17.07.2024
News
How PepsiCo is trying to turn Doritos and Cheetos bags into compost bins
Snacking habits have increased during the pandemic lockdown, and even though rising inflation has led to higher prices for almost all goods, consumers continue to buy all kinds of chips, crackers, and other salty snacks.
This continued demand for snacks has been a boon for PepsiCo, with its subsidiaries Frito-Lay North America and Quaker Foods North America, which produce products such as Lay’s, Doritos, Cheetos, Tostitos, and Quaker Oats, all posting double-digit revenue growth in 2022. But the increase in the number of chip bags and snack containers sold also means more waste from plastic and other packaging materials, and PepsiCo is looking to address this issue.
Stephen Williams, CEO of PepsiCo Foods North America, where he leads the company’s nearly $23 billion snack and convenience foods business in the region, said the company has set a goal of developing 100% of its packaging to be recyclable, compostable, biodegradable or reusable by 2025.
“There are a lot of packaging tactics that we’re using to achieve that goal,” Williams told CNBC’s Christina Parzinavelos during CNBC’s Sustainable Returns virtual event on Wednesday. “It’s hard, it’s not easy, but I want to say that we are fully committed to this.”
Williams said that while biodegradable packaging technology is “still in its infancy,” the company has made several steps toward its goal.
For example, he noted multipacks, the official name for something like a Lay’s package containing several different types and brands of chips.
“Two years ago, if you think about our multipacks, which are one-ounce portions, those packages were in a different outer plastic. So we moved them from plastic to cardboard and recyclable cardboard,” he said.
This move alone has removed 12 million pounds of plastic from the environment, according to PepsiCo.
Activist investors and shareholders, including As You Sow, have been pressing the issue with consumer goods giants in recent years, and the current annual meeting and proxy voting season is no exception. Recently, under pressure from shareholder activists, McDonald’s agreed to prepare a report on reusable packaging in exchange for canceling a shareholder vote on the issue. Last year, similar resolutions targeting Coca-Cola Co. and PepsiCo. were overturned when they agreed to new reusable targets. Coke announced the largest pledge for refillable packaging, with 25% of beverages by volume in refillable packaging by 2030, and Pepsi with 20% of beverages in refillable packaging by 2030.
The path to more compostable packaging has been a long one for Frito-Lay, which has been working on integrating such products for more than a decade. As early as 2019, both Coke and Pepsi had already severed ties with the Plastics Industry Association and announced preliminary goals related to recycling, composting, and reusable packaging.
In April 2021, Frito-Lay introduced an industrial compostable bag for its Off The Eaten Path brand, which is a snack made from vegetables and chickpeas. The bags are made primarily from plant-based materials, and consumers can either mail them back for composting or dispose of them at a local composting facility.
In April, Frito-Lay and Quaker Oats opened a new Packaging Innovation Training Center at Frito-Lay’s research and development headquarters in Texas, where they will conduct field testing, measurements and analysis of compostable packaging with the goal of speeding up the process of testing products for certification by at least two to three times.
Based on the experience of creating Off The Eaten Path packaging, Frito-Lay has introduced another packaging made from 85% renewable plant materials that produces about 60% less greenhouse gas emissions than traditional snack bags.
The next step will focus on packaging that can be composted at home, as well as packaging that is biodegradable, the company said. The goal is to share some of the knowledge gained with the entire industry.
“We’re going to need a community of technology developers, other partners, other manufacturers in our space to make sure we’re applying the best technology and the best solutions to achieve these goals,” Williams said.