PepsiCo: Winning with a Purpose

Sustainable Growth Strategy

A broad objective at PepsiCo is to win sustainability in the marketplace and to accelerate its top-line growth, while keeping its commitment to do good for the planet and for the communities its serves.  The company’s purpose is defined by three pillars of sustainable growth:

1. Products, helping to improve health and well-being through the products it sells. To do that, here are three of its goals for 2025: At least two-thirds of its global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-oz. serving; at least three-quarters of its global food portfolio volume will not exceed 1.1 grams of saturated fat per 100 calories; and it will provide access to at least 3 billion servings of nutritious foods and beverages to underserved communities and consumers.

 

2. Planet, to ensure that PepsiCo’s operations don’t harm the natural environment. For example, by 2025 it plans to design 100 percent of its packaging to be recoverable or recyclable; to improve the water-use efficiency of its direct manufacturing operations by 25 percent (in addition to the 25 percent improvement it achieved from 2006 to 2016); and to replenish 100 percent of the water it consumes in its manufacturing operations within high-water-risk areas. The goal is to transform PepsiCo into a company with a net-zero impact on the environment for it believes that young people today will not patronize a company that does not have a sustainable strategy.

 

3. People, which attempts to create a corporate culture in which employees “not just make a living, but also have a life.” This includes a continued focus on achieving gender parity in PepsiCo's management roles and pay equity for women. Seven behaviors define the PepsiCo way of working: be consumer-centric, act as owners, focus and get things done fast, voice opinions fearlessly, raise the bar on talent and diversity, celebrate success, and act with integrity.

PepsiCo’s vision of performance with a purpose acknowledges the importance of corporate social responsibility and stakeholder strategy. The company is convinced that it has a tremendous opportunity—as well as a responsibility—to not only make a profit but to do so in a way that makes a difference in the world.

Has the approach of “performance with a purpose” impacted PepsiCo’s financial performance? PepsiCo has increased it dividends for 46 straight years.  Over the past five years, while the total return of the S&P 500 increased 65.64 percent, and Coca-Cola increased 45.49 percent, PepsiCo’s increased 76.03 percent.

Reading below not required to answer questions.  It is background information only.

Some additional information on the originally called “Performance with a Purpose” plan:

When appointed CEO of PepsiCo in 2006, Ms. Indra Nooyi was only the 11th woman to run a Fortune 500 company. Since then, Ms. Nooyi has been ranked in the top 10 of Forbes magazine’s list of the world’s 100 most powerful women. In 2016, she ranked #2 on Fortune’s list of the most powerful women in business. Today, leading a $63 billion company that employs more than 260,000 people worldwide, Ms. Nooyi is considered one of the most powerful business leaders globally.

A native of Chennai, India, Ms. Nooyi obtained a bachelor’s degree in physics, chemistry, and mathematics from Madras Christian College, an MBA from the Indian Institute of Management, and a master’s degree from Yale University. Prior to joining PepsiCo in 1994, Ms. Nooyi worked for Johnson & Johnson, Boston Consulting Group (BCG), Motorola, and ABB. Ms. Nooyi is not the typical Fortune 500 CEO: She is well known for walking around the office barefoot and singing—a remnant from her lead role in an all-girls rock band in high school.

It should come as no surprise, therefore, that Ms. Nooyi an executive who spends more than 50 percent of her time outside the United States shaken things up at PepsiCo. CEO since 2006 Ms. Nooyi declared PepsiCo vision as performance with a purpose, defined by three pillars of sustainable growth:

Updated Information on Indra Nooyi (few highlights, not all inclusive):

• Nooyi stepped down from the post of CEO of PepsiCo in 2018.
• Nooyi is serving as a member on the Board of Directors at Amazon. The honcho’s move to join Amazon was praised by many as it took the percentage of women on its board up to 45%, a new high for the industry.