and lactating women in these two countries.
oxroan ueAt1u AttANce
The Oxford Health Alliance is a global organization that
works to reduce the burden of chronic diseases in the United
Kingdom, Mexico, China and India. Working with the PepsiCo
Foundation, the Community Interventions for Health program
was implemented to reduce chronic disease by targeting three
risk factors: diet, physical activity level and tobacco use.
rAmtv ueAt1u setr-emroweameN1 raoec1
The University of Florida and its Family Health Self-
Empowerment Project is a multiyear research and intervention
program that investigates approaches to reduce the incidence
of obesity in low-income and ethnic families.
woatn roon raooaAmme (wrr)
Working with the PepsiCo Foundation Service Corps, this
project will enhance the humanitarian aid capabilities of WFP
and leverage the core competencies of PepsiCo in line with
Performance with Purpose. The program will work to identify
where PepsiCo?s performance culture and supply chain
expertise can be applied to WFP logistical operations and
will provide enhanced tools, metrics and training to facilitate
this. As a result, WFP will be able to provide better and more
efcient assistance to those at greatest risk of hunger and
hunger-related diseases due to extreme poverty and natural
and man-made disasters around the world.
Healthy Food, Healthy Moves: Chicago Communities in
Schools and the Consortium to Lower Obesity in Chicago
Children (CLOCC) are collaborating on the Healthy Food,
Healthy Moves: Inform Chicago initiative to test and deliver
a health promotion program in six Chicago schools. The
three-year pilot project has mobilized a broad network of
community organizations, government ofcials, educators,
public health professionals and families in a citywide effort to
raise awareness of how to achieve healthy lifestyles.
Food Safety, Genetically Modied Ingredients
and Organic Foods
roon sAre1v
PepsiCo, like many consumer product goods companies,
sources ingredients from around the globe to ensure that we
use the freshest, best tasting, and highest quality ingredients
available for our products. Food safety is at the top of our
priority list as we select these materials, and we have an
excellent record in providing safe, wholesome and nutritious
products to our consumers. To ensure that PepsiCo provides
safe products with the highest quality, we only use foods,
ingredients, and packaging materials that have been deemed
safe by scientic consensus and regulatory review. The health
and safety of our consumers is of the highest importance to
us.
PepsiCo shares and actively supports its customers interests
in food safety, and believes customers have a right to relevant
information about the food they buy so that they can make
informed purchasing decisions. PepsiCo, however, believes
that the U.S. Food and Drug Administration, and other
national and international regulatory authorities who are
charged with protecting the health and safety of the public
and the environment, are the proper entities, rather than a
manufacturer like PepsiCo, to evaluate and make judgments
about the labeling and sale of genetically engineered products.
PepsiCo takes its lead from national and international food-
safety and regulatory authorities, and supports their efforts to
take whatever steps are necessary, based on sound scientic
principles, to ensure that any new food technology is safe for
consumers and the environment. While maintaining our own
high internal food safety standards, PepsiCo complies with all
government food labeling regulations.
oeNe1cAttv monren NoaeneN1s
PepsiCo is dedicated to producing the highest quality, greatest
tasting food and beverage products in every part of the world.
PepsiCo ensures all products meet or exceed stringent safety
and quality standards and uses only ingredients that are
safe and approved by applicable government and regulatory
authorities. Approval of genetically modied foods differs from
country to country regarding both use and labeling. For this
reason, PepsiCo adheres to all relevant regulatory requirements
regarding the use of genetically modied food crops and food
ingredients within the countries in which it operates. Where
legally approved, individual business units may choose to use
or not use genetically modied ingredients based on regional
preferences.
oaoANc roons
In North America, PepsiCo currently offers certied organic
products from Quaker. Two varieties of Quaker Instant
Oatmeal are certied organic. Organic Quaker Instant Oatmeal
is made with at least 95% organically produced ingredients.
Every ingredient in the Maple & Brown Sugar Quaker Organic
Instant Oatmeal is natural, and is designated 100% Natural.
Certication follows the USDA certication program known as
the National Organics Program (NOP) and follows the National
Organics Standards (NOS), established in October 2002. All
PepsiCo certied organic products are certied by the USDA-
accredited certier Oregon Tilth.
Consumer and Customer Relations
PepsiCo serves the needs of two important groups:
The consumers who purchase and consume our products
The retailer and bottler customers who purchase and resell
these items
PepsiCo has several methods in place for measuring and
improving consumer and customer relations.
coNsumeas
Consumers are a key stakeholder for our business. All PepsiCo
divisions conduct regular qualitative and quantitative research
to understand our consumers needs. Our North America
divisions conduct over 100 custom and standard studies per
year. These studies range from small focus groups (to learn
from individual consumers), to telephone or online surveys (to
gain statistically signicant insights). Consumer insights are
translated into product improvements, new product ideas, and
communication tactics.
In the U.S., our packages carry a toll-free number and web
address to allow consumers easy access to PepsiCo if they have
questions or comments regarding the company or one of its
products. Each business has a Consumer Relations Department
that serves as the rst point of contact for all communications
and correspondence received from our consumers. Should
consumers need to contact us after hours, they can dial our
toll-free number and a message will be activated offering
them an emergency line number. A special team of Consumer
Relations professionals are available 24 hours a day, 7 days a
week; and they can be contacted through our emergency line
and will immediately return a call to a consumer or one of our
eld representatives.
In 2008, PepsiCo call centers measured consumer satisfaction
and service levels across all of their North America businesses.
The tools used covered a range of key consumer metrics
including response rate, representative knowledge/
professionalism, satisfaction with resolution, service level, and
willingness to recommend products to family/friend.
For example, our Pepsi-Cola Company call center operates
at an over 99% service level. This indicates that the center
answers and handles calls to the toll-free number without
hold time for over 99% of calls, well above industry standard.
When the consumer provides feedback or input via the call
center, this input is funneled to the correct business owner and
addressed as appropriate.
cus1omeas
PepsiCos key customers are retailers and bottlers. PepsiCo
commissions retail customer surveys that measure customer
satisfaction, including such things as target setting and
strategic planning. Dedicated PepsiCo customer teams work
across our divisions to provide the highest level of service to
our major customers. These individuals work closely to assure
that all customer feedback is understood and addressed as
quickly as possible.
In addition to the day-to-day management of customer
feedback, PepsiCo has established forums to solicit feedback.
One such forum is PepsiCos Innovation Summits, which
are held annually with our major customers. These summits
take place in the early spring to late summer and preview
innovation for the following year and beyond. Customers
are shown PepsiCos proposed new products and are
asked to provide verbal and written feedback. This feedback is forwarded to the R&D and
commercialization teams, often resulting in changes to nal product. In addition to Innovation
Summits, PepsiCo will also be conducting Supply Chain Summits with our top customers to
build a strategic agenda around in-store conditions, cost removal and sustainability.
PepsiCo has created Centers of Excellence (COEs) to ensure a high quality of customer service.
One of our most active COEs is focused on customer insights, helping to quantify and provide
innovative solutions for our customers most challenging issues, including consumer shopping
habits, macro consumption trends, and retailer competitive dynamics.
Additionally, PepsiCo has a COE dedicated to Customer Supply Chain and Logistics, and focused
on go-to-market capabilities. It addresses customer supply issues and enables rapid resolution of
situations as they occur. Ultimately, the COE enables a more exible and adaptive supply chain
for our individual retail customers. PepsiCo has also instituted a regular Supply Chain scorecard
process. The scorecard sets targets and measures results on metrics such as on-time delivery and
consistent service.
ao11tea eNoAoemeN1
In the U.S., our Pepsi-Cola businesses work closely with our independent bottlers to assure
the seamless production and delivery of our products. There are several formal processes for
soliciting bottler feedback. Strategic planning is conducted in collaboration with our largest
bottlers, as well as an annual bottler meeting which communicates Pepsis Annual Operating
Plan to the entire bottling system.
coNsumea ravAcv
Consumer privacy is important to PepsiCo, and we make every effort to ensure that consumers
understand our policies. Each division maintains its own marketing website and these are
accessible by consumers. Brand-specic websites and promotion-specic microsites are also
maintained, where consumers can voluntarily provide personal information to participate in
online programs and promotions. On each website, a privacy policy is conspicuously posted
that outlines the types of information collected by each division on that site and how the
information is used and protected. We comply with applicable laws, rules and regulations.
Also, personal information received through the Consumer Relations toll-free number is kept
condential.
Protecting our natural resources and
operating in a way that minimizes
our environmental footprint.
ENVIRONMENTAL SUSTAINABILITY
We Recognize Our Responsibility to
Minimize Our Environmental Footprint
LESLIE STARR KEATING,
Senior Vice President, Frito-Lay Operations
Every day, we rely on the earths natural resources to run our
businesses. Water is essential for all foods and our ability to
enjoy them from growing and washing to processing and
cooking. It is the primary ingredient in our beverages.
Fuels, electricity and, increasingly, other forms of energy are
indispensable to making, moving and selling our products.
As a company that is expanding across many developed and
emerging markets, we are committed to minimizing the
impact our business has on the environment with methods
that are socially responsible, scientically based and
economically sound.
Our environmental sustainability efforts are primarily focused
on water, climate change, agriculture and packaging areas
that are critical to our business and where we can make the
biggest impact. We continuously improve our environmental
programs and explore inventive solutions to the worlds
challenges, in particular water scarcity and climate change. We
look for ways to bring to scale the good ideas being imple-
mented across our global business and to share this experience
with our peers and supply chain. The following pages spotlight
initiatives taking place around the world in Mexico, India,
the U.K. and the U.S. and illustrate how we approach our
commitment to sustainability.
Our ability to improve the effectiveness of our environmental
sustainability initiatives has been strengthened by the creation
of common, enterprise-wide metrics. This is helping us to
better understand and track our comprehensive environmental
footprint and to be more transparent in our reporting.
Our goal is to reduce water consumption by 20%, electricity
consumption by 20%, and fuel consumption by 25%
per unit of production by 2015 as compared to our 2006
consumption. Weve made notable progress in all three areas.
For the rst time ever, Bureau Veritas issued a verication of
our environmental data and we are reporting our results on the
total business, rather than by operating division as in the past.
We are also keen to address other areas of opportunities,
including gathering consolidated bottler data and continuing
to embed our global sustainability strategies and goals within
all our businesses for greater consistency.
PepsiCos sustainability efforts are guided by a dedicated
Environmental Sustainability Leadership Team supported
by an Environmental Council. Sustainability teams at our
manufacturing facilities around the globe are at the front line
of our efforts. Employee volunteer Green Teams operate
at many U.S.-based businesses, including Quaker, Tropicana,
Gatorade and Frito-Lay. An Environmental Management
System framework, an Environmental Policy and external
Reduce water
consumption by
20%
Reduce fuel
consumption by
25%
Reduce electricity
consumption by
20%
audits support our efforts, ensuring that we are continually
reaching for more ambitious goals.
2007
2008 13.6
9.20
8.20
3.90
WATER EFFICIENCY IMPROVEMENT
in %
as compared to 2006 base year
Beverages Foods
2007
2008 3.80
3.70
2.70
1.00
ELECTRIC EFFICIENCY IMPROVEMENT
in %
Beverages Foods
2007
2008 13.6
10.4
5.20
2.80
FUEL EFFICIENCY IMPROVEMENT
in %
Beverages Foods

In addition to our own efforts, we consistently rely on
partnerships that help us address the worlds environmental
challenges. These relationships with a range of external
stakeholders provide us with additional insights, expertise
and knowledge on multiple aspects of sustainability. We will
continue to actively lead and engage in key private-public
partnerships to spur collaborative action and solutions that
address the urgency of these issues.
Water: At PepsiCo, we are committed to minimizing our
water use through greater efciency across our operations
and to ensuring that we source our water in ways that do
not cause damage to local communities and ecosystems.
Working closely with our suppliers, we are nding new ways
to further reduce their water usage and to help avoid water
conict with local communities.
PepsiCo also collaborates with corporate peers to ensure that
we are doing more, collectively, to reduce our impact on the
environment. In 2008, Indra Nooyi, our chairman and chief
executive ofcer, joined select global leaders as a signatory
to the United Nations CEO Water Mandate and we are
actively involved in supporting all elements of the mandate.
Through the work of The PepsiCo Foundation, we continue
to invest in sustainable water resource management
methods, which positively impact both quantity and quality
of water supply. Since 2005, the Foundation and PepsiCo
Corporate Contributions have committed more than
$15 million to organizations working to bring safe water
to developing countries.
Climate Change: We are working hard to reduce our use
of energy and transform our businesses by replacing our
existing use of oil, gas and fossil fuels in manufacturing with
renewable energy sources.
We are actively moving towards having all our new facilities
meet the U.S. Green Building Councils (USGBC) Leadership
in Energy and Environmental Design (LEED) standards one
of the worlds most rigorous standards for green building.
In an industry-leading move, we introduced our Sustainable
Engineering Guidelines (SEG) based on LEED standards.
These guidelines ensure our buildings are constructed to
environmentally sustainable standards and apply to all new
construction as well as major remodels of existing buildings
globally, where practical.
By consistently making our manufacturing operations more
environmentally responsible, we are also making them
more economically efcient through our water and energy
conservation processes and teams. For example, the Frito-Lay
plant in Modesto, Calif., installed a solar energy generating
system that powers the daily production of thousands
of bags of SunChips multigrain snacks. In Casa Grande, Ariz.,
our teams are working toward the goal of taking the Frito-Lay
plant there off the power grid, or nearly so, and running
it almost entirely on renewable fuels and recycled water.
Agriculture: Guided by our Global Sustainable Agriculture
Policy, PepsiCo is working across the agricultural supply
chain to ensure our practices are efcient and sustainable.
Continuous benchmarking against our industry peers
ensures we are adopting best practices including water
savings techniques, waste reuse, soil protection and chemical
use throughout the diverse aspects of our business.
One of the most exciting developments in our environmental
sustainability efforts has been on the packaging front. In 2008,
we introduced a new half-liter bottle for our Aquana
avored waters, Lipton Iced Teas, and Tropicana juice drinks.
The new bottle contains 20% less plastic than the previous
bottle and its label is 10% smaller than before. These innova-
tions are taking nearly 6 million kilograms of packaging out of
the system each year and reducing greenhouse gas emissions
by 18,000 metric tons annually. Thats equivalent to taking
3,350 cars off the road annually.
Our goal is to design and develop packaging systems that are
environmentally responsible throughout their entire life cycle.
We want to inspire consumers who are seeking ways to live
more environmentally sustainable lives by promoting recycling.
In addition, we want to partner with leading organizations to
promote sustainable packaging and recycling practices. Most
recently, we have launched a global sustainable packaging
policy and formed a Sustainable Packaging Council to further
our efforts in this area.
PepsiCos commitment to environmental sustainability a
key plank of our Performance with Purpose mission is part
of how we do business every day. The steps weve taken to
minimize our impact and institute more robust, enterprise-
wide processes to better track, manage and understand our
environmental footprint are helping us to do better each
day. With the expert knowledge, world-class skills and
breakthrough technology that empower our environmental
teams across the globe, Im condent that this will lead to
continuous progress.
Our Environmental Policy
PepsiCos Environmental Policy applies to all our operations.
PepsiCo monitors company-owned operations and joint
ventures where we hold a majority share. We encourage our
suppliers, service providers, bottlers and other partners to
adhere to the policy.
> View PepsiCos Environmental Policy
PepsiCos Corporate Environmental Policy is a statement of
the companys commitment to being an environmentally
responsible corporate citizen in all aspects of our business.
The policy expresses principles that form the foundation of
our commitment to environmental stewardship at all levels
within PepsiCo. This includes the commitment to implement
and maintain an Environmental Management System,
identication and management of environmental risk, and
application of formal governance and auditing processes
to our environmental programs and systems to ascertain
compliance with regulations and company standards.
The policy also expresses our commitment: to implement
resource conservation, environmental best practices, and
use of technology and innovation to minimize the potential
environmental impacts of our business; to set goals and
establish metrics to monitor continuous improvement in
environmental performance; to work with stakeholders up
and down our supply chain to reduce environmental impacts
of our products throughout their life cycle; and to review our
performance in implementing our policy.
Our Management
Environmental performance leadership is the responsibility
of PepsiCos executive supply-chain heads of our operations:
Frito-Lay North America, Quaker, Tropicana, Gatorade, Pepsi-
Cola North America (including working with our bottlers) and
PepsiCo International. These leaders head our Environmental
Sustainability Leadership Team (ESLT), formed in 2007. The
ESLT includes senior executives from all functions to make sure
that environmental impacts are considered in all areas of the
business.
The ESLT charter includes the following:
Create and maintain PepsiCos environmental sustainability
strategy.
Develop, administer and maintain PepsiCo-wide policies on
matters of environmental sustainability.
Develop goals and timelines for PepsiCo environmental
performance.
Assess the gaps and strengths of performance relative to
our aspirations and external benchmarks.
Provide support to divisions in improving PepsiCos long-
term environmental sustainability performance.
Advise and inform the Chairman and CEO, the PepsiCo
Executive Committee and the Board of Directors on matters
of environmental sustainability.
The ESLT is supported by the Environmental Council (EC). The
EC is made up of environmental experts from all areas of our
business, including resource conservation program managers
and environmental compliance managers.
The ECs mission is to provide subject matter expertise
within and across the divisions, and it supports the ESLT to
ensure that we have a strategic environmental sustainability
vision for PepsiCo; uniform system-wide metrics, standards,
and practices;, sensible environmental goals; and accurate
reporting to internal and external stakeholders. In addition
to driving greater efciencies in our use of natural resources
and identifying ways to address water scarcity issues, the EC
is focused on the implementation of a global Environmental
Management Information System (EMIS) to standardize
and consolidate our existing environmental management
software into a single, enterprise-wide solution to provide
common tools and processes for environmental data capture
and reporting, and to ensure that key compliance and
environmental performance metrics and parameters are
effectively measured and managed within our Environmental
Management System (EMS).
To leverage best practices across Environment and Health
and Safety, the PepsiCo Health and Safety Leadership Council
(HSLC) and the Environmental Council both report to the
PepsiCo senior vice presidents of Supply Chain.
In addition, Pepsi Beverage North America has a Bottler
Sustainability Team. Their mission is to advance environmental
sustainability in Pepsi Colas bottling operations through:
Dened and consistent measures: data collection,
benchmarking and reporting with PepsiCo
Setting and achieving goals
Driving continuous improvement
Sharing best practices
Each division is held responsible for implementing
environmental programs, training associates and tracking,
monitoring, correcting and improving environmental aspects
of its business.
moN1oaNo
In 2005, the PepsiCo Environmental Management System
(EMS) framework was rst developed with the help of an
independent third party. Since this time, we have reviewed
our performance and strategy, and in 2008 we expanded the
framework to encompass the environment, health, and safety.
We call this 12-element framework the PepsiCo Environmental,
Health & Safety Management System (EHSMS).
Key features of the PepsiCo EHSMS framework include:
A risk-based management approach
Documented systems that capture and maintain
institutional knowledge
Objectives and targets for continuous improvement
Integration of environmental, health and safety
considerations into core business processes
Routine performance monitoring and internal management
reporting
The EHSMS framework is built along the lines of ISO 14001
and OHSAS 18001. Twenty-one PepsiCo International facilities
are ISO 14001 certied, including nine in the United Kingdom.
Company-owned facilities or joint ventures with PepsiCo
management control implement the PepsiCo EHSMS, which
aligns with ISO 14001 and OHSAS 18001. We have a total of
39 facilities that have been externally accredited to ISO 14001.
We estimate that more than 90% of PepsiCo International
manufacturing facilities receive environmental management
system audits by internal or external auditors.
cAr1At exreNn1uae rt1ea
PepsiCo incorporates sustainability criteria into our Capital
Expenditure Filter (CapEx Filter), and we are using it on all
capital expenditure requests over $5 million. Each request must
include a review of the sustainability issues and opportunities
surrounding the request. The goal is to incorporate
sustainability aspects into projects right from the start and
track sustainability-related capital spending across PepsiCo.
This process is expected to help drive continued improvement.
enucA1oN ANn AwAaeNesseNoAoNo emrtovees
We are committed to educating our associates on the
importance of environmental sustainability. In addition to
regular training of environmental personnel, we conduct
special events at which new ideas are shared.
In May 2008, PepsiCo introduced the Sustainable Engineering
Guidelines, which are meant to support overall implementation
of our environmental sustainability design principles
throughout the engineering process, and to improve efciency
in the use of natural resources. The Sustainable Engineering
Guidelines can be accessed through a website available to all
PepsiCo employees and key partners worldwide. We also offer
workshops on ReCon, our global eco-efciency strategy for
resource conservation within our operations, to our engineers,
facility operations teams, bottlers and co-packers around the
world.
Environmental sustainability is shared with all our associates
through special activities to mark events such as Earth Day and
World Water Week. Environmental information is also included
in our daily e-newsletter. Our PepsiCo Americas Beverages
businesses have quarterly employee e-newsletters dedicated to
sharing environmental sustainability initiatives and projects in
the region as well as showcasing best practices.
In 2008, U.S. employees were offered Chronos, an e-learning
tutorial designed to help associates understand the landscape
of sustainability and the business case for sustainable
development. It was created through a partnership with the
World Business Council on Sustainable Development (WBCSD)
and the University of Cambridge, U.K..
oaeeN 1eAms
Frito-Lay North America maintains a dedicated team of
experts across our manufacturing facilities focused on
reducing consumption of electricity, fuels, and water. Through
GreenTeams made up of groups of volunteer employees,
more than 12,000 manufacturing associates have been trained
to improve their environmental awareness and to understand
how they can do their jobs without adversely impacting the
environment.
Quaker, Tropicana, and Gatorade have established PepsiCo
Green Chicago, an overarching environmental sustainability
initiative to raise employee awareness and create actionable
tactics to improve the business and each associates personal
environmental footprint. The focus is to raise awareness, incite
action and institutionalize sustainability improvement efforts
across PepsiCo. In September 2008, our headquarters building
in Chicago opened a company-rst Sustainability Center,
dedicated to Performance with Purpose. The Center, designed
to Platinum LEED Commercial Interior standards, is used to
educate and inform employees about PepsiCo sustainability
initiatives, business progress and personal actions they can
take at home to reduce their footprint.
PepsiCo workers in Punjab, India, tend to rice elds that were planted using the direct
seeding method, a unique and highly water-efcient approach to rice cultivation.
Rice is Indias largest grain
crop, and uses the
bulk of fresh water used
in Indian agriculture.
In 2008,
direct seeding was
extended to more than
1,000 acres
in ve states and
saved close to
1 billion
liters of water
Water use in
manufacturing was
reduced by over
55%
and in the last three years
we saved more than
2.5
billion liters of water
Water
Pioneering Initiatives to Achieve Positive Water
Balance
Water is required to make our products, so that we maintain
the highest quality standards for consumersand water
is required to ensure a clean and safe workplace for our
employees and our suppliers. In turn, efcient use of water
across our operations is nothing short of imperative. We are
committed to minimizing our global water use through greater
efciency, innovative processes and new technologies.
In 2008, we conserved more than 7.5 billion liters of water as
a result of gains in water efciency from the 2006 baseline.
And while using water responsibly is a top priority, we also
believe in our ability to help address the broader challenge
of water scarcity and to help avoid water conicts in local
communities.
In India, all industry accounts for about 6% of total water use.
Within that 6%, the soft drinks and bottled water industry
accounts for about four-hundredths of 1%. In comparison,
agriculture accounts for over 80% of total fresh water use
in the country. To have signicant impact on total water
conservation, farming must use water more efciently. We
believe we can play an important role in providing solutions.
In 2003, our India team embarked on an ambitious journey
to achieve positive water balancegiving back as much as
we take. Through a comprehensive program to conserve and
optimize water usage, we have pioneered major initiatives
by partnering with farmers, working with numerous rural
communities and establishing private-public partnerships
with Punjab Agriculture University and The Energy Resources
Institute (TERI). We have carried out a variety of innovative
reuse and recycling initiatives within our own operations;
raised farm productivity, which increased farmers incomes;
and improved the quality of life in many communities. These
initiatives, among others, will help us make signicant progress
toward positive water balance in 2009.
In the last ve years, our India manufacturing team has
reduced water use by more than 55% and in the last three
years, we have saved more than 2.5 billion liters of water
through conservation efforts. We have also prevented
depletion of ground water aquifers by constructing rainwater
harvesting systems in most of our plants.
One of the most effective initiatives is our work with farmers
to reduce water intensity in rice cultivation through a method
called direct seeding. Our India team has become a leading
proponent of direct seeding of rice (versus transplanting
seedlings from nurseries to paddies that are then ooded).
While direct seeding of rice is done in some countries, it is not
widely practiced in India.
In India, PepsiCo has been experimenting with direct seeding
for four yearstesting methods to improve yield and reduce
weed growth and even developing a tractor-mounted direct
seeding machine, adjustable for seed variety, planting depth
and plant-to-plant spacing.
After carrying out initial direct seeding trials at our own model
farms, pilot tests have been run in farmers elds to conrm
the results. In 2008, direct seeding was extended to more
than 1,000 acres in ve states and the initiative saved close
to 1 billion liters of water. In addition to saving water, it also
reduced costs by 1,400 rupees per acre for farmers.
Direct seeding will go a long way in enabling our India team
to achieve positive water balance for our beverage business
by 2009. More important, it has the potential to dramatically
reduce water usage in a country where water is an increasingly
precious commodity.
This single initiative is an example of both climate change
mitigation and adaptation. We are mitigating our impacts
on climate change by using signicantly less resources,
and helping our farm communities adapt to the changing
environment.
In India, PepsiCo has been experimenting with direct seeding, one of
the most effective ways to reduce water use in rice cultivation. Shown here is a
direct seeding machine, adjustable for seed variety, planting depth
and plant-to-plant spacing.
Conserving Water in Our Operations
One of the most important elements of sustainable water
conservation is in-plant water conservation. To formalize
this in our manufacturing facilities and embed conservation
practices into the day-to-day operations of the plant, we have
developed the water component of our successful Energy
Resource Conservation (ReCon) tool. Like the energy tool, the
water tool includes a PC- or web-based diagnostic, with audit
guidance and solution sets. With this tool, the manufacturing
facility can conduct a self-audit of its water management
practices. To complement the Water ReCon tool, we have
developed a Water Proler, which will map and quantify all
major water uses within the facility, identify relative local
costs of these applications, and identify a hot list of water
conservation measures that can be implemented both short
and long term. We estimate that, in general, application of
the Water ReCon Tool in a plant will result in a 10- to 20%
reduction in water use. The tool is now being expanded to our
franchise bottler network and our co-packer partners.
Weve instituted a number of other technological
improvements in our global manufacturing operations to save
water:
In the U.K., our total water use across all our foods and snacks
operations was 1.4 billion liters in 2008. Between 2001 and
2008, we reduced the water used to manufacture Walkers
Crisps by nearly 60%, from 13 L/KG of production to 5.4 L/KG.
The Walkers team developed engineering solutions to reduce
equipment water use and created sources for recycled water.
Frito-Lay, the U.S. snack division of PepsiCo, continued to
improve its water efciency by conserving over 380 million
gallons (1 billion liters) of water in 2008 as compared to 2006;
through its continued water conservation efforts known as the
Gallon per Pound Challenge, Frito-Lay won recognition from
the Environmental Protection Agency as a Water Efciency
Leader in 2007.
In 2008, our Latin American operations participated in the
Inter-American Water Day, an awareness campaign aimed at
raising awareness of the growing scarcity of potable water
in the region and the importance of water conservation. The
program also had a volunteering component where PepsiCo
employees visited schools to teach children about water
conservation.
In addition, in 2008, Latin American Beverages manufacturing
operations saved 28 million liters of water, both in company-
owned and franchise business. As part of the same initiative,
we also saved 31,415 MWhr of electricity in our Latin America
Beverage manufacturing operations.
In 2008, PepsiCo reinforced its commitment to science and the
environment through water conservation by using waterless
rinsing technology at Gatorades U.S. plants. Using air rinsing
on all of our Gatorade and Propel lines, the water savings are
more than 5 million liters of water per year.
Pepsi-Cola franchise bottlers in North America are also doing
their part. Pepsi Bottling Group has installed reverse osmosis
recovery systems or incorporated high recovery designs
into their new manufacturing lines that cumulatively save
more than 1 billion liters of water annually as compared to
traditional designs.
How We Source Water
Across PepsiCo, we have a variety of standardized processes
and procedures to assure the safety of our consumers,
integrity of our products and respect for the environment and
community around us. For new sites, each of our businesses
applies the elements of an environmental site assessment,
similar to the American Society for Testing and Materials
(ASTM) Standards for Environmental Site Assessments.
With specic regard to water sources, we utilize a mixture of
municipal supplies, which may be from surface or groundwater
sources and private wells. In addition, water resource selection
at new sites is included in a PepsiCo-wide, web-based tool
called the PepsiCo Sustainable Engineering Guidelines. This
pan-enterprise effort captures all critical areas of new facility
construction and provides solution sets for the user who
encounters water-related or other risks. In addition, the tTool
provides a fast-track path to LEED certication.
PepsiCo was a full supporter and advisory board member in
the development of a Water Resource Assessment Tool by the
World Business Council for Sustainable Development (WBCSD)
in conjunction with a globally recognized environmental
consulting rm. This tool was launched to global acclaim in
Stockholm in 2007 and updated in 2009. This risk mapping
and management tool provides an assessment of relative
water availability (abundance, stress, scarcity) for any physical
location coordinates entered, in addition to a wealth of other
water-related information.
To the best of our knowledge, this was the rst comprehensive
tool of its kind that was entered into the public domain
completely free of chargefor use by any and all business
sectors, governments, NGOs, and other stakeholders. We
are currently mapping all PepsiCo facilities across the world,
and both current and projected risk of water stress are being
identied and evaluated by a doctoral level, dedicated senior
manager of water stewardship. In addition, this high-level
assessment will be cascaded to our eld operations for the
next level of watershed risk assessment at the local level.
Water Quality
Our U.S. facilities are primarily supplied by municipal water
sources. As such, these sources comply with all applicable
water quality requirements and provide Consumer Condence
Reports (CCR), which detail the water quality being provided
to the consumer as it compares to compliance with EPA quality
requirements. The water quality data is available from the
municipal water purveyors whether the purchaser is PepsiCo,
one of our franchise partners, or a home consumer.
Similarly, outside the United States many of our plants are
supplied by water from municipal sources, and the same
approach would apply. In areas of the world where we
develop our own water sources (for example, extraction from
commercial wells), we do so in full compliance with applicable
regulations concerning use of local resources. In these cases,
we work with the local authorities to assure that the quantity
of water needed to run our business, and thereby help
support the local community and economy, is consistent with
regulations and safe for the natural resource.
Where we develop our own wells to supply water from
groundwater sources, every source is tested by an approved,
external laboratory that is capable of reporting drinking water
testing results. The test protocol is based on the most current
revision of the World Health Organization Guidelines for
Drinking Water Quality, and also includes testing required by
local authorities.
Worldwide, every water source used for our beverages
must rst be analytically qualied, which includes using
government-accredited, recognized laboratories to test for a
harmonized list of over 100 parameters, covering many classes
of raw water chemical/physical constituents. In addition, the
microbial quality of the source is evaluated to help conrm
that our products will be safe. We also believe that protection
of water at the source is important; accordingly, a formal
training program is provided to all of our key beverage plant
personnel, which covers areas such as water source selection,
well construction and source protection. At every plant, the
incoming water is then further puried, using a variety of
treatments depending on the raw water characterization, to
meet the high standards of quality to be used in our products
whether these products are bottled water, carbonated
beverages or non-carbonated drinks.
In addition to source qualication, our plants monitor the
raw, in-process and treated water for a core list of parameters
and at frequencies ranging from hourly to daily to weekly
(depending on the specic parameter and application). We
have also established internal laboratories in the United States
and Europe which routinely monitor raw, treated, and bottled
water quality worldwide.
Once the water source is adequately identied for capacity and
tested for quality, conserving the amount of water used in our
plants becomes a critical component of stewardship. We seek
to minimize our impact through traditional efforts to protect
what we use. We follow the U.S. EPA guidelines (common to
other governments as well) to reduce, reuse and recycle water
whenever possible.
A1 nscuAaoe
PepsiCo recognizes that regulations vary considerably
across the globe and that some may not be adequate
from the perspective of responsible water stewardship.
Consequently, we have developed and implemented the
PepsiCo-wide Responsible Standards for Efuent, which
ensure environmentally safe, responsible treatment and
discharge of our process water waste streams across the
world. In addition to including and complying with local
regulations, these internal PepsiCo standards are also included
in the twelve-element system-wide Environmental, Health
& Safety Management System Framework (EHSMS). This
combined EHSMS framework is compatible with ISO 14001 for
Environmental Management Systems, and OHSAS 18001 for
Occupational Health and Safety Management Systems. More
than 30 PepsiCo facilities have achieved formal ISO 14001
certication, and ve have received formal certication to
OHSAS 18001.
Water is unique in that it sits squarely at the nexus of climate
change, food security, gender empowerment/education and
global health. Consequently, PepsiCo believes that we have an
obligation to positively impact the water crisis in its many
elements on several levels. The in-plant and supply chain
efforts of our global businesses must be complemented by
high-level policy advocacy, and broad-scale social investment
through smart philanthropy partnerships.
uN1en NA1oNs
PepsiCo Chairman and CEO Indra Nooyi publicly demonstrated
PepsiCos commitment to helping address the global water
crisis by joining other partners as a signatory to the United
Nations CEO Water Mandate. By signing the CEO Water
Mandate, PepsiCo has committed to adhering to a holistic
approach to water management in six areas: direct operations,
supply chain and watershed management, collective action,
public policy, community engagement and transparency.
ceN1ea roa s1aA1eoc N1eaNA1oNAt s1unes
Through the Center for Strategic International Studies,
PepsiCos Chairman and CEO, Indra Nooyi, endorsed the
Declaration on U.S. Policy and the Global Challenge of Water.
This critical document urges U.S. policy makers to publicly
recognize the role that the U.S. plays in helping to mitigate the
worldwide water crises.
woatn ecoNomc roaum (wer) wA1ea Anvsoav
oaour
The WEFs Annual Meeting in Davos, Switzerland, is
consistently a venue of global focus and represents a
formidable backdrop against which awareness can be raised
and inuential audiences can be educated. Toward the end
of 2007, PepsiCo engaged in the WEF Water Advisory Group
to develop a technical white paper on the topic of water use
in agriculture, industry and global health. The intent was to
use this as a vehicle, targeted at the 1,000+-CEO audience, to
place the global water crisis squarely at the center of attention
and debate.
woatn ausNess couNct roa sus1ANAate
nevetormeN1 (wacsn)
PepsiCo plays an active role in the WBCSDs Water Core
Working Group, which developed the WBCSD Water Resource
Risk Tool and which was launched at World Water Week in
Stockholm in August of 2007, and re-launched with a more
robust watershed database in 2009. PepsiCo subject matter
experts played a signicant role in the development of the
white paper Agricultural Ecosystems: Facts and Trends, which
highlights the myriad environmental issues where agriculture is
connected.
aeveaAoe Nnus1av eNvaoNmeN1At aouNn1Aate
(aea)
Acknowledging that conservation and stewardship efforts
within our facilities are foundational to engagement in the
environmental sustainability space, leading companies like
PepsiCo have an obligation to help inform and positively
inuence broader industry efforts as well. BIER is an example
of this broader leadership. BIER was formed in 2006 with the
mission of dening both qualitatively and quantitatively
what environmental stewardship entails. BIER consists
of peer and competitor companies across soft drink, bottled
water, brewery and distilled spirits sectors of the industry that
have aligned specic tangible deliverables to help advance the
collective industry.
woatn wA1ea nAv
In 2008, as in previous years, we were active supporters of
World Water Day. Our most visible activity was with Ethos
Water, which is a part of the PepsiCo water family. Ethos
Water has a unique business model, which includes helping
to raise awareness of the severity of the world water crisis.
PepsiCo is helping to increase the distribution of Ethos Water.
For each bottle of Ethos Water sold in the U.S. Starbucks
makes a $0.05 donation, and for each bottle sold in Canada
a C$0.10 donation, to water projects, with the goal of
contributing $10 million by the end of 2010 to help children
and their communities around the world get clean drinking
water.
1ue eNeaov ANn aesouaces Ns11u1e (1ea)
In India, we have a partnership with TERI for research and
implementation to ensure long-term availability of water
resources through interventions aimed at eco- restoration
through surface water treatment measures, articial
groundwater recharge and demand management measures,
and improvement in the quality of life of the community
by undertaking interventions in areas of water supply,
sanitation, hygiene, health, and education through community
involvement.
Leaving a Positive Footprint on
Society
Millions of people around the globe face a growing water
crisis. In order to help minimize the impact of this crisis, the
PepsiCo Foundation supports programs that protect water
sources and create better use for existing water. In the
environment portfolio, the strategic focus is on water security,
sustainable agriculture and adaptive approaches to our
changing climate. Since 2005, The PepsiCo Foundation and
PepsiCo Corporate Contributions have committed more than
$15 million to organizations working to bring safe water to
developing countries.
The Earth Institute: In 2008, The Earth Institute at Columbia
University, one of the worlds premier institutions dedicated to
global sustainable development, and the PepsiCo Foundation
entered into a $6 million, three-year partnership. The program
includes a series of high-impact, community-based activities
and practical solutions across water, agriculture and climate.
Water.org: In 2008, the PepsiCo Foundation made a $4.1
million grant to WaterPartners to provide safe drinking water
and sanitation to communities of the greatest need in India.
This grant was the biggest single contribution to Water.
orgs WaterCredit Initiative, an innovative program that uses
micronance to increase access to safe water and improve
sanitation for local communities in India. The project will
directly impact a minimum of 120,000 lives. Approximately
60,000 people will be served through traditional grants,
while an additional 60,000 people will be served through
WaterCredit. Women and children comprise an estimated
68 % of this total. It is anticipated that there will be a
natural multiplier effect that will widen the impact of this
commitment to a larger number of beneciaries throughout
the recipient communities.
Safe Water Network: Through a three-year partnership with
Safe Water Network, the PepsiCo Foundation pledged $3.5
million to implement safe water initiatives for village water
systems in Ghana, India and Bangladesh, as well as rainwater
harvesting systems in India.
Tropicana is calculating the amount of greenhouse gases produced during
the manufacturing and use of its Tropicana Pure Premium orange juice.
Including processing and
packaging, the carbon
footprint for a 64-ounce
carton of Tropicana Pure
Premium Orange Juice
1.7kg
of COe
Use and Disposal
0.05kg
Agriculture
0.62kg
Distribution
0.37kg
Climate Change
Understanding Our Brands Carbon Footprint
Climate change may adversely affect the raw materials and other
supplies we use to make our products, including water and
various crops from potato, oats, and corn to oranges and apples.
Throughout our business, an important part of our greenhouse
gas (GHG) emissions results from the energy used in our
manufacturing and related processes. We are reducing our
emissions through more efcient use of non-renewable fuels
and increased use of renewable energy. We also partner with
non-governmental organizations to examine how our business
impacts climate change and how we can change the way we
work to further reduce our footprint.
*The 2008 GHG data presented in the chart above has gone
through 3rd party verication and represents nearly 85% of
total Scope 1 and Scope 2 emissions for PepsiCo. This data is
comparable to the 2006 and 2007 data reported for trending.
Scope 1 and Scope 2 emissions include the following for
company-owned operations:
Fuel combusted during manufacturing, calculated by
standard emissions factors according to each fuel
Fuel combusted for building heat
Emissions from eet vehicles, based on vehicle type, fuel
type and volume of fuel used
Fugitive emissions from refrigeration units at manufacturing
sites based on leak rates and refrigerant purchases.
Purchased Electricity for Manufacturing, Distribution
Centers and Ofces
Purchased Steam for Manufacturing Operations
The data shown above excludes additional greenhouse gas data
that has been estimated for the rst time in 2008, including:
Company-owned International Fleet and Fugitive
Operations; 490,600,000 metric tons CO2e
Company-owned Coolers and Vending Machines**;
761,000,000 metric tons CO2e
**Note: PepsiCo has reported emissions from these company-
owned coolers and vending machines as Scope 3 to be
consistent with how these types of emissions sources have
historically been reported by the beverage sector. However,
based on careful review of the World Resources Institute
Greenhouse Gas Protocol, in our opinion it is not clear that
Scope 3 is the most appropriate designation. In 2009, PepsiCo
will work with relevant third-party experts and stakeholders in
the beverage sector to develop formal guidance for designation
of these source types.
> Statement from Bureau Veritas
In 2003, we began working with the Carbon Trust, an
independent, not-for-prot company set up by the U.K.
government to help businesses address the growing threat
of global climate change and to pioneer carbon footprinting
methodology and standards. The Carbon Trust believes that in
order to effectively reduce a companys carbon footprint, they
must rst know how to accurately measure it.
We began the work with our leading crisp brand in the U.K.,
Walkers Crisps. Following months of intense research, Walkers
became the rst consumer brand to pilot the original method
for assessing product carbon footprints and the rst major food
brand to display a carbon footprint/reduction label on its packs.
Since 2000, Walkers has reduced its energy use per pack by one-
third and its water use by 42%, and it is committed to reducing
the carbon footprint of its products even further.
The collaborative work continued and, most recently, Tropicana
Pure Premium Orange Juice became the rst consumer brand
in North America to be independently certied by the Carbon
Trust. The process included working with an academic research
partner, The Earth Institute at Columbia University, to determine
the mapping process. The Carbon Trust then conducted a review
of scientic life cycle data and certied the carbon footprint of a
standard 64-ounce carton by:
Mapping the product life cycle, from growing and
squeezing oranges and getting the container on the
shelves, to nally disposing or recycling the packaging.
Looking at the energy consumption directly involved in
each of these life cycle stages and converting this into
equivalent carbon dioxide emissions (CO2e).
Adding the equivalent carbon dioxide emissions (CO2e)
from each stage to estimate the total product greenhouse
gas footprint of the product.
Using this process, the estimated carbon footprint for a
64-ounce carton was determined to be 1.7 kilograms. The
Carbon Trust has certied the footprint, giving PepsiCo a
veriable benchmark against which the company can measure
GHG reduction progress going forward.
In coming years, additional products, including Pepsi, Diet Pepsi,
Aquana, and Gatorade, will be assessed. Today, more than 10
products that represent a true market basket of our consumer
offerings are currently being evaluated for a carbon footprint.
This science-based information is helping our businesses target
operational improvements and achieve their energy efciency
goals, while striving for even more ambitious,
Since 2000, Walkers
has reduced its
energy use per pack
by one-third and
reduced water use by
42%
yet realistic, targets.
Uncovering information about where and why carbon is
generated in the manufacturing, distribution and disposal of
products will also help drive collaboration with partners and
suppliers on carbon reduction initiatives and elevate consumer
awareness.
Reducing Our Energy Use
Each division of PepsiCo is committed to achieving the 2015
reduction targets and has developed customized tactics
to ensure their achievement: continued energy efciency
improvements to minimize energy intensity of our products,
development of additional renewable energy generation at
our own facilities, support for renewable energy generation
outside our facilities through the purchase of Renewable
Energy Certicates, and working cooperatively with our supply
chain partners to share best practices in energy efciency and
sustainability improvement.
Large reductions in the use of non-renewable energy in the
future will require innovative technologies. Hastening the
development and application of these technologies will take
bold steps, such as the one Frito-Lay has begun in an attempt
to transform their Casa Grande, Ariz., facility to a net zero
manufacturing facility. The goal of this project is to dramatically
reduce the use of nonrenewable energy and water at an existing
plant through implementation of transformational technology.
The rst stage will involve installation of a water recovery and
reuse process that is expected to reduce water consumption
by over 80 %. This project is under way, with planned start-up
in 2010. The water recovery system allows for a section of the
existing wastewater land-application area to be repurposed for
use in a future solar and biomass system that will reduce the use
of nonrenewable energy at the plant by 80% to 90%.
A 4.6 megawattcombined heat and power (CHP) plant was
constructed at the Frito-Lay facility in Killingly, Conn. The CHP
plant generates enough electricity to offset the total electrical
demand of the plant at an efciency exceeding twice that of
electricity currently pulled from the grid. As part of the project,
an upgrade to the existing steam system at the plant was
completed, and we expect to prevent the loss of approximately
10,000 MMBTU per year of ash steam and save the plant
$100,000 per year in energy costs.
PepsiCo India Beverages made the decision to focus on
renewable energy sources to provide cleaner energy for its
manufacturing sites across the country. The switch took place
quickly, and the changes have already delivered signicant cost
savings and emissions reductions.
In 2007 and 2008, 17 oil-red boilers were converted to use
biomass briquettes at plants owned by PepsiCo India. PepsiCo
India also launched our rst remote wind turbine, harnessing
one of the most efcient, clean and renewable sources of
energy. This turbine is connected to the public electricity grid
with sufcient power to meet more than two-thirds of the
electricity needs of the companys local Mamandur plant, and
it directly offset up to 5% of our company-owned bottling
operations power requirements for 2008. In 2008, this initiative
also reduced carbon emissions by about 3,000 tons, with the
potential to offset more than $200,000 per year. India is also
converting company-owned manufacturing sites to biomass
boiler capability. With our wind energy program and investments
in solar lighting and biomass boilers, more than 16% of the
energy PepsiCo India used in company-owned plants during
2008 was derived from renewable sources.
Our business in the U.K. is working to radically transform its
business model and has committed to increase total share of
electricity from renewable sources from 8% to 14% within three
years. All energy used in manufacturing and distribution is to be
from renewable sources within 15 years. In 2008, PepsiCo U.K.
reduced its energy use by 11.8% and doubled its renewable
electricity use from 8% to 16%.
> More information about PepsiCo UKs environmental
commitments and progress
At our snacks operation in Turkey, projects varying from small
to very large scale have been implemented, such as Solar
Tube Lighting, Stack Heat Recovery, Boiler Management, Heat
Exchanger Bundle Replacement, and Online Energy & Water
Consumption Monitoring Database. At our facility in Tarsus, the
installation of the rst industrial-scaled solar power system at
PepsiCo International was completed in 2008. This pioneering
project is not only a milestone for environmental sustainability,
but also a global model for all companies.
At the Gatorade distribution facility in Tolleson, Ariz., the
facility installed the largest rooftop solar array in the state, a
500-kilowatt system that will supply 40% of its annual energy
needsenough electricity to power 50 Arizona houses for a
year. The system is capable of producing more than 760,000
kilowatt hours per year. A solar thermal energy system was also
installed on the roof top of the Tolleson Gatorade manufacturing
plant, located across the street from the warehouse. The solar
thermal system is capable of generating 5.2 billion BTUs per year
and is one of the largest rooftop solar thermal concentrators in
the United States.
At our Sabritas facility in Toluca, Mexico, we installed an
anaerobic wastewater treatment plant that produces biogas
with 60% methane content. The gas will be used to produce
electricity through a microturbine with the intention to reduce
fuel consumption at the plant.
With the help of these projects, 10.000 MWh of fossil fuel
energy has been saved; these savings helped to reduce 13,000
tons of CO2 emission, which is equal to the amount of carbon
dioxide absorbed by 40,000 trees.
oaeeN autnNo ANn nesoN
PepsiCos commitment to saving energy through green building
worldwide continued in 2008. Our newly constructed facilities
were designed to meet the U.S. Green Building Councils
(USGBC) Leadership in Energy and Environmental Design (LEED)
standardsone of the most rigorous standards for green
building in the world.
PepsiCo Americas Beverages (PAB) has implemented a policy
whereby all new construction will be certied through the
USGBC LEED program. During 2008, PepsiCo Chicago continued
its green building construction initiatives by certifying two
additional facilities under the USGBC LEED program. In April
2008, the new Gatorade manufacturing plant in Pryor, Okla.,
achieved LEED Gold certication, and in October 2008 the
Chicago headquarters building was awarded LEED Silver
certication as an existing building.

The Pryor Gatorade manufacturing plant, now the largest
LEED-Gold-certied food and beverage manufacturing facility in
the world, achieved its certication in part by reducing energy
intensity by approximately 40% and water use intensity by 50%
when compared to an average facility. To achieve LEED-Silver
certication, the Chicago Plaza reduced energy use by 10% in
less than a year, cut water to 37% below the Energy Policy Act
performance standards, and eliminated almost 226 metric tons
of greenhouse gas emissions through energy-saving programs.
The Chicago headquarters building also installed combined
solar and wind generation systems to provide a portion of the
electrical power needs for the recently constructed Sustainability
Center. The wind power generating system at the Plaza is the
rst functioning wind-to- electricity generating system in the
downtown Chicago area.
The Sustainable Engineering Guidelines support a transformation
of the company infrastructure through green design.
In May 2008, PepsiCo introduced the Sustainable Engineering
Guidelines based on LEED standards. The guidelines support
our environmental sustainability commitments throughout our
engineering process, and apply to all new construction as well
as major remodels of existing buildings globally. The Sustainable
Engineering Guidelines can be accessed through a website
available to all PepsiCo engineers and key partners worldwide.
This website provides guidelines for:
Site selection
Construction activity management
Water use reduction
Building materials
Building systems
Plant process management
Indoor air quality
Site stewardship
Lighting systems
In addition to evaluating the feasibility of LEED certication
for new buildings, we apply PepsiCos Sustainable Engineering
Guidelines to ensure that every project manager in the world
has a common set of guidelines and approved solution sets
to ensure that they design and build in an environmentally
responsible way.
The Resource Conservation (ReCon) tool was developed to
facilitate the rapid transfer of best practices around the world.
The tool includes Energy and Water User Prolers and a
customizable online site audit or diagnostic. ReCon is now in
its third year of deployment and is rapidly spreading to PepsiCo
operations around the globe.
aeveaAoe cooteas ANn veNnNo mAcuNes
Marketing equipment (coolers/vending machines) affects the
environment through the use of electricity and refrigerants.
PepsiCo is committed to reducing the impact of our marketing
equipment through design and process changes developed to
reduce greenhouse gas (GHG) emissions.
PepsiCo has a long track record of improving the energy
efciency of its vending machines and coolers. On average,
2008 model vending machines, which all meet EPA Energy Star
requirements, use 51 percent % less energy than 2003 models,
and 2008 coolers consume 44 percent% less energy than
their 2004 counterparts. In addition, PepsiCo was also the rst
in the industry to mandate that the foam used to insulate its
vending machines and coolers be free of HFCs. Through these
improvements, PepsiCo has reduced GHG emissions from its
refrigeration equipment by 598,000 metric tons, an average
of 282,000 metric tons per year the equivalent of removing
52,000 cars from the road or planting 125,000 trees annually.
PepsiCo is testing thousands of machines around the world
that rely on other green refrigerantsspecically isobutane and
propanethat also have a lower climate impact than current
HFC refrigerants.
rtee1
Sabritas, our snack food business in Mexico, has 13,000
distribution vehicles, about 6,000 of which were converted
over the past 10 years to burn liquid propane gas. This reduces
carbon and nitrogen emissions and generates fuel savings of
between 15% and 22% (depending on geographic conditions
and fuel costs).
In the U.S., both Frito-Lay and our bottlers use advanced routing
technologies and have a no-idle policy to reduce miles and cut
fuel consumption on delivery routes. Pepsi Bottling Group (PBG),
our largest bottler, has veried the electronic settings on vehicles
with electronic controls to ensure that idling reduction and
speed parameters are set efciently.
PepsiCo and Frito- Lay have joined SmartWay, a voluntary
partnership between various freight industry sectors and
the Environmental Protection Agency (EPA) that establishes
incentives for fuel efciency and GHG emissions reductions. By
2012, this initiative is expected to save up to 25 billion liters of
fuel per year (equivalent to 150 million barrels of oil).
The Frito-Lay Fleet Team is also hard at work to reduce its carbon
intensity. Through active partnership with the EPA SmartWay
program, the Fleet Team is investigating ways to improve miles
per gallon (MPG) and reduce the environmental footprint of our
delivery eet. In 2009, 1,200 high-MPG sprinter delivery trucks
were ordered and placed into service. These sprinter vehicles
almost double the fuel efciency of our current vehicles, taking
MPG from the 8-10 range up to 18. Other fuel savings initiatives
such as GPS Route Optimization, Idle Shut-Downs, Tractor and
Trailer Aerodynamics, and improved eet maintenance practices
have also been executed to further improve fuel efciency and
reduce the eets environmental footprint.
In 2008, our U.K. operation was able to reduce food miles and
associated CO2 emissions for two major products. For Walkers
Crisps, we continued to transition from a blend of U.K.- and
European-sourced potatoes to focus on sourcing 100% raw
British potatoes. Local potato production has reduced potato
miles into U.K. plants. In 2008, total raw potato into Walkers
plants was 385,000 metric tons. By sourcing from local British
farmers, a savings of 800 metric tons of CO2 was achieved
through mileage reduction vs. 2007. Additionally, a further
savings on these deliveries of 340.03 metric tons of CO2 was
achieved through bio-diesel vs. 2007.
We continue to develop external partnerships focused on strategies to reduce greenhouse gas
emissions.
In 2008 PepsiCo strengthened its partnership with the U.S. EPAs Climate Leaders program.
Frito-Lay joined Climate Leaders in 2002 and PepsiCo joined in 2007, setting a goal to reduce
greenhouse emissions in the United States 25% by 2015 from a baseline year of 2006. In
announcing the goal last Fall, PepsiCo stressed the critical role energy conservation will play in
achieving the target.
PepsiCo participates actively in various organizations that provide thought leadership to
governments and regulators throughout the world. These organizations include U.S. CAP in
the U.S., the WBCSD, the WRI, the Carbon Trust, and others. PepsiCo believes that its active
participation in these respected organizations allows us to be competitively positioned relative to
other companies to adapt to changes in the climate change regulatory environment.
By working with the Carbon Trust and the Earth Institute at Columbia, PepsiCo has gained unique
insight into the carbon footprint of our product portfolio. This insight enables us to communicate
more effectively with customers, consumers and regulatory organizations about our carbon
footprint and the best strategies to reduce it.
PepsiCo has joined with other multinational corporations and Greenpeace in a global initiative
called Refrigerants Naturally! Its goal is to address climate change and ozone layer depletion
caused by Hydrouorocarbons (HFCs) in refrigeration equipment. We are working together to
eliminate use of HFCs in refrigerated point-of-sale equipment. We are also experimenting and
testing natural refrigerants, which may be required in the future.
In 2008, PepsiCo gained signicant insight into the risks and opportunities it has relative to climate
change, rst through a comprehensive study of future risks and secondly through an aggressive
and broad-based effort to understand the full carbon footprint of our products. Specically in
2008, PepsiCo joined with the U.K. not-for-prot organization Forum for the Future in a project
called Global Scenarios and Strategies for 2030. In this effort, PepsiCo and Forum for the Future
combined to analyze critical risks and opportunities associated with climate change and other
environmental and social factors.
Packaging
Reducing our packaging footprint
We distribute our products in a variety of packages, each
carefully designed to deliver convenience and appeal to our
consumers while protecting the integrity of our products.
Our team of engineers and packaging suppliers are dedicated
to nding preferable designs and are working continuously
toward improving our packaging performance while reducing
our packaging environmental footprint.
Our goals are to design and develop packaging systems that
are environmentally responsible throughout their entire life
cycle and to partner with leading organizations to promote
sustainable packaging and recycling practices.
We have launched a global sustainable packaging policy
and formed a Sustainable Packaging Council (SPC) to
develop a road map that will guide us toward this goal.
This multidisciplinary team includes leaders from our R&D,
Innovation, Procurement, Sales & Marketing, and Public Policy
groups. The objectives of this team are to develop sustainable
packaging strategies, goals, targets and alternative material
technologies and to support responsible disposal practices.
The SPC reports to the Executive Sustainability Leadership
Team (ESLT).
> Download our Global Sustainable Packaging Policy
PepsiCo supports the principles of developing programs
that aim to reduce, recycle, use renewable sources, remove
environmentally sensitive materials, and promote reuse
of packaging in the entire process of packaging selection,
design, specication, and procurement. Through our ongoing
engagement with our packaging suppliers, we are working
to move to a position where all our operations use the most
environmentally suitable packaging available in their given
country of operation.
Reduce: Packaging Reduction & Resource
Conservation
Across the world, we continue to deliver innovative new
designs, reducing the amount of packaging material used.
Since 2003, our packaging teams efforts in the U.S. have
eliminated more than 36 million kilograms of plastic, reducing
greenhouse gas emissions by some 150,000 metric tons.
North America Beverages:
In 2008, we introduced a new, half-liter bottle for our
Aquana avored waters, Lipton Iced Teas, and Tropicana
juice drinks. The new bottle contains 20% less plastic than
the previous bottle and its label is 10% smaller than before.
These innovations are taking nearly 6 million kilograms
of packaging out of the system each year and reducing
greenhouse gas emissions by 18,000 metric tons annually.
Thats equivalent to taking 3,350 cars off the road for a
year.
In 2008 we also trimmed the amount of plastic used in
the bottles, caps, and labels of our most popular Aquana
bottle, the half-liter (16.9-oz) bottle. This initiative saves
more than 27 million kilograms of plastic a year and
reduces greenhouse emissions by 78,000 metric tons
annually. Thats equivalent to taking 14,000 cars off the
road for a year.
Our Tropicana team reduced corrugate use by 4%, cutting
greenhouse gas emissions by 4,000 metric tons.
European Beverage: Gatorade Europe reduced their 500ml
bottles by 12%
India Beverages: Carbonated soft drink crown lining was
converted to a PVC-free compound, removing resin and cost.
Reuse: Recovery and Take-back Systems
Globally: Returnable case programs have been implemented
in areas of the world where appropriate infrastructure exists,
notably Greece, Spain, Turkey and South Africa.
North America Snacks: Optimized the collection of
manufacturing waste involving corrugated materials to
promote the recovery of nearly 30 billion kilograms of material
across Frito-Lay plant operations.
Recycle: Designing Packaging for Recycling and
Developing Biodegradable and Compostable
Packaging Solutions
PepsiCo beverage and food packaging has signicant recycling
potential throughout the world, especially with bottles, cans,
paperboard and corrugated materials. While dependent upon
the local infrastructure to facilitate recycling, a signicant
amount of our packaging is eligible for recycling. Over 95 % of
our packaging can be recycled or is used in a returnable bottle
system. The remaining percentage is being addressed by our
renewable-sourced packaging objectives.
North America Beverages: PET recycled content of 10% has
been achieved for carbonated soft drink bottles in 2008 as
well as in the past two years.
In 2008, Tropicana teamed up with Waste Management,
the largest residential recycler in the U.S., to launch a
national initiative that will increase the number of juice
and milk cartons for recycling. The initiative kicked off the
long-term goal of increasing beverage carton recycling to
every community across the nation, and will be promoted
through the Carton Council. Waste Management is
accepting juice and milk beverage cartons at all of its
recycling processing facilities across the country.
To continue our efforts to use more recycled material,
we are leveraging next-generation recycling technologies
to ramp up usage of post-consumer recycled material
in our packages. Our Naked Juice division in the U.S.
will be launching packages made from 100% post-
consumer recycled (PCR) content in 2009; in the U.K.,
we will be producing our Copella juice brand with 100%
PCR packaging. We are also launching packages in
other markets such as Mexico, Brazil and Germany with
postconsumer recycled PET content ranging from 15% to
50% by weight.
Brazil Snacks: Salty Snacks bags are transformed into plastic
vases, pencil cases, CD and DVD cases saving more than
200,000 kilograms of plastic per year.
Australia Snacks: In Australia, we are able to use 100%
recycled paper board in the manufacture of corrugated
packaging cartons.
Globally: Our aluminum beverage cans typically contain
about 40-50% post consumer recycled content.
Renew: Increasing Use of Renewable Material
Resources
PepsiCo focuses its innovation teams to develop and discover
creative packaging solutions, which include the investigation
of cutting-edge technologies that promote environmentally
responsible packaging and the potential use of plant-
based packaging. This will allow our packaging to have a
biodegradable end-of-life scenario.
North America Beverages: We strive to source ber for
paperboard and corrugated from suppliers who have
certication from either Sustainable Forestry Initiatives (SFI)
or Forest Stewardship Council (FSC). The aim is to ensure
sourcing from suppliers who use responsible forestry
management practices. Many of our packages, such as
Tropicanas cartons, are SFI certied.
North America Snacks & Beverages: PepsiCo has increased
selection of suppliers certied in credible resource
conservation initiatives (e.g., Sustainable Forestry Initiatives
and Energy Star). This results in signicant amounts of
recycled materials within our paperboard and corrugated
materials and drives continuous improvement.
Remove: Eliminate Environmentally Sensitive
Materials and Processes from Our Packaging
PepsiCo is implementing programs globally to address the
removal of heavy metals (lead and cadmium) from all applied
ceramic labeling (ACL) ink formulations on decorated glass
bottles.
North America: Quaker Foods replaced PVC tamper
bands with PLA/biodegradable shrink tamper bands for
Quaker tubes. Naked Juice eliminated PVC shrink labels,
removing over 100,000 kilograms of PVC from the supply
chain. Tropicana eliminated white colorant on 10 oz. PET
bottles, eliminating over 13,000 kilograms of colorant and
signicantly improving the recyclability of nearly 500,000
kilograms of PET.
Americas: In Brazil, we eliminated PVC in all products and
promotional items.
Having a strong understanding of our packaging footprint
allows PepsiCo to evaluate and drive sustainable packaging
improvements, such as increasing the use of recyclable
materials. Over 95% of our packaging can be recycled.
However, PepsiCo recognizes the need to support increased
recycling rates and works with consumers and other
organizations to help get these materials back into a viable
recycling stream.
The data provided is global and represents packaging where PepsiCo is directly
involved in acquisition of materials, whether for company-owned operations or
strategic bottlers.
Solid Waste
In the United States, Frito-Lay sends nearly 7 million kilograms
of potato and corn solids (potato pulp and peelings, cracked
corn, and corn husks) to Americas livestock and dairy farms,
where it is used for feed. Chips that do not meet Frito-Lays
strict quality control standards and chips not sold in stores by
the guaranteed fresh date can be used by livestock feeders and
pet food manufacturers as a feed supplement. This process
diverts over 6 million kilograms of unusable snacks that
otherwise might have been sent to landll.
Tropicana minimizes landll waste by using virtually every
part of the orange, as well as its by-products after the juice is
extracted. The by-products become scent extracts and animal
feed. Quaker optimizes the use of all oat hull by-products.
Quaker delivers oat hulls to local animal feed markets and a
nearby university that utilizes oat hulls for the generation of
power.
PepsiCo India continues to strengthen its solid waste
management initiatives in partnership with Exnora, an
environmental NGO. This award-winning, income-generating
partnership currently impacts more than 100,000 people in
Tamil Nadu, Andhra Pradesh, and Haryana and reached out
to more than 200,000 people in 2008. In partnership with the
government, NGOs and community members, PepsiCo India
continues to implement waste management projects in various
districts in the country. The program has been recognized as a
model project by UNICEF.
PepsiCo teams with leading organizations to advance our
understanding of environmental issues and to work together
to promote sustainable packaging and recycling practices.
PepsiCo has taken an industry leadership position in
packaging. Signicant programs include:
Sustainable Packaging Coalition: PepsiCo is a member
of the executive committee for this industry-leading
organization that provides life-cycle analysis and design
guidelines for sustainable packaging.
Grocery Manufacturers Association/Food Products
Association (GMA/FPA): PepsiCo plays a leadership role in
the industry development of common reporting protocols
and procedures for reporting packaging improvements.
These procedures aim to create an industry-wide public
reporting process for consumers, investors, and other
stakeholders to understand packaging and environmental
improvements in a consistent and transparent manner.

The European Organization for Packaging and the
Environment (EUROPEN): PepsiCo U.K./Europe is a key
member of EUROPEN, a packaging supply chain body
that champions packaging and the environment, with
representation at board level.
Our Australian business unit has been a signatory member
to the National Packaging Covenant, whose charter is
to focus on reduction of waste to landll through reuse,
recycling, or reduction through product redesign. These
efforts have been formally monitored and reported since
2001.
In early 2008, YHS Singapore, a Pepsi-Cola bottler, was a
signatory with Singapores National Environment Agency
Agreement on packaging to reduce, recycle and reuse on
packaging.
AmeacAN aeveaAoe AssocA1oN
PepsiCo and the American Beverage Association are founding
members of the National Recycling Partnership, a national
nonprot organization dedicated to the advancement and
improvement of recycling. Its more than 4,000 members
include consumer product companies, manufacturers that
use recycled content in their products, recycling processors,
government regulators, and recycling advocates.
keer AmeacA aeAu1rut
PepsiCo has also supported Keep America Beautifuls
(KAB) Great American Cleanup, the nations largest annual
community improvement program. In 2008, Aquana teamed
up with Sams Club to encourage recycling with the Return
the Warmth program. Return the Warmth challenged local
communities and schools to recycle 80 million plastic (PET)
bottles during the 2008 Great American Cleanup, which took
place nationwide from March 1 through May 31. The actual
results, 189 million recycled bottles, far exceeded that goal. A
total of 25,000 eece jackets made from recycled plastic bottle
material were distributed to the 100 schools that collected the
most bottles.
> More information about our recycling efforts in North
America
cunAn sAtunAate ANn 1ue mut1tA1eaAt
Nves1meN1 ruNn
Ciudad Saludable and the Multilateral Investment Fund (MIF),
with the support of PepsiCo Beverages Latin America and
the Asociacin Atocongo of Cementos Lima, announced
a partnership program: Developing the Market for
Comprehensive Recycling Management.
The program is aimed at supporting 300 professional
recyclers in four Peruvian districts: Villa El Salvador, San
Juan de Miraores, Villa Mara del Triunfo, and Callao. The
primary objective is to improve economic opportunities and
quality of work for the recyclers. The program will provide
stability to local recyclers and strengthen their professional
organizations, as well as improve the capabilities of micro
and small enterprises that provide recycling services for large
corporations and municipalities. PepsiCo Beverages Latin
Americas contribution will help to train recyclers, strengthen
recyclers professional organizations, and provide micro-credits
that will be awarded to recycling micro enterprises.
Responsible Sourcing
Extending Performance with Purpose to our
supplier community
Supplier CSR Assurance Program
We communicate, educate, and work with our suppliers to
improve corporate social responsibility performance across the
supply chain.
PepsiCo has developed a Supplier Code of Conduct to clarify
our global expectations in the areas of labor practices,
employee health and safety, environmental management and
business integrity. It has been translated into 18 languages,
has been proactively communicated, and is mandatory in all
procurement contracts. Our Supplier Code is based on the
International Labor Organization, United Global Compact and
other benchmark standards.
We use our Supplier Code of Conduct to articulate these
priorities, and our Supplier Corporate Social Responsibility
(CSR) Risk Evaluation and Management Program to educate,
validate compliance and facilitate continuous improvements.
In 2007, PepsiCo joined the Supplier Ethical Data Exchange
(Sedex) to further demonstrate our commitment to
sustainability in the supply chain. Sedex provides a web-based
system that allows companies to maintain and share data on
practices in the areas of labor practices, employee health and
safety, environmental management and business integrity
at their production sites. Sedex members are committed to
continuous improvement of the responsible performance of
their supply chains.
We were also a founding member of an industry-wide initiative
called AIM-PROGRESS along with other CPG manufacturers to
work together to develop and implement common methods of
evaluating CSR performance within the supply chain. PepsiCo
continues to lead expansion of AIM-PROGRESS across the
industry.
Working with our supplier community on specic initiatives,
PepsiCo is able to grow and extend our effective resource
conservation programs. Were also focused on setting
quantiable goals for energy, greenhouse gases (GHG), water,
agriculture, and forestry resource conservation within the
extended supply chain.
Some examples of our environmental supplier outreach
programs in action include:
Our U.K. and Ireland business is one of 12 charter members
of the Carbon Disclosure Projects Supply Chain Leadership
Collaboration (SCLC). This group aims to dramatically increase
to the thousands the number of its member-suppliers reporting
on climate change mitigation efforts and adaptation strategies.
Our membership demonstrates to our suppliers how important
we feel climate change is to business decision making, along
with our desire to work collaboratively.
Weve joined other companies and Greenpeace in a global
initiative called Refrigerants Naturally! Its goal is to address
climate change and ozone layer depletion caused by gases
in refrigeration equipment by working with our suppliers to
improve the environmental performance of our coolers and
marketing equipment. More than 99 percent of our new
purchases of refrigerated point-of-sale equipment in the
United States use HFC-free insulation.
In 2008, PepsiCo implemented a supplier sustainability
outreach program designed to share resources, tools, and
expertise in energy conservation, waste minimization, and
other areas with key suppliers. PepsiCo has involved more than
200 of its largest suppliers across the globe in this program
since 2007, addressing nearly $10 billion in annual purchases.
These suppliers represent packaging and processed ingredients
that directly impact our nished product and account for a
high proportion of our environmental footprint.
We also work with suppliers to use more renewable energy
sources in the production of materials. In North America,
PepsiCo has increased the selection of suppliers certied in
credible resource conservation initiatives. Examples include the
Forest Stewardship Council and Energy Star.
> More information about our responsible and sustainable
sourcing efforts
> Download our Supplier Code of Conduct
Sabritas, our snack business in Mexico, is contributing to the overall development of
low-income farming communities by providing technical and business training to farmers,
transferring relevant technology to the communities and initiating farming contracts.
Sabritas participation in
the Educampo program
has helped drive:
300%
increase in income
80%
improvement in
land productivity
37,000
hours of education
Sabritas participation
to date has helped more than
300 low-income
corn producers
receive funding, technical
support and training
resulting in an estimated
9,300
tons of corn production across
2,000
hectares
Agriculture
Supporting the Long-Term Success of Our
Farmers
As a food and beverage company, agriculture is perhaps the
largest element of our eco-footprint, so we work hard to
continually improve our agricultural processes.
This year, we developed and published our Global Sustainable
Agriculture Policy, which demonstrates our approach to
sustainable development across our entire agriculture supply
chain, including water savings, waste reuse, soil protection
and chemical use.
Our Policy addresses six broad objectives within the agriculture
supply chain:
Water Management
Soil Conservation and Preservation
Agrochemical Management
Energy Management
Farm Economics and Land Management
Social and Community Improvement
To support the implementation of the Policy, we established
a PepsiCo-wide governance structure called the Sustainable
Agriculture Council (SAg Council). This council is staffed by
agro-scientists, engineers and sustainability professionals from
across all of our PepsiCo businesses. The purpose of the SAg
Council is to provide leadership and subject matter expertise
within and across PepsiCos Global Operations to assure:
A strategic global sustainable agriculture vision for PepsiCo
Uniform, accurate, and system-wide metrics, standards,
and practices in accordance with PepsiCos SAg policy
Development of long- and short-term global SAg goals
Accurate messaging to internal and external stakeholders
Development and maintenance of strategic partnerships
with suppliers, advisory board members and external SAg
organizations
A reduction in the environmental and social impacts of
agricultural operations that support our business
In addition to the agriculture policies, the PepsiCo Worldwide
Code of Conduct and Supplier Code of Conduct include
standards highlighting how we expect our people and our
suppliers to conduct business aligned with our environmental
sustainability values.
> Download our Sustainable Agriculture Policy
PepsiCo has implemented numerous strategies at the regional
and brand levels to support and drive our agricultural and
environmental policies; several more are highlighted below as
they relate to each of the six objectives:
1. WATER MANAGEMENT: PepsiCo aims to optimize the
applied water footprint to crops and to reduce water waste
during irrigation, as well as responsibly manage runoff risks
of pollution or contamination of ground or surface water
with pesticides, nutrients or soil.
In China, PepsiCo invested in a potato farm in the inner
Mongolian desert. We installed the necessary infrastructure
(roads, electric supply), water-conserving pivot irrigators,
and soil-conserving crops (sea willows, trees) to protect
from erosion due to sandstorms. By partnering with the
local farmers, we established a rotation of commercially
viable crops (winter wheat, potato, sorghum, and corn)
with an initial water savings of 50% by moving from
traditional ood irrigation to pivot. We are continuing
this evolution from pivot to drip irrigation with the aim
of conserving 70% of the water needed over traditional
farming methodsthe equivalent of avoiding additional
water consumption of nearly 0.25 billion liters per year
for the operation. A critical component of the community
engagement portion of this projectbesides the farmer
interestis the installation of local libraries to promote
literacy and education in the communities.
2. SOIL CONSERVATION AND PRESERVATION: PepsiCo aims to
preserve and improve soil fertility and nutrients, minimize
soil loss through erosion, and avoid soil damage due to
disease and contamination.
Frito-Lay North America has developed and implemented
protocols to wash potatoes at the farm to reduce/eliminate
the residual soil shipped to our plants, thereby allowing this
soil to be redistributed at the farm rather than disposed
of through the plants waste water discharge, and also
reducing diesel fuel requirements.
In China, through various collaborations, our foods
team is successfully growing potatoes under desert
conditions. PepsiCo installed the infrastructure needed
for transportation, planted erosion-protective crops, and
replaced the traditional practice of ood irrigation with
water-sparing pivots. By utilizing in-plant conservation
approaches, coupled with the installation of pivot irrigation
systems, in 2006 our China team saved over a billion liters
of water compared to the prior year. The China team is
also evolving further from pivot to drip irrigation in 2008,
with the aim of reaching 70 % water conservation for
these systems. As part of this collaborative effort with the
communities, our local business is also building libraries for
local children to improve their education and literacy.
In Brazil, a soil conservation initiative for potatoes has been
ongoing and involves minimal soil preparation to reduce
soil degradation, along with a fuel consumption analysis to
decrease fuel use by reducing tractor use and machinery
size. Sustainability benets: reduced soil erosion, water
use, and diesel consumption, along with reduced potato
losses due to soilborne diseases, resulting in a 5% water
reduction and 20% savings on irrigation costs.
3. AGROCHEMICAL MANAGEMENT: PepsiCo aims to reduce
the use of pesticides, nutrients, and other agrochemicals
by optimizing agricultural operations. PepsiCo supports
sustainable practices that substitute natural controls for
agrochemicals, foster ecosystem balance, reduce direct and
indirect greenhouse gas emissions, and reduce crop losses.
Frito-Lay North America initiated an organic line of snacks
including Tostitos Organic Blue Corn Tortilla Chips, Cheetos
Natural White Cheddar Puffs, and Lays Natural Country
BBQ Potato Chips. The company will follow the U.S.
Department of Agricultures standards in labeling organic
products.
Frito-Lay has also developed potato varieties that store
longer and are resistant to disease and better adapted
to adverse climatic conditions, allowing Frito-Lay North
America to grow its potatoes in the most efcient
agronomic areas in the U.S. This results in higher
production per acre, which minimizes the use of all farm
inputs, including energy, water, fertilizer, pesticides and
herbicides.
In Saudi Arabia and Egypt, climate and soil moisture
measurement and recording systems were implemented
to potato crop elds to forecast blight disease, with a view
toward more optimized use of chemicals. This has resulted
in fewer chemicals being used and greater disease control.
These systems are now also installed in Pakistan.
4. ENERGY MANAGEMENT: PepsiCo aims to optimize the
use of energy in crop production and management of
agricultural waste to improve economics for the farm and
reduce both direct and indirect greenhouse gas emissions.
Quaker supplies over 200 million pounds of oat hulls as
raw material ingredients and as a renewable source of fuel
for the generation of steam at the University of Iowa. One
hundred percent of the oat hulls are utilized as either a
raw material or fuel source, reducing dependence on less
renewable sources of fuel. Generation of steam through
use of oat hulls as fuel source reduces dependence and use
of non-renewable fuel sources.
5. FARM ECONOMICS AND LAND MANAGEMENT: PepsiCo
supports sustainable agriculture practices that enable
farmers to improve product value by maximizing the
desired outputs of an agricultural system while minimizing
the required inputs and avoiding any negative impacts to
the farm and surrounding environment. PepsiCo works
with farmers who develop long-term economic plans of
efcient and responsible farm production.
Frito-Lay North America practices optimal crop rotation
policies that result in improved soil fertility. Frito-Lay
continuously develops new growing areas closer to their
manufacturing plants, reducing the diesel fuel used to
transport inbound potatoes. They also share agricultural
best practices with all of their corn and potato growers.
The practices include crop rotation, low- and no-till soil
preparation, cover crops, and irrigation using efcient
pivots.
Quaker has been a leader for decades in the oat industry,
developing new oat varieties that deliver increased eld
yields and improved disease resistance. Improving eld
performance through new oat varieties reduces producer
inputs of fertilizers, fungicides, and herbicides. Quaker
encourages the use of low-till practices on oats that
conserve both water and fuel.
Tropicana utilizes virtually every part of the orange,
including the peels, which are sold as cattle feed. Before
the peel is dried into cattle feed, Tropicana extracts valuable
oils, essences, and biodegradable solvents.
SOCIAL AND COMMUNITY IMPROVEMENT: PepsiCo invests
in new knowledge and innovation in farming practices,
which can improve both social and human capital of the local
economies. Sustainable agriculture practices can help to make
the best use of local and available resources to improve the
welfare of communities supporting our agriculture supply
chain.
In Mexico, our snack food business Sabritas actively
participates in a program that contributes to the overall
development of low-income farming families in corn-producing
communities. In partnership with the Mexican Foundation for
Rural Development (FUNDAR), Sabritas contributes to technical
and business training for farmers, transfers relevant technology
to the communities and initiates farming contracts. Sabritas
and FUNDAR intend to incrementally bring about profound
cultural change in these communities that will lead to the
creation of small, sustainable agribusinesses.
At the onset, the program began in the state of Jalisco, located
near Sabritas facility in Guadalajara, and now spans six
municipalities in Mexico. Sabritas pledged 9.1 million pesos to
fund several initiatives, including:
The organization of corn producers to use their collective
bargaining power to better negotiate competitive contract
prices for corn crops
The launch of a social education program focused on
training farmers
The purchase of contracts with corn producers
The increased use of technology to produce higher yields.
Sabritas participation to date has helped more than 300
low-income corn producers receive funding, technical
support and training, which has resulted in an estimated
9,300 tons of corn production across 2,000 hectares.
The three-year program is expected to provide farmers
with resources for a 300% increase in income, an 80%
improvement in land productivity, and 37,000 hours of
education.
Throughout the program, Sabritas works toward an improved
understanding of the farmers needs to become independent
business partners. The program also benets our business.
Strengthening the capabilities of our suppliers located near
our manufacturing facilities means saving warehouse and
transportation costs as well. We know that engagement
with rural farming communities and private-public partners
is integral to delivering the positive social, environmental and
economic impacts of this program.
PepsiCo invests in innovative farming practices and education to improve
the welfare of the communities that support our agricultural supply chain.
By contributing to the overall development of low-income
farming communities, Sabritas is helping reduce poverty while
improving productivity, protability, and sustainability of small-
scale farming.
Sabritas works toward an improved understanding of its farmers needs to
become independent business partners.
Sustainable Palm Oil
PepsiCo currently uses palm oil in some of our products around
the world. We are making efforts in a number of regions
to convert to oils that are lower in saturated fat. These are
steps in the right direction to continue to make our product
offerings healthier. However, in some parts of the world,
supply is largely limited to palm oil, which is the worlds
predominant cooking oil. When we purchase palm oil, we seek
supply partners who operate responsibly and in a sustainable
manner. PepsiCo is joining the Roundtable for Sustainable Palm
Oil (RSPO) to help bring about a greater supply of sustainable
palm oil.
Cargill, our largest supplier of palm oil, is a founding
member of the RSPO, and has recently announced that one
of their plantations has been certied by the RSPO.
In the U.K., our Walkers business switched from palm oil
to 100% high oleic sunower oil (Sunseed) to make their
famous crisps.
Frito-Lay North America moved out of palm oils as its
primary cooking oil in the 1980s. As of 2005, Frito-Lay
North America primarily uses corn and sunower oils, as
they are among oils lower in saturated fat, and do not
contain trans fats.
We are working every day within the PepsiCo system to
operate in a more sustainable fashion. In particular, we are
focusing on reducing our environmental footprintincluding
energy, water, and packaging. As a customer, we seek supply
partners who will take responsible actions to address these
issues. The production of palm oil involves a wide variety of
constituents, ranging from small independent growers to
large multinational suppliers; thus, it will take the efforts of
consumers, NGOs, governments and groups like tThe RSPO to
effect meaningful changes.
Biodiversity
Agriculture is one of the leading causes of biodiversity loss,
and it is in our interest to make sure that our supply chains
are environmentally sustainable. As the climate changes, food
and water supplies will be increasingly vulnerable and prone to
disruption. We can minimize these risks by helping to promote
healthy ecosystems and sustainable agriculture at the origins
of our supply chains.
PepsiCo believes that protecting and enhancing biodiversity
is vital to the sustainability of our planet and ecosystems, and
we have begun to explore improvements we can make with
pilot projects in key places like India and China. In the coming
years, we have an opportunity to take a leadership position in
our industry by scaling up this work and becoming a force for
biodiversity conservation across all of the regions where we
operate. We will accomplish this by:
Investing directly in the conservation of key landscapes and
marine areas.
Continuing the development of clearer environmental
standards, metrics, and scorecards in our supply chains.
Engaging our consumers and employees by helping them
to understand the nature of the biodiversity problem and
how they can make a difference by consuming responsibly
and supporting conservation themselves.
In addition to these initiatives, PepsiCo developed enterprise-
wide responsible standards for efuent to protect ecosystems
into which we discharge efuent from our manufacturing
locations.
Involving and empowering people,
helping them to realize their potential,
renew themselves and achieve success.
We Recognize Our Responsibility
to Take Care of Our Employees
LESLIE TEICHGRAEBER, Vice President, PepsiCo University
Now more than ever, we are sharpening our focus on the
development of our employees. To build on our current
marketplace success, we are committed to providing
comprehensive learning opportunities to develop all
employees to their fullest potential. Not only do we want
to provide learning experiences, coaching and training,
we also want to ensure that PepsiCo is among the top
destinations for the worlds best talent.
With a long-standing history of delivering leadership
excellence supported by our proven development tools,
we took additional steps to drive the transfer of best
practices, skills, knowledge and technology across the
businesses.
In 2008, we launched PepsiCo University, which offers a
blended approach to learning through both classroom
activities and online tools. Designed for employees at
all levels of our organization, the expansive coursework
helps them develop the knowledge and skills needed to
drive innovation and growth for the future. PepsiCo
University is available in the U.S., U.K., Mexico, Brazil,
Russia, and European Union countries, among others.
Through a close working relationship with PepsiCos
operating groups, attention is given to leveraging best
practice curriculums residing in the business units and
scaling these programs enterprise-wide. We also offer
e-learning performance support tools addressing a wide
range of functional topics along with business and
management skill building. The overall curriculum is
centered on building people skills, managerial skills and
general business skills. One of the most successful courses
is the leadership advancement transition program that
prepares employees for the three key leadership mile-
stones: the move from individual contributor to manager,
from manager to leader, and from leader to senior leader.
PepsiCo University will be launched in China, India and
the Middle East by late 2009.
In an industry-leading move that demonstrates our com-
mitment to our values and manager quality, we shifted
to an equal weighting of 50% Business and 50% People
results in our annual performance review system. This
system includes mid-year and year-end career discussions
between employees and their managers. Individual
people performance objectives include measures relating
to the Performance with Purpose sustainability planks
(Human, Environmental, Talent) as well as improved oper-
ating efciencies, customer and employee satisfaction,
To demonstrate our commitment
to values and manager quality,
we shifted our annual performance
review system to equally balance
business and people results.
50%
people results
50%
business results
TALENT SUSTAINABILITY
acknowledged these concerns and there is strict rigor in
protecting the condentiality of employees personal data.
HealthRoads, PepsiCos employee wellness program, motivates
and enables employees to lead active, healthy lives.
and the management and development of people. There
are specic courses offered through PepsiCo University
that provide tools for people development. This change
has had a signicant impact on employee perceptions of
PepsiCo as an organization focused on People results.
To attract and retain the worlds best talent, we must
continue to build on the legacy of our learning culture to
prepare and develop our diverse workforce for the future.
GREG HEASLIP, Vice President, Global Benets
Our employee wellness program, called HealthRoads,
recognizes that good health and well-being is a journey,
not a destination. HealthRoads successfully motivates
and enables employees to lead healthy lives by seeking
preventive care, making behavioral changes to reduce
health risks, and working one-on-one with a health
coach to manage an existing condition.
HealthRoads is comprehensive in scope. Its primary focus
is diet, exercise and nutrition. However, it enables
employees around the globe to address a wide variety of
potential health risks, including stress, tobacco use, sleep
deprivation, diabetes, asthma, high cholesterol and high
blood pressure. In addition, HealthRoads uses multiple
modes (online resources, print materials, one-on-one
coaching) to maximize its accessibility, reach and effec-
tiveness with our employees.
HealthRoads is currently available in 21 countries, including
the U.S., Australia and Canada. Moving forward, were
rolling out the program in additional countries, including
Mexico, the European Union and the Middle East, by 2012.
One of our primary challenges is engaging employees
from diverse cultures, in which attitudes differ widely
with respect to weight, diet and one-on-one health
coaching. Were working on alternative approaches to
engage our diverse population. The condentiality and
privacy of personal health information are also global
concerns for our employees. Senior management has
Now in the fth year of our HealthRoads journey, we
have accomplished key milestones to ensure sustainability
and support of this initiative:
Senior management support: Our leadership team
champions employee wellness around the globe.
Their continuing support sets the stage for grassroots
acceptance and engagement.
Worksite wellness: A key to sustaining a wellness culture
is to make it relevant at the local level. HealthRoads
is tailored to meet each participating sites needs by
involving local employees in the design and execution
of ongoing wellness activities in that particular location,
within a consistent framework.
Strong incentive program: Although good health is its
own reward, incentives motivate and engage employees
in the right behaviors.
Tracking and measurement: We understand the value
of data. For the past four years, weve been measuring
the reduction or elimination of health risks among our
employees and the nancial return on our wellness
investment. Data and results are reported on an
aggregate basis, not an individual basis.
HealthRoads is slowing the rate of increase in PepsiCos
medical costs and is positively impacting the health of our
employees and their families. In the U.S., about two-thirds
of our employees and their spouses/partners have regis-
tered for HealthRoads and 93% of them have completed
the personal health assessment. More than 80% of indi-
viduals who completed a health assessment also agreed
to participate in a wellness coaching program. More than
31,000 participants reduced or eliminated a health risk as
a result of engaging in a wellness program. Since 2006,
we have identied a return on investment of $3.4:1 to
$5.0:1, depending on whether incentives are included.
HealthRoads is a catalyst for changing behaviors. It pro-
vides the resources, tools and incentives that enable our
employees to lead healthier lives. We believe HealthRoads
fosters a culture of well-being that can contribute toward
a sustainable business.
In the U.S., about two-thirds
of our associates and their
spouses/partners have registered
for HealthRoads and 93% of
them have completed the personal
health assessment. More than
80% of those individuals also
agreed to participate in a wellness
coaching program.
93%
completed
health assessment
80%
participating
in programs
Our Employees
We recognize our responsibility to take care of
our employees
Employee Learning and Development
Increasing the skills of our employees is crucial for business
success in a competitive global economy.
Outside of the leadership area, PepsiCo has traditionally
approached the functional organizational learning and
knowledge management aspects of development from a
primarily decentralized perspective. Each division handles
its functional organizational learning and knowledge
management locally. As a result, each division has developed
its own set of functional competency models. To foster
consistency where appropriate, we have developed cross-
divisional functional competency models for Sales, Marketing,
Finance and Human Resources. These models are used as the
basis for building career frameworks that described certain
job roles and responsibilities. These tools are available on
our internal learning management and career development
websites.
PepsiCo also offers associates specic job training as required,
including attending professional conferences to enhance their
skills, and we have a robust program for helping associates
manage their careers. Elements include a guide for career
growth tailored to PepsiCo, as well as guides focused on
specic functions. Our yearlong proprietary career process
includes objective setting, performance and development
reviews, development action plans, mid-year reviews, and
360-degree evaluations, all supported by training and
materials. Executive leadership training focuses on helping
high-potential managers learn to be more effective leaders and
to gain a broader perspective of our business. All employees
are included in some form of performance management
process across PepsiCo.
As a guide for associates in all functions and at all levels of our
organization, we have the PepsiCo Leadership and Individual
Effectiveness Model. The model details the key competencies
and associated behaviors that are required-individually and
collectively-to assure that we reach our performance goals.
Regardless of current role, level, or career aspiration, every
associate can use the model to understand which behaviors
they should strive for today and what will contribute to their
own personal success, as well as success for PepsiCo.
360 Degree Feedback at PepsiCo is an annual process for
executives and people managers across all divisions of
PepsiCo. While we have always had a robust 360 program, in
2008 the process was enhanced to be even more focused on
building self-awareness of the participants by linking results
to a best-in-class personality assessment inventory (the Hogan
Assessment Suite). The process now requires mandatory
follow-up feedback meetings with certied professionals
(based on a custom-designed three-day certication program)
in the 360 program and personality tools to ensure a high-
quality and rigorous feedback and development planning
discussion. Evaluation results from the program in 2008
were extremely positive, with 86% of respondents indicating
that the integration of the 360 feedback with the Hogan
Assessment Suite helped them gain valuable leadership
insights into ways they can maximize their effectiveness.
Beginning in 2008, we aligned our 360 degree feedback
process with the PepsiCo Leadership and Individual
Effectiveness Model to make it more robust and to ensure that
leaders know and understand whats expected of them. As a
new and signicantly valuable addition, we will combine the
360-degree process with other feedback tools to further build
self-awareness and provide participants with rich, one-on-one
developmental feedback from trained and certied facilitators.
For our entire executive and professional population (all
salaried employees at all levels), we have a formal performance
evaluation system with separate Business and People
objectives that our employees are evaluated on each year.
As part of the performance appraisal process, our entire
executive and professional population is required to have a
mid-year review with their manager, and employees provide
input on their results against their objectives. All individuals
receive a formal written feedback form that follows a standard
process, including summary highlights and developmental
opportunities. Formal written feedback is signed by the
employee, the employees manager, the next level manager,
and Human Resources leadership. Individual performance
objectives include measures relating to the companys
Performance with Purpose agenda in each of our three
sustainability planks (Environmental, Human and Talent) as well
as improved operating efciencies, customer and employee
satisfaction, and for all people managers, their performance as
it relates to the management and development of people.
Front-line employees in certain operating divisions and
in certain functions (primarily sales and manufacturing
operations) receive feedback directly from their managers/
supervisors on an ongoing basis in real time and do not require
the same type of objectives-based process.
We also ask associates to respond to an Organizational Health
survey biannually. The Organizational Health survey provides
developmental feedback to people managers throughout the
organization. The survey is a global process with a consistent
set of core items. All employees are surveyed in every country
in the world for their feedback, resulting in survey translations
into over 35 languages. Topics include benets, working
conditions, compensation, career development, diversity and
inclusion initiatives, community activities and many others. The
results of the survey are shared with associates and used at
multiple levels (e.g., front-line supervisors, middle managers,
functional VPs, division and business unit CEOs, the PepsiCo
CEO, External Advisory Boards, etc.) to drive action plans and
improvements throughout the corporation. Results are also
leveraged for summaries and action planning of employee
issues across various populations, including African-Americans,
women of color, Latinos, Asians, white males, women, and
GLBT employees.
Award Programs
PepsiCo offers a variety of award programs to recognize
associates. Common to all businesses are gift awards for
length of service. All associates are also eligible to receive
stock option grants as recipients of The Chairmans Award, a
program that recognizes outstanding accomplishments above
and beyond an individuals basic job accountabilities and
that delivers a sustainable business impact in support of the
companys Performance with Purpose vision. The Chairmans
Award is the highest honor at PepsiCo.
To honor those who have helped PepsiCo advance its
commitment to world-class performance in diversity and
inclusion, we have created a unique Chairmans Award called
the Harvey C. Russell Inclusion Award. Harvey C. Russell was
chosen as the namesake for this prestigious award because his
leadership, perseverance, and commitment to raising the bar
are the foundation upon which PepsiCos diversity initiative is
built.
The Steve Reinemund Diversity & Inclusion Leadership
Legacy Award is a PepsiCo leadership award given to senior
leaders who champion diversity and inclusion over time,
and move PepsiCo to new levels of diversity and inclusion
accomplishments and behaviors through their words and
actions.
Front-line associates are those who make, sell, and distribute
our brands. These associates, as well as the front-line
employees of our bottlers, are eligible for the Presidents Ring
of Honor. This annual award inducts high achievers into a
permanent role of honor. We have a variety of other award
programs within our divisions.
Employee Benet Programs
We are continually looking for ways to make PepsiCo a
great place to work. One way we do this is by offering
comprehensive benets packages designed to address the
health care and nancial needs of our employees, both now
and into retirement.
In the U.S., we offer a full range of health care, savings and
retirement benets. Our health and welfare benets include
medical, dental, vision, prescription drugs, mental health,
life and accident insurance, disability, and exible spending
accounts. We also offer commuter reimbursements, adoption
assistance, employee assistance program, child and elder
care referral and resources, smoking cessation programs,
care and lifestyle management programs, and family and
medical leaves. Domestic partners who meet certain eligibility
requirements may be covered under PepsiCo benets. Eligible
part-time employees receive medical, dental, vision, life
insurance and disability benets.
Financial benets in the U.S. include company-funded pension
plans, a 401(k) plan with a company match, the PepsiCo Stock
Purchase Program, and SharePower, a broad-based stock
option program. SharePower was introduced in 1989 and is
a global program that offers eligible employees stock options
that may be exercised after a vesting period. We believe
SharePower clearly reects a culture that places a high priority
on ownership. Currently, over 90,000 PepsiCo employees
receive the grant annually.
Outside the U.S., benets are provided through a combination
of company-sponsored programs and state programs
funded by payroll or other taxes. PepsiCo has adopted global
standards designed to ensure that all employees receive at
least basic medical, disability, life insurance and retirement
benets, regardless of location. The company has an ongoing
process in place to review and, if necessary, adjust practices
in mature markets, and shape practices in emerging markets
against these standards.
Expanding Opportunities Through Diversity and
Inclusion
PepsiCo approaches diversity and inclusion as a fundamental
business priority. Our continued innovation and growth
requires employees who can understand the needs of
international and diverse markets. We intend to continually
evolve our culture so our associates are recognized for their
contributions and valued for the unique differences they bring
to the workplace.
We are committed to hiring and retaining the best talent to
ll each and every job in the corporation. And we are equally
committed to fostering an atmosphere of caring, open
communication and candor among our employees, where we
treat each other with respect. These fundamental policies are
reected in our PepsiCo Values Statement.
That commitment to diversity continues today. We place
a great deal of emphasis on personal integrity and believe
long-term results, from real accomplishments, are the only fair
way to judge performance. We respect individual differences
in culture, ethnicity and gender. PepsiCo is committed to
equal opportunity for all employees and applicants. We are
committed to providing a workplace free from all forms of
discrimination. We respect the right of individuals to achieve
professional and personal balance in their lives.
Although PepsiCo is a global corporation, the way it operates is more local in
character. In markets outside the United States, PepsiCo businesses rely primarily
on hiring local managers and employees.
In the United States, our Diversity and Inclusion Networks
promote a culture where everyone feels they have an
equal opportunity to contribute and succeed. The groups
include African Americans, Latinos/Hispanics, Asians, Native
Americans, Women, Gay/Lesbian/Bisexual/Transgender, and
EnAble, for individuals with disabilities. In addition to our core
employee resource groups, we have the Women of Color
Multicultural Alliance and the White Male Inclusion Advisory
Group.
PepsiCo has a Global Diversity and Inclusion Governance
Council that is composed of internal and external thought
leaders and is co-chaired by our Chairman and Chief Diversity
Ofcer. The Council is focused on raising the bar on diversity
and inclusion capabilities and creating a sustainable and
differentiated competitive advantage for PepsiCo. Diversity
and Inclusion Councils have been successfully established in all
four continents of our PepsiCo International business, focusing
on locally relevant diversity and inclusion strategies and plans,
with a particular focus on women. PepsiCos External Diversity
Advisory Boards consist of educators, politicians, practitioners,
and customers to advise PepsiCo senior management on a
variety of issues relating to diversity and inclusion.
All employees participate in inclusion training sessions. Our
Diversity and Inclusion Governance Council, formed in 2005,
is a cross-divisional, cross-functional group composed of
internal and external thought leaders. Our Ethnic Advisory
Boards provide counsel and advice on a broad range of social,
cultural and business needs, including marketing, hiring,
supplier development and diversity. In the U.S., we have
African-American and Latino/Hispanic Ethnic Advisory Boards.
In Canada, we have an Asian Advisory Council.
Providing a Safe and Healthy Work Environment
The safety, health and well-being of our employees around
the world are of utmost importance. PepsiCo is proud to live
by our Sustainability Vision, and we believe that protecting the
health and safety of our people is a core value.
occurA1oNAt ueAt1u ANn sAre1v
PepsiCo believes that a safe and healthy workplace is a basic
human right, and protecting the health and safety of our
people is among our core values. We have communicated
our beliefs and commitment to them in our companys
Occupational Health and Safety Policy, and have adopted an
integrated framework for managing environmental, health
and safety risks (the PepsiCo Environmental Health and Safety
Management System (EHSMS) framework). The PepsiCo
EHSMS framework combines our environmental, health and
safety expectations for all of our business units and aligns with
the international Occupational Health and Safety Assessment
Series management standard OHSAS 18001:2007 and
international specication for Environmental Management
Systems ISO 14001:2007.
PepsiCos commitment to occupational health and safety is
described in the PepsiCo Occupational Health and Safety Policy.
The policy is posted on the PepsiCo website and intranet, and
is referenced in the PepsiCo Code of Conduct training. The
PepsiCo Occupational Health and Safety Policy was developed
in consultation with more than 500 PepsiCo employees and
was approved by the PepsiCo Public Policy Coordinating
Group. The policy has been translated into 20 languages.
> Download our Occupational Health and Safety Policy
Health and safety performance is governed by the PepsiCo
Health and Safety Leadership Council (HSLC). The council
comprises members from across PepsiCo, including
representation from Frito-Lay North America, PepsiCo Canada,
SACC Sabritas in Mexico, PepsiCo International, PepsiCo
Americas Beverage, Quaker Food & Snacks, Global Research
& Development, Risk Management and Legal. The HSLC is
sponsored by PepsiCos CEO, SVP of Human Resources and
SVP of Operations.
The HSLC operates under three platforms: governance,
leverage and connectivity. The HSLC reports on health and
safety performance using globally-agreed-upon metrics and
implementation of the PepsiCo EHSMS framework. The HSLC
meets every two months and is responsible for:
Dening the PepsiCo Occupational Health and Safety policy
and strategic framework and monitoring its compliance
across all divisions.
Assessing performance, systemic strengths, and gaps
relative to our own aspirations and external benchmarks.
Developing goals and timelines for PepsiCo health and
safety performance.
Prioritizing and directing activities to continually improve
performance.
Partnering with efforts in Human and Environmental
Sustainability to assure comprehensive and complementary
strategies for PepsiCos Performance with Purpose.
Advising and informing PepsiCo senior management on
matters of worker health and safety.
Many of our facilities have been externally accredited for their
health and safety management systems and performance.
In the United States, 28 Frito-Lay North America plants,
one Quaker Foods North America and four North American
Beverage plants have been recognized under the Occupational
Safety and Health Administration (OSHA) Voluntary Protection
Programs (VPP) Star program. Additionally, our Quaker,
Tropicana and Gatorade plants in North America have been
invited by OSHA to participate in Phase 2 of the VPP Corporate
Pilot. Globally, ve of our international plants have achieved
OHSAS 18001 certication. Our remaining plants continue to
implement the PepsiCo EHSMS framework.
PepsiCo International also published more than 20
environment, health and safety (EHS) standards that describe
minimum requirements for EHS management systems and
risks, including EHS risk management, permit-to-work, EHS
Competence and training.
PepsiCo Chicago has a dedicated professional staff comprised
of approximately 13 EHS professionals who are responsible
for both occupational safety and health programs and
environmental programs. PepsiCo Chicagos manufacturing
sites have one or more dedicated EHS professionals who
assist their sites in meeting PepsiCo Chicagos standards
and risk management expectations. All site EHS leaders are
members of their site leadership teams, and report to both
their plant managers and division EHS staff. PepsiCo Chicagos
EHS efforts are delivered through management systems
called Organizational Practices that apply to both employee
safety and health and environmental considerations. These
Organizational Practices include Leadership and Commitment,
Employee Ownership, Risk Management, Training and
Learning, Information Management, and Continuous
Improvement. EHS risk prevention and regulatory compliance
is achieved through the Risk Management Organizational
Practice. Risk Management includes identication of EHS risks,
evaluation and prioritization, and execution of feasible and
effective controls (both interim and long-term).
In 2008, PepsiCo Chicago received several internal and external
awards, including OSHA VPP Star certication at Columbia,
Mo., Quaker and OSHA VPP Star recertication at Ft. Pierce,
Fla., Tropicana.
Frito-Lay continued its involvement in OSHA VPP. During 2008,
the manufacturing sites in Kirkwood, N.Y., and Modesto, Calif.,
were approved at the Star level, the highest honor bestowed
under the program. Frito-Lay now has 30 VPP Star sitesthe
most in the food industry.
Frito-Lay continues to build on its strong safety culture in both
the Operations and Sales functions. Frito-Lay continues to
provide ongoing injury and vehicle collision prevention training
for all associates and is leveraging the power of employee
engagement to create the positive safety culture needed for
long-term success. The organization embraces the safety
visionZero Injuries and Zero Collisionsand believes that
all injuries can be prevented.
Human Rights
PepsiCo Values include a commitment to respect others,
inside and outside the company, which is consistent with our
value of treating people with dignity. PepsiCos Human Rights
Workplace Policy ensures a work environment that is free from
all forms of discrimination where people feel comfortable and
respected. In 2008, we translated this policy into 30 languages
and broadly communicated it as part of our annual Code of
Conduct Training, a leading-edge process that ensures that our
businesses are operating in the most ethical way possible.
Human rights policy violations can be reported to HR,
the PepsiCo Law Department, or through the Speak Up
hotline. We encourage employees to report issues such as
discrimination, harassment and mistreatment of employees
when they occur. In addition, in the United States, PepsiCo
is providing inclusion training to associates, including all
managers. During the training, we explore the human rights
intrinsic to all and the importance of sustaining an inclusive
culture.
PepsiCos Code of Conduct requires all employees to follow
local employment laws and regulations, including child labor
laws and treatment of employees. We have set 15 as the
minimum age that anyone can work for PepsiCo.
rersco uumAN aou1s woakrtAce rotcv
PepsiCo respects the dignity of our workers in the workplace,
and we work to ensure our associates rights to personal
security; a safe, clean and healthful workplace; and freedom
from harassment or abuse of any kind.
We deal fairly and honestly with our associates regarding
wages, benets and other conditions of employment, and
recognize our associates right to freedom of association. We
do not use compulsory or child labor.
We do not tolerate discrimination, and work to ensure equal
opportunity for all associates.
We comply with all applicable laws, regulations and other
employment standards wherever we operate or work.
We encourage our partners, suppliers, contractors and vendors
to support these policies, and we place substantial value on
working with others who share our commitment to human
rights.
As a signatory to the United Nations Global Compact, PepsiCo
is visibly committed to all of its 10 principles, including those
for Human Rights and Labor Standards. We collaborate with
our contractors, licensed bottlers, suppliers, customers and
local communities to reduce the health and safety impacts of
our daily operations and technology as it applies to them.
> Download our Human Rights Policy
Speak Up
To promote high ethical standards and open communication
across a global organization, we ensure that employees have
clear lines of communication to report potential issues. We
have a telephone hotline called Speak Up for this purpose.
It is accessible from around the world at no charge to
employees. To further ensure an environment that fosters open
communications, employees may remain anonymous.
PepsiCo expects and encourages all of its employees, as well
as its contractors, subcontractors, agents and their employees,
to promptly report on a condential and/or anonymous basis
any conduct or situation that he/she believes could conict
with PepsiCos Code of Conduct, Values, and policies or
violates state local or federal law. Speak Up is a 24-hour,
toll-free, anonymous hotline available to report any suspected
misconduct or business abuse. Speak Up calls are received by
a third-party vendornot a PepsiCo employeeto ensure
anonymity. The Speak Up hotline is available in 48 countries
and 33 languages through dedicated country-specic toll free
phone lines, and available elsewhere via collect call. Any Speak
Up calls received from suppliers, vendors and customers are
handled in the same manner as calls received from employees.
Explanations of Speak Up are provided on this website, on
posters and in PepsiCos Worldwide Code of Conduct, which is
available on PepsiCos website in 33 languages.
The availability of the Speak Up hotline is communicated
across PepsiCo. Types of incidents that may be reported
through the Speak Up hotline include, but are not limited to:
Employee mistreatment
Discrimination, including sexual harassment
Product tampering
Substance abuse
Falsifying company records
Accounting irregularities
Questionable business practices
Fraud or theft
Criminal conduct
Impermissible gifts
Safety hazards
PepsiCo continues to add additional lines and languages as
the company acquires new businesses and expands into new
countries. In the past year, three new country-specic lines
were installed in Pakistan, New Zealand and Croatia, and
an additional ve lines went live in June 2009. In addition,
PepsiCo continually improves the service offered by the hotline.
In the fall of 2008, a new enhanced web-based reporting
tool was launched, enabling complaints to be made over
the Internet to a secure website maintained by a third-party
vendor. As a result of the new web-based reporting tool, the
number of complaints received over the web has increased
three-fold over the rst six months since the tool went live.
HIV/AIDS
Across PepsiCo we recognize HIV/AIDS as a uniquely
challenging global health issue that poses a signicant threat
to the sustainability of our business operations worldwide. We
are committed to making a signicant contribution to the ght
against this devastating pandemic and to assisting employees
and family members affected by it. PepsiCo has established
an internal task force on HIV/AIDS to address the issue in our
businesses. In addition to the United States and South Africa,
the task force identied priority countries where there is a
high or rising prevalence and we have major businesses: India,
China and Russia.
We made have made great progress in developing and
implementing workplace programs in South Africa, India,
Russia and China. Thailand and Mexico have recently joined in
the effort.
In South Africa, we are continuing the direct AIDS intervention
program, which includes full treatment coverage for all
employees and spouses. The program provides community
outreach through peer education and providing assistance
to affected families. PepsiCos South Africa business has
also implemented quarterly Health and Wellness weeks that
provide employees with free testing for conditions such as
HIV, diabetes and high blood pressure, and free counseling
on matters such as nutrition and cancer. South Africa ICAS
E-Care Employee Wellness Programme helps employees take
ownership of total well-being (physical, psychological and
social).
In India, we have provided education, treatment and
community outreach programs, including peer education. In
China, we have provided education, engaged in programs
with outside groups, and have a dedicated wellness doctor
who visits our business unit facilities to provide information
on health and wellness issues, with an emphasis on HIV/AIDS.
An information hotline was established to answer questions
about HIV/AIDS and other health issues, as well as to provide
referrals to treatment facilities and case management where
appropriate. In Russia, in addition to employee education and
awareness, PepsiCo is participating in community educational
programs.
The Thailand business has been a part of a number of
activities, including a National Childrens Days activity book
on AIDS prevention for children and how to live with AIDS-
infected children. The business has a certicate of gold level
from the AIDS Response Standard Organization (ASO Thailand)
for outstanding HIV/AIDS work.
In the United States, PepsiCo has an active program that
includes information on the HealthRoads website, a review
of benet plans to ensure coverage of HIV/AIDS. In addition,
associates participated in HIV/AIDS awareness marches across
the United States, raising funds to ght this disease.
> More information about our HIV/AIDS policy
rou1No uv/Ans
Since 2002 PepsiCo has been a member of the Global Business
Coalition on HIV/AIDS, Tuberculosis and Malaria (GBC), a not-
for-prot group dedicated to ghting HIV/AIDS and related
diseases.
nevetorNo ru1uae teAneas
PepsiCo participated in Fair and Independent Courts: A
Conference on the State of the Judiciary, at the request of
Supreme Court Justice Sandra Day OConnor. The conference
goal was to advance the independence and fairness of the
judiciary, which is important to the business environment.
Separately, the PepsiCo Foundation made a $100,000 grant to
the Georgetown University Law Center. Our contribution will
help to implement the projects like the production of an online
tool for high school students to learn about the independent
courts.
rANnemc raerAaA1oN
PepsiCo recognizes the dangers pandemics could pose to our
employees and business, and has established a task force that
is addressing this and other potential pandemics. In the United
States, this includes education, awareness and steps to take
regarding work-related issues.
Leaving a Positive Imprint on Society
The PepsiCo Foundation has a long history of funding diversity
programs in education and workforce development with
community-based organizations in the United States. The
Foundations objective is to foster economic achievement and
mobility for the underserved and minority populations.
Johns Hopkins University was awarded a $5 million grant
in support of the Diplomas Now program, a collaborative
initiative between Johns Hopkins, City Year, and Communities
in Schools. The goal is to transform the high-poverty secondary
schools in the 10 U.S. cities that produce most of the nations
dropouts. The program seeks to substantially increase the
graduation rate among these schools by helping students stay
on track, graduate from high school and prepare for adult
success.
The PepsiCo Foundation continued to support National
Council of LaRaza and the Escalera project in 2008. Together
with National Council of LaRaza in 2001, PepsiCo Foundation
created the NCLR Escalera Project: Taking Steps to Success
to stem the tide and close the gap of Latino high school
dropouts, encouraging them to graduate from high school,
prepare for college and explore career opportunities through
internships.
The Diamond Scholars program was supported by the PepsiCo
Foundation again in 2008 and has been implemented in
Dallas, Detroit, Miami, San Jose, and Los Angeles. Annually,
it offers renewable scholarship aid to urban youth who have
demonstrated an ability to overcome adversity and plan to
pursue post-secondary education.
The Foundations commitment extends beyond grants by
encouraging employees to engage in their communities
through volunteer activities and by offering a Matching
Gifts program, United Way Campaigns, and Community
Service Day. In 2008, more than $6 million in matching funds
was distributed globally in support of employees nancial
contributions.
commuN1v eNoAoemeN1
PepsiCo encourages and supports its employees in their efforts
to volunteer with community organizations and projects. We
sponsor and participate in a wide variety of local and national
activities through employee involvement. During PepsiCos
2008 Global Week of Community Service, more than 1,800
employees around the world spent time serving their local
communities and service organizations and served 9,273
volunteer hours.
Our Business
PepsiCo offers the worlds largest
portfolio of billion-dollar food and
beverage brands, including 18 different
product lines that each generate morethan
$1 billion in annual retail sales
Our main businessesFrito-Lay, Quaker, Pepsi-Cola, Tropicana
and Gatoradealso make hundreds of other nourishing,
tasty foods and drinks that bring joy to our consumers in over
200 countries. With more than $43 billion in 2008 revenues,
PepsiCo employs 198,000 people who are united by our
unique commitment to sustainable growth, called Performance
with Purpose. By dedicating ourselves to offering a broad
array of choices for healthy, convenient and fun nourishment,
reducing our environmental impact, and fostering a diverse
and inclusive workplace culture, PepsiCo balances strong
nancial returns with giving back to our communities
worldwide.
PepsiCo is organized in three business units, as follows:
PepsiCo Americas Foods (PAF), which includes Frito-Lay
North America, Quaker Foods North America and all of our
Latin American food and snack businesses (LAF), including
our Sabritas and Gamesa businesses in Mexico.
PepsiCo Americas Beverages (PAB), which includes
PepsiCo Beverages North America and all of our Latin
America beverage businesses.
PepsiCo International (PI), which includes all PepsiCo
businesses in the United Kingdom, Europe, Asia, the Middle
East and Africa.
In 2008, our three business units were comprised of six
reportable segments, as follows:
Frito-Lay North America (FLNA)
Quaker Foods North America (QFNA)
Latin Americas Foods (LAF)
PepsiCo Americas Beverages (PAB)
United Kingdom & Europe (UKEU)
Middle East, Africa & Asia (MEAA)
Beginning in 2009, we realigned certain countries within PI
to be consistent with changes in geographic responsibility.
As a result, our businesses in Turkey and certain Central Asia
markets will become part of United Kingdom & Europe,
which was renamed the Europe division. These countries
were formerly part of Middle East, Africa & Asia, which was
renamed the Asia, Middle East & Africa division.
Our Operations
Outside of the United States, our largest markets are Mexico,
the United Kingdom and Canada.
In addition to our various headquarters, our major properties
include:
Frito-Lay North America (FLNA)
FLNAs most signicant properties include its headquarters
building and a research facility in Plano, Tex., both of
which are owned. FLNA also owns or leases approximately
40 food manufacturing and processing plants and
approximately 1,750 warehouses, distribution centers and
ofces. In addition, FLNA also utilizes approximately 55
plants and production processing facilities that are owned
or leased by our contract manufacturers or co-packers.
Quaker Foods North America (QFNA)
QFNA owns a plant in Cedar Rapids, Iowa, which is its most
signicant property. QFNA also owns or leases ve plants
and production processing facilities in North America. In
addition, QFNA utilizes approximately 25 manufacturing
plants, production processing facilities and distribution
centers that are owned or leased by our contract
manufacturers or co-packers.
Latin America Foods (LAF)
LAFs most signicant properties include a food plant in
Celaya, Mexico, and three snacks plants in the Mexican
cities of Vallejo and Veracruz and the Brazilian city of Itu, all
of which are owned. LAF also owns or leases approximately
50 food manufacturing and processing plants and
approximately 660 warehouses, distribution centers and
ofces. LAF also utilizes one plant facility that is owned by a
contract manufacturer.
PepsiCo Americas Beverages (PAB)
PABs most signicant properties include the headquarters
building it shares with QFNA in downtown Chicago, Ill.,
which is leased, and its Tropicana facility in Bradenton,
Fla., its concentrate plant in Ireland, and its research and
development facility in Valhalla, N.Y., all of which are
owned. PAB also owns or leases approximately 40 plants
and production processing facilities and approximately 50
warehouses, distribution centers, and ofces. In addition,
authorized bottlers in which we have an ownership interest
own or lease approximately 65 bottling plants. PAB also
utilizes approximately 70 plants and production processing
OUR BUSINESS
facilities and approximately 60 warehouses and distribution
centers that are owned or leased by our contract
manufacturers or co-packers.
Europe
Europes most signicant properties are its snack
manufacturing and processing plants located in Leicester,
U.K., and Coventry, U.K., each of which are owned.
Europe also owns or leases approximately 35 plants and
approximately 320 warehouses, distribution centers and
ofces. In addition, authorized bottlers in which we have
an ownership interest own or lease seven plants and
approximately 30 distribution centers. Europe also utilizes
approximately one plant and production processing facility
and approximately two distribution centers that are owned
or leased by our contract manufacturers.
Asia, Middle East & Africa (AMEA)
AMEAs most signicant properties are its beverage plant
located in Shenzhen, China, and its snack manufacturing
and processing plant located in Tingalpa, Australia, each of
which are owned. AMEA also owns or leases approximately
100 plants and approximately 1,100 warehouses,
distribution centers and ofces. In addition, authorized
bottlers in which we have an ownership interest own or
lease approximately 25 plants and 120 distribution centers.
AMEA also utilizes two plants and production processing
facilities that are owned or leased by our contract
manufacturers.
Shared Properties
QFNA shares ve production facilities and ve warehouses
and distribution centers with FLNA, 10 warehouses and
distribution centers with both FLNA and PAB, and 10
ofces with PAB and FLNA, including a research and
development laboratory in Barrington, Ill. PAB, Europe and
AMEA share production facilities at two concentrate plants
in Cork, Ireland. PAB and AMEA share a concentrate plant
in Colonia, Uruguay.
Mission, Values, and Guiding
Principles
Mission
We aspire to make PepsiCo the worlds premier consumer
products company, focused on convenient foods and
beverages. We seek to produce healthy nancial rewards
for investors as we provide opportunities for growth and
enrichment to our employees, our business partners and the
communities in which we operate. And in everything we do,
we strive to act with honesty, openness, fairness and integrity.
Values
Our commitment is to deliver sustained growth through
empowered people acting with responsibility and building
trust. We dene these values as follows:
Sustained Growth is fundamental to motivating and measuring
our success. Our quest for sustained growth stimulates
innovation, places a value on results and helps us understand
whether actions today will contribute to our future. This value
is about the growth of our employees and the companys
performance. It prioritizes making a difference and getting
things done.
Empowered People means we have the freedom to act and
think in ways that we feel will get the job done, while being
consistent with the processes that ensure proper governance
and being mindful of the rest of the companys needs.
Responsibility and Trust form the foundation for healthy
growth. Its about earning the condence that other people
place in us as individuals and as a company. Our responsibility
means we take personal and corporate ownership for all we
do, to be good stewards of the resources entrusted to us. We
build trust between ourselves and others by being committed
to succeeding together.
Guiding Principles
We must always strive to:
Care for customers, consumers, and the world we live in
Sell only products we can be proud of
Speak with truth and candor
Balance short term and long term
Win with diversity and inclusion
Respect others and succeed together
OUR BUSINESS
Code of Conduct
Along with our Values, the PepsiCo Code of Conduct is at the
center of everything we do. The Code applies to all employees,
ofcers and directors, to all divisions and subsidiaries, and
to every business transaction we make. It unites all PepsiCo
employees through shared values and common goals, and is
a declaration of our commitment to the highest standards of
ethics and integrity.
Since 1976, PepsiCo has had a Code of Conduct that is
regularly updated and communicated to all our employees
annually. The Code includes provisions relating to ethical
business dealings, bribery, business gifts and entertainment,
discrimination, harassment, condentiality of information,
insider trading, accounting and record-keeping, health and
safety, human rights, the environment, political activities,
protection of company assets, and whistle-blowing.
Code of Conduct Awareness
The PepsiCo Compliance and Business Practices department
works to educate employees on business ethics and Code
of Conduct compliance to ensure that employees know the
principles embodied in the Code as the rst fundamental step
towards operating ethically.
Each year, PepsiCo requires over 24,000 employees worldwide
to train and certify compliance to the Code of Conduct. In
May and June of 2008, over 24,000 managers and employees
completed a 45 minute web-based Code of Conduct training
course, which was available in 18 languages. The online
training course provided a detailed overview of the Code of
Conduct and featured key policies, such as the Human Rights
Workplace Policy and the International Anti-Bribery Policy. Each
year, a new customized Code of Conduct training course is
developed by the Compliance department, and in 2009 up to
40,000 employees will train in 23 languages.
In addition to the annual online Code training, PepsiCo
designates one month each year as Code of Conduct Month
to increase awareness of the Code across the entire employee
population. During Code of Conduct Month, copies of the
Code are distributed to all PepsiCo employees, including those
in plants, producing facilities and warehouses. The Code is also
promoted through newsletter articles, e-mail messages from
division presidents and senior managers, mentions at town
hall meetings and work-site posters. During Code of Conduct
Month, all employees are encouraged to review the Code
and recommit to what we stand for: doing the right thing
consistently and without compromise.
In an effort to expand the compliance training initiatives
beyond the annual Code of Conduct Month activities, a
year-round compliance training curriculum was developed
in 2008. Online training on key risk areas, such as Antitrust,
Trade Spend Compliance and Anti-Bribery, was commenced in
2009. New topics will be added every year to the compliance
training portfolio. This supplemental training is designed to
instill an effective values-based compliance and ethics culture
throughout the company.
Code and Our Policies
At PepsiCo, operating ethically and with integrity means
compliance with the laws and regulations that impact our
business worldwide, our Values, our Code of Conduct, and
the corporate and division policies that support the principles
embodied in the Code. Such policies include but are not
limited to the International Anti-Bribery Compliance Policy,
Anti-Harassment/Discrimination Policy, Equal Employment
Opportunity Policy, Human Rights Workplace Policy, Customer
Trade Agreement Policy, Disclosure Policy, Environmental
Policy, Food Safety Policy, Information Security Policy, Travel
& Entertainment Policy, Workplace Violence Policy, Security
Communications Protocol, and Occupational Health and Safety
Policy. These policies apply to all of our employees worldwide
and are posted on company intranets for downloading by
employees.
Making the Code Count
PepsiCos Chief Compliance Ofcer has overall responsibility
for overseeing PepsiCos implementation of its Code of
Conduct, supported by other functional groups including
Control, Corporate Communications, Human Resources and
Corporate Audit. Within each operating division, the Law
Department, Controller and Human Resources Department are
primarily responsible for their business units implementation
of the standards and procedures established by the Code.
Division lawyers work closely with members of the Compliance
function. In 2009, Compliance established a cross-functional
network of division-based Control Environment Councils
consisting of Controllers, Personnel Ofcers and Legal
representatives to improve local control and maintain
efciencies in reporting, investigating and escalating signicant
matters.
All employees are required to comply with the Code of
Conduct. Actions that uphold the Code of Conduct have been
recognized with the Chairmans Award, which is given to
employees who show outstanding commitment to PepsiCos
Values and the Code. The Award includes a special stock grant
in recognition of the recipients contributions.
Failure to comply with the Code may result in a variety of
corrective actions, including counseling, written warnings,
reduction in annual compensation or annual bonus, failure to
receive long-term compensation, cancellation of stock options,
and termination, depending on the type and seriousness of the
matter.
Compliance Review and Reporting
PepsiCos compliance programs are periodically independently
reviewed by a third party to determine key compliance risks.
PepsiCo has in effect a Code of Conduct Escalation Policy
requiring management attorneys to report any violations of the
securities laws, breach of duciary duty or similar violations.
PepsiCos outside auditor receives reports regarding potentially
signicant violations that relate to fraud, accounting, auditing
and internal control matters. The Audit Committee also
receives regular reports regarding compliance with the Code of
Conduct.
Information on violations of the Code of Conduct is reported
internally on a need-to-know basis to monitor trends,
foster consistency of discipline, and ensure that appropriate
corrective action and in-person training is taken. Efforts are
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made to share learnings and increase awareness of the risks
attendant to Code of Conduct violations internally within
the organization without compromising condentiality or
anonymity of any specic violation(s). As an example, our
customized Code of Conduct online training course includes
interactive activities and work-related scenarios that are
generally based on actual Code violations that have occurred
within the company.
PepsiCo also maintains its Speak Up reporting hotline, which
is a toll-free, anonymous hotline for any employee to report
potential violations of the Code of Conduct. This hotline
is operated by an independent vendor and is available to
employees, vendors and customers worldwide and 24 hours a
day. In addition to receiving reports of misconduct and Code
violations, the Speak Up hotline also receives general inquiries
and questions on the companys policies and on Code of
Conduct compliance. Employees are also encouraged to raise
questions on business ethics and Code compliance to the
Chief Compliance Ofcer, the General Counsel or the General
Auditor. In addition, the Compliance department maintains
and monitors a special projects e-mail mailbox that accepts
inquiries from employees on Code-related issues and training.
> Download Our Code of Conduct
Risk Management
PepsiCo is subject to risks in the normal course of business
with respect to several areas, including those relating to
sustainability. These risks include: product demand; our
reputation; information technology; supply chain; retail
consolidation; the loss of major customers and failure to
maintain good relationships with our bottling partners;
global, economic, environmental, and political conditions; the
legal and regulatory environment; workforce retention and
outsourcing; raw materials and other supplies; and market
risks.
In 2008, we continued to focus our risk mitigation efforts to
further reduce PepsiCos exposure to risks, and integrated
those efforts in our businesses operating plans and budgets
where accountability is assigned and performance is measured.
Risk Management Process
PepsiCos Chief Risk Ofcer is responsible for heading the
companys risk management function, reporting directly to the
CEO. Our risk management process is intended to ensure that
risks are taken knowingly and purposefully. PepsiCo leverages
an integrated risk management framework at the corporate
level as well as across divisions to identify, assess, prioritize,
manage, monitor and communicate risks across the company.
The infrastructure underlying PepsiCos risk management
framework supports a top-down, bottom-up viewpoint of the
nancial, operational, strategic and compliance risks facing
PepsiCo at various levels of the Company. This framework
includes:
The PepsiCo Risk Committee (PRC) is a cross-functional,
senior leadership team which identies, assesses, prioritizes
and addresses strategic, reputational and emerging risks,
and is chaired by PepsiCos Chairman and CEO. The PRC
is charged with owning the development of mitigation
activities and communicating to PepsiCos Board of
Directors, Audit and/or Compensation Committee.
Meetings are held quarterly, and from a communications
standpoint each risk is owned by a PRC member, who is
responsible for owning and reporting out one of PepsiCos
top risks.
The PepsiCo Executive Committee (PEC), comprised
of a cross-functional, geographically diverse, senior
management group that meets regularly to identify, assess,
prioritize and address strategic and reputational risks
Division Risk Committees (DRCs), comprised of cross-
functional senior management teams that meet regularly
each year to identify, assess, prioritize and address division-
specic operating risks
PepsiCos Risk Management Ofce (RMO), which manages
the overall risk management process, provides ongoing
guidance, tools, and analytical support to the PEC and the
DRCs, identies and assesses potential risks, and facilitates
ongoing communication between the parties as well as to
PepsiCos Audit Committee and Board of Directors
PepsiCo Corporate Audit, which evaluates the ongoing
effectiveness of our key internal controls through periodic
audit and review procedures
PepsiCos Compliance Ofce, which leads and coordinates
our compliance policies and practices
As a subset of our many risk mitigation capabilities, PepsiCo
has dedicated crisis management resources at corporate
and division locations responsible for the crisis management
capabilities of the company. Crises include disaster recovery,
product recall, etc. The company has crisis management
protocols and procedures for each division and at corporate
headquarters that dene when the protocols should be
activated and that also identify key individuals. The crisis
management program includes a risk assessment methodology
by geographic location and business disruption tabletop
testing exercises that ensure the readiness and effectiveness of
the program.
Many work processes across PepsiCo incorporate risk
management principles, including PepsiCos compliance
program; SOX 302, 307, and 404 compliance programs;
internal audit protocols; nancial policies; pre- and post-
close reviews; operating policies and procedures; strategic
planning; annual operating plans; business and joint venture
reviews; advertising guidelines and reviews; product safety
and security programs; crisis management; disaster recovery
plans; and people planning and development processes; as
well as Corporate, Divisional, Sector, and Business Operating
committees.
Assessment and prioritization of risks are based on calculation
of likelihood and impact, taking vulnerability into account.
Velocity is also measured to assess strategic risks at a
corporate level. Emerging risks, which are considered slow to
materialize but high impact, are also addressed within the risk
management process.
In addition to the embedded risk management activities that
take place each and every day within our normal business
processes, PepsiCo uses an integrated risk management
framework to explicitly identify, assess, prioritize, manage,
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monitor and communicate risks across the company. Utilizing
the enterprise risk management framework, the process is
intended to deliver risk transparency, and to provide clear
understanding of the level of resiliency of our most critical
risks and alignment between management and our Board
of Directors regarding the companys risk tolerance. These
deliverables are achieved through the following efforts:
Risk IdenticationThis takes place annually from a top-
down and bottom-up viewpoint. Our risk identication
efforts seek to evaluate both external sources of risks as
well as risk associated with our internal capabilities in the
context of achieving our long-term vision (e.g., being the
premier consumer product goods company focused on
the convenient food and beverage category). Risks are
identied on an inherent basis.
Risk Assessment After identifying our most signicant
inherent risks, each assessing party (PRC, DRCs, RMO)
assesses the most signicant risks from a probability, impact
and vulnerability perspective. This assessment requires
that we fully understand the existing capabilities, controls,
programs, insurance coverage and other mitigating factors
that enable an accuracy assessment of the residual risk
assessment.
Risk PrioritizationAfter assessment, all risks that exceed
a predetermined threshold are prioritized by both the
assessment itself as well as the ability to inuence/mitigate.
In addition, the RMO aggregates the risk assessment
information to look for risk interdependencies and common
mitigation solutions.
Risk ResponseFollowing prioritization, the PRC and DRCs
are required to explicitly determine the response to each
signicant risk. The responses include accepting, avoiding,
mitigating and transferring (via third-party insurance).
The DRCs also identify which risks need monitoring on an
ongoing basis and what measurement index will be used.
Having selected the risk response, management identies
control activities necessary to help ensure that the risk
responses are carried out effectively.
Risk maps are submitted to the RMO by DRCs on a semiannual
basis and are used to document specic information about
identied risks, including the assessment of the likelihood and
impact of the risk, as well as the risk response and urgency
for action. Risk maps are also used to monitor and track the
progress against the mitigation strategies.
In addition, PepsiCos corporate risk owners are required to
submit annual updates of our top strategic risks to RMO on a
periodic basis. Similar to the DRC risk maps, these documents
capture and prioritize each risk and list mitigation strategies
and progress made throughout the year, as well as a targeted
end state for PepsiCos position with regard to each risk.
Communication
Each DRC is required to summarize its risk management
efforts by providing semiannual DRC meeting minutes, as
well as semiannual submission of the division risk map. For
risks disclosed in our annual report, PepsiCo has assigned
Executive Risk Owners responsible for understanding the risk
across the company and providing annual updates to the PRC,
as well as to the Audit Committee or full Board of Directors.
Lastly, a semiannual risk management update is provided to
the PepsiCo Audit Committee to discuss our risk prole, risk
mitigation efforts and risk management process.
> More information about our business risks
Corporate Governance
Our governance includes the following:
Board of Directors and Standing Committees
Disclosure Committee
PepsiCo Executive Committee
Public Policy Coordinating Group
Board of Directors and Standing Committees
PepsiCos business strategy and affairs are overseen by our
Board of Directors. Our Board of Directors has three Standing
Committees:
1. Nominating and Corporate Governance
2. Audit
3. Compensation
As of March 2009, there are 13 board members,
including 11 independent outside directors and
2 executive directors. Members of all Board
Committees are independent outside directors.
PepsiCos independent director standards are dened in the
Corporate Governance Guidelines in the section entitled
Director Qualication Standards. These standards conform
to the director independence rules of the New York Stock
Exchange.
> View our Corporate Governance Guidelines
The PepsiCo Board, in its strategic oversight capacity, reviews
key social responsibility and sustainability issues on an as-
needed basis. In addition, the Board Committees periodically
review specic issues or initiatives consistent with the scope of
each committees charter.
See the Investors/Corporate Governance section of PepsiCo.
com for Corporate Governance Guidelines, Audit Committee
Charter, Compensation Committee Charter and Nominating
Committee Charter.
> More information about the election of directors
PepsiCo Executive Committee (PEC)
The PEC is comprised of a cross-functional, geographically
diverse senior management group that identies, assesses,
prioritizes and addresses strategic and reputational risk and
is chaired by Indra Nooyi, PepsiCos Chairman and CEO. This
committee meets regularly on all areas of the business.
Public Policy Coordinating Group
In July 2007, PepsiCo established the Public Policy Coordinating
Group to address issues of public policy and sustainability. The
group is under the direction of PepsiCos General Counsel and
includes senior functional heads as well as other company
leaders who are focused on Human, Environmental and Talent
Sustainability:
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Human Sustainability is led by our Chief Scientic Ofcer
(CSO), who is charged with driving our product portfolio
transformation through our global R&D organization and
businesses. Our CSO reports to our Chairman and CEO and
serves on the PEC. In 2008, we expanded our global research
and development capability to address public health concerns
including obesity. Our network of leaders includes world-
renowned clinical scientists and experts in science, nutrition,
food safety, epidemiology and health policy.
Environmental Sustainability is led by the
Environmental Sustainability Leadership Team (ESLT), which
is charged with advising and informing the Chairman and
CEO, the PEC and the Board of Directors on matters of
environmental sustainability. The ESLT is comprised of the
heads of the supply chain at each of our four businesses,
as well as senior leaders from Sales, Human Resources,
Communications, Government Affairs, Legal, R&D, Purchasing,
Finance and Investor Relations. They are supported by the
Environmental and Sustainable Packaging Councils, which are
comprised of subject matter experts across all divisions and are
responsible for recommending and implementing actions.
Talent Sustainability is led by our Chief Personnel
Ofcer (CPO), who is supported by our stafng team, our
compensation and benets team, and our diversity and
inclusion team. Our CPO reports to our Chairman and CEO
and serves on the PEC. Were committed to developing our
employees, enabling them to build careers and become
ambassadors for our company and our brands.
Communications with the Board of Directors
To facilitate communications with our shareholders, we
provide various methods to contact the Board of Directors.
These may be found under Contact the Board of Directors/
Audit Committee in the Corporate Governance section
of our website. In addition, PepsiCos Proxy Statement,
which is distributed to all shareholders, details the process
for contacting the Board, a committee of the Board or an
individual member of the Board.
Shareholder Proposals
Shareholders wishing to submit shareholder proposals may do
so in accordance with the instructions in our Proxy Statement.
> View our proxy statement
Board and Executive Compensation
PepsiCos Proxy Statement includes a detailed description
of our Board of Directors compensation program, which is
the same for all nonmanagement Board members, with an
additional retainer provided to the three Committee Chairs and
to the Presiding Director, who does not serve as a Committee
Chair.
Compensation for the CEO, CFO and next highest paid ofcers
are disclosed in the annual Proxy Statement. Details include
salary, bonus, stock option awards, performance-based
restricted stock awards, performance-based long-term cash
awards, perquisites, pension and executive income deferral
earnings. Information on stock-based compensation values
directly tied to shareholder value is also included.
PepsiCos Proxy Statement also describes stock ownership
guidelines applicable to Senior Ofcers and the Board of
Directors, as well as our exercise and hold policy. Beginning
in 2009, executive ofcers who meet their recently increased
ownership level are exempt from this exercise and hold
requirement as long as they continue to meet their ownership
requirement.
> View our Proxy Statement
Conicts of Interest
Our Code of Conduct, which applies to all PepsiCo employees
and directors, contains clear guidelines regarding conicts
of interest. PepsiCos Corporate Governance Guidelines also
include director independence standards to address potential
director conicts of interest.
Director Nomination Process
The Nominating and Corporate Governance Committee
does not solicit director nominations but will consider
recommendations for director nominees if the individuals
recommended meet certain minimum Board membership
criteria detailed in our Proxy Statement and, if so, if the
candidates expertise and particular set of skills and
background t the current needs of the Board. This process
is designed to ensure that the Board includes members
with diverse backgrounds, skills and experience, including
appropriate nancial and other expertise relevant to the
business of the Company.
Annual Performance Evaluation of the Board
PepsiCos Nominating and Corporate Governance Committee
conducts an annual review and assessment of Board and
Committee performance.
Several independent organizations rate companies on the
quality of their corporate governance. PepsiCo received
a perfect 10 out of 10 corporate governance rating from
Governance Metrics International in 2008/2009.
> More information about our Nominating and Corporate
Governance Committee Charter
Capital Expenditure Filter
All requests for capital expenditures over $5 million must
include a review of sustainability issues and performance
against appropriate benchmarks. Additionally, opportunities
for improving the sustainability of the project surrounding the
capital request must be highlighted. The goal is to incorporate
more sustainability opportunities in projects right from the
start.
Memberships and Partnerships
PepsiCo has always prided itself on being a good corporate
citizen and taking action or aligning itself with leading experts
and organizations focused on emerging social issues. Examples
of this include addressing health and wellness initiatives
including diet and nutrition concerns, climate change, water
resources and HIV/AIDs.
Through our memberships and partnerships, PepsiCo endorses
a number of initiatives related to our businesses. In addition
to the initiatives noted below, on a global level, we have
endorsed the United Nations Millennium Development Goals.
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Professional Trade Groups
We are also members of many trade and professional
groups and take an active role in these as suitable. These are
sometimes local and specic to the business. Among these are:
American Beverage Association (ABA)
Snack Food Association
International Life Science Institute
International Society of Beverage Technologists
National Safety Council
American Industrial Hygiene Association
American Society of Safety Engineers
Con Mexico
European Association of Industries of Juices & Nectars
International Council of Beverage Associations
CEEREAL European Breakfast Cereals Association
European Food and Drink Federation (CIAA)
Memberships and Partnerships (Selected Listing)
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General
Organization Purpose
World Business Council on Sustainable
Development
Member companies are united by a shared
commitment to sustainable development.
World Economic Forum Members are committed to improving
society and the environment.
World Health Organization (WHO) PepsiCo subscribes to WHO Guidelines on
diet, physical activity and health, as well as
drinking water quality.
Oxford Health Alliance Oxford Health Alliance and the PepsiCo
Foundation implemented Community
Interventions for Health,a program to
reduce chronic disease by targeting three
risk factors: diet, physical activity level and
tobacco use.
Save the Children Save the Children became one of PepsiCo
Foundations newest grantees within the
Global Health portfolio in November 2008
with a $5 million grant for a program aimed
at decreasing newborn and child mortality
and malnutrition in India and Bangladesh.
Alliance for a Healthier Generation This is a joint alliance with the William J.
Clinton Foundation and American Heart
Association to combat childhood obesity.
American Council on Fitness and Nutrition A group dedicated to helping people
improve health. PepsiCo is a founding
member.
Childrens Advertising Review Unit (CARU) Members evaluate child-directed advertising
and self regulate.
Family Friendly Programming Forum Members support family-friendly
programming on TV.
National Council of La Raza PepsiCo is working with this group on health
and wellness initiatives, including supporting
a research project to equip afliate
organizations with effective community-
based healthful lifestyle programs. PepsiCo is
working with this group to advance diversity
and inclusion.
National Urban League PepsiCo is working with this group on health
and wellness initiatives, including providing
capacity development support to build
organizational expertise in health and quality
of life. We also work with this group to
advance diversity and inclusion.
Carbon Trust A U.K. organization established to address
climate change.
The Earth Institute at Columbia University One of the worlds premier institutions
dedicated to global sustainable
development.
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Air and Waste Management Association Environmental professionals share
information.
Climate Leaders PepsiCo is a member of this U.S.
Environmental Protection Agency program
focused on voluntary reductions of
greenhouse gases.
UN CEO Water Mandate PepsiCo signed this mandate to contribute
positively to the emerging water crisis.
Water.org Water.orgs WaterCredit Initiative is an
innovative program that uses micronance
to increase access to safe water and improve
sanitation for local communities in India.
Energy Star PepsiCo participates in this U.S.
Environmental Protection Agency program
focused on improving energy performance.
European Organization for Packaging and
the Environment (EUROPEN)
Members are dedicated to resolving the
environmental challenges facing the
packaging chain. PepsiCo is represented at
the Board level.
Exnora International PepsiCo is working with this environmental
group in India to manage solid waste in an
environmentally friendly manner.
Global Beverage Industry Roundtable on
Water Stewardship
Members are dedicated to addressing water
issues.
Keep America Beautiful This group is dedicated to recycling and
community cleanups. Pepsi-Cola is a Great
American Cleanup founding partner.
Refrigerants Naturally! We partner with this coalition of business
and nongovernmental members, including
Greenpeace, who are committed to moving
to ozone-friendly point-of-sale refrigeration.
Safe Water Network Members are working to help provide safe
water for communities in need.
SmartWay Transport Partnership This is a U.S. Environmental Protection
Agency partnership. Members are
committed to promoting greater energy
efciency and air quality within the freight
transport business. Frito-Lay North America
is a member.
Sustainable Packaging Coalition/GreenBlue This industry leading organization provides
life-cycle analysis and design guidelines for
sustainable packaging. PepsiCo is a member
of the Executive Committee.
SUSTENTA Members of this Mexican group are
committed to the betterment of solid waste
management.
The Energy and Resource Institute (TERI) PepsiCo is working with this group in India
to expand the availability of water.
Supplier Ethical Data Exchange (Sedex) PepsiCo joined this group to partner with
suppliers to improve performance across the
supply chain.
U.S. Climate Action Partnership (USCAP) Member companies are working to
encourage climate action to reduce
greenhouse gas emissions.
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Cuban-American National Council PepsiCo is working with this group to
advance diversity and inclusion, including
building leadership capacity.
Ethics Resource Center Members are devoted to the advancement
of high ethical standards and practices.
Global Business Coalition Members lead the business ght against
HIV/AIDS and related diseases.
Habitat for Humanity This Tropicana and Tostitos partnership with
the national organization builds homes for
the needy.
MacBride Principles Members subscribe to Northern Ireland
diversity principles.
Make-A-Wish Foundation Frito-Lay North America is working with this
group to encourage donations.
NAACP PepsiCo is working with this group to
advance national leadership and grass-roots
activism.
National Minority Supplier Development
Council
Members support minority supplier
development.
Organization of Chinese Americans PepsiCo is working with this group to
advance diversity and inclusion, especially
through national leadership and grassroots
activism.
OSHA Voluntary Protection Plan This is a government health and safety
program. Frito-Lay, Quaker, Tropicana and
Gatorade plants have been accepted to
participate in OSHA Corporate VPP program.
Susan G. Komen Breast Cancer Foundation Frito-Lay North America has joined with this
group to use SunChips multigrain snacks to
raise awareness for a cure for breast cancer.
Sullivan Principles Members subscribe to human rights
principles.
U.S. Pan Asian Chamber of Commerce PepsiCo is working with this group to
advance diversity and inclusion, especially
through national leadership and grassroots
activism.
Womens Business Enterprise National
Council (WBENC)
Members work to promote womens
enterprise.
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Awards & Recognitions - Select
Listing
2008 Milestones
PepsiCo named to the Dow Jones Sustainability World
Index and the Dow Jones Sustainability North America
Index, (DJSI World and DJSI North America) for the third
time
Forbes Names PepsiCo Among Its Best Big Companies
CRO Names PepsiCo to Top 25 100 Best Corporate Citizens
2008
PepsiCo Honored with 2008 Energy Star Partner of the Year
Award
PepsiCo Internationals China Foods Wins Chinas Top
Leaders 2008 Award
Wall Street Journal Article Recognizes PepsiCo for
Leadership in Employment of People with Different Abilities
PepsiCo France Recognized as Great Place To Work by
Institute Survey
PepsiCo UK and Ireland Named Among Where Women
Want to Work
PepsiCo Wins New Freedom Initiative Award
PepsiCo Wins at Out & Equal Workplace National Summit
PepsiCo, Goldman Sachs and William C. Thompson, Jr.
Recognized for Leadership on LGBT Workplace Equality
PepsiCo Earns Top Marks in 2009 Corporate Equality Index
PepsiCo Named to DiversityInc Top 50
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Our Stakeholders
We interact with a wide range of individuals,
groups and advocates who represent
community, environmental and social interests.
We touch the lives of many people through our businesses.
We welcome honest discussion with individuals, groups and
advocates who represent community, environmental and social
interests. Issues of concern brought to the attention of PepsiCo
will be considered with a view toward our businesses and our
sphere of inuence. We interact with many stakeholders.
Our Consumers
Through our Human Sustainability initiatives, we offer our
consumers a wide range of products that deliver great
taste, nutritional value, convenience and affordability. We
are committed to playing a responsible role in health and
wellness by encouraging consumers to adopt healthy, active
lifestyles, beginning with the products we offer. Each year,
we invest in innovation to better serve consumer wants and
needs through new products and packaging. We continually
expand our distribution network to make our products
more widely available. And we work relentlessly to improve
productivity so we can offer affordable products to a broad
range of consumers. We have toll-free telephone numbers
that consumers can call with questions or comments. The
call numbers are included on our product packaging. We
also provide a number of websites where consumers can get
information about our brands, including nutritional content
and answers to many other questions about our products
Our Communities
We recognize our responsibility to be a contributing member
of our communities, on both a global and local level. We
operate our businesses responsibly and seek to be a positive
force. We support our communities through our businesses
by contributing to not-for-prot groups and by working with
organizations dedicated to improving the lives of people.
We have advisory groups that focus on health and wellness,
African-American, Asian and Latino/Hispanic issues. We also
work to be good stewards of the environment. In areas of
the world where water scarcity is an issue, we are working to
protect the resources weve used, and we are partnering with
nonprot groups to promote clean water access.
Our Employees
Our employees are the greatest factor in our success. Their
hard work, dedication and resourcefulness enable PepsiCo to
compete effectively, serve the needs of customers and deliver
the results our investors expect. Our Talent Sustainability
principles reect our commitment to providing a work
environment that allows our employees to achieve professional
growth and personal fulllment. We ask our employees
to respond to an Organizational Health survey generally
every other year. Topics include benets, working conditions,
diversity and inclusion initiatives, and career development,
among others. The results of the survey are shared with
associates, and action plans to address issues are developed
and made part of performance goals.
Our Customers
Our retail customers are supermarkets, grocery stores,
mass merchandisers, club stores, drugstores, gas stations,
convenience stores, restaurants, foodservice outlets, vending
machine operations and others who carry our products and
make them directly available to consumers. We provide our
products as well as marketing support that contributes to their
growth, prot and positive cash ow. Retail consolidation and
the current economic environment continue to increase the
importance of major customers. We have dedicated teams
for our customers, partners and suppliers, and interact with
them on a regular basis. We have a team dedicated to supplier
diversity, including working with our women and minority
suppliers to build their capabilities and business with PepsiCo.
Our website includes a dedicated site for information on our
women and minority supplier diversity program. Pepsi Cola
North America has partnered with Sams Club over the last
three years in a national, school-based recycling program.
Our Investors
We strive to provide investors a reasonable return on
their investment, based on consistent nancial growth in
the marketplace and consistent nancial results. We take
a long-term view and make appropriate investments to
strengthen our brands, develop our capabilities and pursue
new opportunities. We seek healthy year-over-year growth
and report honest, transparent and timely nancial results.
We regularly conduct web-based quarterly conference calls to
provide updates to analysts and investors, and we broadcast
our annual shareholder meeting on our website. Knowing
the commitment of many investor groups to sustainability,
we apply for admission to the Dow Jones Sustainability Index
(DJSI) each year. PepsiCo has been named as a member of
the North America Index and named a member of the World
Index. The DJSI World Index identies those companies that
exemplify leadership in sustainability among the leading 10
percent of the worlds top 2,500 companies. The DJSI North
America Index identies those companies that exemplify
leadership in sustainability among the largest 600 North
American companies.
Our Partners
Our bottlers and other business partners manufacture many
of our products. We provide certain needed ingredients and
supplies as well as quality assurance and technical assistance.
We conduct our business to allow both our partners and
PepsiCo to earn a reasonable return and grow together. We
work with our partners on sustainability initiatives including
resource conservation. Pepsi Beverages North America has
a Bottler Sustainability Team whose mission is to advance
environmental sustainability in Pepsi-Colas bottling operations.
Our Suppliers
Our suppliers provide us with the goods and services needed
in our business. We buy goods and services at competitive
prices, allowing both our suppliers and PepsiCo to make a
reasonable prot. We seek efcient suppliers with whom
we can work and grow as long-term partners. We especially
seek suppliers that are owned by minorities and women. We
extend our commitment to sustainability to our suppliers
through our Supplier Code of Conduct, Sustainable Packaging
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Policy and sustainable agriculture practices. In 2008, PepsiCo
implemented a global Resource Conservation Outreach
Program designed to share resources, tools and expertise in
the area of energy conservation with key suppliers. The initial
phase of this effort involved reaching out to 12 contract
manufacturing partners for Frito-Lay North America and
Quaker Foods North America to assist them in developing
energy management systems and projects. This program has
been very successful and has expanded to include additional
contract manufacturers and other key suppliers in 2009.
Our Economic Impacts
We market hundreds of brands in approximately
200 countries and territories around the world.
The following should be read in conjunction with Managements Discussion and
Analysis and Consolidated Financial Statements included in PepsiCos 2008
report on Form 10-K
> View PepsiCos 2008 report on Form 10-K
We market hundreds of brands in approximately 200 countries
and territories around the world. The consumers who eat and
drink our products spent an estimated $107 billion on our
brands in 2008.
Summary of Economic Performance 2008
PepsiCo has 18 mega-brands that generate $1 billion or more
each in annual retail sales.
In addition to beneting our own associates, this powerful
performance helps support our independent bottler network
and distribution operations, and contributes to the sales of
retailers throughout the world. Our economic reach is broad
and deep and sustainable.
Our Economic Contributions
1Axes
In 2008, PepsiCo paid billions of dollars in income taxes, net of
refunds, worldwide. In addition to income taxes, PepsiCo paid
hundreds of millions of dollars in payroll, property, transaction-
based and other miscellaneous taxes worldwide. These tax
payments make an important contribution to the countries
and communities in which PepsiCo has a presence.
rot1cAt coN1aau1oNs
PepsiCo believes that, both as a company and as individuals,
it is important to be engaged in the public policy and political
arena. PepsiCo has always disclosed information on how we
are spending resources for political purposes as required by
law and regulation. In 2005, PepsiCo developed a Political
Contributions Policy that provides shareholders with details on
the policies, procedures and criteria used in connection with
all political contributions. In addition, we are now providing
details of PepsiCo political contributions on our website.
Shareholders were involved in discussions leading to the
development of this policy.
oua ecoNomc coN1aau1oNs
ShareholdersWe provide shareholders with a strong return
on their investments. In 2008, we paid $2.5 billion in dividends
and provided shareholders with a 12 percent return, which is
stock appreciation plus dividends reinvested.
EmployeesWe directly employ approximately 198,000
employees. Our customers and business partners, such as
franchised bottlers and licensees, employ tens of thousands
of additional people as they manufacture and distribute our
brands.
RetailersWe create income and prot for our customers,
which means jobs and opportunities in millions of retail
establishments around the world. Our brands are among the
most protable brands that retailers carry.
SuppliersWe purchase millions of dollars of supplies, services
and raw materials that help to support hundreds of thousands
of additional jobs in communities around the world.
GovernmentsOur businesses have a positive impact on the
economies of the countries and localities in which we operate
by generating billions of dollars of revenue for governments
through taxes paid directly by PepsiCo and indirectly by
PepsiCo employees, investors, commercial partners and
suppliers.
TechnologyWe share expertise and technologies that
provide important benets to communities and countries. In
emerging markets, such as India and China, our agricultural
development programs have signicantly improved crop yields
for local farmers.
Contributions and Community
As a corporate citizen, PepsiCo Inc. and its companies have a
long and proud history of supporting communities in which
they do business. We give to nonprot community groups
and initiatives through the PepsiCo Foundation, Corporate
Contributions, PepsiCo Community Affairs and our various
operating divisions. We encourage employees to volunteer.
Additionally, we provide gifts-in-kind, support community
and nonprot events, conventions and journals, and sponsor
meetings.
In-kind donations include food, beverages, equipment and
services and are estimated at cost to PepsiCo.
zoos coN1aau1oNs (s N mttoNs)
OUR BUSINESS
Cash contributions (in
millions)
PepsiCo Foundation:
$30
Corporate Giving: $3
Division Giving: $9
In-kind giving: Employees
volunteering during paid
working hours
PepsiCo currently does not
place a monetary value on
this type of giving
Estimated In-kind giving
(in millions)Product or
service donations Projects/
partnerships or similar
$45 (value at cost of goods)
Total: $87 million
rersco rouNnA1oN
As a corporate citizen, PepsiCo and its subsidiaries have a long
history of supporting communities in which they do business.
We give to nonprot community groups and initiatives through
the PepsiCo Foundation, Corporate Contributions, PepsiCo
Community Affairs, and our various operating divisions.
Additionally, we provide gifts-in-kind, support community and
nonprot events and conventions, and sponsor meetings.
Each of the PepsiCo entities that participate in philanthropic
activities has developed its own processes for evaluating the
impact and success of its charitable contributions.
For example, the PepsiCo Foundation focuses its grant making
in the following areas:
Global Health
Environment
Global Inclusion
The PepsiCo Foundation also provides assistance for
humanitarian aid and recovery efforts following major
disasters.
Grant requests must address specic criteria.
> View our Grant Guidelines
To track the progress made and measure the impact of our
contributions, the Foundation utilizes the methods detailed
below.
PepsiCo Foundation grantees are required to submit
semiannual progress and nancial reports that include an
accounting of the progress against goals over a given time
period. The type of data captured is determined by the nature
of the grant program and the expected outcomes the grantee
described in their proposal plan.
Examples of the Foundations efforts can be found throughout
this report.
> More information about the PepsiCo Foundation
commuN1v ArrAas
PepsiCo Community Affairs is an integral part of the way we
do business. We are currently active in these areas:
Health and Wellness
We participate in conferences, events and volunteer activities
to increase awareness of PepsiCos commitment to health and
wellness in ethnic communities. We also form partnerships
with community-based organizations to encourage active
lifestyles. We have key partnerships with The National Council
of La Raza and the National Urban League.
Diversity and Inclusion
We create awareness of PepsiCos goals of recruiting diverse
associates by representing PepsiCo at national recruiting
conferences, such as the National Black MBA Associations,
Inc., and the National Society of Hispanic MBAs.
We provide leadership and support PepsiCos commitment
to increase procurement from minority-owned and women-
owned businesses. We participate in events and conferences
where we seek rst- and second-tier suppliers. We provide
support for events and initiatives of the following groups:
U.S. Pan Asian American Chamber of Commerce (USPACC);
National Minority Supplier Development Council (NMSDC);
U.S. Hispanic Chamber of Commerce (USHCC); and Womens
Business Enterprise National Council (WBENC). The PepsiCo
Foundation continues its seed funding to the National Council
of La Raza for a scalable national Latino education and
workforce model.
Government and Legislative
In partnership with the Black Caucus and the Hispanic
Caucuses, we build community awareness of PepsiCos health
and wellness commitment and program initiatives. We initiate
and participate in panels and workshops with the goal of
creating understanding and awareness of our commitment to
health and wellness.
In-Kind Donations
PepsiCo provides in-kind donations for many nonprot
organizations. The largest program is Americas Second
Harvest and its network of food banks. We also make in-kind
donations of products, premiums, equipment, meeting space
and other services.
> More information about Corporate and Divisional
Donations
OUR BUSINESS
About PepsiCo
PepsiCo offers the worlds largest portfolio of billion-dollar food
and beverage brands, including 18 different product lines that each
generate more than $1 billion in annual retail sales. Our main
businesses Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade
also make hundreds of other nourishing, tasty foods and drinks that
bring joy to our consumers in over 200 countries. With more than
$43 billion in 2008 revenues, PepsiCo employs 198,000 people who
are united by our unique commitment to sustainable growth, called
Performance with Purpose. By dedicating ourselves to offering a
broad array of choices for healthy, convenient and fun nourishment,
reducing our environmental impact, and fostering a diverse and
inclusive workplace culture, PepsiCo balances strong nancial
returns with giving back to our communities worldwide.
WORLD HEADQUARTERS
Purchase, New York, USA
BUSINESS UNIT HEADQUARTERS
PEPSICO AMERICAS FOODS (PAF)
Frito-Lay North America (FLNA) Plano, Texas, USA
Quaker Foods North America (QFNA) Chicago, Illinois, USA
South America Foods (SAF) So Paulo, Brazil
Sabritas Mexico City, Mexico
Gamesa Monterrey, Mexico
PEPSICO AMERICAS BEVERAGE (PAB)
Pepsi-Cola North America Beverages (PCNAB)
Purchase, New York, USA
Gatorade Chicago, Illinois, USA
Tropicana Chicago, Illinois, USA
PEPSICO INTERNATIONAL (PI)
Europe Geneva, Switzerland
Asia, Middle East and Africa (AMEA)
Dubai, United Arab Emirates

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1 PepsiCo Corporate Citizenship Report 2008

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