pepsico's sustainable future - potato council

PepsiCo’s Sustainable Future

PepsiCo Europe – a large Agricultural

Business

1.2 Million tonnes of potatoes

120,000 tonnes of oats

80,000 tonnes of corn

30,000 tonnes of apples

…from 2,200 farms, some supplying PepsiCo for 3 generations and supporting

some of the best loved consumer brands in Europe

How can producer / purchaser

relationships drive farming

productivity and profitability?

Must

V

Potato Example: UK Cost Indices* v CPI

42

31

17

Ind

ex

* Cost of processing potatoes : Andersons and Bidwells for UK Potato Council

Costs >> CPI

highlight the need

for collaboration &

transformation

Left unchecked, potato

cost increases would

be 11% higher than

food as a whole

The commercial landscape is also changing...

• Fewer growers

• Competing Crops

• Higher yielding varieties

• Regulatory pressure

• Climate change

Number of Registered UK potato growers

only 3% of what it was in 1960

Number of UK Potato Growers 1960 - 2009* British Potato Council, July 2011

Weather events have caused significant

crop losses in 6 of last 8 years

So what does all that mean?

Growers and buyers need to carefully select who

to contract with... and where we should grow

Clear, aligned objectives between grower and buyer

reflecting in longer term, more strategic agreements

Seize opportunity to leverage Industry collaborations

& latest technology to do things better

Share the benefits...

Collaboration requires us all

to play a part...

• Doing nothing is not an option

• Trust each other - we are in this together....

• We all have something to learn

• Look around us.... what are other people doing?

• Try something new & share results

By 2017, 80% of PepsiCo crisps will be made from

new, proprietary potato varieties

...but together, we can achieve great things

=

i-Crop Precision Agronomy -

Right variety, right location grown in the right way

10% of UK crop under i-Crop monitoring; rolled out to

Holland, Belgium, France, Germany, Iberia, Poland, Turkey


i-Crop Precision Agronomy

Outputs: Canopy Growth Curve


• No growing days lost on this crop due to canopy falling below 90%

Full Cover (FC)

>90% Canopy

Target: Keep blue line (Act

ETp)

near green line (Pot ETp)!

• This crop reached 95% of its potential yield

• But received 402mm water in total, but ideally only needed 326mm

i-Crop Precision Agronomy

Outputs: Water Modelling


Less Water: >300Ha Drip Irrigation trials Less Carbon: 6 Scale Fertilizer trials

PepsiCo UK “50 in 5” commitment to reduce Carbon and Water use in

our key crops by 50% in 5 years....

• Working with experts to understand scale of the challenge & what we can do

• Working with Cambridge University to develop i-crop technology to measure

and analyse water use; Peers, ADAS, SAI, University of Aberdeen on Carbon

• Working with PepsiCo colleagues to learn from best practice around the

world – introducing drip irrigation

• Most importantly – working with growers to make it happen


Agro Sustainability: Four Key Platforms

12PepsiCo Confidential

• New VarietiesBetter yield, solids, lower defectsSome require less fertilizer and drought tolerant

• i-Crop Precision AgronomyHow and where to grow our crops

• Modified Agronomy: Irrigation & FertilizersDrip-irrigation; low carbon / organic fertilizers and application

• Cool Farm ToolMeasures results, engages growers in “what if” scenarios

Across EU... CO2e Summary – Very similar drivers across programs


Sustainable agriculture - progress

• In 2011, the first year of our “50 in 5” commitment, water usage reduced by 8% and yield

increased by 13%

• We have a clear road map to meeting our commitment:

– including the use of i-Crop and Cool Farm Tool

– implementing new varieties of potatoes

– optimising the use of fertilisers as well as switching to lower carbon fertilisers

– implementing drip irrigation in water stressed areas

– improving storage facilities of potatoes

• We are working with others, including Cambridge University Farms and ADAS, to find

further opportunities e.g:

– using smart phone apps to give accurate measurements of crop growth and development

– encouraging growers to generate green energy through biomass, solar and wind

What have we done


2009 2010 2011 2012

New

Varieties1.75% 5.2% 9.7% 18.3%

I-Crop

UK: 24 fields,

55 crops

UK: 46 fields,

83 crops+ WER, Iberia

UK: 46 fields,

84 crops+ WER, Iberia,

Poland, Turkey

Irrigation /

Fertilizers

UK: 100Ha Drip

TU: 240Ha Drip

UK: 100Ha+ Drip

TU: 240Ha DripSP: mini-sprinkler

& pivot study

WER: 6 Fert. Trials

Cool Farm

Tool

1 Carbon

Footprint

(Carbon Trust)

2 Footprints

UK

26 Footprints

UK, WER, Iberia

>80 Footprints

UK, WER, Iberia,

Poland, Turkey

Carbon Roadmap to 53-59% by Crop 2015

100% 87%

83%

81%

79%

73%68%64%

Crop 2010 Base

Crop 2012-14 Variety Mix

Change

Crop 2014 Drip Irrigation

Crop 2012-13 Switch to

Abated Fertilisers

Crop 2013 Variety

Reallocations

Crop 2011 I-Crop Gain

Crop 2012-15 Additional I-

Crop EfficiencyCrop 2014-5 Storage

Upgrades

+13%

Yield

-6%

Carbon18%

reduction on

34% of

footprint

+2%

Yield

+4%

Yield

+5%

Yield-5%

Carbon33%

reduction on

15%

footprint

+2%

Yield

63%

53-59%Rosetta Replacer 1-3%

Fertiliser usage reduction 1-3%

Field Operations 2-4%

(+ Green Energy TBC)


Water Roadmap achievable by Crop 2014

100% 105%

82%

45%

38%33%

Crop 2010 Base

Crop 2012-14 Variety Mix

Change

Crop 2014 Drip Irrigation in

East Anglia

Crop 2012-15 Additional I-

Crop Efficiency

Crop 2013 Variety

Reallocations

Crop 2011 I-Crop Gain

+5%

Water

+5%

Yield

-37%

Water

-23%

Water

-7%

Water


UK Drip Irrigation Trials : -36% H20 & + 7% yield.

Blackleg Noticeable difference in Blackleg disease loadings between gun and

drip irrigated areas, with 8% less disease in the drip areas

� Comparison of Blackleg counts in same field, different irrigation regimes

� <1% Blackleg in the Drip treated area and 8% Blackleg in the Gun treated area

� Would affect both field yield, but also take extra disease into stores with risk of extra losses


More Yield

+ Better quality

+ less field, store and factory waste

= The oxygen of sustainable productivity

Things need to change... but together, as

growers & buyers, we can make a real

difference in tackling cost inflation whilst

growing our potatoes better:

Doing things better across the agricultural

supply chain drives efficiencies, lowers all

our costs and is more sustainable...

Something we can all feel proud of

...and will give our consumers something

to smile about

Want to know more....?

[email protected]

pepsico's sustainable future - potato council

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