How PepsiCo is restructuring its global supply chains in 2023

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The USD 247 billion multinational conglomerate, PepsiCo is home to brands like Gatorade, Frito Lays, Pepsi, Quaker, and many more. Managing and running a successful multinational company that creates long-term value requires an effective global supply chain that can elude the challenges and maintain resilience. Let’s take a look at how the New York-based company is restructuring its global supply chain to be prepared and meet challenges head-on in 2023.

Reusable Packaging

In 2022, PepsiCo seeing eye to eye with sustainability in packaging, agreed to reduce the use of single-use packaging for its beverages. PepsiCo is aiming to change the traditional beverage consumption game, by making reusable, refillable options accessible and convenient, at scale for its consumers. It has set the goal to double the use of reusable packaging to 20% by 2030, which will help the conglomerate meet its target of reducing virgin plastic per serving by 50% by 2030, and to become Net Zero by 2040.

This is yet another effort taken by PepsiCo toward helping heal the environment. The company has set targets both broadly and through specific products within its portfolio for years.

The food and beverage industry has often been in the eyes of critics when it comes to sustainability efforts. The limited transparency from brands showing if they are following their pledges can be a major reason for this, with of course a large amount of CO2 emissions.

While recycling alone is not enough to reduce the plastic pollution crisis, it is an important step toward creating a sustainable ecosystem.

Automation and Digitization all the way

One of the largest food and beverage companies in the world, PepsiCo is developing a modernized data and cloud infrastructure replete with automated processes and workflows. The company has applied predictive analytics, AI, robotics, and process automation in many of its business operations.

PepsiCo is becoming much more digital, insightful, and precise as a company, and that applies to its supply chain.

The company is leveraging intelligent data analytics to predict purchasing trends and avoid shortages or overproducing items.

For any F&B brand, driving supply chain efficiency is integral now, as ever-increasing food prices have more and more grocery shoppers turning away from their favorite products to lower-priced store-brand alternatives.

Along with predicting demand, PepsiCo is also looking to improve its supply chain by streamlining the portfolio of products being manufactured. PepsiCo can boost its supply chain by eliminating under-performing products and focusing on those that sell well.

PepsiCo’s tech investments are aimed at improving its supply chain issues in many ways including speed, flexibility, and agility, reducing on-demand forecasting from weeks to days or hours. They’re feeding the PepsiCo supply chain more accurately and frequently.

Electrifying Fleets

Beginning to electrify the fleet, PepsiCo has announced plans to roll out 100 of the heavy-duty Tesla Semis in 2023 when it will start making deliveries to customers like Walmart and Kroger. Amongst the first to experiment with heavy-duty Teslas as a way to cut environmental impact, PepsiCo ordered the Semis in 2017. The company will deploy 36 Semis, with 15 in Modesto and 21 in Sacramento, so far.

PepsiCo is purchasing the big trucks ‘outright’ and is upgrading its plants, including installing four 750-kilowatt Tesla charging stalls at both its Modesto and Sacramento locations. A USD 15.4 million California state grant and USD 40,000 federal subsidy per vehicle help offset part of the costs.

These new Semis can haul Frito-Lay food products for around 425 miles (684 km), but for heavier loads of sodas, the trucks will do shorter trips of around 100 miles (160 km).

The Semis being deployed by PepsiCo will have a 500-mile (805km) range. The company is also looking forward to the 300-mile (480km) trucks and is rotating them into its fleet.

PepsiCo will roll out the Semis in the central U.S. next. Tesla has provided design and engineering services for the facilities, which come with solar and battery storage systems.