Approach

Water stewardship has long been one of PepsiCo’s top priorities. We have a vision to become net water positive — an ambition borne from our longstanding belief that access to water is a human right and our acknowledgement of its criticality to our business.

In order to achieve this, we have adopted an approach to watershed management that includes efforts to:

• Improve water-use efficiency within our value chain — on farms and in manufacturing facilities;
• Replenish water and improve the health of the local watersheds that are most at risk where we source crops and where we operate; and
• Increase safe water access for communities that face water insecurity, including scarcity and unsafe water sources.

PepsiCo is acutely aware of the critical role water plays in the food system, and it is our vision that wherever we operate, water resources will be in a better state because of our presence. We work with community stakeholders to understand water challenges at a local level and support collaborative solutions that address the specific needs of the watershed and the communities that depend on it.

Goals

We have set standards for ourselves and our supply chain that support our vision for net positive water impact. As part of our pep+ (PepsiCo Positive) ambitions, we're working towards becoming net water positive in our operations, enhancing watershed health in our agricultural supply chain and contributing to community water access. Altogether, our water ambition aims to improve water-use efficiency and the health of watersheds by replenishing back into the local watershed 100% of the water used in our operations in high water-risk areas. Our pep+ agenda builds on our prior sustainability efforts and, by 2025, aims to:

• Achieve 100% water replenishment at company-owned facilities designated in high water-risk areas;² and
• Continuing to adopt the Alliance for Water Stewardship (AWS) Standard in high water-risk manufacturing facilities by 2025, as a vehicle for water advocacy;

By 2030, we aim to have net water positive impact by:

• Reaching average water-use efficiency ratios of 1.4 liters/liter of production in beverages sites and 1.7 liters/kilogram of production in convenient foods sites for 100% of high water-risk PepsiCo and franchise bottler manufacturing facilities;³
• Replenishing back into the local watershed 100% of the water we use in high water-risk PepsiCo and franchise bottler manufacturing facilities;⁴ and
• Reaching 100 million people with safe water access.⁵

We believe long-term transformation requires agility to identify what's working, what isn't, and adjust to focus on areas where we can have the greatest impact. We regularly review our sustainability goals and initiatives and consider changes that are from time to time warranted, including in the context of new developments, such as business growth, necessary investments relating to our initiatives, as well as external developments.

pep+ in context: Water

How we're working toward our vision of becoming net water positive:

Operations

Improving water efficiency

PepsiCo supports the principles of circular water within our company-owned high water-risk manufacturing operations and high water-risk franchise bottler manufacturing. This means we look to reduce our freshwater footprint and identify reuse opportunities for treating process water within our company-owned manufacturing facilities and those of our franchise bottlers in high water-risk areas.

We assess operational water-use efficiency against our peers, in both beverage and food production, based on publicly-available information as well as against peer company commitments and information shared with us through industry groups. This benchmarking helps inform our water agenda, including the goals we set.

These ambitions and impacts build on PepsiCo’s long record of water conservation. Between 2006–2015, water-use efficiency rate improved by 26% in global legacy operations.

In our own operations, we aim to capture efficiencies through initiatives such as our Resource Conservation (ReCon) program, which identifies operational efficiency best practices at the plant level and shares them across PepsiCo locations as well as those of our franchise bottlers and contract manufacturers. We are also developing low-water manufacturing processes and investing in new technologies that allow us to safely recover and reuse water. 

Water sustainability is integrated across our business, including in the design of line expansions, validation of new water reuse solutions, product design and capital approval processes. Through these and more, we expect to continue to invest significantly to support our water strategy.

We know that collective action is needed to address shared water challenges. That’s why we include franchise bottler manufacturing partners in high water-risk areas in our water efficiency ambitions. We are working together to share best practices and source performance data to track and improve progress towards our net water positive vision. Our aim is to improve water-use efficiency and incorporate their progress into our goal metrics.

Water replenishment

Given the risks facing good quality fresh water and the importance of water availability to our business, we aim to replenish 100% of the water we use in high risk watersheds. In other words, we aim to restore and protect freshwater ecosystems by putting back the same amount of water that we take from local watersheds.

To do that, we’re working with partners to deploy a range of initiatives that aim to restore the health of high-risk watersheds, ultimately bolstering their ability to retain water. The most common types of projects are those that seek to:

• Conserve and restore land to reduce watershed impacts from excessive runoff and increase groundwater infiltration;
• Increase water supply reliability through water-use efficiency improvements;
• Improve water quality; and/or
• Restore and protect aquatic habitats and ecosystems through wetland protection or restoration.

Each watershed is unique, so we work with local partners to identify replenishment tactics that are informed by the unique challenges and local conditions. For example, we have partnered with the Nature Conservancy in South Africa through the Greater Cape Town Water Fund, a multi-stakeholder initiative, to implement a project to remove invasive plant species from an aquifer’s primary recharge zone. This reduces the amount of water used by invasive plant life and increases water security. The partnership is also designed to contribute to the conservation and restoration of ecosystem functioning and to the diversity of native plant life and the habitat of native fauna.

We continue to measure progress against both our original 2025 and extended 2030 goals. The goals, while similar, differ as follows:

• 2025: 100% water replenishment at company-owned facilities designated in high water-risk areas;²
• 2030: 100% water replenishment at company-owned facilities and franchise bottler manufacturing facilities in high water-risk areas.⁴

Advocacy for improved water security

While we can make a significant impact in water stewardship through action within our value chain, we also have opportunities to help mitigate water insecurity more broadly, through advocacy for improved water governance and through increased collective action. 

We support existing collaborative efforts to address water risk and mitigate water insecurity. In addition to these, we also seek out new opportunities to partner with other stakeholders. We do this by advocating for the adoption of smart water policies and regulations; by sharing information and best practices with local stakeholders; and by providing public education and training for communities. In addition, we joined the Alliance for Water Stewardship in 2018 and aim to adopt the AWS Standard at all of our high water-risk facilities by 2025, using it as a vehicle for advocacy and to help ensure that freshwater resources in high water-risk locations are available for all water stakeholders. AWS adoption is led by cross-functional teams of PepsiCo employees who have come together to identify local water risks and evaluate opportunities for the facilities to implement good water stewardship practices. We have made the training program we developed for these teams available for free to our partners and any other interested party through the online platform, Coursera.org under the course name “PepsiCo: Water Stewardship.”

Community

Access to clean and safe water is a fundamental human right, and with billions of people lacking access, it is a problem of global importance requiring urgent intervention. Water insecurity puts communities at risk, increasing negative health outcomes, decreasing food availability, increasing costs of basic goods and services and, in the worst cases, driving communities from their homes. 

PepsiCo and the PepsiCo Foundation partner with experts aiming to close the gap in safe water access programs, implementing projects primarily in Latin America, Asia, the Middle East and Africa. These efforts are designed to help improve water security, including building sanitation facilities and community water systems, providing loans to families to build water infrastructure in their homes, supporting local water entrepreneurs, installing community water access points and helping to rehabilitate natural springs.

Agriculture

Beyond our direct, operational water-use, we aim to work with farmers and NGOs to improve agricultural water-use efficiency as part of our pep+ regenerative agriculture ambitions. Regenerative agricultural practices include farming in ways that improve watershed health. For many crops, this means improving the efficiency of irrigation.

To improve irrigation practices and embed other water stewardship practices, we identify opportunities in at-risk locations, develop phased action plans, aim to ensure farmers have the correct equipment, and train them to execute against water goals. By the end of 2023, 83 demonstration farms were testing and sharing best practices around the world, many of which feature water-use efficiency best practices or demonstrable improvements in water quality. These farms provide an opportunity to engage large numbers of farmers in hands-on learning and understanding of innovation.

A key aspect of our approach is helping farmers transition to more water-efficient irrigation equipment, such as drip irrigation. Our partnership with N-Drip aims to help farmers in our supply chain adopt high-efficiency irrigation technology across 25,000 acres by the end of 2025. N-Drip’s gravity-powered technology combines the water-saving benefits of high-pressure drip irrigation with lower energy, operating and maintenance demands.

As we continue to improve water-use efficiency in areas where we directly source our crops, we identify the specific needs of high water-risk locations and create action plans that support farmers with the relevant training, equipment and resources they need to meet water goals. We recognize that water stress is experienced not only by our farmers but also every other farmer using that watershed. Without comprehensive action to implement more sustainable practices across the board, local communities and the natural environment will continue to be at risk. For this reason, we’ve expanded our work to include broader watershed health actions in two of the most at-risk sourcing regions in the world: Caborca, Mexico and Uttar Pradesh, Mexico.

For more on our efforts to spread the adoption of sustainable agricultural practices, see Agriculture.

Governance

Our global approach to water stewardship is led by a team of water experts in PepsiCo’s Global Sustainability Office. They, in turn, collaborate with our operating segment teams and external partners to execute our strategy and work toward achieving our goals. PepsiCo’s water strategy applies to the entire organization, including all companies, entities or groups over which operational control is exercised. Portions of our water strategy, including operational water-use efficiency and replenishment, also apply to franchise bottlers. 

The Board plays an essential role in determining PepsiCo’s strategic priorities and considers sustainability issues (e.g., water stewardship) as an integral part of its business oversight. To this end, the Board established a Sustainability and Public Policy Committee to assist the Board in providing more focused oversight of key sustainability, inclusion and public policy matters. One of the primary responsibilities of the Committee is to review PepsiCo’s key sustainability programs and related goals and monitor the Company’s progress toward achieving those goals, including progress against its water goals.

The PepsiCo Executive Committee (PEC), made up of the Chairman & CEO, the CFO, operating segment CEOs and functional heads, meets quarterly to review progress against goals, progress against broader environmental risk mitigation and to ensure that we are adapting our sustainability strategy to changes in science, stakeholder expectations and marketplace conditions. In addition, the PepsiCo Sustainability Committee, a sub-committee of the PEC, takes further responsibility for sustainability matters and meets on a monthly basis to discuss strategy and progress.

Assessing water risk

Through our Enterprise Risk Management process, we identify and assess water-related risks within our direct operations and other stages of our value chain twice per year. Supplementing that process, we also conduct an in-depth global water risk assessment of all our company-owned operations on a rolling three-year cycle, most recently in 2022. Additionally, we assess third-party manufacturing operations, though asynchronously from our own-operation assessment. For both, we have partnered with a specialized environmental consultancy to develop a robust water risk assessment process that leverages multiple data sets and local insights. This process is designed to provide PepsiCo with a holistic view of current and future water-related risks in our global manufacturing locations. 

Assessment inputs include the World Resources Institute’s (WRI) Aqueduct tool,  the World Wide Fund for Nature (WWF) Water Risk Filter tool, local site risk assessment surveys and third-party independent expert experience and knowledge operating within the watersheds. This helps us to determine and quantify the level of physical (quantity and quality), regulatory and reputational water risk. 

The outcome of our operational water risk assessment informs which locations are designated as high risk and allows us to focus our efforts and resources where it matters most. 

Progress

Improving water-use efficiency in our direct operations

In 2023, PepsiCo had 105 high water-risk manufacturing locations as defined by our global water-risk assessment process. These locations span five continents and account for 36% of our company-owned manufacturing facilities, with high water-risk locations accounting for approximately 30% of our company-owned production volume. To track our operational water-use efficiency goal, we measure both water withdrawal (the total amount of water that we remove from a water source) in high water-risk areas and non-high water-risk areas as well as the volume of product produced. In 2023, we withdrew approximately 74 million cubic meters of water across all company-owned operations — 24% from regions of high water-risk. Water consumption (the amount we withdraw that is not replenished back into its source) was approximately 24 million cubic meters of water — 25% from regions of high water-risk.

In our effort to reduce our freshwater consumption, we are piloting innovative water treatment technology in high water-stress areas to use as models for other PepsiCo sites around the world. These technologies include:

• Efficient corn washers: We’re scaling a new approach to how we wash corn when making products such as Tostitos, Fritos and Doritos to more than 100 global manufacturing lines within a year. This corn hopper halo washer efficiency solution reduces the time the water is turned on by more than 85% during a phase of the corn-washing process.
• ​Membrane bioreactors: We’ve Implemented technology at 21 manufacturing sites globally, including 14 in high water-risk areas, to treat, purify and recycle water to drinking-level standards for reuse in operations. This alone can help a site to reduce its freshwater demand by an average of 70%.
• Rain water capture: In Latin America, 15 sites, including 10 in high water-risk areas, utilize rain water capture to reduce the water burden on local municipalities.
• Ingredient water capture: The average potato is made up of about 80% water. At our Kolkata factory, we found a way to give that inherent water a purpose by capturing it and cleaning it to safe drinking standards instead of letting it evaporate off as steam. The technology can recover more than 50% of the water used in the potato chip cooking process. 
  

Water replenishment

With the launch of pep+ in 2021, we extended our 2025 replenishment goal to 2030, covering facilities not previously identified as high water-risk and expanding the goal to include high water-risk third-party bottling partners.⁴

In 2023, we were working on 42 replenishment projects across the globe, with our support of the Greater Cape Town Water Fund and our reforestation partnership with the Arbor Day Foundation in California delivering the greatest replenishment impacts by volume.

Access to safe water

Since 2006, PepsiCo and the PepsiCo Foundation have helped more than 91 million people gain access to safe water through distribution, purification and conservation programs.

In 2023, the PepsiCo Foundation invested $1 million in safe water access programs, and it plans to continue to expand the reach of its safe water access program by providing grants over the next three years to two new water stewardship programs in Latin America and Africa.

Building on a decade-long, successful partnership with the Inter-American Development Bank's Aqua Fund, the PepsiCo Foundation aims to improve water access and sanitation services across the Latin America region.

In Nigeria, the Foundation works with WaterAid to support the construction of water supply and sanitation facilities and the development of programs to promote good hygiene practices. Funding from the grant aims to support improvements to the lives of more than 170,000 people with sustainable access to adequate water, sanitation and hygiene.

Advocacy for improved water security

In 2023, we accelerated our progress to adopt AWS, expanding our global impact through this program. At the end of 2023, we had 59 facilities in the process of adopting and 27 facilities in high water-risk areas that have completed adoption of the AWS Standard.

Improving water-use efficiency in agriculture

In 2023, PepsiCo launched a pilot program in India that aims to address water stress at a broader watershed level. Through this pilot program, we aim to work with 1,500 farmers outside of our value chain to improve their knowledge on water-efficient farming practices while also working with ten local villages to develop long-term water security plans. We estimate this project could result in the conservation of approximately 70 million liters of water per year.

In 2023, we exceeded our agricultural water-use efficiency target of 15% (reaching 22% when compared to a 2015 baseline) in high water-risk watersheds two years ahead of schedule by supporting farmers through partnerships, targeted training and programs such as our demonstration farms. As a result of achieving this goal ahead of schedule, we will no longer report on it. But, we will continue our work in watershed health through other pep+ goals and remain focused on continuous improvement. For more detail on agricultural water use, see Agriculture. For more detail on how we measure progress across all of our water goals, see Calculation methodology.

Community

We launched an open-access online course on water in 2023 to share the knowledge from experts and partners and help educate people within- and outside the company on water issues. Courses include The Water Cycle, Water Security & Stewardship and Water Governance & Economics, and each are available to audit for free by interested participants.

Strategic partnerships

PepsiCo draws on the expertise and local knowledge of an array of partners in order to deliver on its water stewardship ambitions. These include non-profit organizations, research institutions, developmental experts as well as collaborative initiatives. For detail on a selection of these partnerships, see Water partnerships and engagements.

What's next?

In the coming year, we plan to continue bringing our net water positive vision to life. This will include prioritizing:

• Operational water-use efficiency: Working towards continued improvement in water-use efficiency at our high water-risk company-owned and franchise bottler manufacturing facilities;
• Water replenishment: Pursuing our goal to replenish 100% of the water we use back into local watersheds and beginning work to expand our replenishment program to high-water risk franchise bottler manufacturing facilities;⁴
• Community access to safe water: Implementing new programs and expanding existing partnerships to make progress on our safe water access goal benefiting a total of 100 million people by 2030 since 2006;⁵ and
• Advocacy: Working towards our goal to adopt the AWS Standard at all high water-risk company-owned facilities.