LET’S TAKE A CLOSER LOOK AT OUR POSITIVE AGRICULTURE GOALS. The way we farm and produce food can make a positive difference and can be a key solution. PepsiCo is working to:


1) Drive regenerative practices across approximately 7 million acres globally (approximately the size of PepsiCo's agricultural footprint, and is estimated to result in a net reduction of at least 3 million tons of GHG emissions.


2) Sustainably source 100% of our key crops and ingredients expanding to include not only our direct-sourced crops (potatoes, whole corn, oats and oranges), but also key crops from third parties, such as vegetable oils and grains.


3) Improve the livelihoods of more than 250,000 people in our agricultural supply chain and communities.


While change at this scale will take time, significant effort, and deep collaboration, our pep+ agenda is an important step toward a more inclusive, efficient, sustainable, and resilient food system.


THERE ARE THREE MAIN FOCUS AREAS TO IMPLEMENT REGENERATIVE AGRICULTURE AND REDUCE GHG’S: 1) Nutrient management by using the “4R” fertilizer practices (Right source, Right rate, Right time, Right place) and using more organic fertilizer (such as manure).


2) Soil health & sequestration by installing cover crops or second crops, applying intercropping or using a minimum/no till practice with less soil disturbance.


3) On farm & processing emissions reductions by reducing the number and intensity of the tractor passes, electrification, solar panels, wind turbines.


The practices to implement regenerative agriculture and lower GHG’s are very similar, no matter what crops we are looking at. But the approach differs between the directly sourced crops (in our case potatoes, oats, whole corn) and the supplier sourced crop (sweeteners, vegetable oils, other grains). On direct crops, we will mainly pilot and implement the new practices directly with our farmers, using our PepsiCo data tools. To drive pep+ outcomes on supplier sourced crops, our main focus will be on leveraging our supplier relationships, working on building industry standards, using certifications, establishing leading grower groups and collaborating with implementation partners on the ground.


These new sustainable practices will take us away from buying pure commodities, as it will add those requirements as a new specification on top of the


~7 million


acres of farmland make up our agricultural footprint


products we are buying. This will only change once these sustainability practices become the new industry standard, which would allow us to go back to commodity sourcing, but this will take time.


We therefore see a clear need to build strong partnership and collaborate with our suppliers on the agenda. We want to build a landscape approach where feasible, where we identify and collaborate with the right implementer partners that will support the farmer practice changes.


Our processing suppliers will need to re-think their sourcing strategies and their origination structure and capabilities, and we will offer long term contracts where viable to enable and unlock these structural changes. We expect our suppliers to have SBTi targets like ours and it will become a future pre-requisite for business awards. Together with our suppliers and partners, we want to influence and move the industry standards to help the system change on a broad scale.


Regenerative agriculture is an essential part of PepsiCo’s broader pep+ strategy, which sees our business focus on changing the global food system for the better, and we are proud of the initiatives we are working on with the farmers in their fields. We are seeing tangible results because of the work we are doing, and we’ll continue to invest our efforts to make more progress.


Stefan Kramis Procurement Director, Vegetable Oils & Grains, Europe PepsiCo E: Stefan.Kramis@pepsico.com


6 | ADMISI - The Ghost In The Machine | Sustainability Edition 2023


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