However, given the high degree of competition in the industry, I don’t think PepsiCo’s leadership team would agree to do this.

In 2014, Walmart launched a program to help thousands of its Chinese suppliers make their factories more energy efficient through the use of an online tool. To address nutritional concerns, Mr. Rowell pointed out that in addition to using natural ingredients like juices and coconut water, “we use non-GMO ingredients everywhere that is possible” and these products are non-GMO Project certified. I really like the idea of increasing commutation across the supply chain, given that each party likely has its own sustainability concerns and is thinking about the same problems Pepsi is facing. This is troubling for PepsiCo because fresh water is not only a key ingredient for their beverages, but also because many of the areas affected are strong agricultural suppliers for PepsiCo. space model that enables PepsiCo to better predict its capacity requirements, increase supply chain efficiency, and save money. Pepsico can leverage some of these best practices as it collaborates with its suppliers. Could hotter weather drive more demand for ice-cold cola (seriously)? On the one hand, consumers have the opportunity to put immense pressure on PepsiCo to take bold strides to improve sustainability in their supply chain. Organic products, for example, were up 11 percent in 2015 while the overall food market is growing at 3 percent according to a report released by the Organic Trade Association. Secondly, many of these require cold chains where products are refrigerated all the way to the store shelves.

http://www.ipcc.ch/pdf/technical-papers/climate-change-water-en.pdf, [3] The Guardian: PepsiCo Takes on Coca-Cola with Latin American Water Plan, Alison Moodie: https://www.theguardian.com/sustainable-business/2016/dec/22/pepsico-challenges-coca-cola-with-latin-america-water-plan, [4] Performance With Purpose. However, does the average PepsiCo consumer care about sustainability? If water costs are higher, wouldn’t the pricing of the whole range of substitute beverages move in chalk-step?

I am the Vice President of Supply Chain Services at ARC Advisory Group, a leading industry analyst and technology consulting company. Not only should Pepsi be setting a precedent with their own operations, they should be doing everything they can to enable their suppliers to do the same. You may opt-out by. The communication with copackers, the critical capacity bottleneck, requires active collaboration. Great overview of Pepsi’s challenges and efforts in combating climate change. How do they ensure that their suppliers are doing enough to have a true impact? 2.)

Through increasing temperatures, droughts, and extreme flooding, studies from the EPA that climate change harm the quantity, quality and cost of agricultural crops and the global food supply at large[1]. 4 Aug. 2017, www.csrwire.com/press_releases/40239-PepsiCo-Reports-Continued-Progress-Towards-Goal-of-100-Percent-Sustainable-Palm-Oil. For these reasons (among others), I agree that PepsiCo needs to be more responsible in sourcing its products (palm oil in particular) from the farmer’s field to the consumer’s mouth. Register for an account. Alternatively, I wonder if Pepsi has considered alternative production locations by either helping to relocate their existing suppliers or switching to different suppliers in locations less likely to face drought conditions. I agree with the author’s underlying argument that projected declines in agricultural yield and fresh water supply represent a significant threat to PepsiCo. Increasing recycled content in packaging materials, 4. You must be logged in to post a comment. Are there opportunities to start rethinking the business on a more holistic level. I have found that for any contract, treaty, or agreement to be enforceable, it has to carry weight and, in some cases, penalties. If these sorts of things are true, then perhaps there should be more of a central regulatory role in deciding corresponding requirements (which would also cement competitor response, securing larger results and avoiding competitor outperformance through freeloading).

Disruption of Video Game Retailers. This prebuild begins before the standard 20 weeks of lead time to account for the Typhoon season in Southeast Asia. PepsiCo plans to reduce their Scope 1 emissions in the following ways[5]: PepsiCo’s greatest opportunity for GHG reductions is in Scope 3 emissions – which currently account for 92% of the firm’s entire carbon footprint. This is PepsiCo’s core early warning mechanism. Packaging material is sourced from Europe, Asia, and the Middle East. Opinions expressed by Forbes Contributors are their own. I’d like to dig a bit deeper in PepsiCo’s ability to meet the short-term priorities of current shareholders, while optimizing for the longer term. This article raises an interesting conundrum facing all consumer packaged goods companies, especially those reliant on agricultural inputs such as PepsiCo. A number of consumer product companies are leading significant changes through their suppliers when it comes to fighting the climate change battle.

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