PepsiCo Investing $216M to Advance Regenerative Ag Transition

March 24, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

PepsiCo announced it is investing $216 million in long-term, strategic partnership agreements with three farmer-facing organizations: Practical Farmers of Iowa (PFI); Soil and Water Outcomes Fund (SWOF); and the Illinois Corn Growers Association (ICGA) to drive the adoption of regenerative ag practices across the U.S. 

Climate change could eliminate up to one-tenth of U.S. gross domestic product by 2100, with agricultural yields potentially down to 1980s levels by as soon as 2050, according to the National Climate Assessment. 

Row crop agriculture contributes 5 percent of greenhouse gas emissions from the U.S., and is the largest emitter of nitrous oxide – a gas with 300 times more warming potential than carbon dioxide. However, scientists estimate that a 21 percent reduction in row crop emissions is a viable goal over the next 15 years through the optimization of current technologies – and a reduction of up to 71 percent is possible with new innovations. 

Despite being a contributor, agriculture is also one of the most vulnerable sectors to climate change. But regenerative growing practices, which work with nature to optimize the health of the entire ecosystem, offer growers the ability to build healthy soils that can protect crops from uncertain rainfall, reduce the need for inputs, reduce farm costs and risks, restore biodiversity, and strengthen the long-term value of the land

However, although the spirit is willing, many farmers looking to adopt regenerative practices are finding it difficult to source the necessary funding and support for the transition, which can be a complex and extensive undertaking. 

Driven by PepsiCo Positive (pep+), PepsiCo’s strategic end-to-end business transformation, these three strategic partnerships will work to provide this support needed to accelerate the uptake of regenerative practices on more than 3 million acres, and in the process deliver approximately 3 million metric tons of greenhouse gas emission reductions and removals by 2030. 

Sally Worley, executive director, Practical Farmers of Iowa, commented, “PFI farmers have known for years that a supply chain that encourages farmers to grow only a couple of crops is not sustainable – it’s not diverse or resilient enough for our changing world.”

“The PFI model is proven – when we plug farmers into our powerful network and connect them with a peer network, educational resources, funding and technical support, they’re able to build more resilient farms.”

PepsiCo expressed that its strategic investment in PFI, SWOF, and ICGA is critical to supporting U.S. farmers as it aims to make changes to secure production volumes of quality crops while mitigating the impacts of climate change.

As the largest food and beverage company in North America, and second largest in the world, PepsiCo stated that a resilient food system is essential to its business and its ability to meet its bold pep+ targets, including the adoption of regenerative farming practices across 7 million acres (the approximately size of PepsiCo’s agricultural footprint) by 2030, and achieving net-zero by 2040. 

“As the climate crisis continues to escalate, the threat to our food system increases as well,” said Jim Andrew, chief sustainability officer, PepsiCo. “It’s critically important to partner, for the long term, with organizations that have earned the trust of farmers as they make the transition to adopt climate-smart agriculture practices. We intend to be shoulder-to-shoulder with farmers as they work to make soil healthier, sequester carbon, improve watershed health and biodiversity, and improve their livelihoods.”

By 2030, PepsiCo stated that its partnership with PFI will reach approximately 1.5 million acres; its partnership with SWOF, nearly 1 million acres; and its partnership with ICGA, approximately 600,000 acres. 

And using progress to-date to extrapolate out future expectations, these collaborative efforts will likely deliver more than 500,000 regenerative acres by the end of this year. 

“The PFI model is proven – when we plug farmers into our powerful network and connect them with a peer network, educational resources, funding and technical support, they’re able to build more resilient farms, said Worley. “We’re excited to continue partnering with PepsiCo and look forward to working together to create a more diversified and resilient agriculture.”

“We are excited to expand our partnership with PepsiCo and farmers in its supply chain to support the adoption of regenerative agriculture practices that have measurable impacts on soil health, the environment, and farm sustainability,” added Adam Kiel, managing director of the Soil and Water Outcomes Fund, who went on to explain the role his organization will play within the strategy. 

“By providing high-quality and customized agronomic assistance to farmers implementing new practices we help them reduce emissions and nutrient loss, unlock a new revenue stream, and increase the value of their farmland for current and future generations.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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