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PepsiCo is betting big on regenerative agriculture

April 20, 2021, 12:15 PM UTC

To the outside world, PepsiCo is best known for its namesake soda. But internally the beverage and snack giant likes to think of itself as an agricultural company. It sources citrus for Tropicana, oats for its Quaker brand, and potatoes for its Lay’s chips.

“We have a huge ag footprint,” says PepsiCo chief sustainability officer Jim Andrew. In total, the land used to grow all of the company’s crops and ingredients comprises about 7 million acres—an amount of land that’s about the same size as the state of Massachusetts.

This morning PepsiCo announced a plan to implement regenerative agriculture practices across farmland that’s equivalent to that entire agricultural footprint by 2030. The company will then source its crops from those acres, a move that PepsiCo says will eliminate 3 million tons of greenhouse gas emissions by the end of the decade.

Currently, there aren’t 7 million acres of land farmed with regenerative ag practices—a method that fosters soil health and healthier ecosystems in an attempt to combat the environmental impact that comes with industrialized agriculture.

Nonprofit Practical Farmers of Iowa has been working in regenerative ag since the 1980s and helped influence the design of PepsiCo’s program. Sarah Carlson, the organization’s strategic initiatives director, says critical elements are getting farmers to use cover crops, which are grown to enrich the soil and protect against erosion, and having them add other crops into rotation with their cash crops. It’s key to what Carlson calls “biological risk management.”

These practices reduce the need for inputs like fertilizers and herbicides, which is good both for farmers’ wallets and the environment. For farmers, “sustainability and financial security go together,” Carlson says.

Carlson says companies like PepsiCo need to take on some of the financial risk to incentivize farmers to change their practices. “That’s a core part of the program,” she says, pointing to one example where PepsiCo invests $10 for every acre that farmers convert to regenerative ag practices.

By the end of this year, PepsiCo says its regenerative ag program will be in effect on more than 500,000 acres of U.S. farmland.

There are currently no set standards or measurements for regenerative ag. “There’s no true definition,” says Christine Daugherty, PepsiCo’s vice president of sustainable agriculture and responsible sourcing. The company is advocating for industrywide standards but right now is focusing on soil health, sequestering carbon and reducing emissions, improving watershed quality, increasing biodiversity, and improving farmer livelihoods. Andrew says the top 200 people in the company will be required to take a course in regenerative ag.

As part of PepsiCo’s announcement, the company said it would extend its commitment to sustainably sourcing all of its key ingredients—not just crops it sources directly like potatoes and oranges.

The company also said it would work toward supporting vulnerable farming communities through partnerships, including the U.S. Agency for International Development, the Inter-American Development Bank, CARE, the National FFA Organization, and the National Black Growers Council.

PepsiCo has previously announced broader sustainability goals, which include targeting a reduction in absolute greenhouse gases by more than 40% by 2030.

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