Indra Nooyi Chairman and CEO of PepsiCo committed on Monday to cut down calorie count of the company’s famous beverages as they look at the counter health concerns about sugar-sweetened beverages. As part of their new sustainability initiative, they plan to double water efficiency companywide.
Nooyi told CNBC “Over the last decade, we have made progress in reducing sugar.” She added, “but there’s a lot more we needed to do because countries which loved sugar were growing faster than countries which were consuming lower-sugar products.”
Available in about 180 countries worldwide, the company earns over $1 billion yearly. Most of this revenue, from the sale of its most famous product the sugar-based Pepsi drink. PepsiCo is definitely taking a huge commitment. The decrease of calories will be followed by several communities to raise tax on sugar-based drinks as a way to fight rising incidents of obesity worldwide.
“Technology breakthroughs right now are resulting in better-tasting colas, almost as good as the full-sugar colas, but with lower calories,” said Nooyi. “So we’re now faced with [an] interesting opportunity to step the consumer down to lower sweetness levels.”
Today almost 25% of the company’s global revenue is coming from soda based products. They also make Pure Leaf iced tea products and Starbucks unsweetened ready-to-drink coffee. Furthermore, there are several sparkling flavoured water and juice under the Gatorade sports drink brand.
According to Mintel estimated 74% of total market shares belongs to diet carbonated soft drinks. Diet category is around 26%, which makes carbonated soft drinks the majority of the category sales industrywide.
Mintel added that the said diet soda business has been decreasing. This is the result of “negative health perceptions surrounding artificial sugar. Also helping the decline is the large number of “better-for-you and low/no calorie beverages available.”
PepsiCo’s initiative to decrease calorie isn’t limited to North America. According to the company’s CEO, as part of the initiative, it has lowered 30% sugar of 7-Up products in Mexico, UK, China and India.
“The consumer can’t tell the difference, and that’s the greatest thing about all of the R&D work, which is now yielding results,” she said.
They also have started efforts to lower-down sodium in products including the snacks sold by the Frito-Lay division.
“By applying the seasoning differently, we can actually still make it a salty snack, but with lower sodium levels, and that’s what we have managed to do with… our products in countries like the U.K. and China, where we’ve reduced salt levels significantly,” she said.
PepsiCo said by 2025, three-quarters of its global foods portfolio will contain sodium volumes not exceeding 1.3 milligrams per calorie. Moreover, not more than 1.1 grams of saturated fat per 100 calories.
The company had made a significant progress and is now frying snacks using a “heart-healthy oil”. The CEO added that they have developed a new frying technique to reduce saturated fat levels by 20%. On the other hand, increasing the machine’s capacity by 25%.
Hello goodness
As part of their “Hello Goodness Initiative”, PepsiCo is now taking its vending machines to contain most company products. These include Frito-Lay’s baked chips, Sabra hummus products and other healthier beverages.
Hello Goodness Machine sales are moving higher than other vending machines. She said “because all of a sudden, people look at this and go, ‘Gee, I can eat everything I want out of this machine rather than, you know, having to go to convenience store or going to my pantry to bring stuff.”
PepsiCo’s sustainability goal is to reduce the company’s total carbon footprint and to increase water savings worldwide.
“We cannot keep operating in communities if we don’t have prudent water goals or greenhouse gas emissions goals because societies won’t allow us in,” said Nooyi. “So I think in many ways, what we are doing with our goals right now is much more — you know a way to drive our performance on a sustained basis, so we are financially motivated with a very strong conscious.”
By 2030, the company’s target is to reduce 20% greenhouse gas emissions across its valued chain. This includes everything from production activities, packaging to transportation, and its agricultural supplies worldwide.
PepsiCo said they are now working to reach their customers and business suppliers to reduce emissions.
The company is targeting “15% improvement in water efficiency of its direct agricultural supply chain in high water-risk areas by 2025”. That means saving equivalent to the total amount of water used in manufacturing operations.
The water saving efforts would lead to 100% replenishing of its water consumption in manufacturing operations within “high-water-risk areas.”
PepsiCo committed that it would “improve water efficiency of its direct manufacturing operations by 25% by 2025”. This is in addition to the 25% savings the company achieved since 2016.
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