PepsiCo, Walmart seed $120m investment to boost regenerative agriculture
“This partnership is very focused on understanding that farmers face a lot of risks to their livelihoods and their business that represents risks to food security and energy security in a place like the United States. [Those risks] certainly [represent] a risk to both of our businesses. And therefore, it's really critically important that ... the work that we do is really around solving for those critical risks.”
PepsiCo, Walmart come together on sustainability being core to business
Following PepsiCo’s previous investment of $216m in regenerative agriculture made earlier this year, this partnership will aim to shift two million acres of farmland to regenerative agriculture practices by 2030, which could eliminate approximately four million metric tons of greenhouse gas emissions per Greenhouse Gas Equivalencies Calculator estimates.
The two companies “see sustainability on both sides as core to our business,” and they “moved very quickly from the idea to senior leaders saying, "This is a really great opportunity for both of us,’” Meyers said. “That senior-level endorsement and support and recognition of the importance as a critical business imperative that was the thing that we both have on both sides. Walmart has that, and we have it. And so, it enables ... you to do something really big like this.”
The partnership will provide "farmers with incentives to support a transition to a more regenerative farming system,” Meyers said. It will work closely with strategic partners, including the Practical Farmers of Iowa and the Soil, Precision Conversation Management, and Water Outcomes Fund, he added.
“We thought it was important to make a long-term commitment with [those partners], so that they could really scale with us and know that we're serious about it over the long term, so that they could really invest the resources now so that their organizations are scalable.”
Regenerative agriculture isn’t a one-size-fits-all approach to farming
Farmers face a number of technical, capital, and human challenges when adopting regenerative agriculture practices, Meyers said. The two companies will work to “de-risk” financial challenges to encourage a shift to regenerative agriculture, he added.
“Money that we're committing to spend, the vast majority of that money does go to farmers in the form of incentives, incentives for practice change, incentives for innovative finance solutions, to de-risk to help offset the costs of transition and to de-risk it because there is a cost component. We really recognize that it's important to understand that and support it in a way that farmers don't bear the brunt.”
Though the financial piece is crucial to incentivizing the shift, so too is building the infrastructure for regenerative agriculture, Meyer said, noting that each farm has unique considerations to fully adapt regenerative agriculture practices.
“While the principles are the same, the transition of a farm from a more conventional system to a more regenerative and resilient system is really different and unique for every farm, and that adds a level of complexity, which is just a fact. There's no getting around it.”
Continuing the work on PepsiCo’s pep+ framework
This partnership is also the latest in the company's larger PepsiCo Positive (pep+) framework, which the company rolled out in the fall of 2021 to transform the company across three pillars: positive agriculture, positive value chain, and positive choices. As part of the positive agriculture pillar, PepsiCo has engaged other members of the company's supply chain, including agriculture supplier ADM, Meyers noted.
These commitments also show that the company is "an agricultural company at [its] heart," and without agriculture, the company couldn't deliver on consumer demands for its food and beverage products, he added.
"The work that we're doing here is critically important for delivering our sustainability objectives, but it's really part of the whole PepsiCo Positive umbrella, which is about an end-to-end transformation of our business, and so it's really core to what we do. And the great thing from my perspective is it's a recognition that PepsiCo is very much an agricultural company. We source 30 ingredients across 60 countries around the world, and we would ... [be selling] empty bags and bottles if it wasn't for agriculture."
