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PepsiCo, Danone and Kellogg's share ingredients for global food system transformation

man waking on tightrope between junk and healthy food

The companies we think of as food titans are actually agricultural giants, and they are starting to process what their businesses might look like in sustainable future.//Image courtesy of Shutterstock.

We will need help from the biggest food companies in the world to transform the food system into one that is sustainable while also feeding the almost 9 billion people on the planet. 

They are the ones with connections to thousands of farmers, millions of acres of crops and hundreds of thousands of livestock. They are the ones with the brand names that are starting to feel pressure from consumers to address sustainable production. And they are the ones with hundreds of thousands of employees and billions of dollars to invest in addressing the problem. 

GreenBiz21's breakout on transforming the food system brought together sustainability executives at three of the largest food companies in the world — PepsiCo, Danone and Kellogg’s — to find out where they are prioritizing their efforts. Representatives from the companies highlighted some tactics they’re using to catalyze changes to their own operational habits and meet their increasingly aggressive climate commitments. Here are three high-level takeaways from the session. 

1.PepsiCo is prioritizing partnerships on its path to net-zero emissions 

PepsiCo at its core is an agricultural company — according to PepsiCo CSO Jim Andrew, 52 percent of the food and beverage company’s products start in the ground. To address its impact, PepsiCo recently announced that it’s doubling its science-based targets to reduce absolute greenhouse gas emissions by more than 40 percent by 2030 and to achieve net-zero emissions by 2040. Andrew highlighted that partnerships are the only way for PepsiCo to reach its goals.

"We’re trying to team up with as many people as we can to crack the nut on some of these big, big complicated issues," Andrew said. "There’s power in public and private partnerships when it comes to these big systemic challenges, to find and implement shared solutions and then scale them."

Since 2017, PepsiCo has partnered with Ellen MacArthur Foundation’s New Plastics Economy in a bid to get 100 percent of its packaging to be recoverable or recyclable by 2025. Its recent results included that it seems to be inching towards that goal. In late 2020, PepsiCo announced 100 percent of its bottles in nine European markets will be made from recycled PET by 2022. Adding to its partnership arsenal in 2021, PepsiCo disclosed in late January that it is teaming up with Beyond Meat to launch an all-plant based line of snacks and drinks. 

2. Danone uses its niche brands to experiment with sustainability innovations

As the world’s largest B Corp, Danone feels that it has "an obligation to act with an urgency that is in line with the size of the problem," said Deanna Bratter, head of sustainable development at Danone North America, during the GreenBiz 21 session. 

Danone has set goals in line with science-based targets, including a 50 percent reduction in full-scope emissions by 2030. Danone has even narrowed in on a few key brands including Horizon, which it hopes will be the first national organic dairy brand to go carbon positive across its full supply chain by 2025. And it has established a $15 million investment fund for Horizon farmers toward that end. 

We have an obligation to act with an urgency that is in line with the size of the problem.

The company is also tackling food waste with other partners to put the weight of Danone behind the projects. For example, in conjunction with the nonprofit Full Harvest, Danone used rescued Meyer lemons in its Two Good Yogurt and plans to launch more flavors in 2021.

"There are not, in most cases, solutions that can be solved by one company stepping forward and raising their hand," Bratter said. "Sometimes you need to be that company so you can be a catalyst to ignite the conversation, accelerate the conversation or show what’s possible."

3. Kellogg’s highlights the importance of the investor focus ESG goals

Kellogg’s is already a plant-forward food company with world-class recycling. According to James Duies, director of investor relations at Kellogg’s, 76 percent of its packaging is recyclable and 86 percent of its portfolio is plant-based. It plans to ramp up even more plant-based options by making its sub-brand Morningstar 100 percent vegan and starting a new alternative meat line called Incognito.

By switching to these more plant-based options, Kellogg’s is aiming for a 15 percent per pound of food produced reduction in emissions by 2020 and 100 percent reusable, recyclable or compostable packaging by the end of 2025. 

But he stressed that the real innovation is coming from investors, who have been part of the inspiration behind such initiatives. 

"There is a groundswell under ESG investing," Duies said. "Many more investors are choosing their investments today based upon ESG factors. There has been a convergence of traditional investors with those that are more solely focused on ESG." 

According to Duies, Kellogg’s Better Days commitment had strong support from investors, which helped Kellogg’s invest resources into reducing Scope 1 and 2 greenhouse gas emissions by 65 percent and to achieve 100 percent renewable electricity by 2050.

During the session, Duies emphasized the importance of actions by the Vanguards and BlackRocks of the world that have the buying power of millions of dollars of ordinary people’s money invested in their funds. They, as the guardians of those assets, can direct those funds to prosocial endeavors, he said. 

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