The PepsiCo Way: A Cultural Transformation

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A CULTURAL TRANSFORMATION


contents

1 INTRODUCTION BY RAMON LAGUARTA 7

be consumer centric 16

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act as owners 38

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voice opinions fearlessly 62


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focus and get things done fast 84

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raise the bar on talent and diversity 106

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act with integrity

celebrate success



Introduction Let’s Celebrate You!

In late 2018, I gathered 30 of our leaders across different functions and geographies to discuss how we could position PepsiCo for growth, how we could be more deeply connected as a global organization, and how we could use our significant scale for good. I felt great confidence about the task at hand. We had an extremely strong foundation to build on and a fantastic group of seasoned leaders. We saw a very good organization that had the capacity to be truly great, and we knew that with the right strategy, the right capabilities, the right behaviors, nothing could stop us. But there was something missing. We needed a guide that could help lead and inspire us into PepsiCo’s next era. The process of charting PepsiCo’s future was exciting and invigorating. I met with these 30 leaders several days each month for four months. We identified our values and what we wanted to be known for. Our objectives. Our do’s and don’ts. Then we solicited input from every level of our organization: from the people who make, move, and sell our products to junior associates, people managers, and executives. We went to great lengths to ensure any guide we developed would be the right fit for our associates, our customers, and our whole company and we knew the voice of our associates would be the best judge of that.


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We wanted to be absolutely certain that we were coming up with ideas that were authentic to the entire organization, that differentiated us from the competition, and that created a sense of aspiration amongst our team. Once we knew who we wanted to be, we looked for places to improve our strategies and strengthen our capabilities. We asked how we can be better organized and work together to drive more effective execution. And we explored how we can elevate our sense of purpose to be an even greater source of inspiration to our associates and all our stakeholders. We emerged from this process filled with optimism. In particular, we believed we had an opportunity to accelerate our topline growth in a sustainable way, compete more effectively to win in more of our markets, and more rapidly evolve our capabilities to widen our advantages versus the competition. With this in mind, we united behind a new mission: to Create More Smiles with Every Sip and Every Bite, and a new vision that elevates PepsiCo Positive to the heart of everything we do: to be the global leader in beverages and convenient foods by winning with pep+. This is a call to action that reflects our commitment to running our business in a way that simultaneously satisfies and advances the interests of our many stakeholders: our consumers, our customers, our associates, our communities, our planet, and our shareholders. To achieve these aims, we also committed to becoming Faster, Stronger, and Better: Faster by being more consumer centric and accelerating investment for topline growth and winning in the marketplace. Stronger by transforming our capabilities and culture, including stepping up our efforts at digitalization and our commitment to Diversity, Equity, and Inclusion. And Better by continuing to integrate our pep+ agenda into our business strategy and brands, whilst doing even more for the planet and our people. From the start, it was clear that the key enabler for all of this would be our culture. It has been said that culture eats strategy for breakfast, so we knew that we had to get this right. We needed to establish ways of working that empowered employees to bring their best effort and best ideas, with the support of our leadership team and their fellow associates. We needed a core set of behaviors we could use to propel us forward and fall back on when times got tough. A method to define ourselves that had nothing to do with results, but everything to do with performance. Common values that would unite our large, global organization and be internalized by associates at every level across the world.



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Ultimately, we settled on seven leadership behaviors that have been rapidly embraced by every level of our organization. We call these behaviors The PepsiCo Way. • Be Consumer Centric: Constantly innovating to create more value for end consumers; factoring those end consumers into every decision we make; and using data and empathy to understand and anticipate their needs. • Act as Owners: Continuously seeking new opportunities for growth, efficiencies, and accelerating pep+; taking calculated risks and encouraging others to do the same; and thinking end-to-end by doing what is best for PepsiCo as a whole, not just one area of the company. • Voice Opinions Fearlessly: Creating a transparent and safe space for different opinions; actively seeking feedback and listening to one another and being curious; and respectfully challenging decisions when we disagree. • Focus and Get Things Done Fast: Making sure that we stay focused on what really matters and clarifying the things that don’t; simplifying the way we work, eliminating bureaucracy and other obstacles; and deciding, committing, and executing with speed and agility. • Raise the Bar on Talent and Diversity: Hiring and promoting only the best people and fostering continuous development for all; building diverse teams and inclusive environments; and recognizing people based on The PepsiCo Way behaviors, performance, and potential. • Act with Integrity: Always doing what’s right for PepsiCo, the planet, and the communities where we operate; behaving in a transparent and authentic way; and trusting our teammates and empowering them to deliver. • Celebrate Success: Building a positive and supportive human-centric work environment; creating moments of fun and celebration; and showing appreciation for each other’s contributions, big and small. Fundamentally, each of these behaviors stands on its

The seven behaviors have helped to create a culture that is more cohesive and diverse.

own and can be adapted to suit the complexities of each market. But what is truly special about The PepsiCo Way is that each behavior also builds on and reinforces the others, creating a virtuous circle that is already lifting our company. For example, when we Raise the Bar on Talent and Diversity, we can also become more Consumer Centric by increasing our understanding of the markets and communities we serve. When we Focus and Get Things Done Fast, we can also Act as Owners by efficiently managing costs. When we


Voice Opinions Fearlessly, we can help ensure the company Acts with Integrity by speaking up for what is right. When we defined The PepsiCo Way, I’m honestly not sure I imagined, even in my most optimistic moments, that it would have the positive impact it already has. By just about any important measure, we have outperformed where I believe we would have been without The PepsiCo Way. The COVID-19 pandemic was an early test of this. During some of the most challenging years in recent memory, years that reshaped the way we run our business and live our lives, our associates truly showed what it means to embody The PepsiCo Way behaviors. I was moved by the ways our associates took care of each other, all whilst showing up for our consumers, customers, and our communities when they needed us most. I couldn’t be prouder of our team and how they rose to the challenge. In less than four years, the seven behaviors have helped to create a culture that is more cohesive and diverse. Our standing as a global presence has improved, as have our local and regional relationships, which was vitally important during these very difficult past two years, with a deeper connection to the communities we are honored to work with and serve. We’re even making hiring decisions and promotion decisions by looking into The PepsiCo Way, which by some measures is the basic definition of culture. And the one giant reason this has happened so spectacularly: our asso­ ciates. It is because of them and their commitment to leaning into these behaviors that our business is positioned to emerge from the pandemic even Faster, even Stronger, and even Better than before. To each and every PepsiCo associate across the world, I congratulate you on all the great progress we’ve made since we established The PepsiCo Way. As we look to the future, my hope is that this book becomes a must read for every associate, especially new hires. It should be a reference manual that not only Celebrates Success, but holds us accountable to these seven behaviors that have carried us through recent difficult years and will no doubt carry us through difficult years ahead, fueling our next frontier of growth and creating more smiles with every sip and every bite for people across the world.

—Ramon Laguarta, Chairman and CEO


Edmonton, Canada

ACT WITH INTEGRITY

jeremy plotnikoff

Plotnikoff brought PepsiCo Beverages Canada’s first solar project to the Edmonton facility. He recognized a unique situation with a combination of strong government rebate, a province with high coal dependency, and one of Canada’s best solar climates to craft a proposal that was funded by the PepsiCo Beverages North America sustainability fund.

New York City, NY, United States

RAISE THE BAR ON TALENT AND DIVERSITY

cricket temple

Chicago, IL, United States

VOICE OPINIONS FEARLESSLY

jammil telfort

Pachuca, Mexico

CELEBRATE SUCCESS

Upon joining the Gatorade team, Telfort quickly adapted to his new role, asking smart questions, not being afraid to seek clarification when needed, and encouraging dialogue around important social issues.

mara paulina ayala polanco

Polanco facilitated a smooth and caring approach to professional development, helping her team to be better prepared to face workplace challenges.

Temple has championed gender and diversity policy changes at PepsiCo around bathroom access, dress codes, and clarifying pronoun usage.


Geneva, Switzerland

BE CONSUMER CENTRIC

diego elias

Elias has stepped up to take on the challenge of establishing and leading a multiyear strategic partnership with Lavazza, enabling PepsiCo to enter the fast-growing and incremental category of ready-to-drink (RTD) coffee for the first time in Europe.

Guangzhou, China

FOCUS AND GET THINGS DONE FAST

elaine lee

Lee and her team led the setup of a new forensics capability in Beverage and Nutrition in China, solving seven incidents/crises.

Egypt

ACT AS OWNERS

ahmed al-hadidi

A seasoned IT manager, Al-Hadidi went above and beyond with his reporting of automation. His initiative and ability to act as an owner ensured that we are more agile and consumer centric, and will help to improve PepsiCo’s net promoter score. Ahmed is a strong leader who demonstrates ability in developing and leading teams, and building strong relationships cross functionally with all levels of the organization.


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MATED/NEED HI-RES

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be consumer centric

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Constantly innovate to create more value for end consumers.

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Use data and empathy to understand and anticipate the needs of our end consumers.


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Factor the end consumer into every decision we make.



wants and needs, comfort and joy More communication, more data, and new technology mean our end users are closer than ever NINETY THOUSAND CONSUMERS signed a petition to bring back Cheetos

Asteroids. “What did we do?” recounts Steven Williams, CEO of PepsiCo Foods North America. “We brought them back, launched them, and since then sales have doubled.” You have to know what makes people smile. “A big refresh through The PepsiCo Way was let’s be consumer centric and gain a better understanding of local consumers to capture markets,” says Ramon Laguarta, Chairman and CEO. “PepsiCo is such a large company, we often ran like a machine, in our corporate and global approaches to brand and marketing.”


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terry pille UNITED KINGDOM launch of Naked Zing

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a taste of inspiration Consumers want what they want—yesterday, if possible. So Terry Pille, Senior Brand Manager for Naked in the U.K., and her team did all they could to make that happen. Using consumer-led data and executing on an astonishingly short idea-to-launch product cycle—under a year— Naked Zing was introduced in the U.K. in July 2020 to an eager audience that had already let their taste be known. Team members Jan Beckers, Naked WESSA’s Marketing Manager, and Basma Malik, Insights Associate, leveraged comprehensive testing, research, and a co-creation workshop with consumers—which ultimately inspired the name “Zing”—to provide the drink with the stamp of consumer approval before it arrived, helping it to win internal buy-in. And what exactly did consumers want? A punchy new range of revitalizing, citrus-infused smoothie flavors. “When people drink smoothies at breakfast, what are they looking for?” asks Pille. “Something to put them in a positive mindset and really wake them up.” So Naked Zing was developed with that in mind: more creativity and innovative flavors at breakfast— Zings in Strawberry and Tropical. “I love that it was born from very simple insights,” says Pille, referring to the consumer input that helped propel the Naked brand into the breakfast category. After a career in Strategy and Finance, Pille was drawn to Marketing for the chance to drive product development from start to finish. Her new position pushed her to be consumer centric, especially key as the snacks landscape changes so rapidly. As it turns out, consumers know what they want. With strong support from retailers—including PepsiCo’s largest customer, Tesco, which offers the juices in 2,300 stores—Naked Zing is poised to help the brand achieve its ambitious goal of doubling its share of the take-home smoothie category by 2023. “What I really love about marketing is that I can work both on defining the strategy and ensuring it becomes a reality,” says Pille. Mission accomplished.

What I really love about marketing is that I can work both on defining the strategy and ensuring it becomes a reality.


THE CONSUMER MESSAGE IS LOUDER AND CLEARER

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When the PepsiCo Executive Committee was choosing and refining the behaviors to include in The PepsiCo Way, “Be Consumer Centric” was one of the first, partly because of major shifts in the retail environment. Consumers increasingly want “responsiveness, customization, innovation, local nuances,” says Grace Puma, former Executive Vice President and Chief Operations Officer. “They want lots of real-time service

The world is shifting. Some of it is in product portfolio and their own tastes, and some is How do I get my product, where do I get it, how fast can I get it?

and go-to-market capability. The world is shifting. Some of it is in product portfolio and their own tastes, and some is How do I get my product, where do I get it, how fast can I get it? This behavior change requires big shifts in what and how we prioritize, to capture that and maintain top performance.” Hugh Johnston, CFO, concurs that a shift in focus, from “customer” to “consumer,”

was needed. Technology, for one, “allows us to go from being communication-centric to consumer relationship–centric. All of a sudden, I’m not talking to you through an ad during the Super Bowl. Now, I can build a direct relationship with you. I know a lot

steven williams

of your habits through online buying. I can shape messages to

CEO OF PEPSICO FOODS

you. I can learn a lot from individual transactions, but also,

NORTH AMERICA

through the aggregate of my relationship with you, how I might be missing opportunities for people like you, or introducing you to products of ours that you might not be aware of.” PepsiCo has always cared deeply about the end user, of course, but now aspires “to do a better job of putting the consumer in the room when we have discussions,” says Williams. “Lay’s is the biggest food brand in America. If I’m going to take salt out of chips, I want to ask the consumer first. If I’m going to change the price or take two potato chips out of the bag, I need

If I’m going to take salt out of chips, I want to ask the consumer first. If I’m going to change the price or take two potato chips out of the bag, I need to hear from the consumer.

to hear from the consumer.” Consumer centricity means focusing on the needs and wants of the people you serve. Achieving it requires seeing the world beyond your own walls. How has PepsiCo achieved this in the last three years? “Do we spend time with consumers when they consume our products?” asks René Lammers, Chief Science Officer. “What are the occasions? What is their mood? What are they looking for?”


give the people

WHAT THEY

WANT

THE RETURN OF

Cheetos Flamin’ Hot Asteroids

Though popular, the sphere-shaped, canister-packaged asteroids were discontinued in 2009. Two years later, a fan created a Cheetos Flamin’ Hot Asteroids Facebook page, which garnered almost 10,000 followers, and Frito-Lay got the message.

THE FANS SPOKE

FRITO-LAY LISTENED The new Flavor Shots line features portable pouches of Cheetos Flamin’ Hot Asteroids (in a shiny, new package), as well as Doritos Fiery Habanero Triangles, Doritos Nacho Cheese Nuts and Doritos Flamin’ Hot Nacho Cheese Nuts. One small step for a fan, one giant leap for all Doritos lovers.


product INNOVATIONS

CHEETOS POPCORN

Cheetos Popcorn delivers all of the rich, smooth, cheesy flavor you know and love from classic Cheetos now in popcorn.

QUAKER PORRIDGE TO GO

SODASTREAM BUBLY DROPS Now you can make your own refreshing bubly sparkling water at home with your SodaStream!

MOUNTAIN DEW ZERO SUGAR

Mountain Dew Zero Sugar offers all the bold charge and flavor of Mountain Dew, now without any sugar.

Quaker Porridge to Go Breakfast Squares are delicious, hearty baked squares. Each one has the same amount of Quaker Oats as a bowl of porridge and is combined with tasty ingredients such as golden syrup for a mighty start to the day ahead.

LAY’S SUPER CHIPS

Lay’s Super Chips combine intense flavor with a deepridged structure to create an irresistible snacking experience.


WALKERS NANDO’S PERI-PERI CHICKEN

ALVALLE GAZPACHO

Alvalle Gazpacho uses an original Spanish gazpacho recipe, and is made with only fresh tomatoes and carefully selected vegetables.

Walkers partnered with Britain’s mostloved restaurant to transform the iconic and irresistible PeriPeri Chicken flavor into an all-new crisp.

LOCALIZING

tastes PEPSI OSMANTHUS FLAVOR

Pepsi went local in China to provide the comfort of local culture and tastes with this Osmanthus-flavored beverage.

QUAKER BUBUR LAMBUK

Quaker Bubur Lambuk celebrates the classic Malaysian dish.

LAY’S MAGIC MASALA

Lay’s India Magic Masala chips combine Lay’s classic chip with a blend of irresistible Indian spices.


28 PepsiCo has answered these questions by:

1. Understanding consumers better, diving into consumer insight data to understand how different communities adopt their own behaviors, needs, and wants.

Being consumer centric really is about understanding what consumers want or will want in the future and delivering exactly on that expectation.

2. Thinking like a consumer and putting ourselves in other people’s shoes, considering various emotional needs, the reasons behind them, and then responding effectively. Empathy is key.

3. Anticipating consumer needs and wants, distinguishing between what people need and what they think they want, coming up with novel solutions to everyday problems.

4. Being a brand ambassador, s haring our favorite products, innovations, and news with friends and family.

THINK LIKE “THEM” Curiosity and empathy. These are perhaps the two most important virtues for better connecting with and


29 understanding the consumer. Along with big data, they enable the company to get closer to people, uncover new opportunities, and drive effective decisions. PepsiCo’s Insights organization allows us to listen continually to consumers and better understand them. Maneesha Khanna, Director of PepsiCo’s Global Media and Consumer Data,

jim andrew EXECUTIVE VICE PRESIDENT AND CHIEF SUSTAINABILITY OFFICER

keeps up with the blistering pace of evolution of media platforms and technologies, which are often driven by unpredictable and rapidly changing consumer media consumption habits: “We have a rich pool of consumer data that we leverage to create more personal experiences. Harnessing and structuring this data, we can now uncover preferences, patterns, and behaviors to predict what consumers want. This allows us to customize personalized experiences and product recommendations that are more likely to meet their needs. This is the best time to be a marketer. Personalized products and experiences are more likely to build love and loyalty, as well as drive conversion.”

It’s really about putting the consumer at the absolute center of everything we do, who they are, what drives them, what motivates them, what their hopes, needs, and desires are.


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Lammers refers to helpful “consumer benchmark” scorecards, which show how well PepsiCo is doing against local competitors—on price, taste preference, and other indicators. “We’re getting better at that,” he says. Paula Santilli, CEO of PepsiCo Latin America, puts it ­simply: “Wherever you see a shopper, talk to him or her. It will be a wealth of direct information.” To build greater empathy, PepsiCo encourages its people to put themselves in the shoes of the shopper, but also provides an “empathy map” as a guide. The need to connect and empathize reached another level during the height of the pandemic. “During COVID-19 we talked to consumers every week, about everything,” says Williams, “Big data, thick data, emotional data. What do you need to hear from us? What’s happening in the market? What do you love? What do you not love so much? We asked thousands and thousands of consumers: How are you feeling? We want joy, our consumers told us. We need comfort. It was such difficult times, so we changed whole campaigns, because they told us that comfort and joy were what they needed from us. We got hundreds of letters from consumers. I can’t believe I found Lay’s on the shelf when nothing else was there. eCommerce was going through the roof, and we also heard from consumers who couldn’t find their favorite flavor. We asked ourselves, ‘How are we going to supply that?’” In the middle of the chaos and sadness of a global pandemic, an amazing team of PepsiCo engineers and others—with the benefit of a longdormant URL the company owned—got the digital platform snacks.com up and running in a seemingly impossible 30 days.

ramon laguarta CHAIRMAN AND CEO

Every single one of us is a consumer. Our family members are consumers. Our neighbors are consumers. So, when we want to become more consumer centric in our work, paying attention to the needs and desires in our own communities is a great place to start.


a new relaxation sensation One of more than 600 entries in PepsiCo’s inaugural global Next Big Idea competition in 2019, Driftwell, a drink offering safe, science-backed ingredients to help consumers unwind, was devised by multiple teams in Canada, whose team members—Duncan McRae of PBNA-Finance Canada; Sean Cauterman and Stephanie Solonynko, both of PBNA-Marketing Canada; and Mark Dekker of Global R&D-PBNA Canada—then worked with Emily Silver, Vice President of Innovation and Capabilities for PepsiCo Beverages North America, and her team to transform the concept into an actual product. There was much deliberation over what a “relaxation beverage” should taste and look like, and when a consumer might drink it. “I am always trying to underF LE O PEPSI stand what problems we can solve,” Silver says. P CO Her team studied consumer feedback on all the EO P ways relaxation was missing from our lives. And considerable time was spent collaborating with R&D, of course, to decide what should go in the product. That meant reviewing scientific studies and working with nutrition experts to determine the precise type and PURCHASE, NEW YORK amounts of ingredients to include in piloting Driftwell from the product: an enhanced still water concept to consumers beverage with a hint of blackberrylavender flavor, magnesium (10% daily value), and L-theanine, an amino acid and E I scientifically supported ingredient that helps R CO T promote relaxation (it’s found in green and N NS UMER CE black teas and certain mushrooms). Driftwell is also considered a functional beverage, a category of drinks that have benefits beyond just refreshment, and a segment where PepsiCo has steadily increased its presence. With her first sip of the blackberry-lavender-flavored prototype, Silver had her eureka moment. As she says, “I couldn’t wait to put it out in the world.”

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Scan to watch a video and hear Emily Silver’s story in her own words.

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emily silver


32 GO BIG AND SMALL Chief Design Officer Mauro Porcini reflects on the need to be consumer centric on two levels: global and local. “Pepsi is Pepsi, the most global brand we have,” he says. “But then we created regional limited-edition packaging, like the very successful one that celebrated culture in different c ­ ountries— in China, in multiple countries in the Middle East. We aim to understand the nuances of cultures across the world, empowering our people in every region to understand deeply the uniqueness of their region, while also understanding the global strategy. They need to act as cultural translators between the two worlds.” The push is constant and growing. “We talk to thousands

jane wakely EXECUTIVE VICE PRESIDENT, CHIEF CONSUMER AND MARKETING OFFICER AND CHIEF GROWTH OFFICER, INTERNATIONAL FOODS

of people weekly,” says Williams. “It’s not just for one product or one period. It helps inform not just what we do, but also our understanding of how the market moves. We make these massive word clouds out of all the information we gather, then talk about it as a management team.” There’s yet another compelling reason to shift toward consumer centricity: It makes PepsiCo an even better corporate citizen. “Previously, our approach was grounded much more in the business need—taxation, public pressures on big corporations,” says Puma. “Now, it’s a lot more because of consumer need. Consumers are looking for companies to be responsible—do the right thing, better manage their impact on the environment and society, leave it better for the next generation.” At its most basic, being more consumer centric isn’t a hard

We need to ask ourselves: How can we bring even more smiles to our consumers? How can we use creativity as a growth amplifier, utilize new technologies to personalize their experience with our brands, and deliver purpose-driven campaigns?

leap. Every single one of us is a consumer. So are our family members, our friends, and our neighbors. And the closer PepsiCo feels to the people they serve, the more fulfilling its mission, day to day and longer-term. “With this new mindset, the consumer is better served,” says Williams. “We’re always asking, What’s the consumer going to say? That has made us way better. We know it’s a behavior that’s important to win the future.” That’s worth a smile.


consumer centricity

United States

Russia

STEVEN ANDRE

IRINA SCHERBAKOVA

Warehouse Supervisor

R&D Associate Engineer

ISSUE

Poor methods of handling out-ofstock merchandise in the warehouse

ISSUE

Lack of seasonal beverage options

APPROACHES

APPROACHES

Developed a streamlined process that diminishes the time the products are not on the shelves

Developed a delicious juice drink, Lubimy Christmas Mix, and its summer counterpart, Lubimy Summer Sangrinita

RESULTS

The process is now best practice for all warehouses, allowing PepsiCo foods to be back on the shelves for consumers faster

RESULT

Consumer appreciation and outstanding sales


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peak performance With the Gatorade Sports Science Institute, Principal Scientist Michelle King helped bring science designed for elite athletes out of the lab and to consumers. The goal for the Gx Sweat Patch was to bring technology to all athletes to help optimize their performance—whether they’re training for a 10K or entering a basketball tournament. “We have this innovative science for elite athletes, but we want to make it work for the needs of all consumers,” King explains. The breakthrough, PepsiCo’s first wearable device and the first of its kind on the market, is deceptively simple. Exercisers attach the patch to their forearm before a workout. The device measures sweat rate and electrolyte concentration. Users then snap a post-workout photo of the patch and the Gx app delivers personalized recommendations on hydration, recovery, and nutrition. For King, joining GSSI in 2019 was “part of a lifelong dream.” A competitive runner since high school (and a fan of orange Gatorade), she honed an interest in exercise physiology early on, particularly the impact of hydration on performance. Using her research skills in real-world scenarios is exactly what King says makes her job so fascinating. “I’m an athlete, too,” she says. “I want to help consumers who are having the same problems as I do.” As the team went through every design iteration and exercise trial, King says the consumer was top of mind: “Consumer centricity means making the science relatable and making sure this fits people’s needs.”

We have this innovative science for elite athletes, but we want to make it work for the needs of all consumers.

Scan to watch a video and hear Michelle King’s story in her own words.


FINDING MORE WAYS TO CREATE SMILES

growing the pepsico family As we strive to deliver on our mission to create more smiles with every sip and every bite, PepsiCo continuously transforms its portfolio with diverse and delicious snacking options that meet consumer wants and needs. Here are some of the most recent additions to the

BARE

2018

PepsiCo’s strategic focus on providing more nutritious snacking options led us to acquire Bare Snacks, a U.S.-based maker of baked fruit and vegetable snacks.

PepsiCo family!

MUSCLE MILK/ CYTOSPORT 2019 PepsiCo acquired CytoSport from Hormel Foods, which meant adding Muscle Milk to bolster our growing Sports and Fitness portfolio.

PIONEER FOODS

2020

One of the largest South African producers and distributors of a range of branded food and beverage products, Pioneer Foods has been a welcome and exciting addition to PepsiCo’s family of brands.


SODASTREAM

2018

SodaStream, the world’s leading at-home sparkling water maker, was acquired by PepsiCo in 2018. SodaStream bubbles are better for the consumer—healthy, easy to make, light to carry—and better for the planet, with a goal of avoiding more than 200 billion single-use plastic bottles.

ROCKSTAR

2020

PepsiCo grew its energy drink portfolio with the acquisition of Rockstar, a popular maker of functional beverages designed for those who lead active lifestyles.

BETTER FOR YOU

2019

BFY Brands, maker of PopCorners snacks, joined the PepsiCo family in 2019. The line is available in grocery stores nationwide and includes Flex Protein Crisps and Flourish Veggie Crisps.

PLANET

2021

PepsiCo collaborated with Beyond Meat to create The PLANeT Partnership, a joint venture to develop, produce, and market innovative snack and beverage products made from plant-based protein.



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Continuously seek new opportunities for growth, efficiencies, and accelerating pep+.

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Take calculated risks and stimulate others to do the same.


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Think end to end; do what is best for PepsiCo as a whole and not just for your own area.



what would YOU do? Doing the job as if the whole company is on the line AS THE PANDEMIC RAGED EARLY ON, Paula Santilli, CEO of PepsiCo Latin

America, looked to her team. “We all had to wash our hands every minute, more or less,” she recalls, “which presented a problem for our salespeople. The customer wasn’t going to lend you their bathroom, at least not then. If you had to stop at a convenience store or other outlet to wash your hands, you would lose time and sales. And since this was a global pandemic, multiply this problem by every PepsiCo salesperson in the world. Then, in what seemed like two seconds, the sales team figured: Okay, we need fresh water for hand-washing inside the van, somehow. How do we do it? They invented a mechanism—a jug that holds about 20 liters of water, with a faucet—and installed these in thousands of vans and trucks. Sometimes it involved tubes full of water running along the side of the truck. This allowed our people to wash their hands after every store visit and feel safe.”


44 Ingenious? Yes. Resourceful? Absolutely. Perhaps more than anything, though, it embodied the go-getter mindset and turn-on-a-dime agility of people acting as if the company they worked for was their own. Because it is.

SUPPOSE IT’S YOUR OWN MONEY No behavior has been more eagerly embraced and exemplified than “Act as Owners,” because the ambitious, independent, creative mindset it requires is already stamped in the DNA of PepsiCo and its people. Still, it’s a rallying cry that reminds everyone, top to bottom, that each of them can have a significant impact on cost savings, team safety, more successful product launches, improved efficiency, and, well, everything. “If there was a problem in your own business, you wouldn’t go home until it was fixed,” says Gibu Thomas, former Global Head of eCommerce who was involved in the development and

hugh johnston VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER

launch of The PepsiCo Way. “In a big company you sort of share accountability, and metrics, so you can say, ‘Well, it’s this guy’s problem or that guy’s problem.’ No. This is our business. So if it’s our business, what would we do?” “Act as Owners” instills a sense of urgency, of progress over perfection.” René Lammers, Chief Science Officer, notes that, “When you imagine you’re spending money as though it’s your own, there’s a higher degree of scrutiny. It’s not as if you’re counting every penny but it’s a different mindset. I think that’s changed at the company.” Hugh Johnston, CFO and the man who keeps track of where all the money goes, offers a different analogy: “Imagine the company was owned by your parents, or your siblings. What

To me, “Act as Owners” is two things. One is seeking growth opportunities for PepsiCo. Second, managing cost like you would manage your finances at home.

decisions would you make? Because the decisions you would make representing them are probably the right decisions to be making for the company as a whole.” The PepsiCo Way is a great way to refresh our understanding of this behavior. “Over many years, as PepsiCo became a bigger, more complex organization, I think ‘Act as Owner’ got a little lost,” says Eugene Willemsen, CEO, Africa, Middle East, South Asia (AMESA). “We were determined to bring back this notion.


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Of course, with that comes a lot of accountability. The decisions you make must stand up to certain tests. Financial scrutiny. Acting in the best interest of consumers, as well as other stakeholders. There’s a lot of focus on individual responsibility.”

OWNERS THE WORLD OVER The people of PepsiCo have responded, in so many ways, across so many functions and so many markets. Steven Williams, CEO of PepsiCo Foods North ­America, points out one of his favorite examples. “If I had to give accolades to the one team that had the worst possible scenarios, yet thrived, it’s the ‘Away from Home’ team,” he says. “The pandemic had shut down everywhere we sold anything— airports, universities, schools. And you know what those guys did? They moved a bunch of resources from ‘Away from Home’— which was way down—over to retail, which was booming.

This is our business. So if it’s our business, what would we do? “Act as Owners” instills a sense of urgency, of progress over perfection.


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nicole jones CHICAGO, ILLINOIS helping Black-owned restaurants reach greater heights

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digging in The notion of “pay it forward” is central to Nicole Jones’s worldview. After graduating from Hampton University, a historically Black university (HBCU) in Virginia, she started a scholarship program at her high school to encourage others to attend HBCUs. “I wanted to tell people about my experience and give them the tools and knowledge to get the same opportunities I had,” she says. Paying it forward is also key to anyone who acts like an owner: You shoulder responsibility above and beyond the assignment itself, wanting to build something of lasting value that benefits others. That’s exactly what Jones is doing as Senior Marketing Manager for PepsiCo Foodservice Brand Building, where she’s taken ownership of Pepsi Dig In, a multi-pronged initiative aimed at uplifting Black restaurant owners. “It’s my first time completely leading a project, and that’s stretching me in a way I’m thankful for,” says Jones. Dig In was conceived after the June 2020 announcement of PepsiCo’s Racial Equality Journey, a commitment to a more than $570 million set of initiatives over five years to lift up Black and Hispanic communities and increase Black and Hispanic representation at PepsiCo. “I raised my hand and said, Hey, I’m passionate about this and want to help,” Jones remembers. The Foodservice Brand Building team promotes brands like Pepsi, Mountain Dew, bubly, and Pure Leaf within restaurants, catering services, and dining halls, which translates to relationships with restaurant owners across the country. Jones’s team held panels to find areas of need for these businesses and discovered three key problem areas they felt equipped to address: • p roviding access to capital, training, and mentorship for both aspiring and current restaurant owners; • a ddressing the challenges and barriers that restaurants currently face, such as optimizing for takeout and online ordering; and • generating greater awareness of Black-owned restaurants. Dig In aims to generate $100 million in sales for Black-owned restaurants by 2025. It’s also an opportunity that’s kept Jones motivated. “I’m working on something that’s so much bigger than me,” she says, “and I don’t take that lightly.”

Scan to watch a video and hear Nicole Jones’s story in her own words.


It’s about never forgetting that we all have responsibility not just to our individual part but to the entire company.


49 Then they went out hunting for new business. We closed the deal on more new business in 2020 in places that were either declining significantly or not operating. We closed on four of the five major airports, because our people went out and said to prospective customers, ‘Hey, listen, you’re going to be flying at some point. We want to do a deal. We’ll start paying soon. Let’s get a deal done for when you’re up in the air.’ We locked in amusement parks, including Six Flags. They weren’t operating! Amazing. And it’s paying dividends like crazy now. Hats off to that team because it would have been easy to say, ‘I’m out. I’m not doing anything.’ But they dug in and just signed up business after business.” Ram Krishnan, CEO International Beverages and Chief Commercial Officer, has another pandemic-related account: “I was managing the China business at the time, and since they went through the pandemic first, there was no model, no steps to follow. We had to empower each office and manufacturing plant location to adapt and act decisively to keep the associates safe while delivering market-winning performance. And our guidance was based on one criterion: Would you make this decision if it was your business? Despite so many unique challenges, our teams did the right thing and got the job done.” Willemsen recounts another example. In South Africa, where PepsiCo has a significant bread business, major social unrest in the summer of 2021 left numerous shops damaged. “One of our bakeries was impacted,” says Willemsen, “and within 48 hours, the team at that bakery had repaired and cleaned it and had it up and running again, producing and selling bread to the marketplace. That’s taking ownership.”

ramon laguarta CHAIRMAN AND CEO

We need all of our employees’ talent and creativity to drive our business forward, to share big ideas for PepsiCo, whether it’s about a product, a process improvement, a sustainability innovation, or something completely different.


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food for good Eltoreon Hawkins of St. Louis was 22-years-old and planning a career as a police officer when he volunteered at a city-sponsored health drive. That’s how he first learned about PepsiCo’s Food for Good program and its commitment to distributing meals to families in need. He interviewed for a job packing meals and got hired on the spot. “I ended up packing food for eight hours in a refrigerator wearing my church clothes,” Hawkins laughs. “That’s how I got started.” Vital as the job was, Hawkins aspired to more, wanting to make sure that Food for Good reached the communities most in need. According to the Food Security Information Network, more than 11 million children across the U.S. live in food-insecure homes, a number that more than tripled during the pandemic. And scarcity worsens during summer months, when kids don’t have access to school meal programs and parents may not have the funds to provide three meals a day. So Hawkins threw block parties to create a setting where families felt comfortable accepting free meals. “People don’t like to feel needy,” Hawkins explains. He visited distribution sites to make sure all the partners knew how critical they were to the cause. That commitment helped Hawkins rise in the ranks at Food for Good. “I act as if they’re my dollars, my employees, my family,” he says. Food for Good’s St. Louis team distributed more than one million meals during the pandemic and is prepared for many more. And Hawkins’s involvement goes beyond serving sandwiches. “Black leaders are not often visible, even in St. Louis,” the program City Lead explains. Sometimes kids asked him to relay feedback to the boss. “I’d tell them, ‘You’re looking at him,’” says Hawkins. “I have to break it down for them because they don’t really see young Black leaders in the communities that I serve.” Hawkins has worked with Food for Good for six years, managing a team of three food packers and six drivers. “My heart aligns with this,” he says.

I act as if they’re my dollars, my employees, my family.

Scan to watch a video and hear Eltoreon Hawkins’s story in his own words.


52 In Perry, Georgia, a PepsiCo plant experienced a shortage of technicians, so the team there developed a program that partnered with the local gov-

steven williams CEO OF PEPSICO FOODS NORTH AMERICA

ernment and technical colleges to train technicians from the ground up, allowing the plant a pipeline of skilled talent. Numerous innovative, limited-edition marketing successes have come from local or regional teams “thinking as entrepreneurs,” says Chief Design Officer Mauro Porcini. “They see opportunities and proactively push them. These are great initiatives planned not upfront, not at the global level, but locally.” It’s not just the work that employees must do, but the work that they want to do. “I can give you 2,100 examples—that’s the number of employees

A great example of acting as the owner happened at our Perry, Georgia, plant. They had a pipeline problem with technicians, and the team on their own developed a program partnering with the government and technical colleges to develop technicians from the ground up. This allowed the plant to have an active pipeline of skilled talent and increased work diversity at the same time, solving their problem.

who submitted ideas to our Next Big Idea competition,” says Silviu Popovici, CEO Europe. “These are ideas for new ways to make the company grow faster or make more money. It’s a great illustration of what ‘Act as Owner’ means.” That’s one of the key components of the behavior: not just greater personal responsibility but continually seeking new growth opportunities. It’s about “never forgetting that we all own part of PepsiCo; we all have a responsibility not just to our individual part but to the entire company,” says Jim Andrew, Chief Sustainability Officer. Indeed, the mindset is more profound than tweaks or even mid-sized improvements. “We can either take the business that was given to us and try to run it better, or we can build something new from

the foundation the previous leaders left us,” says Kirk Tanner, CEO of PepsiCo Beverages North America (PBNA). “We’re not trying to run something slightly better, but to build something for the future. Running a business and building a business are completely different things. And to build a new business that will grow faster, you have to have ownership all the way through the organization.”


It’s about never forgetting that we all own part of PepsiCo.


act as owners

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China

MORGAN STEVENS

CISSY CHENG

Delivery Supervisor

Senior R&D Product Development Supervisor

ISSUE

ISSUE

Lack of cohesion between Warehouse teams, Sales District Leaders, and Food Service Representatives

Many challenges in rollout of Lay’s Deep Ridged chocolate-coated chips

APPROACHES

Quickly equipped team with chocolate knowledge and research, led project from concept to assembly line in just eight months, coached packers to design and build process line

APPROACHES

Worked cross-functionally between teams in order to ensure everything is communicated effectively and delivered responsibly

RESULT

RESULT

Ensured all cases are delivered on a daily and weekly basis, contributing greatly to her team’s success

Ensured a smooth and fast rollout of a product that allowed Lay’s to target a new business growth area


BRANDON BAKER Product Development Associate Scientist at PepsiCo

United States

ISSUE

A critical need to establish long-term, sustainable hazardous waste reduction initiatives

APPROACHES

Analyzing and reviewing data, aligning with key stakeholders

RESULT

Savings and significant increases in productivity in the areas of raw material costs, lab efficiency, and hazardous waste reduction


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sustainability at scale Can you act as owner . . . of the planet? Roberta Barbieri, Vice President of Sustainability, believes you must. “I feel a responsibility to help set the course for how the company reacts to the climate crisis,” she says. What sounds like a lofty goal is a lifelong commitment that has become a day job. Since Barbieri joined PepsiCo in 2016, her team’s relentless mission is studying the company’s carbon footprint at each step of the supply chain and searching for ways to shrink it. That means considering everything from how the potatoes that become Lay’s chips are grown to what kind of trucks deliver them to grocery stores around the world. And given the stakes, good enough is not good enough. The company doubled its original climate goal, now planning to reduce its carbon emissions by more than 40% in the next decade and reach net zero emissions by 2040, a decade earlier than laid out in the Paris climate agreement. “We’re planning a combination of emissions reductions like renewable electricity, improving energy efficiency in our vending and cooling machines, and moving away from fossil fuel–based packaging,” says Barbieri.

That’s what drives me to get up every day, for my team and me to do the very best we can to be a part of the solution.


We’re helping our farmers adopt regenerative practices in their fields.

She believes that PepsiCo’s scale can help operationalize sustainable practices around the world. “To get to net zero emissions, we need to do things like regenerative agriculture. We’re helping our farmers adopt regenerative practices in their fields through our sustainable farming program.” Though her job and mission are daunting, Barbieri, who leads not only climate strategy but also water conservation, is optimistic and determined. “It’s a strong community in PepsiCo of high-caliber sustainability professionals. That’s what drives me to get up every day, for my team and me to do the very best we can to be a part of the solution.”



INITIATIVE

the next BIG IDEA Annual employee challenge to provide us ideas on products, ways of working, or sustainability

Working in groups of two to five people, employees could take on the role of:

The submitted ideas should respond to one of the following themes:

1

1

ENTREPRENEUR

EVOLVE OUR PRODUCT PORTFOLIO

by submitting a disruptive idea and getting heard.

2 CONTRIBUTOR by using their specialist skills and expertise to elevate their team’s idea to the next level.

3 INVESTOR by virtually investing cash to find the brightest innovation. The wisest investor also won a seat (and vote!) in the Grand Finale.

by developing new products or enhancing existing brands that truly put the consumer at the center.

2 TRANSFORM THE WAY WE WORK by improving current business model processes and how PepsiCo operates.

3 ADVANCE OUR PEPSICO POSITIVE JOURNEY by identifying impactful, sustainable solutions for our products and planet.


600+ ideas

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Create a transparent, safe space for different opinions.

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Actively seek feedback, listen, and be curious.


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Respectfully challenge decisions when you disagree.



express yourself

The more voices we hear—from all different parts of the company— the greater we’ll be ARTICULATING THE PEPSICO WAY means that everyone is aware of each and

every one of the seven behaviors that define and motivate the company— yet the very setting down of the behaviors gives license to one, in particular, to be front and center at all times: “Voice Opinions Fearlessly.” For instance, if you’re launching a kid’s snack in a large bag because you don’t have small-bag capacity, is that consumer centric? If you’re focused and getting things done fast—is it fast enough? Do you need to be challenged on that? The PepsiCo Way invites the stress-testing of decisions, compelling everyone, regardless of rank, to voice opinions whenever it seems something might be done better.


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a vital voice The start of the COVID-19 crisis led PepsiCo to “connect with our local partners in a different way and explore new ways to engage,” says Kenny Thompson, Head of External Affairs, North America. “And then George Floyd’s murder happened, and that opened up so many conversations—externally and internally— about the role of PepsiCo, and corporate organizations and companies generally.” The more Thompson spoke with PepsiCo associates, the more his thoughts turned to voting, why it’s so vital, and how to get people involved. “There was a groundswell of internal excitement and enthusiasm about getting engaged and participating in the voting process, so we put together a plan.” Thompson oversaw the PepsiCo 2020 Voting Initiative, a partnership with organizations to empower employees to vote and participate in the democratic process—no matter their political leanings. “It’s important that people know that their vote matters, and how to vote,” he says firmly. “It’s that simple. And that is non-partisan at its core.” PepsiCo’s long-standing partnership with the Leadership Conference on Civil and Human Rights brought in experts on a range of issues, including civil rights and voting rights. The big question, according to Thompson, was: “How do you present things in an educational way to inform your employees, to inform voters of how to do things?” Thompson engineered partnerships with entities chosen for their dedication to helping citizens engage with democracy, such as national voter registration organizations Time to Vote and When We All Vote. Thompson’s been thrilled by the response: By raising his voice fearlessly, he’s hearing others do it, too. He’s had messages of support from truck drivers on the frontlines, partners on the executive team, and many others. One firsttime voter who works at the Bradenton, Florida, juice plant had some questions about the election and how to get involved, and said this would be his first time voting. Thompson hopes to meet him someday: “I don’t know how old he is, and I don’t know why he hasn’t voted before, but the fact that he felt comfortable enough telling me that this is something he wants to do and that he’s pursuing . . . it felt really good to know that the work that we’re doing has gotten out.”

It’s important that people know that their vote matters, and how to vote.


70 “That particular behavior became so, so important to everything else,” says Sergio Ezama, the company’s former Chief Talent Officer. “It’s one thing to have great people, great brands, a great network,” he says, but “you can’t be a very inclusive company if people feel they can’t speak their minds.” And it speaks volumes that if the more junior associates feel as if the behavior applies as much to them as to those higher up. “I think about a day I spent at the Frankfort, Indiana, plant, when a young manufacturing lead brought up an exclusive product we were making for one of our club customers,” recalls Steven Williams, CEO of PepsiCo Foods North America. “It had, she acknowledged, a ‘stellar component,’ but that made the product not only very expensive but also very difficult to make. She courageously asked if we might consider making another item for the customer, one that wasn’t so expensive or hard to make. We took her advice. She was right. That’s voicing your opinion fearlessly.” Jennifer Saenz, former Global Chief Marketing Officer and President of Global Foods, notes that The PepsiCo Way maintains relevance and vitality only if it’s embraced company-wide,

david flavell EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL, AND CORPORATE SECRETARY

so voicing one’s opinion is not negotiable. “We wanted to make sure that everyone in the organization was participating in crafting this vision,” she says. “Whether you’re a junior person on a team or a senior person, you need to feel equally comfortable expressing your thoughts because that’s actually how we get to great—hearing amazing perspectives from different people and then debating them. We shouldn’t be in an echo chamber, hearing just what we want to. We should hear the pros and cons of an argument, and ultimately get to a place where we’re much better for having stretched that idea and pulled it apart in different ways.” “It takes courage,” acknowledges Saenz. “It takes a lot of

It's critical for the people actually doing the work to voice their opinions on how to achieve our goals. Who better to share ideas than the people living it day in and day out?

work as an employee to get comfortable with voicing opinions fearlessly. The more junior you are, the more you need the encouragement of the word ‘fearlessly.’ You may have to overcome a fear of repercussions. You have to hear from leaders, ‘No, no, we want to hear your opinion, good, bad, supportive, conflicting.’” Including that behavior in The PepsiCo Way, then—and with that specific wording—“was a promise we needed to make to people for the culture to progress.”


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Difficult as it can be for a junior employee to question, say, the specs or cost of a product launch, that hesitation may be magnified when it comes to questioning PepsiCo’s larger role in the community and the world. The political and cultural convulsions of the last couple of years, particularly around race and social justice—all of it boiling in the cauldron of a global pandemic and daily warnings about climate change—put the behavior to the test. In the midst of the unrest, recounts Saenz, “A person on my Marketing team, one of the most junior folks, sent me this note that was pretty brave and bold about, Hey, what’s PepsiCo’s stance on some of these issues? What politicians were we donating money to? What was the company’s ranking by the NAACP? She was bringing to light things she felt we were doing well in and things where she felt we were failing, and failing big. I thought, My goodness, the bravery it takes to write this note. I followed up with her. I asked her to tell me more. It opened a huge dialogue for our team. We did a series of town halls. Senior leaders communicated that when tough things happen in the world, we would not ignore them.”


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One of the key positives, says Saenz, is that this new openness—whether it has to do with internal operations and being a more profitable company, or PepsiCo’s place on the geopolitical stage—means that “All of a sudden you’re interacting up and down the ladder. Colleagues of all levels are actually proactively reaching out to you, versus waiting for you to summon them into your office, the way we might have done in the past. As people get more comfortable with that, it’s amazing the imagination and ideas that get unlocked. They’re no longer shy about suggesting a strategy pivot or a next best action. They come bottom up.” Gibu Thomas agrees: “A title doesn’t make you smarter. The best ideas can come from anywhere. Usually the people closest to the problem see what’s wrong, way before an executive or a senior person sees it.” Voicing opinions fearlessly, then, is a directive to everyone in the organization: Tell us what you think is best for the future. We need to hear from everyone if we’re going to be great and stay great.


73 BUILDING AND CULTIVATING FEARLESSNESS Continual encouragement by leaders has helped to entrench “Voice Opinions Fearlessly” as a core principle, an essential ingredient in any recipe for success. The executives who insisted on its inclusion in The PepsiCo Way do all they can to enable it. “We have taken down barriers,” says Ezama. “It’s not about how you use PowerPoint, or a different way to conduct meetings, but being more conversational generally. People feel more relaxed to speak their minds. It’s also in how you build a team. You need a few folks who help to create an environment where you can even have fun debating and having alternative perspectives and there’s nothing wrong with that. One day it’s your idea, next day it’s mine, and that’s okay. That’s been a breakthrough.” He gives as an example the transformation of Global Business Services. “With GBS we’re looking at what we do across every function and business and carving out transactional activities that might be done more efficiently elsewhere. In the past, conversations about whether a function or business should remain where it is or be moved under another umbrella have been textbook examples of passive-aggressiveness: There’s a meeting, people listen, say, ‘Yeah, yeah, yeah,’ you walk out of the meeting, and so much of what should have been expressed hasn’t been. Now, we’re at a level of candor and conflict that has been extremely surprising and gratifying to me. We're at a place where everyone feels comfortable saying, ‘Listen, maybe we don’t agree on that.’ All in a good way. Not, ‘I’m going to talk to Daddy and he’s going to resolve this.’ No, in a very open manner. No behind-yourback conversations. It can be emotional and sensitive, and we’re handling it like adults.” Eugene Williemsen, CEO, Africa, Middle East, South Asia (AMESA), sees the change in his town hall meetings, which he now conducts virtually with thousands of participants.

eugene willemsen CEO, AFRICA, MIDDLE EAST, SOUTH ASIA (AMESA)

Voicing your opinion fearlessly, you listen carefully and with respect to others. But then in a discussion, when you have a different point of view, you bring that point of view across.


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collaboration at the heart “Even before getting this job, football was one of my biggest passions,” says Luca Pogliaghi, Senior Manager of Global Sports Marketing. Now, with Lay’s RePlay, Pogliaghi is able to share his love of the game with people in need around the world. He’s the architect behind the global initiative, which aims to address social issues impacting local communities through long-term educational sporting programs. As part of the project, Lay’s bags, which have already been enjoyed by our consumers worldwide, are used to create sustainable artificial turf fields (aka pitches). In partnership with UEFA Foundation for children and the NGO streetfootballworld, Lay’s RePlay has reached South Africa, the U.K., Brazil, and Italy and impacted more than 19,000 community members so far, with plans to reach even more. One secret to Pogliaghi’s success has been building a team where everyone feels free to voice their opinions fearlessly. “At PepsiCo, you can make a difference as an individual and in your team and with your opinions,” he explains. “All our opinions are necessary to bring this partnership to the next level. I think it’s okay, productive even, to disagree when it comes to work.” Ultimately, Pogliaghi says, all the discussions, collaborations, and debates are worth it once a pitch opens. He remembers inviting the community to test-drive the newly built Lay’s RePlay pitch in Tembisa, South Africa. “You could see that it’s not just the beautiful infrastructure— it’s people thinking, ‘Oh, wow, I have this now to play with every day.’” he says. “Happy faces are the best reward.”

I think it’s okay, productive even, to disagree when it comes to work.

Scan to watch a video and hear Luca Pogliaghi’s story in his own words.


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A title doesn’t make you smarter. The best ideas can come from anywhere. Usually the people closest to the problem see what’s wrong, way before an executive or a senior person sees it.

“I took this position November 1, 2019. My first town hall, there were almost no questions. I was surprised. I was told, ‘Well, people can be a bit shy.’ The last six months? The volume of questions has gone up significantly. Now we have more questions than can be addressed during one town hall. I see that as a great accomplishment.” There is unquestionably great—and passionate—support for this behavior, but, in Willemsen’s words, “We still have a long way to go.” That’s why it’s important for leaders to

continue to highlight moments ripe for opinion-voicing. “Whenever we’re in a meeting and having a discussion and we’re about to make a big decision and there’s always one or two people

roberto azevêdo EXECUTIVE VICE PRESIDENT AND CHIEF CORPORATE AFFAIRS OFFICER

who aren’t coming forward with an opinion, we need to invite them into the conversation, to make sure we’re hearing their perspectives,” says Dave Yawman, former PepsiCo General Counsel. Ronald Schellekens, Chief Human Resources Officer, offers the reminder that the behavior works only if it’s a two-way street: “It’s not only voicing,” he says, “but also listening and being curious about what people are telling you and exploring that.” In the end, whatever you may believe only has a chance to help yourself, your team or division, the company, or the world if it’s voiced. “Always express your opinion,” says Paula Santilli, CEO of PepsiCo Latin America. “Silence does not help you, especially when you have an opinion that is completely different from what everybody else in the room is saying.

We want to hear our people’s best thinking and their best opinions. Not everybody’s going to be right, but the collective additions of all of the inputs can get us to the best answers.

Speak up; say your opinion fiercely. You might make a huge, huge difference.”


voice your opinion fearlessly

United States

United States

THILO WREDE

CRYSTAL RAMOS-NIEVES

Vice President

Organizational Capability Leader

ISSUE

ISSUE

Lack of financial strategy that prioritized consumers

Lack of team morale among recent hires and high turnover rate

APPROACHES

Questioning the regional strategy, thoughtfully listening while respectfully challenging the status quo

APPROACHES

Researched individual learning styles, encouraged frontline employees to voice their opinions and reviewed their feedback

RESULT

Developed a plan that centralized consumer value and business growth above pricing and margin protection

RESULT

Developed a new training manual called the Participant’s Guide, started a “train the trainers” program to improve onboarding experience for new hires


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a thirst for winning James “JR” Coman’s insatiable thirst for winning has produced innovative thoughts on Customer Development Agreement partnership structures and Retail Pricing strategies. After he expressed these ideas to his Unit Sales Manager (USM) and Market Director, several of them were implemented.

This isn’t just about a person courageously raising their voice, but an organization that listens and implements the changes that need to happen.


vested interest In the terrible early months of the pandemic, no state was hit harder than Washington. COVID-19 tore through nursing homes and was spreading elsewhere, and there were lots of frightened frontline employees. In Spokane, Tim Steltzer, Zone Business Manager at Frito-Lay, was concerned that that his team members, while stocking shelves in grocery stores, were often not afforded the recommended six feet of social distancing to keep safe. Steltzer gathered the ideas from frontline workers, took them to a Grainger vendor, and they created a yellow safety vest that announced on its back, PLEASE ALLOW 6 FEET SAFETY ZONE, with arrows F pointing out sideways to indicate what LE O PEPSI P the wearer wanted, eschewing the CO EO need for sometimes uncomfortable P conversations. An instant success, the yellow safety vest was implemented across the market. “This isn’t just about a person courageously raising their voice,” says Jessica Chen, Senior Director of Human Resources, SPOKANE, WASHINGTON PepsiCo Foods North America, thinking on your feet “but an organization that listens and implements the changes that need to happen.”

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CHARTING YOUR PROGRESS

the measure of success

continually driving personal growth Given how performance- and metrics-driven PepsiCo is, how does the company know when its people are improving at the seven PepsiCo Way behaviors, and by how much? A PDR—Performance and Development Review—is a manager’s assessment of an employee’s performance, scored annually or more frequently. With The PepsiCo Way as a framework for these reviews, one might look at how the employee improved on, say, Consumer Centricity, or Acting as Owner. The PDRs look at two to three PepsiCo Way behaviors, not all seven, per year; this narrowed focus helps employees make meaningful inroads on the selected behaviors. Of course, managers have their performance reviewed, too. Some sample objectives? For “Focus and Get Things Done Fast,” a manager might create a cross-functional slam team to develop a new product line/flavor, based on the consumer data report, and simplify the decision and communication channels to shorten the deliverables from nine months to three. For an employee, it might be to look for ways to shorten a particular packaging design process, while still meeting the sustainability packaging standard. For “Voice Opinions Fearlessly,” a manager might pilot a feedback chatbot with their team, one that enables employees to give instant feedback on a newly implemented practice, ensuring continual improvement. For an employee, it might be to develop a channel within the team to encourage suggestions that might improve the company’s health and safety policy. PDRs ensure that the PepsiCo Way behaviors aren’t merely abstract, if lofty, aspirations, but rather stated goals that will be measured regularly on whether they are reached, and how well, and how fast. The PepsiCo Way.


This narrowed focus helps employees make meaningful inroads on the selected behaviors.


OUR RACIAL

COMMUNITY

JOURNEY

OUR REACH IN MORE CITIES ACROSS THE U.S. TO SUPPORT

EQUALITY AS OF 2021

WE'VE EXPANDED

2

-YEAR/TRADE CERTIFICATE

COMMUNITY COLLEGE

SCHOLARSHIPS (UPLIFT SCHOLARSHIP)

AND ESTABLISH SCHOLARSHIP SUPPORT FOR STUDENTS TRANSITIONING FROM

2-YEAR TO 4-YEAR

PROGRAMS

PEOPLE BLACK MANAGERIAL

REPRESENTATION TO

(S.M.I.L.E. SCHOLARSHIP) OUR UPLIFT

COMMUNITY COLLEGE SCHOLARSHIP PROGRAM

8.4% 1,800 9.5% HAS GROWN FROM REACHING STUDENTS IN 11 CITIES TO HAVING DISPERSED FUNDING FOR NEARLY

AND

HISPANIC MANAGERIAL

REPRESENTATION TO

PROGRESSING TOWARD OUR

SCHOLARSHIPS

ACROSS 20 CITIES

2025 goal of 10% 25

OUR S.M.I.L.E.

(SUCCESS MATTERS IN LIFE & EDUCATION)

INITIATIVE HAS AWARDED SCHOLARSHIPS TO

BLACK AND HISPANIC

STUDENTS


BUSINESS WE'VE SPENT MORE THAN

$450 MILLION WITH BLACK AND HISPANIC-OWNED

SUPPLIERS IN 2021 WE LAUNCHED

JUNTOS CORECEMOS, A

$50 MM PLATFORM AIMED AT STRENGTHENING HISPANIC-OWNED SMALL BUSINESSES, INCLUDING RESTAURANTS, BODEGAS, AND CARNICERIAS (MEAT MARKETS) AS PART OF THIS INVESTMENT

THE PEPSICO FOUNDATION'S

IMPACTO

HISPANIC BUSINESS ACCELERATOR IS PROVIDING

$10 MILLION IN FUNDING TO HELP

500

HISPANIC SMALL FOOD AND BEVERAGE

BUSINESS OWNERS IN

13 CITIES ACROSS THE U.S. GROW THEIR ENTERPRISES OVER

FIVE YEARS

THROUGH

PEPSI DIG IN AND THE PEPSICO FOUNDATION’S

BLACK RESTAURANT

ACCELERATOR WE HAVE INVESTED

$22.3 MM IN FUNDING FOR BLACK-OWNED

RESTAURANTS PROGRESSING TOWARD OUR GOAL OF INVESTING

$50 MM OVER FIVE YEARS TO

STRENGTHEN BLACK-OWNED

BUSINESSES



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Stay focused on what really matters and clarify what we won’t do.

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Simplify the way we work, eliminate bureaucracy, and remove obstacles.


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Decide, commit, and execute with speed and agility.



go, go, go

Because no one says you can’t be big AND fast “IT USED TO BE THAT A CAPEX DOCUMENT authorizing the purchase of a pro-

duction line required 27 signatures,” says Silviu Popovici, CEO Europe. “Each signature takes time. And this is a repetitive purchase, not a one-time thing, so each time it required 27 signatures. Now, it requires six. Hiring somebody took 12 signatures. Now, hiring a sales rep takes three. It used to take more than a year to launch a new product, and now we can do it in a couple of months.” Over at Design, they launched PepsiCo Design + Innovation, a quickcycle initiative that accentuates agility, enabling the development and design of products like Hilo Life keto chips (online launch), Driftwell, Soulboost, “in record time,” says Chief Design Officer Mauro Porcini.


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a pop art revolution Suppose you had a really good, big idea that needed to be delivered quickly. What would your first step be? How about to make it even bigger? And deliver it just as quickly? Darya Gorelova, a PepsiCo Brand Designer, was tasked with bringing Lipton’s Pop art limited-time offer (LTO) cans of tea to life. “Lipton is a cheerful, positive, full-of-sunshine brand,” Gorelova says. “We wanted to create something special that highlighted the brand inspirationally.” Gorelova’s plan was nothing if not ambitious: The designs were inspired by Pop art icons such as Andy Warhol, while featuring entirely original artwork created by Gorelova and her team. And while the initial plan called for nine collectible cans, the team decided to deliver 12, and to create designs reflective of four prominent artists’ styles, not three. They worked around logistical limitations, such as staying within a certain color palette from style to style for printing purposes— especially difficult across such a broad collection. “Picking up artists and styles that were different from each other, while at the same time creating the collection as one family, was tricky,” Gorelova says. The 12 brightly-colored cans featured bold patterns, collaged imagery, and eye-catching graphics. Despite many moving pieces and cross-collaboration efforts, the Lipton Pop art LTO was one of the biggest launches of its kind to reach market in such a short period. The Pop art cans are the second in a series; last year’s collection drew creative inspiration from the early 20th-century Russian Avant-Garde period. Following that launch, the Russia Lipton brand increased its share of market for cans by 25%, and the volume of items shot up 44% versus 2018. Design was likely a factor driving the numbers, since the launch had little promotional support. Gorelova can imagine more of the same for version two: “It clearly demonstrates how a small regional project mixed with a lot of passion, love, and cross-functional teamwork can produce strong results.”

We wanted to create something special that highlighted the brand inspirationally.


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Embracing this behavior can profoundly change the organization because it implies a need for simplification, eliminating waste and unnecessary steps. It’s not easy, but the rewards are large.

The timeline for meeting larger goals has been compressed, too, in areas where anything but faster is not an option. “For our climate goals, we’ve announced that we’ll be net zero by 2040, 10 years faster than the Paris Climate Accords,” says Jim Andrew, Chief Sustainability Officer. “We’re already 100% renewable electricity in the U.S. in our direct operations, and we’ve got very specific targets globally. We have extremely aggressive goals on water.” Speed to market is increasingly an

asset—sometimes a hard one for a giant company to cultivate—in a changing world. “Yesterday’s competitive advantage was scale,” says Popovici. “Today’s it’s speed. Small companies can compete with big companies by being fast and agile, by innovating much faster. But it’s not a given that if you’re big you must be slow. We should be big and fast.” He pauses. “But getting the elephant to dance—it’s not a simple task.”

HOW A FAMOUSLY AGGRESSIVE COMPANY GETS FASTER There were—and still are—obstacles to overcome, as PepsiCo embraces both parts of “Focus and Get Things Done Fast.” “We’re still not as focused as we could be,” says Ronald Schellekens, Chief Human Resources Officer. “We still have lots of complexity in the system. We still have lots of discussions and too many meetings. We’re a multibillion-dollar company, in many markets. That adds complexity.” So how can complexity, bureaucracy, and other productivity-­ marring nuisances be addressed? One approach, says Schellekens, is obvious: “You’re clear on the things you’re going to do, and clear on the things you’re not going to do.” Ram Krishnan, CEO International Beverages and Chief Commercial Officer, says, “In a market like China’s, speed is the only sustainable advantage, so we’ve instituted a ‘three by three’ rule: We talk about an issue not more than three times, and we make a decision in less than three days.”


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I like when people sometimes make decisions using instinct. Now and then you can trust your gut.


95 Adds Mike Spanos, former CEO of PepsiCo’s Greater China Region: “If an objective requires more than 48 hours, then we make sure that everyone knows the targeted deadline to get that objective accomplished.” Chief Science Officer René Lammers says, “I like when people sometimes make decisions using instinct, rather than looking excessively at data. As a scientist, that can be a hard thing to do, but that’s how you get to faster decision-making. Now and then you can trust your gut.” Much of the speed-first mentality has been necessitated by the rise of Silicon Valley and tech startups that transformed into tech leviathans thanks to their lightning quickness. PepsiCo’s eCommerce group took notice. “When we first set up the group, we studied all the best companies that were entrepreneurial at scale,” says Vince Jones, Global Head of eCommerce at PepsiCo. “We studied Amazon, Apple, Netflix. They were the ones, at scale, moving at the speed we aspired to.” CFO Hugh Johnston recalls how the company brought together a focus group of business and IT people, looking to improve speed. “The term in Silicon Valley is ‘MVP,’ Minimal Viable Product. How do we get to something like that? What’s the critical path to that?”

EXTRAORDINARY TIMES, EXTRAORDINARY SPEED The onset of COVID-19 tested how well the company was living this behavior. “The focus on getting things done fast helped us through many obstacles in the pandemic,” says Kirk Tanner, CEO of PepsiCo Beverages North America, “where we’ve been able to understand the problem, quickly get the right decisionmakers in the space, evaluate one to three scenarios, and make a call. The ability to learn fast and adapt. We brought key leaders together and looked at the implications of COVID-19.” They were able quickly to rationalize the portfolio, while understanding that it would be difficult to manufacture and distribute the tail of the portfolio. Processes were streamlined in the plants and the warehouses.


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an opening day home run Baseball’s Opening Day, a joy for so many, was delayed in spring 2020 due to the pandemic—and no one, not even Major League Baseball, knew when, or if, the season would begin. After months of assessing safety and economic impact, the league announced in the last week of June that a shortened season would kick off in July. Melissa Duhaime, Director of Sports Marketing for PepsiCo, wanted her team to help fans rediscover their joy for the game. “When baseball returned, we wanted to make sure we were front and center,” she says. But they had all of three weeks to execute on any sort of plan. Duhaime was inspired by a survey that noted that people were craving “unapologetic enjoyment.” As she says, “People wanted to give up ‘adulting’ for a little bit. To disconnect. And some of the ways they do that are going to the stadium or enjoying games.” Duhaime and her team decided to encourage fans to tune out their other responsibilities on the new Opening Day. “We knew people were going to be so excited,” she says, “and we could build a program that gave them the exact tools to do all of that . . . to just enjoy the things that they truly love, like baseball.” It would be a sprint to make that dream come true, from brainstorming the initial idea, to recruiting star New York Yankees outfielder Aaron Judge to producing all the content. We even created a downloadable kit called the “Judge Free Pass,” which included a ticket that, Duhaime says, “got you out of all responsibilities that were not watching baseball on Opening Day;” a voicemail recorded by Judge; “out-of-the-office” emails and texts fans could use; and more. Judge’s email read, in part: • If you need them for any reason, they will be watching the game, • eating hot dogs and drinking Pepsi until tomorrow. • Any questions or concerns can be directed to me. The program got plenty of attention: 110 million media impressions, 600 digital toolkit downloads, and more than 4,000 social interactions in just days. Twenty lucky fans got virtual meet-and-greets with Judge, “a once-in-a-lifetime opportunity,” Duhaime says. Opening Day might not have been in spring, but thanks in part to Duhaime and her team, many fans felt baseball joy return sooner than they expected.

We could build a program that gave them the exact tools to do all of that . . . to just enjoy the things that they truly love, like baseball.


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problem-solving in real time The can line capacity had become critical; the variety pack line, which shares the palletizer, had become impossible to run. The variety line would be moved to the Bag-in-Box (BIB) line to run more efficiently, but COVID-19 restrictions prevented the plant team from bringing in the needed resources. Justin Ives mobilized the maintenance team to plan, design, execute, and ramp up a capitalized project that worked within restrictions—and delivered peak production.


99 The approach to everything in the supply chain changed so that it was possible to manage with less labor. Money was moved to where consumers could find the greatest value. Food service resources—a business that was down 70 percent—were shifted to help the retail business. And all of this was accomplished in the course of a week. “Normally it would have taken a year,” notes Tanner. “The urgency and mindset allowed us to thrive through a difficult time. We’ve acted faster to get things done in the last 18 months than probably in the last 18 years,” he noted, in August 2021. ­Steven Williams, CEO of PepsiCo Foods North America, recalls that to get snacks.com up and running during the

They said to us, “You guys move so fast, we couldn’t keep up with you.”

pandemic, it took a mere—and astonishing—thirty days. “In the face of adversity we moved fast,” says Popovici. “But how can you design this into day-to-day life and not just in response to a massive crisis? Embracing this behavior can profoundly change the organization because it implies a need for simplification, eliminating waste and unnecessary steps. It’s not easy, but the rewards are large.” It will take not just a logistical shift but a psychological one, as well. “Guess what?” asks Lammers. “We can make decisions without knowing everything. We’re on a trajectory to get better at that. The pandemic accelerated that.” Johnston echoes the notion, pointing out that bureaucracy and meticulousness can sometimes get in the way of opportunity. “We’re making decisions to invest in upside more than we ever have before. It used to be that we would wait until we were really, really sure before we’d make any decision. You’re talking October, November, and by that time, you can do only so much with the money. More often than not, we probably delivered most of the upside rather than investing it back in the business. The transparency on financial information is dramatically higher than it was. The posture towards investing for growth versus delivering in the short-term has changed dramatically.”

jon banner FORMER EVP, GLOBAL COMMUNICATIONS, AND PRESIDENT, PEPSICO FOUNDATION

When I think about “Focus and Get Things Done Fast,” I think about focusing on the things that matter to our business, that will create shareholder value, that will enable our pivot to growth as a company.


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athina kanioura EXECUTIVE VICE PRESIDENT, CHIEF STRATEGY AND TRANSFORMATION OFFICER

That’s not to portray the company, pre-PepsiCo Way, as plodding. “We’ve always gotten things done fast,” says Grace Puma, former Executive Vice President and Chief Operations Officer, “but we’re doing it in a different way now. We were always on steroids, with thriving results, but now we’ve started down a path of simplification, less bureaucracy, faster decision-making. We’ve shifted to asking, ‘How do we make decisions? How do we decide what we’re going to do, then move together?’ There’s less behind-the-scenes, fewer revisits. We make decisions and go. That’s the big culture shift. Laguarta set the tone: ‘Okay, this is a priority, let’s have the discussion, we’re aligned,

If we want to simplify the way we work and make decisions and execute quickly, we have to take advantage of teamwork. We have to be a team that co-ideates, challenges, and dives into the toughest problems together. This is a behavior we need to forge from the beginning.

let’s move.’” Johnston points to PepsiCo’s SodaStream purchase as an example of the benefits of such behavior—in tangible results and also perception. “A private equity house had also been interested in the company,” he says, “and private equity is known for their speed. After the deal they said to us, ‘You guys move so fast, we couldn’t keep up with you.’”


focus and get things done fast

United States

Ireland

PAUL HUDSON

AINE CURRAN

Zone Director

Supply Chain Innovation Senior Analyst

ISSUE

ISSUE

Absence of brand promotion in local stores

Unprecedented demand for Mtn Dew Zero and Gatorade G-Zero Berry

APPROACHES

With his local team, quickly met with the decision makers of Tops Market to discuss expectations and Customer Development Agreement execution

APPROACHES

Expedited manufacturing, weekend work, airfreight, micro management, and status reporting

RESULT

RESULT

Their wins included a Pepsi and Lipton cooler on the perimeter, a Lipton cooler at the front end, and a 10-cooler corral

Ability to meet demand, get ahead of the issue, and deliver requirements


working smarter, HARDER & FASTER

SODASTREAM RESPIRATORS

RAPID RECOVERY

During the COVID-19 crisis, SodaStream helped develop new breathing technology for patients in just three months.

Just two days after the Dayton Distribution Center was leveled by a tornado in 2019, all 47 sales routes were back online servicing customers.

FILLING VACANCIES PepsiCo Global Business Services acted quickly and efficiently to fill frontline vacancies in Cairo, Egypt, from 25% to 10%.


AIDING THE FRONTLINE During the COVID-19 crisis, the PGCS Arlington, Texas, team stepped up to manufacture hand sanitizer for frontline workers, getting from zero production to shipment in just 20 days.

GROWING OUR FAMILY PepsiCo Global Business Services added over 1,600 positions around the world.

BURST RINSING Employee-created “burst rinsing” technique­— cleaning tanks faster and more efficiently with powerful bursts of water rather than continuous spraying—will help conserve up to 2 million gallons of water, and increases productivity.


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quickly making snacking from home easy When the pandemic changed the world’s shopping habits almost overnight, PepsiCo had to respond with lightning speed—but how? Henry Mori, PepDirect Engineering Director, and Christine Wang, eCommerce Product Manager, were primed for just such a moment, thanks to their respective experience at startups: he, as cofounder of Wellspace, an eCommerce platform PepsiCo acquired in 2019, and she, formerly of the RealReal. “We had that DNA you’d expect from the startup scene,” says Mori. Gibu Thomas, former Senior Vice President and Global Head of eCommerce, entrusted them to launch PantryShop. com, the first site where consumers could get bundles of PepsiCo products shipped directly to their doorsteps. Mori and Wang had 30 days to get from concept to go-live. First of all, what would the site do? It would accommodate consumers who were hesitant to shop during COVID-19, allowing them to order bundles, including Smartfood popcorn, Quaker Instant Oatmeal, Doritos, Muscle Milk, and many other items, all grouped by themes like “Rise & Shine” or “Workout & Recovery.” Figuring the mix for each bundle was part analytics, part intuition, the Data Insights team shared information, everything from which cereals were in demand to reports that Gatorade and Propel were flying off the shelves. The PantryShop.com team also brainstormed which bundles consumers who were snacking more and working from home might naturally crave. “There was a lot of gut instinct,” says Wang. When the 30-day timeline was first announced, “Mori and I looked at each other—remotely, of course—and had a mind-blown moment,” Wang says. Then again, they’d come on board precisely to build these sorts of capabilities, only for a very big company—though, granted, perhaps not at quite that pace. “I barely slept for 30 days,” recalls Mori. Since PantryShop.com’s May 2020 launch, consumers have been clicking, more than 200,000 visitors in all by the end of August. PantryShop.com has made life easier simply by bringing the basics—and the fun stuff—directly to people’s doors. PepsiCo also launched snacks.com—using a domain name purchased in 1997—which has flourished, too, with more than 250 offerings, as well as frequent limited time offers and project innovation launches, allowing the company to test and gather data on what consumers like. “It’s really great knowing that you made an impact in someone’s life,” says PantryShop.com’s Wang, “even if all you did was just reduce a little bit of work for them.”



raise the bar on talent and diversity

raise the bar on talent and diversity

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Hire and promote only the best and foster continuous development for all.

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Recognize people based on The PepsiCo Way (TPW) behaviors, performance, and potential.



two sides of the same coin The world changes fast, and we need the people who get it “WE’RE A VERY LARGE COMPANY,” points out René Lammers, Chief Science

Officer, “and we can hire any consultant, apply any capital, develop great processes, outline these behaviors. But ultimately what’s going to make the difference is our human capital. Having the best people. That’s the only way we’re going to win.” It may seem at first as if the behavior “Raise the Bar on Talent and Diversity” is an attempt to mash together two aims, but it isn’t. In important ways, in fact, “they’re interconnected,” says Ronald Schellekens, Chief Human Resources Officer. Until recently, such a notion was not appreciated or even considered, in American or global organizations. That’s changed. Whether it’s age, race, gender, sexual orientation, or other aspects of self, the greater the workforce variation, the better for connecting with PepsiCo’s end users. “We need to be very purposeful that our employee base reflects the consumer that we sell to,” says Ram Krishnan, CEO International Beverages and Chief Commercial Officer.


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showing your pride When Kira Barden was considering joining PepsiCo five years ago, she had other offers. But PepsiCo’s reputation for diversity weighed heavily. “It’s important to be able to bring your whole self to work, to just be who you are, and to show people everything you can contribute in the professional world and as a citizen in the community,” says Barden, Director of Global Talent Management and Co-Chair of EQUAL New York. That didn’t mean there wasn’t lots to do at her new employer, of course. In June 2020, because of the COVID-19 pandemic, there were no big parades or mass gatherings at the office celebrating Pride Month. So, Barden sought to ensure that Pride Month was not forgotten amid the global health crisis, and that PepsiCo continued to shine as an advocate for acceptance and inclusion. She was a key member of the team that developed the company’s first Rainbow Pride logo. “We wanted to make sure that all of our associates know that PepsiCo supports the LGBTQ+ community during Pride Month, and the logo is one way to show that,” she says. Another was to conduct a Pride flag-raising ceremony at the global headquarters in New York. The event was so successful that more than 200 PepsiCo locations around the globe now fly Pride flags through the month of June. In 2021, the tradition lived on through virtual events and other creative activities hosted by the EQUAL Employee Resource Group. “We don’t all have to be in the same physical space to celebrate who we are and appreciate the uniqueness we all have to offer,” says Barden. “That’s how we continue to connect with and understand each other and make our organization stronger.” Barden’s presence can be felt at PepsiCo and beyond, as she spearheads efforts to raise the bar on talent and diversity internally, while also enhancing the company’s profile in the broader LGBTQ+ community. “We realized that we were missing out on a huge opportunity,” she says, “both a business opportunity as well as a social and community one.”

It’s important to be able to bring your whole self to work, to just be who you are.


114 “I like meetings with new marketing folks,” says Paula Santilli, CEO of PepsiCo Latin America. “They’re new to the company, they’re super digital, they understand the consumer in a very different way. Who else could take care of Doritos in a music festival in Brazil or Mexico? That’s the value of having diverse experiences and backgrounds.” Internal surveys conducted by the Talent Management teams show that African-America and Latinx people feel positively about The PepsiCo Way. Greater workplace diversity is not some box to check—it’s the key to harnessing greater talent and continued organizational success. “We should never be satisfied with the level of diversity that we have,” says CFO Hugh Johnston. “We need to constantly challenge ourselves to add more.”

SETTING GOALS AND HITTING THEM “We have three very explicit, public aspirations in the U.S.,” says Schellekens. “One is female managerial parity by 2025.

ramon laguarta CHAIRMAN AND CEO

The other two are reaching 10% Black managers and 10% Hispanic also by 2025 to mirror the workforce availability of the communities we serve.” Aspirations are one thing— yet PepsiCo provides robust support, making “steady progress on all three dimensions,” says Schellekens, through “the right culture around learning and mentoring, around building the right place for people to be.” As of 2021, 43% of PepsiCo’s managerial ranks are women, and the company is focused on raising female representation both in the rank-and-file and within the

One thing I’ve learned over my twenty-three years with PepsiCo is that our culture is our greatest strength. It is what enables us to attract the best talent, and empowers each associate with a winning spirit.

management level, especially in the “three largest, more technology-focused functions—supply chain, IT, and sales. We have to crack that to hit our aspiration of parity.” In some areas, parity—and then some—is already a reality. Says Steven Williams, CEO of PepsiCo Foods North America, “In the Frito-Lay sales and supply chain, our operating roles are now led by more than 50% women and people of color, reflecting the rich diversity of our markets.” Over in Design, the team is 55% women. “This comes from a very conscious effort,” Chief Design Officer Mauro Porcini emphasizes.


Diversifying is not an obligation or fad. It’s an essential. A no-brainer. “If you don’t have those diverse perspectives,” says Jennifer Saenz, former Global Chief Marketing Officer and President of Global Foods, “then you never actually get the benefit of them.” Says Lammers, “It’s not just the right thing to do. It’s a business imperative. Without that drive for diversity, PepsiCo will not succeed.”

SUCCESS NEEDS TO BE MODELED When Santilli was President of PepsiCo Mexico, young women at the company would come to the doorway of her office and not cross over. “I would say, ‘I’m not a tiger, I’m not going to bite, you can come in,” she recalls. But still they hesitated. They stood in the hallway, as if to say, Really? I can walk in? When they finally entered, they might say, ‘I can’t believe this is your office. I wish I could have an office like this one day.’ I asked more than one young woman if she wished to sit in the chair behind my desk. Again, they usually hesitated. I pointed out that it was just a chair but I also understood their hesitation. It was a symbol of power and leadership. I think the physical environment of the office, the desk, the chair made it real for them. I hoped they understood that they too could attain a leadership role.”


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you belong here One of the critical benefits of a genuinely diverse workforce: your personnel more fully represent your consumers. That includes people with disabilities, at a time when one in four adults in the U.S. has a condition that qualifies. “Having the voice of the disability community in mind as we develop products makes us a stronger company,” says Kevin Fitzpatrick, PepsiCo’s Equal Opportunity Affirmative Action Compliance Director and a driving force behind PepsiCo’s “You Belong Here” video campaign. The campaign highlights the contributions of associates with disabilities and caregivers, and encourages anyone with a disability to voluntarily self-identify year-round. Fitzpatrick is committed to making people with disabilities feel as if their conditions need not be hidden: An estimated 70% of all disabilities are “invisible”—depression, cancer, migraines, anxiety, and all types of diabetes qualify as disabilities. Since these conditions often don’t require workplace accommodations, people can be reluctant to come forward to disclose something they’ve grown accustomed to hiding from employers. “There’s a certain fear and stigma that goes around with talking about disability in the workplace,” says Fitzpatrick. “We had to take that head-on.” The impetus behind “You Belong Here” is full acceptance of an individual. “And bringing your whole self to work,” says Fitzpatrick, “really gets to the core of what The PepsiCo Way is overall.”  As employees come forward, Fitzpatrick explains, the company is able to make them more comfortable—say, by adjusting lighting or allowing for flexible schedules. For “You Belong Here,” Fitzpatrick worked with PepsiCo’s EnAble Employee Resource Group to find associates to share their experience on camera, from a soda fountain technician in Las Vegas, Nevada, to a finance manager in Plano, Texas. “I wanted to bring disability out of the darkness and into the light, to start conversations,” Fitzpatrick says. His instincts were spot-on. After the launch of the 2019 video, Frito-Lay alone saw a 25% increase in voluntary selfidentification. That same year, PepsiCo won the first-ever Department of Labor Excellence in Disability Inclusion Award. “These individuals need to be recognized for their honesty and bravery,” Fitzpatrick says. “I think a weight is lifted for some by being able to share Scan to watch these things they’ve harbored in silence for so long.” a video and hear Kevin Fitzpatrick’s story in his own words.


Once people who look like you are leading in ways that you aspire to—that’s how barriers crumble.


119 “What is culture but the product of everybody’s behavior?” asks CFO Hugh Johnston. Once people who look like you, who come from a similar background or demographic as you, are doing jobs you want to do, leading in ways that you aspire to: that’s how barriers crumble. Opportunities open. Previously untapped viewpoints and capacities lead to new markets to play in, and to do so with familiarity, insight, and talent. That’s competitive advantage, in a nutshell. While PepsiCo has made extensive efforts and investment in hiring generally, different cultures may require different strategies. In Latin America, says Puma, “we’re really focused on getting women who grew up in Operations being promoted in Operations. In other cultures, like the Middle East, we’re looking to get more women in the supply chain function. There’s absolutely a global need to diversify, but we have to get specific on what that means, on what’s relevant in each environment.” Raising the bar on talent is also about matching the worker and the work. “You’re not doing someone a favor by keeping them in a job they’re not set up to succeed at,” says Gibu Thomas, former head of Global eCommerce. ‘Raising the Bar’ gave managers permission to have conversations with people who might have been in roles they had outgrown. PepsiCo needed to move at a different speed.” In the eCommerce division, which operated in some ways more like a startup, Thomas says, “We brought in people who would never before have considered PepsiCo, who would have gone to tech companies like Google, Amazon, Uber, a hedge fund, wherever. We weren’t content going after just any data scientist but ones that the best tech companies could attract.” There was no hesitation that PepsiCo was positioned to recruit the best tech people, selling them on the vision; and great people would serve as talent magnets for others.

ronald schellekens EXECUTIVE VICE PRESIDENT AND CHIEF HUMAN RESOURCES OFFICER

Raising the bar on talent is setting high performance standards, and making sure that great people with high performance get the big chances in the company. And it means that we build a diverse workforce representing society.


women

hold 43% OF OUR MANAGERIAL POSITIONS

WORLDWIDE

MORE THAN

$570

MILLION invested over

5

YEARS TO ADDRESS ISSUES OF

INEQUALITY

& LIFT UP BLACK & HISPANIC BUSINESSES & COMMUNITIES


100% OF EXECUTIVES HAVE COMPLETED

INCLUSIVE LEADERSHIP & UNCONSCIOUS BIAS

TRAINING

2,000 SCHOLARSHIPS FOR HISPANIC STUDENTS

NAMED AMONG

BEST PLACES TO WORK FOR

disability inclusion


122

ram krishnan CEO INTERNATIONAL BEVERAGES AND CHIEF COMMERCIAL OFFICER

We brought in people who would have never considered PepsiCo, who would have gone to tech companies like Google, Amazon, Uber, a hedge fund, wherever.

There was no need to “apologize” for being a big company. Now, PepsiCo could say, “You’ll get to have a level of impact here. Take this incredibly storied company with its legacy and change it for the next generation. Build Raising the bar on talent and diversity is about hiring and promoting only the best, building a diverse and inclusive environment, and recognizing people based on performance and on potential.

the next generation’s CPG. You can transform an industry.” With a critical mass of new talent assembled, others saw it and thought, There must be something going on there. Maybe I should go there. The eCommerce team even created a new compensation scheme, more akin to those at a startup, creating an incentive that rewarded entrepreneurialism, something unusual in big companies. Combine that talent push with PepsiCo’s famously strong campus recruitment—“We hire about 1,200 graduates a year,” says Schellekens, “with a strong focus on diversity: female, racial, digital capabilities”—and it’s clear that PepsiCo is not resting. DiversityInc recognized the company’s efforts, including it in their 2020 Top 50

Companies for Diversity list. The Society of Women Engineers honored numerous PepsiCo employees for their significant contributions to the STEM community and the advancement of women in engineering. “PepsiCo has been known historically as an organization that focused on diversity,” says Eugene Willemsen, CEO, Africa, Middle East, South Asia (AMESA), “but over the last three years we’ve increased the focus, with very specific commitments.”


raise the bar on talent and diversity

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Ireland

JENNIFER CHENG

CLIONA MURPHY

Human Resources Manager

R&D Quality Assurance Vice President

ISSUE

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Lack of feedback from employees of color

Dearth of women in STEM careers

APPROACHES

APPROACHES

Prepared and participated in multiple employee-experience discussions, prompting valuable conversations with workers

Leads Million Women Mentors program

RESULT RESULT

Garnered feedback from a diverse set of employees that will help PepsiCo continue to grow and raise the bar

1.7 million mentor relationships created


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pushing for parity Avantika Nigam didn’t just raise the bar: any Olympic high-jumper would be impressed by how easily she’s cleared it. In just 18 months as head of HR for PepsiCo’s Global Business Services India Hub in Hyderabad, Nigam and her team reached an extraordinary threshold: 30% of Hyderabad Business Services (HBS) managers are women, compared to the industry average of 11%. “It’s very gratifying to see,” she says, with typical understatement. Not that things end there for Nigam. PepsiCo aims to have women hold half of all managerial roles worldwide by 2025. “It’s not enough to just hire women,” she says. “You need to have them in leadership positions.” It hasn’t been easy. Many of the roles in the rapidly growing Hyderabad office are in STEM fields—science, technology, engineering, and math—which at HBS translates to positions across finance, analytics, HR reporting, insights, and IT. But fewer women are available to apply for these positions—an issue that starts in school, where women represent just 35% of STEM college students globally. This divide can lead to women in STEM careers feeling alienated once they’re in the workplace. “Bringing in one or two women at a time is never going to help,” explains Nigam. “You need volume to create a culture change.” She and her team have done that; the HBS team overall is currently 40% women.

You need volume to create a culture change. Scan to watch a video and hear Avantika Nigam’s story in her own words.


Nigam’s strategy included a mix of thoughtful outreach, intentional hiring, and internal community-building, among other measures. To encourage more young women to enter STEM fields, she launched an apprenticeship program for female students from underserved communities. She also drove her team toward more intentional hiring practices by setting clear goals and emphasizing the importance of gender parity in the office’s top roles. While her team’s goal is to up the total number of women at HBS to 50%, she already feels the impact of their achievement in the sense of community that exists among the women at HBS. Knowing women feel valued and heard, Nigam says, is one of the most meaningful benefits of her work. “We all need to feel like we can contribute and have a larger impact,” she says. “And when you’re able to drive an agenda like this one, it can also have a big impact on society.”


It’s not enough to just hire women,” she says.“You need to have them in leadership positions.


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empowering women farmers “Taking action to help the people in my country has been a driving force behind my entire career,” Citizenship and Sustainability Manager Dulce Santana says. Now the Mexico City native is doing just that with Agrovita. Through the three-year program PepsiCo launched in partnership with nonprofit Proforest, Santana is helping raise the bar on talent and diversity among farmers in PepsiCo’s supply chain for plantain and cocoa, empowering women in southern Mexico to take on a larger role in producing these crops. It’s working on these kinds of programs that first drew Santana to PepsiCo, an organization she says “totally aligns with my own values.” Santana and her colleagues began developing Agrovita in 2019, targeting the regions of Tabasco and Chiapas, agricultural-based economies that are among the poorest areas of the country. The idea was that training women and other smallholder farmers to grow their crops in a more sustainable way would help PepsiCo reach its goal of spreading regenerative agriculture practices across 7 million acres globally. Santana says that at least half of Agrovita’s 37,000 beneficiaries will be women, including more than 20% of the producers. “We recognize that women have the potential to take on more of a leading role in agriculture,” Santana says. “Inviting them to participate and giving them more opportunities to develop themselves is how we raise the bar on talent and diversity.” “I have had a lot of female leaders and coaches that have helped me throughout my career,” Santana says. “I feel I owe the same to my community and the people I’m trying to serve.”

We recognize that women have the potential to take on more of a leading role in agriculture.

Scan to watch a video and hear Dulce Santana’s story in her own words.


MAKING THE PEPSICO WAY A LOCAL PHENOMENON

celebrating the pepsico way across the world In taking The PepsiCo Way global, people found all different kinds of ways to have fun while recognizing the importance of the seven behaviors. Here are some photographs of The PepsiCo Way celebrations from all around the globe!


CLOCKWISE FROM BOTTOM LEFT

PepsiCo employees try out virtual reality headsets at one of the many booths during The PepsiCo Way Day in Purchase, NY. Employees in Saudi Arabia pose for a photo. In Russia, employees attend live panels where keynote speakers discuss The PepsiCo Way. People play drums and dance during celebrations of The PepsiCo Way in Burma. A team-building game is played during a celebration in India.



act with integrity

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Always do what is right for PepsiCo, the planet, and the communities where we operate.

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do the right thing

Integrity has always been a company hallmark—so why say it out loud? “PEPSICO IS KNOWN FOR being a high-integrity company,” says Steven

Williams, CEO of PepsiCo Foods North America. That was true long before The PepsiCo Way; it didn’t seem necessary to embed “Act with Integrity” as a pillar behavior. Examples abound. After the COVID-19 pandemic caused a devastating global rise in food insecurity and a shortage of PPE, PepsiCo and the PepsiCo Foundation shifted into high gear to provide protective gear for healthcare workers, support testing and screening services, and bring more than 145 million meals to those in at-risk populations. When reviewing a carton-filling machine by a new supplier, an AMESA quality and food safety associate noticed that the proposed design was nearly identical to that of a long-term PepsiCo partner, reported it to Compliance and Ethics, and PepsiCo subsequently refused to work with the new supplier.


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transforming potato farming Known across Canada as “the potato guy,” Georges Dion, a proud associate of PepsiCo Canada for 24 years, manages the potato supply chain from seed to manufacturing, deploying terms like “higher-grade potatoes,” “demonstration farms,” and the ultimate compliment—“that’s the perfect potato”— while helping to grow the business. More profoundly, Dion acts with integrity by helping to revolutionize farmers’ day-to-day operations. He has played a huge role in PepsiCo Canada’s sustainability journey, helping it to reach its goal in 2019 of sustainably sourcing 100% Canadian potatoes used in Lay’s, Ruffles, and Miss Vickie’s potato chips. To Dion, “‘sustainably sourced’ means using every potato that’s grown, following our social, environmental, and economic principles of PepsiCo’s Sustainable Farming Program, and most importantly, not letting anything go to waste.” Says Dion: “There is urgency to do things smarter in all areas of our supply chain, and awareness and solutions have to be amplified. Sharing smart practices and leveraging technology are the key to widespread adoption and enabling positive impact at scale.” As epic as the task sounds, it always comes down to the personal. Dion works with small and large-scale farmers around Canada to test locally relevant, sustainable approaches to water use and soil health, such as drip irrigation and drone imaging for pest management. “When you build a relationship with the grower, it shows them we are serious about our commitment,” he says. He hosted the Best Practice summit in 2006 to maintain a strong relationship with PepsiCo’s growers and suppliers. Initially a regional summit that hosted growers from Nova Scotia, Alberta, Quebec, and Ontario, it has evolved into a national gathering. “This took time to build,” says Dion, “but when we come together, we’re working towards building a more sustainable and robust future.”

Sharing smart practices and leveraging technology are the key to widespread adoption and enabling positive impact at scale.


140 In China, where PepsiCo deals with many state-owned enterprises, the company maintains meticulous transparency about every meeting and interaction with government officials; PepsiCo’s people are equally open and thorough with their HR team so that the latter knows about every transaction. Integrity is built into the company’s ethos. “We have a great framework already with the code of conduct,” says Ronald Schellekens, Chief Human Resources Officer. “It’s clear what we expect from our leaders, and many of them go over and above, continuously talking about integrity and modeling it.” PepsiCo’s former General Counsel Dave Yawman

When I reflect on why I ultimately came to PepsiCo, it’s because it’s a great company with a great culture, and also that you can make an impact.

agrees, saying, “Even when you have a tough situation to talk about or bad results to summarize, you never try to bury or spin the story.” Jim Andrew, Chief Sustainability Officer, says simply: “It’s about doing what’s right when people are looking and when people aren’t.” So, if the company is already wired for integrity, why give it the precious space and mindshare afforded by each of the seven foundational behaviors in The PepsiCo Way? In fact, there was pushback. “‘Act with Integrity’ was on, and then it was off, and then it was on, and then it was off,” says Andrew, reflecting on PepsiCo Executive Committee discussions about which behaviors to articulate and include in the final list. “The only reason some people


141 wanted to leave it off was not because they didn’t believe in it but because, as some pointed out, ‘It’s so much of who we are, we don’t even have to say it—oh, and by the way, I want to leave that off the list because I’d rather include a different behavior . . .” This also wasn’t a legal, cross-all-t’s-and-dot-all-i’s

ramon laguarta CHAIRMAN AND CEO

decision. Chief Financial Officer Hugh Johnston points out that integrity, like any virtue, is sometimes open to interpretation—or at least animated discussion. “We need constantly to be talking to each other and getting advice from each other because there are lots of gray areas that people are presented with,” he says. “By getting input from colleagues, as well as experts, we don’t merely operate with integrity but we operate visibly with integrity. That’s the bar we need to set for ourselves. Not just to do it right but to do it in a way where people can see it.” Chief Science Officer René Lammers agrees that including the behavior has a powerful, expansive effect: “Every day you have to think about it. It’s a continuous refresh, because this is how we build trust with our consumers, our customers, our brands, and, most importantly, among ourselves.”

THE BENEFITS OF INTEGRITY Given PepsiCo’s reach, acting with integrity creates a ripple effect. “We feel part of the communities in which we operate,” says Eugene Willemsen, CEO, Africa, Middle East, South Asia (AMESA). “We want to play a valuable

Integrity is among PepsiCo’s most valuable assets. It is critical to maintaining our reputation with our stakeholders, ensuring equal employment opportunities, sharpening our competitive advantage and driving long-term growth. And while a culture of integrity and ethics takes years to build, it takes just a moment to lose. So, that culture cannot be taken for granted. We must invest in it consistently, day after day, year after year.

role in those communities because that means job creation, engaging with local farmers, building skills with those farmers, creating livelihoods in the communities. We partner with foundations and other support programs. During COVID-19, when many AMESA communities were hit hard, we started a program to distribute millions of meals. Through the PepsiCo Foundation, we’ve provided roughly 50 million meals to other communities in need—it started in Pakistan, then expanded to India, South Africa, North Africa. We’ve provided school breakfasts. For us, this is a way to meaningfully help these communities, specifically the children.”


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rewarding recycling It was the right thing to do, and not the easy thing. Gaby de la Garza, Miami-based Senior Director of Corporate Affairs, Citizenship, and Sustainability for Latin America, knew that the region she oversaw had some of the lowest recycling rates in the world, with the exception of Mexico. To make things more challenging, she points out, “Several countries in the region lack recycling infrastructure.” Change is hard. Making change when there’s no system yet in place to enable it—that’s another challenge altogether. Over the course of De la Garza’s career at PepsiCo, she acted with integrity by developing programs that drove social change, from initiatives to replenish water to at-risk aquifers, to empowering women entrepreneurs, providing access to nutrition for low-income communities, and aiding small businesses in recovering during COVID-19. And since her first days at the company, she had worked to strengthen local recycling rates, coordinating with local Corporate Affairs teams to lead recycling programs. Her most recent initiative, Recycling with Purpose, was piloted in Peru in 2019 and rolled out in Guatemala and Colombia in 2021, with expansions planned in Brazil by the end of 2021. The three-pronged effort is aimed at consumers, grassroots recyclers, and local bottle manufacturers. It starts with offering consumers incentives to recycle. “If consumers do not separate materials at their homes, then it’s going to be difficult. So we thought: How do we involve them? ” De la Garza, along with Sylvia Desmaison, Associate Manager of Corporate Affairs for Latin America Beverages, developed a plan: offer rewards that could be redeemed for tickets to concerts and football matches or restaurant discounts.

It’s about always doing the right thing, about doing right for grassroots recyclers and our communities.

Scan to watch a video and hear Gaby de la Garza’s story in her own words.


Since her first days at the company, she had worked to strengthen local recycling rates, coordinating with local Corporate Affairs teams to lead recycling programs.


After consumers deposit their bottles at collection sites, the bottles are gathered by grassroots recyclers. Millions of individual recyclers throughout Latin America separate recycling from trash and sell it. “A lot of my motivation is around creating a system where we can help recyclers improve their quality of life and income,” says De la Garza. “It’s about always doing the right thing, about doing right for grassroots recyclers and our communities.” Recycling with Purpose establishes partnerships with NGOs and municipalities to offer recyclers equipment and financial training, and often helps them become formal businesses. Says De la Garza, “So much has happened at a policy level that we’ve become part of the solution.”


It’s not merely to How are you comply with feeling? We the law. It’s want joy, our more than consumers that. It’s told us.doing We really thingscomfort. the need right way.


147 Of course, PepsiCo undoubtedly benefits from modeling this behavior, and from being explicit about it. “We constantly talk about acting with integrity as a company, as teams, ” says Paula Santilli, CEO of PepsiCo Latin America, “which makes us very attractive for external people. We become a bit of a lighthouse in the fog. They

paula santilli CHIEF EXECUTIVE OFFICER, LATIN AMERICA

see us and think, ‘Okay, there’s someone that’s outwardly saying that integrity is important to them. How nice, I want to work at a company like that.’ Being publicly known for high ethical values attracts talent at other companies, ones that do not have a similar conscientiousness.”

Absolutely essential. Everything we do has to be done with the highest ethical standards, with values that we are completely proud of and focused on.


148 Adds former Chief Talent Officer Sergio Ezama, “The world is a tough place. You walk through the doors of a company like PepsiCo, and the culture sets a baseline that this is the same for everyone.”

INTEGRITY NOW AND BEYOND “We received a lot of praise from our customers for how close we were to them during the COVID-19 crisis,” says Silviu Popovici, CEO Europe. “Both big customers and small customers. You have to be sensitive to context. There were many situations where small customers didn’t have the cash to pay us—and, interestingly enough, we helped them and still achieved our cash targets.” Willemsen notes that acting with integrity is not something you do only up to a point. “It’s not merely to comply with the law. It’s more than that. It’s really doing things the right way. That goes way beyond just making sure that whatever you do is legally sound and bulletproof.” Truth is, at PepsiCo’s scale, the behavior of any individual employee matters. “You can literally make an impact,” says Lammers. “When I reflect on why I ultimately came to PepsiCo, it’s because it’s a great company with a great culture, and also that you can make an impact. Every time we sell a product, there’s a little benefit, and that can be for the person or the community or the planet. We sell more than one billion units each day. That’s a huge multiplier.” The way you act can be felt—so much so that PepsiCo people don’t just leave their ideals at work. “Integrity is a guiding principle in both my professional life and my personal life,” says Popovici. “It becomes very easy and simple to make the right decisions when you use integrity as your compass.”

silviu popovici CEO EUROPE

I’m using integrity as a guiding principle both in my professional life and my personal life. It’s very easy and very simple to make the right decisions when you keep integrity as your compass.


act with integrity

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Turkey

CATHERINE SWIFT

GÖKHAN GÖKDAŞ

Site Director

Senior District Manager of Sales

ISSUE

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Lagging morale on-site

After taking over a new sales region in Turkey, Gökdaş recognized a corruption risk in the Compliance training program

APPROACHES

Showed leadership in stimulating a change in site culture built around the elements of safety (personal and food), staffing, and capability

APPROACHES

Gathered details and escalated the issue to Compliance & Ethics (C&E) for evaluation

RESULT

Drove a 40% reduction in recordable injuries, achieved the longest “days safe” streak the site has on record, invested $950M+ in facility improvements, and is at a level of excellence on retention for both exempt and frontline

RESULT

C&E was able to raise awareness of compliance risks among the broader sales organization and strengthen relevant controls to prevent corruption threats


PepsiCo Positive GOALS Achieve net zero emissions across our value chain by 2040, and by 2030, reduce our GHG emissions by more than 40% (against a 2015 baseline), doubling our previous climate goal.

Become net water positive by 2030 by reducing absolute water use and replenishing back into the local watershed more than 100% of the water we use (at both PepsiCo and third-party facilities in highwater-risk areas).

Cut virgin plastic—new plastics that are produced rather than recycled—from non-renewable sources per serving across our food and beverage portfolios by 50% by 2030.

Spread the adoption of regenerative agriculture practices across 7 million acres as of 2030.

Expand our portfolio to provide more consumer choice with products that are better for planet or people, including reducing added sugars, sodium, and saturated fats.


(pep+) is how we’ll transform the way we create value by operating within planetary boundaries and inspiring positive change for planet and people in the global food system. We’re making an impact across three pillars: Positive Agriculture, Positive Value Chain, and Positive Choices.

Scan to read more about the three pillars and our progress.

ACHIEVEMENTS 100% of participants in PepsiCo’s global network of Demonstration Farms, which enable peer-to-peer learning, adopted regenerative farming practices.

Brought safe water access and sanitation to more than 68 million people since 2006, more than halfway to our goal of 100 million people.

Named among Ethisphere’s World’s Most Ethical Companies for the 16th consecutive year (2022)

Delivered more than 245 million nutritious meals to more than 41 million people through our Food for Good program.

22 global markets are transitioning several of our brands to 100% rPET packaging by 2022.

70% of global electricity in our direct operations is from renewable sources.

Achieved saturated fat reduction goal 4 years ahead of schedule, and more than halfway to our 2025 sugar and sodium reduction targets.


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being a pioneer in the community Nico Moloto has never forgotten his good fortune. Growing up in a rural village in Limpopo, South Africa, he, his four brothers, and parents never went a day without a meal on the table—as he notes, “not every kid I knew could say that.” His family shared what they had with others in the community, instilling in Moloto the need to act with integrity and “the value of sharing in a bigger way.” When he joined the massive South African company Pioneer Foods in 2015, Moloto saw a way to make this “bigger—way bigger.” Across his country, 9 million students rely on the government’s lunch program, but many kids lack access to breakfast. Pioneer partnered with the government to identify the areas of highest need and launched a breakfast program to fill that hole in the students’ daily nutrition. Moloto began running an operation that provides over 33,000 students with free breakfast. “Most of these children, they come to school with hungry stomachs. Their first meal was going to be round about midday, when they have their lunch,” says Moloto. “Once they eat breakfast, they’re able to concentrate; they’re able to fill their tummy right in the morning. And when they go to classes before lunchtime, they are able to participate more positively, as opposed to them being hungry or waiting for a plate of food later on in the day.” In March 2020, PepsiCo acquired Pioneer Foods, and in his role as Executive for Transformation and Sustainability for PepsiCo in Sub-Saharan Africa, Moloto’s impact and integrity can touch more lives. “If we are a food company,” he says with bracing clarity, “we are the best to provide a solution around food insecurity.”

Scan to watch a video and hear Nico Moloto’s story in his own words.



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Show appreciation for each other’s contributions, both big and small.



the thank you project

Making time to celebrate successes—wherever we see them. FOR A COMPANY WHOSE MISSION IS TO CREATE MORE SMILES for consumers

and customers, “Celebrate Success” is a good reminder to be more intentional about creating moments of fun for associates, too. Building a recognition culture means being intentional about taking the time to celebrate moments big and small—from cheering an awesome business quarter to championing the everyday thank-you.


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celebrating unsung heroes In a hard-driving culture like PepsiCo’s, it can be deceptively easy to forgo activities that don’t appear, at first, to be work-related—but Tony Schaffer, Logistics Integration Warehouse team member supporting PepsiCo Foods North America, understands the importance of this other “work.” In his volunteer role as Co-Chair for the Mosaic Chicago Team Employee Resource Group (ERG), he’s responsible for keeping Mosaic members engaged with internal events, career and cultural learnings, and community outreach opportunities. Not incidentally, he’s also leading the way in recognizing contributions beyond the workplace. Schaffer launched the “Unsung Hero Project” as part of the Black History Month annual programming to highlight associates across the country who positively impact colleagues or communities. Awards have been given to a wide range of individuals and teams, including the Quaker Good Purpose team, who helped underprivileged youth learn the value of nutrition and healthy meal preparation, and Operation Warm, a Chicago-based program allowing Mosaic partners to bring thousands of coats and PepsiCo products to residents through the Chicago Housing Authority. “These were people just doing good, and very few people knew these works were being done,” says Schaffer. “I want to bring attention to associates who are passionate about working in the community, take pride in helping others within PepsiCo, and normally aren’t recognized for the little things they do that add up and make a huge impact.” Schaffer’s commitment to celebrating the success of others is not just deeply satisfying in itself: He believes more colleagues will be motivated to give back—and join an ERG. “I hope that the simple recognition we’ve been able to provide and will continue to provide these associates shows that everyone has value. We all must take an active role in shaping the culture within and outside PepsiCo.”

We all must take an active role in shaping the culture within and outside PepsiCo.


162 A BIG COMPANY CAN GO SMALL The PepsiCo Way conversations were helpful in reminding the executive team that embedding celebration into a performance-driven culture complements success. The very shift toward pausing and expressing gratitude helps in new ways, says Chief Science Officer René Lammers, “It forces you really to inform yourself deeper down into the organization about what’s going on because, otherwise, how can you thank people? I want to figure it out myself, because I prefer to thank people in person.” That became impossible for many during the pandemic, of course; communicating and celebrating through Zoom was an adjustment. Still, it was vital for leaders to show gratitude any way possible, especially given the heightened difficulties of the last two years. “We have to be really, really thankful to those men and women who were out there, no matter what,” says Paula Santilli, CEO of PepsiCo Latin America. PepsiCo enjoys a robust history of companywide acknowledgment of big contributions, in a big way, and

ramon laguarta CHAIRMAN AND CEO

that’s being expanded. “We made a change in the marketing function, and as part of that we created the first marketing awards to reward teams and individuals in eight categories,” says Ram Krishnan, CEO International Beverages and Chief Commercial Officer. “The BAM (Best Achievements in Marketing) Awards brought together marketers across the world for the first time, building pride in marketing as a function, and celebrating our ­talent.” Silviu Popovici, CEO Europe, calls out The Next Big Idea Challenge, an internal competition that harnesses the collective innovation of the organization, as a

We see the office as a space to create, connect, and collaborate, rather than somewhere to just manage emails. That also includes doubling-down on using the office to Celebrate Success, from PepsiCo Way events, to brand activations, to team celebrations.

great celebration of the entrepreneurialism and success that comes out of that. There’s also the Chairman’s Circle of Champions for frontline operations associates, the Chairman’s Ring of Honor for frontline sales associates, and the PepsiCo Academy of Sciences Awards, which honor the best of the best from PepsiCo’s Global R&D team. “Those are the most eye-catching events,” says Lammers. Yet “Celebrate Success” compels leaders to look not just at flashy, red-letter achievements, but also at honoring people for doing their job well, day after day.


163

“When you work for a global company, it’s wonderful to see that ‘winners’ can come from everywhere,” says Lammers. “Some functions don’t get all the accolades. They can be a little bit invisible. Celebrating success doesn’t always have to be for the hundred-million-dollar launch. It can be for small things. It can be somebody who’s done a great job in the regulatory approval of a natural sweetener in a certain country, because that means we can lower the

What I’ve seen changing is the ability to fight for one another internally, support one another.

sugar content. It can be somebody in the pilot plant who found a new way of storing raw materials more safely and effectively. It can be a way to simplify and digitize the innovation process so we don’t need a lot of documentation. And it doesn’t have to be a big party and champagne. But it has to be recognition, thanking people on a day-to-day basis. Walking to someone’s desk and saying, ‘Wow, that was a job well done. Thank you.’”


THE PEPSICO WAY TOWARD TRANSFORMATION

the pepsico way quarterly awards In a culture that celebrates the success and achievement of its extraordinary people, PepsiCo made recognition easier and more continual with The PepsiCo Way Quarterly Awards, which spotlight and honor associates who live The PepsiCo Way every day— from volunteering their time or stepping up to meet challenges to working together to launch new initiatives or products. The Quarterly Awards grew out of another recognition program, Have a Say, and employ the same digital platform that associates use to bestow Smiles on their deserving co-workers, as well as to make nominations for the annual Chairman’s Awards. The platform has made it easy to nominate and celebrate colleagues for the best of the daily behaviors: In August 2020, the first quarter The Quarterly Awards went live, PepsiCo received over 5,000 nominations, and since its creation over 42,000 nominations have been received, and over 2,200 associates have received an award.


165

wern-yuen tan CHIEF EXECUTIVE OFFICER, ASIA PACIFIC, AUSTRALIA, NEW ZEALAND, AND CHINA

Recognition and gratitude translate across cultures, but the occasion itself may not look the same. “The way people celebrate success in one culture is different from another,” says Popovici. “Some make a big party. Some shout a lot. Some shout less. But at its core, it’s the same thing, and we all believe in it. We should recognize extraordinary performance. We should also have fun.”

A GRATEFUL SHIFT Kirk Tanner, CEO of PepsiCo Beverages North America, notes that shifts in both mindset and culture are needed to get to the point where many can fully embrace celebration—but it’s happening. “Three years ago, when we were talking about the PepsiCo behaviors, I did this quick survey about the seven behaviors and I added in an eighth, Be Selfless. My survey asked which behaviors the respondent could succeed at embodying. Everybody who answered got all the behaviors except for selflessness. The group self-identified that it had a 98% chance of failing at it, because they couldn’t even think about how to be competitive and selfless at the same time.

“Celebrate Success” means we should recognize our great people who deliver incredible results every day. It can be fun, and it can be done. Our sales teams across the sector are big champions of this, showing us how we should be winning together and celebrating together.


166

Celebrating success doesn’t always have to be for the hundredmillion-dollar launch. It can be for small things.

“That was three years ago. What I’ve seen changing is the ability to fight for one another internally, support one another. Our competitors are on the outside.” A culture of recognition and celebration becomes much easier. There are other signs throughout the company that celebration will start getting baked in. “COVID-19 kept us apart for more than 18 months, but finally my team was able to go off-site,” says Popovici, proud and excited about the event. “One of the main objectives was to celebrate the success over the previous 18 months, which were traumatic in a lot of ways, but we also needed to acknowledge the amazing things we achieved.” Success at celebrating success is not just a function of PepsiCo changing internally; it’s also the company responding to the culture. “People today get congratulations every three seconds from social media and games and whatever they’re using,” says Santilli. “The standard of celebrating success has grown a lot during the last few years, and the more we’re surrounded by younger talent, the higher the need for this positive feedback.” Fortunately, those inside PepsiCo need merely to look to their consumers to see what’s worth celebrating. “Every time they enjoy our products, no matter if it’s Quaker or chips, they’re building memories,” says Mauro Porcini, Chief Design Officer. “There’s a moment that gives you a smile, in so many different ways, so many different kinds of smiles.” Now, those responsible for those smiles need to remember to pause—and smile.

rené lammers EXECUTIVE VICE PRESIDENT AND CHIEF SCIENCE OFFICER

We need to tell our people what wonderful things they have achieved. And it could be simple, just walking up to somebody’s desk and saying: “Hey, I just read up on what you did. That’s fantastic.”


celebrate success

United States

India

EMILY PEADEN

DIVYANSHU JAIN

Quality Manager for Global Procurement

CTO Senior Analyst

ISSUE

Lack of overall productivity

ISSUE

Low team morale

APPROACHES

APPROACHES

Came up with an innovative way to create competition between production lines to improve performance. The competition format known as “Power Hour” has given a new way to build positive momentum and a collaborative work environment

Created team-building activities, and made sure there were cake-cutting celebrations for celebrating success or birthdays

RESULT

Increased positive environment for the team RESULT

Best Period 1 performance ever, producing 3.2M cases and 400M cases over plan


CELEBRATING EXCELLENCE

chairman’s awards Every year, we recognize our top-performing frontline operations colleagues through the Chairman’s Circle of Champions and our top-performing frontline sales colleagues through the Chairman’s Ring of Honor. In 2022, we were able to return to global, in-person celebrations for each award. The winners gathered in New York and were recognized for executing with excellence, going above and beyond, outperforming the competition, and winning in the market.



P

E

L OP

E OF PEPS IC O

myron denson TUCSON, ARIZONA inspiring others through music

C

EL

EB

R AT E S U C C

S S E


a jingle with joy Myron Denson wanted to find a way to uplift his teammates. So early one morning, he set up his phone in a parking lot, queued up a catchy old-school hip-hop beat, and turned a safety gear checklist into a rhythmic jingle: “Face mask, gloves, and knee pads.” He closed out the 17-second clip with a joyful, “Hope y’all have a great day!” The Customer Service Specialist posted the video to Yammer and has shared dozens more since—all in the name of motivating, inspiring, and celebrating his team. The exuberant messages have become a fixture in his division’s Yammer channel, where they’re viewed widely. They’ve even been shared by Steven Williams, CEO of PepsiCo Foods North America. Posting those videos is how Denson celebrates success and rallies others to do the same. “I feel like I’m creating a positive and supportive work environment,” he says. “I’m helping people to understand that every day will not be perfect. You will face challenges. But if you wake up with the right attitude and push yourself, today can be better than yesterday.” And Denson says taking the time to acknowledge those wins—no matter how big or small— is important. Denson has received many supportive comments because of his videos, including one from a PepsiCo associate who told him watching those messages of positivity on Yammer helped him get through a difficult time in his personal life. That, to Denson, is success worth celebrating. “I guess I really have been inspiring people,” he says. “And that just pushes me to do more.”

If you wake up with the right attitude and push yourself, today can be better than yesterday.

Scan to watch a video and hear Myron Denson’s story in his own words.


ADAPTING AT TOP SPEED

how the pepsico way helped us navigate the pandemic Rising to the Challenge We all know that COVID-19 profoundly affected individuals, families, communities, businesses, nations—the world. For PepsiCo, COVID-19 presented so many challenges to our ability to keep employees as safe as possible all over the globe, and to continue producing and distributing our products, as well as staying in touch—often closer touch than ever before—with our consumers. And our team performed magnificently. Often heroically. From devising a clever in-truck system for drivers and salespeople to wash their hands before and after each store visit; to repurposing part of a plant’s capacity so that it could produce muchneeded hand sanitizer; to a recent acquisition partnering with a hospital and using its technology to build respiratory devices to relieve the discomfort of COVID-19 patients; we rose to the challenge. We adapted in other ways too: From shifting resources quickly and seamlessly from parts of our business that had slowed to those that were picking up; to creating a new online portal that allowed consumers to get their favorite products more safely; to starting an online summer camp for the children of employees, catalyzing the crucial socialization young kids were missing during the pandemic; to coming up with ingenious ways to market beloved sporting events being conducted without in-person fans; to creating products that satisfied the particular yearnings of consumers during such a stressful time; to building new working relationships in markets currently closed down but that would open back up sooner or later . . . in ways big and small, all over the world, PepsiCo individuals and teams brought The PepsiCo Way behaviors even more to the fore than they had been during less charged times: Acting as Owners, Being Consumer Centric, Focusing and Getting Things Done Fast . . . all of it. The lessons learned—and the admirable, daring, innovative responses by our people—will not be forgotten.


Our team performed magnificently. Often heroically.


smiles “Thank you for all your hard work—your store looked outstanding on Friday!” “Awesome job getting our Q3 training done fast and efficiently!” Posting a message of celebration. Sharing an extraordinary achievement. Sending a note of simple gratitude. How do you make a global company with more than 290,000 employees, layers of communication and complex workflows, feel more like a neighborhood? Enter Smiles, a global employee recognition program that allows associates to acknowledge their peers for demonstrating the company’s culture and values—the PepsiCo Way behaviors. Since its launch in August 2020, Smiles, the fun, colorful, easyto-use platform designed like a social feed, has generated hundreds of thousands of recognition moments—on average, more than 2,000 Smiles a day—from milestones and service anniversaries to birthdays and holidays to nominations for the annual Chairman’s Awards. With the click of a button, employees can celebrate their colleagues in the next room or on the other side of the world, and everyone sees it in the same place, at the same time. “We created Smiles to offer employees an intuitive and seamless experience for recognizing each other,” says Ronald Schellekens, Chief Human Resources Officer. "Now our people can easily celebrate success in meaningful ways, no matter where they work across the globe." The platform reached its 1 millionth Smile in mid-Fall of 2021 (the lucky recipient of #1,000,000 won the opportunity to donate $1,000 to an approved non-profit of their choice), and the more individuals who learn about it, enjoy it, use it, the more the tool contributes to a culture that knows how to celebrate success, achievement, and just plain humanity. “The overwhelming response has proven that our employees are doing great work every day,” says Schellekens, “and this platform helps to highlight the talent, enthusiasm, and expertise inherent in all our teams.”

1,675,307 total smiles


Be Consumer Centric

Voice Opinions Fearlessly

87,880

1,037

27,171

Raise the Bar on Talent & Diversity

201,198

Chairman’s Awards

Celebrate Success

598,430

4,306

Act with Integrity

Quarterly Awards

56,197

Focus & Get Things Done Fast

Act as Owners

390,322

313,309

AMESA

165,521

Europe

301,198

LATAM

213,041

APAC

41,680

Corporate/ Global

212,813

53,233 Life Events

PFNA

PBNA

351,440 389,606


ACKNOWLEDGMENTS: PepsiCo would like to thank everyone who contributed to this book. We acknowledge the dedication and ingenuity of the people who turned The PepsiCo Way into a reality. We would like to extend a special note of gratitude to all of the colleagues interviewed and featured in these pages as well as the following team members who were pivotal in putting together the book: Christina Ali, Kimberly Balega, Vann Bischoff, Vincent Bozek, Faith Cohen, Allan Church, Dreux Coogan, Melissa Cooper, Taylor Anne D’Ilio, Regina Herpin, Xiaolei Hu, Amanda Isler, Sachin Jain, Jacob Lieberman, Jenny McCormack, Jessica Mckenzie, Josh Oshinsky, Rachel Pavsner, Lindsay Porter, Michelle Projekt, Tom Rye-Weller, Jessica Sigelbaum, Elizabeth Tomaselli, Chan Tran, Brittany Troy, and Marina Vataj.

Image Credits SHUTTERSTOCK: 18 tr, 28bc, 28br, 42, 43tr, 48b, 49tr, 49tc, 55, 57, 64, 65, 66, 68b, 69b, 75bl, 75br, 80l, 83tr, 88, 92bl, 98tc, 101bl, 102tr, 102bl, 103c, 108br, 109, 110, 112b, 113, 116b, 121tl, 121cl, 123br, 124b, 126, 127, 134, 151br, 163tl, 170, 171, 173. PEPSICO: 6, 9, 11 tl, 11tl, 11tr, 18bl, 19 tr, 19, 20, 22 b, 23, 24, 25, 26, 27, 28 bl, 29tr, 29bc, 29br, 30, 32b, 33, 34, 36b, 37, 38, 39, 43br, 44, 46, 47, 49br, 51, 52b, 53, 54, 56bl, 56br, 58b, 59, 60, 61, 69t, 70, 71, 72, 73, 74, 76, 77, 78b, 79, 80tr, 80br, 81, 83bl, 86, 87, 90b, 91, 92br, 93, 94b, 95, 97, 98r, 99, 100, 101br, 102c, 103tl, 103br, 104b, 105, 108bl, 108tr, 114, 115, 117, 119, 120, 121cr, 122, 123bl, 125, 128, 129, 132, 133, 136b, 137, 138, 139, 140b, 141, 142, 143, 145, 146, 147bl, 147br, 148, 149, 150b, 151tr, 154, 155, 156, 158b, 159, 160, 161, 163cr, 163br, 164b, 165, 166, 167br, 168b, 169. All other portraits are courtesy of the person pictured.

This book was produced by Melcher Media, Inc.

124 West 13th Street New York, NY 10011 www.melcher.com FOUNDER AND CEO: Charles Melcher VICE PRESIDENT AND COO: Bonnie Eldon EDITORIAL DIRECTOR: Lauren Nathan PRODUCTION DIRECTOR: Susan Lynch EXECUTIVE EDITOR: Christopher Steighner SENIOR EDITOR: Megan Worman SENIOR DIGITAL PRODUCER: Shannon Fanuko EDITORIAL ASSISTANTS: Noa Lin, Carlie

Houser, Elisabeth March, Madison Brown Melcher Media would like to thank Michael Bass, Grace Lees, Carolyn Merriman, Gilbert Nakayama, and Sarah Scheffel.

The PepsiCo Way Copyright © 2022 by PepsiCo. All rights reserved. www.pepsico.com Printed in the United States 10 9 8 7 6 5 4 3 2 1 ISBN: 978-1-59591-124-7 Design by Laura Palese Written by Andrew Postman