PepsiCo more than doubled revenue growth with framework that prioritizes sustainability
Touting revenue growth in 2021 more than double that of the previous year at 9.5% and a staggering 12% growth in earnings per share in the same year, above 2% in 2020, said Laguarta attendees at the Consumer Analyst Group conference in New York late last week that PepsiCo’s PepsiCo Way strategic framework unveiled three years ago, including the launch of pep+ in September, “significantly improved”company performance.
“Over the past several years, we have delivered mid-single-digit organic revenue growth in North America and single-digit organic revenue growth in our international markets, each representing strong acceleration from previous years,”said Laguarta.
Similarly, he noted, global organic revenue growth also accelerated for beverages by 5.4% on average between 2019 and 2021, compared to just 1.6% on average between 2016 and 2018. Convenience Foods worldwide organic revenue growth also increased by 6.7%, compared to 4.7% in the same periods.
In North America, the jump was even greater with average organic revenue growth increasing from 1.5% from 2016 to 2018 to 5.3% between 2019 and 2021.
Pep+ “stimulates action and progress” on three pillars
While many factors have contributed to this success, including in North America, increased manufacturing capacity, continued “consumer-centric innovation” and market execution in the rest of the world, Laguarta also called out the efforts that are part of PepisCo’s still young pep+ program.
“Our investments in our people and our products have also contributed to our success. We have invested in creating a collaborative, inclusive and equitable workplace. …In addition, we have made good progress in providing positive product choices to the consumer and we will continue our efforts to provide more choice with lower levels of added sugar, sodium and saturated fat over time,”said Laguarta.
Both are central elements of PepsiCo’s pep+ program, which Laguarta said PepsiCo launched last fall as a way “transforming the way we create growth and value by operating within planetary boundaries and inspiring positive change for the planet and people in the global food system.”
He added, “Pep+ drives end-to-end action and progress on three key pillars: positive agriculture, positive value chain and positive choices.”
Under the first pillar, PepsiCo strives to increase regenerative agriculture practices, sustainably source key crops and ingredients, and improve the livelihoods of people in its supply chain across the country. over the next eight years. Already, according to the company, it sources 100% of its potatoes in North America from sustainable farms.
Under Pillar Two, PepsiCo is working to reduce emissions, become clean water positive, and reduce virgin plastic in its packaging. He is also investing more than $570 million in his journey to racial equity. On this front, the company says it is on track to have 50% women in leadership positions by 2025, having reached 43% by 2021 and aims to increase the representation of black and white executives. 10% Hispanic. In terms of adopting more sustainable packaging, PepsiCo’s Frito-Lay North America division has introduced an industrial compostable bag for certain Off The Eaten Path products.
The third pillar is to expand positive choices, including for products that are better for people and the planet by incorporating more diverse ingredients, such as chickpeas, plant-based proteins and whole grains.
More growth to come
Looking forward to it and continue to keep the pep+ “at the center of our strategic transformation”,Laguarta said PepsiCo plans to grow the business at a compound annual rate of 4-5% over the next five years to capture 9% market share – a one percentage point increase worth 6 millions of dollars.
Regarding investments, sustainability is one of four priorities and will include financing more sustainable packaging and plastics, decarbonizing operations and the supply chain and improving the sustainability of the water, he said.
Other, broader areas of investment include operational necessities, growth and productivity, according to the company’s presentation.