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C P iC P iCustomer PerspectiveCustomer PerspectiveEnergy Conservation StrategiesEnergy Conservation Strategies

Kevin Chilcoat

Profile of PepsiCoProfile of PepsiCo

• $43 Billion in Revenue for 2009– 17 billion-dollar brands

• 3 Major Operating Sectorsj p g1 PepsiCo Americas Foods ( PAF )

• (Frito Lay, Quaker Foods, Gamesa, Sabritas)2 PepsiCo Americas Beverages ( PAB )p g ( )

• (Pepsi Cola, Gatorade, Tropicana)3 PepsiCo International ( PI )

• Just under 200,000 employees, p y

FritoFrito--Lay ProductsLay Products

• Just under $100 Million Energy & Utility Spend– Natural Gas & Alternative Fuels– ElectricityElectricity– Water & Wastewater

• Over 40 Manufacturing Sites ( US and Canada )• Approximately 170 Distribution Centers• Approximately 170 Distribution Centers

The Importance Of Productivity and SustainabilityThe Importance Of Productivity and Sustainability

•Natural Gas Pricing

• Energy & Utility Spend– < 5% Cost of Manufacturing

1998 – 2001

DOE, RC and Green Teams Aligned

Technology/Capital Focused

RC ECMOD Created 12% IIR

2001 – 2004

1998 – 2001

DOE, RC and Green Teams Aligned

Technology/Capital Focused

RC ECMOD Created 12% IIR

2001 – 2004

< 5% Cost of Manufacturing– > 25% of “Controllable Cost”– Significant Volatility– Significant National Attention

Utility SF becomes Resource ConservationPollution Prevention added to Green Teams50 GPM ChallengeWaste Min Goals CreatedRC Scorecards DevelopedDOE EstablishedBHAGs Set

Water 50%Fuels 30%Elect 25%

1993 – 1997

Green Teams ImplementedRegulatory FocusedSite Audits CompletedUtility SF Team Created

Created 12% IIR

Energy Summit- Vendor Expo- Training Classes

Gov’tPartnerships- Alliance to Save

Energy- Energy Star- Climate Leaders- Fleet Smart

Way

Utility SF becomes Resource ConservationPollution Prevention added to Green Teams50 GPM ChallengeWaste Min Goals CreatedRC Scorecards DevelopedDOE EstablishedBHAGs Set

Water 50%Fuels 30%Elect 25%

1993 – 1997

Green Teams ImplementedRegulatory FocusedSite Audits CompletedUtility SF Team Created

Created 12% IIR

Energy Summit- Vendor Expo- Training Classes

Gov’tPartnerships- Alliance to Save

Energy- Energy Star- Climate Leaders- Fleet Smart

Way

Compliance Focus

“Do Better” Productivity

Technology Investments

Compliance Focus

“Do Better” Productivity

Technology InvestmentsTechnology Investments

Achieving productivity requires process, Achieving productivity requires process, strategy, execution and endless determination……strategy, execution and endless determination……strategy, execution and endless determination……strategy, execution and endless determination……

1. Set A Big ChallengeLittl G l

5. AuditD d S– Little Goals

Produce Little Results

2. Create A Team

– Demand Success &Help To Achieve It

6. Innovate– Every Site Needs

Experts With Enthusiasm

3 Budget

– You Know Your Own Business Best

7 Execute3. Budget– We’re All Driven

By The Numbers4. Scorecard

7. Execute– The Best Laid

Plans … Are Still Just Plans

– The Budget Won’t Show The Opportunities

8. Communicate Results– Share The Stories

& Rewards Of& Rewards Of Success

BHAG ChallengeBHAG Challenge

Achieve Big Hairy Audacious Goals In Energy Conservation•Set a Big ChallengeChallenge

•Create a Team • What Is A BHAG?

– It is tangible, energizing, highly focused. It requires no

•Budget

•Scorecard

explanation. It should fall well outside the comfort zone. It should be so bold and exciting that it will continue to stimulate progress if the leadership disappears.

What Are Frito-Lay’s BHAGs?– Reductions in Energy & Water Consumption per Pound – 50% Reduction In Water

•Audit

•Innovate50% Reduction In Water

– 30% Reduction In Thermal Fuels– 25% Reduction In Electricity– Measured vs. 1999 Baseline Usage

•Execute

•Communicate Measured vs. 1999 Baseline UsageSource - Built To Last, Successful Habits Of Visionary Companies; Collins, James C.; Harper Business 1994

Results

Corporate Team To Partner and Support Corporate Team To Partner and Support Field Operations Execution TeamsField Operations Execution Teams

•Set a Big Challenge Energy Risk Manager Resource Conservation Resource Conservation

Energy & Utilities

pp

•5 HQtrs Engineers

Challenge

•Create a Team

Energy Risk ManagerMarket ManagementPlanning/Forecasting

Energy ProcurementPhysical Fuels Site Champion

Resource ConservationCaptain

East Division

Site Champion


Mid-America Division •16 Region Captains

•Budget

•Scorecard

yNational Partner Management

Energy AssociateAccount Mangement

Field Assistance

p

Site Champion

Site Champion

p

Site Champion

Site Champion

•38 Site Champions

•Audit

•Innovate

Senior EngineerMechanical Systems

Site Champion


Central Division

Site Champion


West Division

•1 SOPS Captain

•16 Region•Execute

•Communicate

Sr Project EngineerMech/Elect Systems

Sr Project Engineer

Site Champion

Site Champion

Site Champion

Site Champion

16 Region SOPS Captains

Additi lResults Water SystemsSite Champion

Site Champion

Site Champion

Site Champion

•Additional Field Subject Matter Experts

Annual Operating Plans Annual Operating Plans Distributed to the Field LocationsDistributed to the Field Locations

•Set a Big Challenge is

t

s %

of

catio

n

pend•$7MM Productivity

Challenge

•Create a Team

Pro

ject

Li

nfla

tion

as

ctiv

ity A

lloc

of T

otal

S

et R

esul

ts•>$1MM Inflation

•’04 $.5MM BT Plan

Total $8 5MM•Budget

•Scorecard

atio

nal R

C

rget

and

I nal

Spe

nd

tal P

rodu

c

rget

as

%

te L

ists

elim

Tar

ge•Total $8.5MM

•6.8% of Total $$$

•Audit

•Innovate 1

A B C D E F G H I J K L M N O P Q R SUpdated 10-

14-04Updated 10-14-04

•Na

•Ta

Tota

•To

•Ta

•Si t

•Pre

•Execute

•Communicate

23

4567

138,458.6 (1,457.7) 1,862.8 893.8 234.1 6,000.0 8/3/04 8,420.6 5,067.0 6,000.0 124,580.7 (1,707.3) 1,862.8 893.8 234.1 5,600.0 5,821.5 7,160.4 4,316.5 400.0 1,395.5 467.1 928.4

Energy/Utilities Budget Fair Share Extra Share Reliability

Abs. Capacity

Total Target

Prelim Target % of Total

Infl Total $M's Infl+target % of Total Percentage Annual 2005 Annual Pd Inst. 2004 2005

3,293.8 (82.4) 49.3 37.0 0.1 201.9 178.6 5.4% 50.0 251.9 7.65% 6.13% 321.8 198.0 Wooster ( 220 ) 15.0 13 - 15.0 3,710.7 (45.4) 55.5 67.8 33.6 297.1 273.6 7.4% 100.0 397.1 10.70% 8.01% 262.0 185.5 Allen Park ( 300 ) 10.0 13 - 10.0 747.6 0.9 11.2 24.0 18.7 2.5% - 24.0 3.21% 3.21% 15.0 11.9 Canton 10.0 9 3.1 6.9

Inflation Calculations e-Air Systems & Lighting

Results 89101112

1,088.2 (15.8) 16.3 7.1 0.5 44.6 58.9 5.4% 34.4 79.0 7.26% 4.10% 71.0 36.6 Williamsport 15.0 13 - 15.0 5,124.3 (240.0) 76.6 28.3 17.3 157.2 231.7 4.5% 192.9 350.0 6.83% 3.07% 339.0 275.0 Kirkwood 10.0 8 3.8 6.2 7,222.4 9.0 108.0 50.4 18.6 337.2 293.3 4.1% - 337.2 4.67% 4.67% 275.0 151.2 Killingly 41.0 13 - 41.0 2,647.2 3.3 39.6 25.1 123.0 128.4 4.9% - 123.0 4.65% 4.65% 65.0 55.0 Aberdeen 40.0 13 - 40.0 3,373.0 4.2 50.4 28.0 25.8 221.4 197.9 5.9% - 221.4 6.56% 6.56% 218.0 112.9 York 35.0 9 10.8 24.2

National Scorecard Used to National Scorecard Used to Rack and Stack PlantsRack and Stack Plants

•Set a Big ChallengeChallenge

•Create a Team

•Budget

•Scorecard

•Audit

•Innovate

•Execute

•Communicate Results

Sharing Best PracticesSharing Best Practicesand Finding New Onesand Finding New Ones

•Set a Big Challenge

and Finding New Onesand Finding New Ones

Challenge

•Create a Team

•Budget

•Scorecard

•Audit

•Innovate

• Each Site - Each Year– Ensure Project Ideas Are Implemented– Document Performance Trend

A dit T C iti•Execute

•Communicate

• Audit Team Composition– Division Resource Conservation Captain– Corporate Support– Alternate Site ChampionsResults Alternate Site Champions

• Strike Team Interventions for Opportunity Sites

Partnerships with Internal and Partnerships with Internal and External SME’s to Fill PipelinesExternal SME’s to Fill Pipelines


External SME’s to Fill PipelinesExternal SME’s to Fill Pipelines

Identify, Develop and

SS TARFLEETTARFLEET

SHYSICSHYSICSPP

SChallenge

•Create a Team

y, pImplement a Broad and Deep Cross Functional Portfolio of

Innovative Ideas

ESSIONSESSIONSSS

•Budget

•Scorecard ENGINEERING

•Audit

•Innovate

SALES STARFLEETEXPERTS

SSSPPP

•Execute

•Communicate HR

PURCHASING

VENDORS

SPPP

SSTechnology

ResultsHR VENDORS

FINANCE

Some of the projects FL has Some of the projects FL has executed or is currently investigatingexecuted or is currently investigating


K ettles

Soak T anks

Corn H opper

C ornW ashe rD ra in

Be lt

Fresh w ater

Sew er

O verflo w

H ydroclonerem ovesSolids

Saves W ater,W astew aterand Steam

LT

Saves W aterand W astew ater

Low Water Corn Process Photovoltaic Generation EER+ HVAC Technology PC Surface Moisture ReductionChallenge

•Create a Team

Low Water Corn Process$1.6MM Annual Savings

Photovoltaic Generation At 5 Calif DC’s

EER+ HVAC Technology$2MM Annual Savings

PC Surface Moisture Reduction$1.5MM Annual Savings

•Budget

•Scorecard

Organic Rankine Cycle Generation

Oven Draft Control$2MM Annual Savings

Stack Heat Recovery Turning Waste to Energy $1.1MM Annual

Micro Filtration80% Reduction in Water

•Audit

•Innovate Built Green DC DayLighting Corn Washer Modifications$ 5MM Annual

Zero Natural Gas FryerWaste Heat from Oven

•Execute

•Communicate

$.5MM Annualc o n d e n s e rc o n d e n s e r

e v a p o ra to re v a p o ra to r

a b s o rb e ra b s o rb e r

g e n e ra to rg e n e ra to r

c h i l le dc h i l le dw a te rw a te r

c o o l in gc o o l in gw a te rw a te r

s te a m o rs te a m o rh o t w a te rh o t w a te r

h e a th e a te x c h a n g e re x c h a n g e r

Results Adsorption Chilling Anaerobic Methane Production High Efficiency Low Emissions CoGen Engine

Hybrid Gas / ElectricDelivery Van

$1.4MM Grant from Texas

3 Projects to Highlight3 Projects to Highlight

•Set a Big ChallengeChallenge

•Create a Team 1.Killingly CoGen•Budget

•Scorecard2.Topeka Bio Mass

•Audit

•Innovate3.Casa Grande Near Net Zero Plant

•Execute

•Communicate Results

#1 Killingly Cogen#1 Killingly Cogen

Killingly FacilityKillingly Facility

• Site is 275,000 sq. feet on 75 acres• Whse 123,000 sq. feet Hi-Rise warehousing• 3 Corn silos• 7 Oil tanks

• Steam plant has 3 Cleaverbooks Boilers40,000 lb/hr steam at 400 psiBurns Natural Gas or #6 Fuel Oil (12 000 gal of fuel/day)Burns Natural Gas or #6 Fuel Oil (12,000 gal of fuel/day)

• 2 water tanks (100Mlbs. and 130Mlbs.); use 850Mgal/dayO Si W W T C• On-Site Waste Water Treatment Center

• 3.5 MW of peak electricity consumptionp y p

Killingly CHP ProjectKillingly CHP Project

Solar Centaur 50

4 6 MW4.6 MW

Natural Gas

Turbine/Generator


Duct Burner - Coen


60,000pph HRSG / SCR - Rentech Boilers

What it takes to make it happen…..

1. Time

2. Legislative Support• State Funding Grantg• Utility Stand-by Charges Waived• Utility Gas Delivery Charges Reduced

3. Electric / Natural Gas Price Spread

What it takes to make it happen…..

4. Balanced Thermal / Electric Loads

5. Capital

6. Corporation Commitment to Sustainability• Energy Reduction & GHG Emissions• Time• Time• Resources

• HeadquartersSit• Site

#2 Topeka Bio Mass#2 Topeka Bio Mass


60 000 h St k B il• 60,000 pph Stoker Boiler

• Electrostatic precipitation

• Wood waste unloading / handling

• Storage bunker with flexible cover

• Metal building to enclose boiler

• Control room / MCCControl room / MCC


Topeka CO2 Emissions

100

120 • CO2 Emissions

2007 – 27,808 tons

60

80

bs o

f Co2

Post Project – 8066 tons

• Reduction in CO2 emissions

20

40MM

L • Reduction in CO2 emissions represents 2.9% reduction in CO2 emissions from all combustion sources in FLNA.

• Reduction is equal to0

2007 Future

• Reduction is equal to removing 3,442 automobiles from highway.

Electric N. Gas

#3 Casa Grande #3 Casa Grande Near Net Zero PlantNear Net Zero Plant

Biomass BoilerBiomass Boiler

Solar EnergySolar Energy

Membrane BioreactorMembrane Bioreactor

Compostable BagsCompostable Bags High-MPG Route TrucksHigh-MPG Route Trucks

Zero LandfillZero Landfill

LEED GoldLEED Gold

Eco AmbassadorsEco Ambassadors

LEED Gold LEED Gold

The Net Zero Project is a The Net Zero Project is a Showcase to Innovation and Forward ThinkingShowcase to Innovation and Forward Thinking

MBRCasa Grande Potential Layout

Bio Mass Boiler Stirling EngineSolar PV Trackers

154

Sustainability Challenges for the FutureSustainability Challenges for the Future


Sustainability Challenges for the FutureSustainability Challenges for the Future

Internal CommunicationsChallenge

•Create a Team

Internal Communications

Performance to Annual PlansR d d R iti•Budget

•Scorecard

Rewards and RecognitionEmployee Magazine Highlights

•Audit

•InnovateExternal Communications

•Execute

•Communicate

Annual ReportCorporate Citizenship ReportsA & MResults A & M

Environmental SustainabilityEnvironmental Sustainability

Water Natural Gas

40% 33% 100100

40%

80

90

BTU

/ Lb

60

70

80

90

Gal

/ Lb

60

70

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '0940

50

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09

Electricity

24%100

24%

>$60MM kw

h / L

b

80

90k

60

70

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09

FritoFrito--Lay publicity……Lay publicity……

Our Goal: “And in 2011, our Casa Our Goal: “And in 2011, our Casa Grande facility will begin to run Grande facility will begin to run ggalmost entirely on almost entirely on renewable energy sources and renewable energy sources and recycled water while producing close recycled water while producing close to zero landfill waste.”to zero landfill waste.”

o Recycle 85% of the plant y pwater

o Reduce natural gas use by 80%

o Use energy generated from bl lik hrenewable sources like the sun

and biomass….

Contact Information:

Kevin Chilcoat

[email protected]

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