‘Not just another initiative’: How PepsiCo is combining innovation and sustainability

Sustainability might not be the first thing you think of when you crack open a can of cold soda, but Athina Kanioura, chief strategy and transformation officer at PepsiCo, says a desire to create a positive environmental impact sits at the heart of her company’s approach.

Whether it’s using AI to prevent water leaks in factories, developing bio-based thermoplastic for product display stands or using bespoke data platforms to meet regulatory requirements, PepsiCo is working hard to ensure the products it sells are produced, shipped, and sold in as sustainable manner as possible.

“For us, it is an integral part of the company,” she says. “It’s all about how we can create a positive environment, whether that’s for the food value chain, for the communities we serve, or for the people who make and buy our products.”

PepsiCo’s sustainability efforts are known as pep+ (PepsiCo Positive), which chairman and CEO Ramon Laguarta has described as “the future of the company” and a fundamental transformation of what the company does and how.

Also: Tech for a sustainable future: The challenges and opportunities ahead

Kanioura says technology plays a key role in helping the company make this change and her organization looks at sustainability through several lenses. 

One is portfolio, which covers the products the company creates, whether that’s cans of soda or packets of chips. Another lens is centered on packaging and the movement from plastics to biodegradable materials. Finally, there’s significant effort across agro and climate change, particularly when it comes to meeting targets and driving innovation.

PepsiCo employs about 250,000 people globally and develops a range of data-led technologies in-house, particularly for ensuring compliance with environmental, social and governance (ESG) regulations.

However, the company also recognizes that innovation is a team sport, and it works with external organizations to develop innovative solutions to intractable sustainability challenges. 

“For different capabilities, we have partners,” says Kanioura. “We address a specific problem that we have in this space with either a tech startup or an established company.” 

The work with startups is led by David Schwartz, VP of PepsiCo Labs, which is a specialist team that comes under Kanioura’s stewardship and is tasked with harnessing innovation. 

Schwatrz explained to ZDNET last year how the lab — which has scaled more than 30 startups in over 200 countries so far — is working on a range of products that are helping PepsiCo meet its sustainability objectives.

Examples include a partnership with technology firm WINT, which uses artificial intelligence to prevent water leaks in PepsiCo factories — estimates suggest the system can cut annual water consumption by as much as 25%. 

In Turkey, PepsiCo is working with Pulse Industrial and BrenPower to monitor and detect failures in steam traps in the company’s plants through an AI system.

PepsiCo is also working with UBQ Materials to turn unsorted household waste, including organics and unrecyclable plastics, into a bio-based thermoplastic that can be used in product display stands.

Schwatrz says the aim is to bring these innovations inside the company and to produce environmentally beneficial results in as effective way as possible.

“We’re a large company with a significant infrastructure,” he says. “We want to make sure the solution integrates seamlessly into the PepsiCo system.”

Across all these pioneering areas, Kanioura says it’s crucial to recognize that delivering positive results for the environment is much more than a nice-to-have.

Also: PepsiCo is working with startups to tap new sources of innovation. Here’s how it does it

She emphasizes the requirement to ensure ESG factors are considered in all investment analysis and business decisions.

PepsiCo already reports ESG indicators across “hundreds and hundreds of KPIs”, says Kanioura.

Kanioura says the company has built a bespoke data foundation that aims to create a consolidated platform for the information the company holds — and that represents a step change from what can sometimes happen in other big firms.

“Data is traditionally held everywhere — it can be in spreadsheets, some of it can be held in the fleet department, someone might have it in a different system in the agro team or in a factory, and some of it might be held on a big platform,” she says.

“If we can have one single data foundation for sustainability, then it’s very easy to report KPIs in a consistent way. It becomes much easier to embed sustainability as a key factor and parameter in every program we do.” 

Kanioura gives an example: the company runs integrated business planning, where it makes decisions on its aims for the next three years. 

One of these decisions might include product launches, which will only be successful if the company can consider all the variations of sustainability as part of the launch process.

“Unless you embed the sustainability KPIs in every part of the process in PepsiCo, you will never be able to make the change,” she says. 

The aim now, says Kanioura, is to continue honing the approach and to ensure that the technology systems her team provides — whether they’re bespoke developments or created in partnership with external innovators — are making it easy to place sustainability at the heart of each business decision.

“We need to think of all the key areas of our business and then consider how we embed sustainability KPIs into every single program, from the source, which is what we call the ‘make part’ of our business, the move part of our business — we have the biggest fleet in North America — and the sale to the consumer,” she says.

“The one thing that I want to stress above all else is that sustainability is an integral part of the strategy of this company. It’s not just another initiative.”