PepsiCo Dives into Its Water Footprint in 5 Water-Stressed Regions

PepsiCo Dives into Its Water Footprint in 5 Water-Stressed Regions

PepsiCo operates nearly 700 facilities in more than 200 countries worldwide. Together, these operations produce hundreds of product lines, among them billion-dollar brands like Frito Lay, Tropicana and Quaker, in addition to the company's famous namesake.

While these facilities differ in the type of products they make, they do have a few things in common: They use lots of water. Many are located in water-stressed regions.

This makes it clear to PepsiCo that protecting water resources and ensuring safe supplies isn't just good for business, it's vital for its short- and long-term survival. So the company today is announcing a partnership with The Nature Conservancy to study the watersheds surrounding five of its manufacturing facilities in the hope that the lessons learned there may be applied across the beverage giant's global operations.

"We needed a toolkit to help all our individual plants in all their various settings determine the most feasible approach to protecting and restoring their water supply," said Liese Dallbauman, PepsiCo's Director of Water Stewardship.

I caught up with Dallbauman last week ahead of the release of a white paper detailing the early findings [PDF] of The Nature Conservancy pilot program. The company is releasing the white paper today during World Water Week in Stockholm, but the findings will eventually become part of a larger and more detailed report.

While individual PepsiCo plants and business units have for years engaged their surrounding communities on water issues, Dallbauman told me, The Nature Conservancy pilot project is the first concerted corporate-level water effort that goes beyond the company's four walls.

In addition to becoming one of the first companies to declare water as a human right, PepsiCo has set several water-related goals, including a 20 percent water use efficiency improvement per production unit by 2015, and achieving what it calls a "positive water impact" in its operations. A little backstory: The company's India unit had already met its goal in 2009 to deliver a "positive water balance" -- returning more water to the community than it consumed in its operations -- following charges it was depleting water sources in the water-scarce country. PepsiCo has now gone further by striving for positive water impact.

"We needed to look not only at the amount of water, but also the quality of water," Dallbauman said. "People don't just need enough water, they need clean water. Positive water impact is intended to include both the amount of water and quality of water."

Sangareddy, India, is one of the sites studied as part of The Nature Conservancy pilot project. The others include: Phoenix, Arizona; Mexico City, Mexico; Boxford, England; and Zhanjiang, China.

"The five locations were selected based on where we operate, where we're growing and where we expect there is probably a water shortage imminent, if not already there," Dallbauman said.

Indeed, the five locations differed in nearly every imaginable way: type and number of facilities located in the regions, watershed histories, competition for water. The types of mitigation strategies also varied considerably for each locale.

"You shouldn't expect the same answer to make sense in Sangareddy, India and Mexico City," she said. "I'm pleased to say that the options that ended up making sense in the local context in the different places, although there was some overlaps -- I think The Nature Conservancy came in with something like 18 to 20 options -- there wasn't a single one of those that made sense for all five sites, which tells me we have correctly wiped out any preconceived notion about what the answer is."

Other lessons: You need to understand the source of your water, not just who supplies it. Studying the watershed to identify opportunities also isn't a linear exercise because all the information you need, such as economic or political information, probably won't be available for you all at once.

The paper is a good read for anyone interested in the complexities surrounding water use, and is a must-read for those who are actually working on the front lines of water-related issues. PepsiCo views the pilot as an investment (it spent about $200,000 on the project), and while it's too early to say whether the future toolkit will be proprietary or open source, the company does plan to release more information about the project.

For those companies large and small looking for opportunities to address water issues in their communities, Dallbauman offered a few words of advice.

"You do need to have your own house in order, so you need to be operating as efficiently as you can," she said. "That's the first step. You need to be pay attention, you need to be taking action to save water in your own plant, partly because it's a smart business thing to do, and partly too because your neighbors are going to know that.

"If you are viewed as a place that's got open hoses and water running down the streets, you're not going to have a lot of credibility in your community."

Top photo -- of a Chinampa, a traditional agricultural methodology in Mexico established by Aztecs -- courtesy of PepsiCo.