Oliver Wyman Partner Dave Xie speaks to Iris Wang from PepsiCo on the company’s ambitious goal to reach net-zero emissions by 2040, focusing on the Pep+ program and various environmental initiatives to engage Chinese consumers.

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INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.

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Dave Xie

We see that in our Pep+ program, PepsiCo has mentioned that by 2040 we hope to achieve net-zero emissions. I would also like to invite Iris to share with us the progress PepsiCo has made on this issue, as well as its long-term attitude towards sustainable development. 

Iris Wang

The strategy of sustainable development has a very solid foundation at PepsiCo, where it is widely accepted. It is also a long-standing strategy. It is not only something we proposed in 2021, but it is also represented by the PepsiCo Pep+ program that we have introduced. We have had similar commitments, namely, the "Performance with Purpose" strategy. They are all part of the same strategy that drives our internal sustainable development. In fact, as a strategic guide, our sustainable development is more reflected in our cultural values and the genes of our enterprise. When facing many opportunities or temptations, we make the right choices and trade-offs by staying true to our standards. 

Within the Pep+ program, it can be broken down into three components. The first is our Pep+ agriculture, where we choose the agricultural projects in which we participate and how we source these resources to select more sustainable options. 

The second component is our Pep+ supply chain, where the entire supply chain from end to end actually reflects PepsiCo's commitment to the sustainability of society, our planet, and the ecological environment as a whole. For example, how can we promote the recycling of renewable energy, such as water recycling and water resources? It is actually a commitment to the environment and its ecosystems. 

The third component is our commitment to consumers, which comes from the Pep+ of our products. Within this component, we provide consumers with more product choices. Expanding from our original snack category, which is about enjoying food and having fun, to addressing more health-related needs and expanding to more energy replenishment needs. Consumers therefore have more choices. In these products, we further optimize our ingredient structure, reducing sugar, sodium, and salt. 

Moreover, in terms of packaging, we keep introducing many innovative ways of reducing plastic. Last Earth Day, we launched a label-less cola bottle, which uses an embossed form to replace the plastic label. It was warmly welcomed by consumers, because it also reflects an advanced commitment to the environment and for being low-carbon. 

Actually, the new generation of consumers is very open and welcoming to these initiatives. Therefore, in these three aspects, PepsiCo has been practicing our commitment to the Pep+ program and the promotion of sustainable development. If we look at examples, over the past one or two years, our global utilization rate of renewable energy has increased from 20% to 40%. In our Beijing factory, 80% of the water we use can be filtered and returned to our water ecosystem. So, under our Pep+ program, we have already realized some great achievements. 

Dave

Understood, thank you for sharing, Iris. Sustainable development issues are actually very broad. When we communicate with consumers, have we found some points that are more compelling to consumers, or that consumers can remember better or agree with more? 

The reason I ask this question is because I know some companies might talk about reducing emissions or reducing waste, but the end consumer's perception may not be that strong. 

Iris

I do not know in our practice whether we have explored for different groups in China, but we have different communication methods to make consumers more aware of the importance of sustainable development and to be more willing to choose our products or services. I think a relevant example is the label-less promotion we did on Earth Day, which was specifically targeted at young consumers. It was a choice to do it such a symbolic day like Earth Day. At the same time, we promoted it on social media. So many consumers got to know about this concept through our socials. This is also a way where we can use a specific method of communication and put forth a substantial product. 

Of course, because our Pep+ program is an end-to-end commitment to the entire ecosystem, the stakeholders involved are very diverse. It's not just our end consumers, but also those that are more upstream, including our farmers, those in our midstream supply chain, and all the collaborators throughout the process. We also have different levels of communication and connection. 

I think you're absolutely right. Sustainable development needs to be felt in a tangible way by consumers. Through innovative methods, consumers are willing to accept our products. I think this is not an ivory tower, but rather a very solid approach to make consumers feel the same way. 

I think it also relates to the innovation topic you mentioned earlier. In fact, in exploring opportunities for sustainable development, there can be many innovative opportunities. For example, we have cleaner agricultural products, which will attract a certain group of people who pursue organic food and healthy lifestyles. From this, we might discover more innovative opportunities. I think these two things can actually be closely combined. Yes, the product is the best carrier for consumer communication. We all speak and demonstrate with our products. 

In addition to the label-less example, we have our Pop Corner, which is also very simple in terms of ingredients. Apart from corn chips, it's just salt. We call it a clean ingredient label. There is nothing extra that has been added to this product. It gives consumers a healthy, no-burden choice. At the product level, it is actually a practice of sustainability. 

Dave

Yes, so I think sustainable development, as you said, is an end-to-end, broad proposition. It exists from the upstream side to market communication, to consumer communication, even to social media sharing. We need to continuously convey this concept to achieve the sustainable development of our entire enterprise. Additionally, on the consumer side, achieving such a resonance at the same frequency results in a win-win combination.  

Well, we really appreciate your time today, Iris. We look forward to seeing everyone again next time. 

Oliver Wyman Partner Dave Xie speaks to Iris Wang from PepsiCo on the company’s ambitious goal to reach net-zero emissions by 2040, focusing on the Pep+ program and various environmental initiatives to engage Chinese consumers.

INFocus Series
INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.

Go to series

Dave Xie

We see that in our Pep+ program, PepsiCo has mentioned that by 2040 we hope to achieve net-zero emissions. I would also like to invite Iris to share with us the progress PepsiCo has made on this issue, as well as its long-term attitude towards sustainable development. 

Iris Wang

The strategy of sustainable development has a very solid foundation at PepsiCo, where it is widely accepted. It is also a long-standing strategy. It is not only something we proposed in 2021, but it is also represented by the PepsiCo Pep+ program that we have introduced. We have had similar commitments, namely, the "Performance with Purpose" strategy. They are all part of the same strategy that drives our internal sustainable development. In fact, as a strategic guide, our sustainable development is more reflected in our cultural values and the genes of our enterprise. When facing many opportunities or temptations, we make the right choices and trade-offs by staying true to our standards. 

Within the Pep+ program, it can be broken down into three components. The first is our Pep+ agriculture, where we choose the agricultural projects in which we participate and how we source these resources to select more sustainable options. 

The second component is our Pep+ supply chain, where the entire supply chain from end to end actually reflects PepsiCo's commitment to the sustainability of society, our planet, and the ecological environment as a whole. For example, how can we promote the recycling of renewable energy, such as water recycling and water resources? It is actually a commitment to the environment and its ecosystems. 

The third component is our commitment to consumers, which comes from the Pep+ of our products. Within this component, we provide consumers with more product choices. Expanding from our original snack category, which is about enjoying food and having fun, to addressing more health-related needs and expanding to more energy replenishment needs. Consumers therefore have more choices. In these products, we further optimize our ingredient structure, reducing sugar, sodium, and salt. 

Moreover, in terms of packaging, we keep introducing many innovative ways of reducing plastic. Last Earth Day, we launched a label-less cola bottle, which uses an embossed form to replace the plastic label. It was warmly welcomed by consumers, because it also reflects an advanced commitment to the environment and for being low-carbon. 

Actually, the new generation of consumers is very open and welcoming to these initiatives. Therefore, in these three aspects, PepsiCo has been practicing our commitment to the Pep+ program and the promotion of sustainable development. If we look at examples, over the past one or two years, our global utilization rate of renewable energy has increased from 20% to 40%. In our Beijing factory, 80% of the water we use can be filtered and returned to our water ecosystem. So, under our Pep+ program, we have already realized some great achievements. 

Dave

Understood, thank you for sharing, Iris. Sustainable development issues are actually very broad. When we communicate with consumers, have we found some points that are more compelling to consumers, or that consumers can remember better or agree with more? 

The reason I ask this question is because I know some companies might talk about reducing emissions or reducing waste, but the end consumer's perception may not be that strong. 

Iris

I do not know in our practice whether we have explored for different groups in China, but we have different communication methods to make consumers more aware of the importance of sustainable development and to be more willing to choose our products or services. I think a relevant example is the label-less promotion we did on Earth Day, which was specifically targeted at young consumers. It was a choice to do it such a symbolic day like Earth Day. At the same time, we promoted it on social media. So many consumers got to know about this concept through our socials. This is also a way where we can use a specific method of communication and put forth a substantial product. 

Of course, because our Pep+ program is an end-to-end commitment to the entire ecosystem, the stakeholders involved are very diverse. It's not just our end consumers, but also those that are more upstream, including our farmers, those in our midstream supply chain, and all the collaborators throughout the process. We also have different levels of communication and connection. 

I think you're absolutely right. Sustainable development needs to be felt in a tangible way by consumers. Through innovative methods, consumers are willing to accept our products. I think this is not an ivory tower, but rather a very solid approach to make consumers feel the same way. 

I think it also relates to the innovation topic you mentioned earlier. In fact, in exploring opportunities for sustainable development, there can be many innovative opportunities. For example, we have cleaner agricultural products, which will attract a certain group of people who pursue organic food and healthy lifestyles. From this, we might discover more innovative opportunities. I think these two things can actually be closely combined. Yes, the product is the best carrier for consumer communication. We all speak and demonstrate with our products. 

In addition to the label-less example, we have our Pop Corner, which is also very simple in terms of ingredients. Apart from corn chips, it's just salt. We call it a clean ingredient label. There is nothing extra that has been added to this product. It gives consumers a healthy, no-burden choice. At the product level, it is actually a practice of sustainability. 

Dave

Yes, so I think sustainable development, as you said, is an end-to-end, broad proposition. It exists from the upstream side to market communication, to consumer communication, even to social media sharing. We need to continuously convey this concept to achieve the sustainable development of our entire enterprise. Additionally, on the consumer side, achieving such a resonance at the same frequency results in a win-win combination.  

Well, we really appreciate your time today, Iris. We look forward to seeing everyone again next time.