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PepsiCo: Helping to Build a More Sustainable Food System

February 5, 2020

Thunderbird grad Ramon Laguarta leads food and beverage giant in water use, packaging, climate change mitigation efforts 

During the World Economic Forum’s annual meeting in Davos in 2019, the then newly minted Chairman and CEO of PepsiCo and ’86 MBA graduate from Thunderbird Ramon Laguarta promised “huge progress” would be made by 2030 to reduce plastic waste, which contaminates humans, wildlife, and oceans.

“We can reduce the amount of plastics in the system, both in our beverages and in our snack businesses," said PepsiCo's Laguarta said last year when he sat down with corporate leaders at Coca-Cola and Dow Chemical. “I’m quite optimistic that by 2030, I don't know if we're going to be solving the problem, but we'll have made huge progress against where we are today.”

This year in the days before Davos 2020, the company announced that PepsiCo’s brands, which include Lay’s, Gatorade and Doritos, will eliminate an estimated half-million metric tons of emissions a year. PepsiCo Inc. will use 100% renewable electricity for its U.S. operations starting this year as part of its goal to slash 20% of its greenhouse-gas emissions by 2030.

“One of Thunderbird’s most prominent alumni, Ramon Laguarta, leads food and beverage giant in water use, packaging, climate change mitigation efforts.” – Click to tweet

A mix of on-site renewable electricity, virtual power-purchase agreements, and renewable-energy certificates will enable PepsiCo to meet its goal, the company said in mid-January. 

One of Thunderbird’s most prominent alumni, Laguarta explained that PepsiCo is addressing the challenges of a “modern food system is no longer fit for purpose.” 

The good news is, Laguarta wrote in a recent LinkedIn Influencer column, if we come together and take action now, we are not beyond hope.

Leading PepsiCo and Its Sustainability Agenda

Laguarta graduated with bachelor's and master's degrees in business administration from ESADE Business School in Barcelona in 1985 and in 1986 he received a master's in international management from the Thunderbird School of Global Management.  

In October 2018, Laguarta replaced Indra Nooyi who led the food and beverage giant for 12 years. Laguarta is just the sixth CEO in the 55-year history of the company.

A 23-year Pepsi veteran, Laguarta ran the Europe Sub-Saharan Africa division before becoming president last year, overseeing global operations, strategy, public policy, and government affairs. A Barcelona native, he worked at lollipop maker Chupa Chups before joining Pepsi.

Time for Business to Lead 

As CEO, Laguarta has been tasked with implementing PepsiCo’s new sustainability agenda. Under his leadership, the company is focusing its efforts and goals around plastics, climate change, water usage, agriculture, and human rights.

In other words, Laguarta is helping to direct PepsiCo’s sustainability efforts, corporate social responsibility, and policies that will guide their way into the Fourth Industrial Revolution

“For years, these were problems exclusively for governments or NGOs,” Laguarta said. “Today, stakeholders also expect companies to help lead the way. That’s a view we at PepsiCo share.”

He pointed to the recent report by the UN Intergovernmental Panel on Climate Change as source material for anyone interested in better understanding what he calls “humanity’s greatest challenges.” 

“As CEO, PepsiCo’s Ramon Laguarta is inspiring the company’s sustainability, corporate responsibility, and Fourth Industrial Revolution initiatives.” – Click to tweet

“Rising demand from a growing population has contributed to the depletion of vital resources and increased pressure on the natural world,” the report says. “Too many farmers and workers still face poverty and discrimination. Single-use plastic packaging is disposed of in ways that litter many communities and pollute our oceans. And many people still struggle to access healthier diets.”

In response to the pressures that the food and beverage industry puts on the world, and as part of PepsiCo’s efforts to help build a more sustainable food system, the company’s new vision is to “Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose.”

Collective Action is Needed

The need for collective action to help address these issues was echoed at January’s Davos 2020 gathering. 

“The current global food system is not structured to cope with a rapidly growing population, climate shocks and the rise of both hunger and obesity,” according to an article on agriculture, food, and beverage prepared for the WEF Annual Meeting.  

In the WEF article, co-authors Wiebe Draijer, chairman Dutch bank Rabobank, and Gilbert Fossoun Houngbo, president of the International Fund for Agricultural Development (IFAD) concluded that “We need far better and more structured collaboration between initiatives and food system players, to share best practices and to develop new projects, solutions, and financial instruments.”

“Thunderbird grad and PepsiCo CEO spearheads company’s focus on helping to build a more sustainable food system.” – Click to tweet

A new McKinsey report released by the WEF in conjunction with Davos 2020, Incentivizing Food Systems Transformation, highlights the role of incentives to effectively shift the behavior of 7.7 billion people who produce and consume food through four pathways – at the policy, business, investment, and consumer levels – and presents a roadmap for change.

The report argues that to enable a comprehensive transformation in the way food is produced while meeting the United Nations’ Sustainable Development Goals (SDG), several transitions are required: to healthier and nutritious diets; to sustainable agricultural practices that protect and restore nature; to more inclusive livelihoods; and greater efficiency in the production, distribution, and consumption of food. 

Laguarta agreed. In his LinkedIn Influencer column on the topic, he wrote: “As a food and beverage company whose products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world, and operates an agricultural supply chain that touches 60 nations and supports over a hundred thousand farm workers, we undoubtedly have a role to play in addressing these challenges.”

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