Download PepsiCo Product Formulation Goals and 2013 Progress GOAL

PepsiCo Product Formulation Goals and 2013 Progress
GOAL: Continue to refine our food and beverage offerings by reducing sodium, added sugars and
saturated fat and to develop a broader portfolio of product choices.
As a leading global food and beverage company, PepsiCo provides a wide variety of safe, high-quality
products, including healthy and affordable foods that are accessible by all ranges of consumers.
Human Sustainability encompasses our approach to health and wellness. We focus on providing
products that meet consumer needs for both nutrition and convenience. We are expanding our portfolio
of nutritious products by increasing the amount of whole grains, fruits, vegetables, and dairy in our
global product portfolio, as well as by improving the nutritional profile of many of our snacks and
beverages. We have taken several important steps to encourage informed and healthier choices by
providing consumers with fact-based nutritional information, responsibly advertising and selling our
products, and promoting healthy lifestyles. We also remain actively engaged in the international
dialogue on health and wellness. We work with governments, nutrition and health experts, NGOs,
academics and our peers to address challenges such as obesity and noncommunicable diseases.
PepsiCo anticipated the increasing focus on health and wellness more than 15 years ago, beginning with
the acquisition of Tropicana, followed by the acquisitions of Quaker Oats and Gatorade. In 2009, we
established ambitious targets for the reduction of sodium, saturated fat and added sugars in our key
global brands in key countries:
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Reduce the average amount of sodium per serving in key global food brands, in key countries, by
25 percent by 2015, against a 2006 baseline
Reduce the average amount of added sugars per serving in key global beverage brands, in key
countries, by 25 percent by 2020, against a 2006 baseline
Reduce the average amount of saturated fats per serving in key global food brands, in key
countries, by 15 percent by 2020, against a 2006 baseline
Increase the amount of whole grains, fruits, vegetables, nuts, seeds and low-fat dairy in our
global product portfolio
Like many other companies, we used our first round of goal-setting to set stretch commitments, in order
to inspire our activity and ensure that we would take action to identify challenges we face on our
journey. We remain steadfastly committed to these reductions in sodium, added sugars and saturated
fat, and believe we will ultimately be successful despite challenges affecting our rate of progress.
We have made progress on all of our goals. However, we have more work to do to meet our sodium
reduction goal. We believe that we will be successful, but that it will take more time than originally
anticipated. As a result, we have extended the deadline to 2020, which is in line with target dates for
reductions in saturated fats and added sugars.
Sodium Reduction
Advances in technology, new recipes and changes in ingredients have allowed us to maintain the great
flavors that our consumers expect while reducing sodium levels. In 2013, we reduced sodium by
approximately 9 percent per serving and removed more than 1,700 metric tons of sodium from key
brands in key global markets, as compared to 2006. In 2013, we removed nearly 3,900 metric tons of
sodium from our total foods portfolio in key global markets, as compared to our 2006 baseline.
Individual markets have made noteworthy progress against this goal. In China and the U.K., we have
already met the 25 percent sodium reduction target, as compared to our 2006 baseline. PepsiCo Brazil,
Canada, Mexico and Russia have all achieved more than 10 percent sodium reduction in key brands, as
compared to our 2006 baseline.
We continue to prioritize the reduction of sodium in our flavored products and, in 2013, PepsiCo Mexico
reduced sodium in six different flavors across our Cheetos, Doritos, Tostitos and Fritos brands. Sodium
reductions in these six products ranged from 5 to 38 percent. Since 2011, Saudi Arabia has reduced
sodium in 12 products across Lay’s, Cheetos and Tasali.
Added Sugars Reduction
PepsiCo remains committed to reducing added sugars in many of our key global brands, while retaining
the great taste our customers enjoy. We are bringing balance to our beverage portfolio with our lowand zero-calorie beverage options available in all our key global markets. In 2013, we’ve removed
approximately 402,000 metric tons of added sugars from our total beverage portfolio in North America,
as compared to our 2006 baseline. We now have 595 beverages in the U.S. meeting our internal
nutritional guidelines. And, in 2013, collectively these beverages comprised 40 percent of our U.S.
beverage portfolio’s sales volume.
In our beverage portfolio, the application of new low-calorie sweeteners enables global production of
low- and reduced-calorie beverages. In 2012, PepsiCo Australia launched Pepsi Next, with 30 percent
less sugar than regular Pepsi, and supported its expansion in 2013. In 2013, PepsiCo United Kingdom
launched Trop50, with 50 percent less sugar than regular Tropicana, and PepsiCo Russia launched Lipton
Ice Tea, with 30 percent less sugar than regular Lipton Iced Tea. PepsiCo Mexico reduced sugar in
Mirinda and Manzanita Sol by 25 percent per serving.
Our goal to reduce added sugars continues to be challenging because of consumer preferences for
sweetness and a global trend away from existing diet sodas. Consumers in many major markets are
demanding natural alternatives to low-calorie sweeteners. We are accelerating our research and
technology investments to address this demand. Sweeteners naturally low in calories, such as stevia, are
increasingly available and provide a solid alternative for achieving a meaningful reduction in added
sugars. PepsiCo is pleased that the flavor modifier Sweetmyx has been determined “generally
recognized as safe” (GRAS). Sweetmyx provides another option for our innovation teams to develop
flavors that meet consumer desire for tasty beverages with less sugar and lower calories.
Saturated Fat Reduction
We are continuing our efforts to reduce saturated fat levels in certain key brands while increasing our
offerings that are baked and contain whole grains. We’ve made some progress since declaring our
saturated fat reduction goal. China, Turkey, the U.S. and the U.K. have all met our goal of a 15 percent
reduction in saturated fat in key global brands, as compared to the 2006 baseline. On a global average
per-serving basis, we have reduced saturated fats by approximately 3 percent, as compared to the 2006
baseline. In 2013, we removed more than 2,100 metric tons of saturated fat from key global brands in
key markets, as compared to 2006.
Progress against our saturated fats reduction goal has been slowed by various factors, including
relatively higher volume growth in developing and emerging markets, where healthier oils are less
accessible and more costly. We anticipate that this trend may continue and could potentially slow our
rate of reduction. We continue to monitor this trend closely and are aggressively exploring healthier oil
options in our developing and emerging markets. Additionally, in 2013, PepsiCo introduced new airpopped potato chip products with the launch of U.K. Walker’s Pops, Australia Smith’s Popped and U.S.
Lay’s Air Pops. Because they are cooked by air popping instead of frying, the chips offer a crispy and
crunchy texture with half the fat of regular potato chips. Smart Food Popped Multigrain Chips were
introduced in the United States, containing 50 percent less fat than potato chips cooked in oil and
providing 12 grams of whole grain per serving.
Increase Positive Nutrition
We focus on increasing our offerings of whole grains, fruits and vegetables, and dairy because most
people across our key global markets do not meet the recommended intake of whole grains, fruits and
vegetables, and dairy/milk. We are developing foods and beverages containing significant quantities of
these three food groups, providing consumers with more options to help them meet dietary
recommendations.
In 2013, we continued to expand our portfolio of nutritious products by building from our positions of
strength with our most important nutrition platforms and brands — Quaker (grains), Tropicana (fruits
and vegetables), Naked Juice (super-premium juices and protein smoothies), Wimm-Bill-Dann (dairy)
and Gatorade (sports nutrition for athletes).
Whole Grain Product Innovation
Quaker, one of the most trusted food brands for more than 135 years, has been a leader in nourishing
families through great-tasting, oat-based products.
Quaker continues to build on its whole grain platform with new products that satisfy the growing
consumer demand for convenient and nutritious grains. For example, in 2012, PepsiCo introduced
Quaker Real Medleys Oatmeal in the U.S., pairing beloved Quaker Oats with chunks of real fruit or
crunchy nuts in a portable and portion-controlled cup. Inspired by the success of Real Medleys Oatmeal,
we introduced Quaker Real Medleys Bars and Quaker Real Medleys Cereal in the U.S. in 2013.
Quaker has also introduced whole grain products in various markets around the world. For example, to
increase the amount of whole grains in the diet of Malaysians, Quaker Malaysia introduced Quaker Oats
for Rice, which uses specially milled oats that cook in the same time as rice. By cooking the oats with
their rice, consumers can incorporate 1/3 whole grain oats into a portion of their staple grain.
Fruit and Vegetable Product Innovation
Now in its second year, Tropicana Farmstand joined Naked Juice as a popular beverage containing
vitamins and minerals in each serving. In the U.S., Tropicana launched three new flavors of Farmstand.
These product innovations include one serving of fruit and one serving of vegetables per 8 ounces of 100
percent juice.
Naked Juice introduced new drinkable fruit and vegetable blends in 2013. Chia Sweet Peach and Chia
Cherry Lime are a new line from Naked Juice that combines chia seeds, which contain the omega-3 fatty
acid ALA, antioxidants, protein, fiber, and fruit in a smoothie. Naked Juice also launched Greens &
Protein and Kale Blazer, which contain green vegetables.
Through our joint venture with the Strauss Group, we expanded our portfolio of nutritious products with
Sabra’s refrigerated dips and spreads. Sabra hummus is made with fresh herbs, spices and chickpeas
grown in the U.S. Sabra Salsa has fresh cut vegetables, spices, and Roma tomatoes grown in California,
while the new Sabra line of guacamole is made with Mexican grown Hass avocados. Sabra Greek Yogurt
Veggie Dips have 67 percent fewer calories and 88 percent less fat than the leading sour cream dips.