LEZMAN - PepsiCo Sustainability_Recycle Florida Today_6!5!2012

Performance with Purpose The Promise of PepsiCo

SUSTAINABLE PRACTICES AT

PEPSICO AND TROPICANA

At $65 billion in revenues,

PepsiCo is the largest food and

beverage company in North America

and the second largest in the world

PepsiCo is one of the largest

agricultural enterprises in the world

Grows or sources 4 million tons of

potatoes for Frito Lay

Sources 3 million tons of oranges

and other fruits and vegetables for

Tropicana, Naked and SoBe

Uses 600,000 tons of oats

for Quaker

Conducts agricultural operations in

more than 30 countries

Highly integrated system

Note: 2009 pro forma revenue reflecting bottler merger

% of system revenue

~15%

Total operating control

~85%

Franchised

Strong Global Brands

$250MM - $1B brands (examples)

18

19 $1B+ brands

Delivering Performance with Purpose

Attract, retain and develop world-class

talent

Be responsible stewards of our

planet’s resources

Nourish

consumers with a range of products

Our Environmental Sustainability Vision

“Sustainability is one of PepsiCo’s most important business imperatives.”

Indra K. Nooyi

Chairman and CEO

PepsiCo

PepsiCo’s responsibility is to protect our natural resources and operate in a

way that minimizes our environmental footprint, with the goal of reaching a

net-neutral impact.

Environmental Sustainability Journey

Tropicana Pure Premium

orange juice became the

first consumer brand in

North America to certify

its carbon footprint

1999 2002

2004 2006 2001

2005

PepsiCo

formalizes

sustainability

initiative

Environmental Task

Force formed to

share best practices

Established a goal of

10% PET recycled

content in plastic

bottles in the US

Sustainability

Vision

defined

Awarded LEED Gold

Level Certification

for Frito-Lay

distribution center

Admitted to Dow

Jones Sustainability

World Index

2007

Walkers was the first

major food brand in

the world to display

a carbon footprint

reduction logo on

its packaging

2009

PepsiCo, an Energy

Star partner since

2007, was awarded the

Energy Star Sustained

Excellence Award

2009

2008

PepsiCo India

achieves positive

water balance

2009

Dream Machine recycling

initiative launched to

help increase US

recycling rate

2010

2011

PepsiCo develops

world’s first

100% plant-based,

renewably sourced

PET bottle

Market-tested our

first-ever 100%

compostable snack

bag for SunChips

Global Awards and Recognition

• Ranked 1st in the 2011 Dow Jones

Sustainability World Index Food and

Beverage Sector

• Listed for the 4th time to the Dow Jones

Sustainability World Index

• Listed for the 5th time to the Dow Jones

Sustainability North America Index

• Placed 3rd in Newsweek’s

Green Rankings

• Ranked 3rd in CR magazine’s 100 Best

Corporate Citizens

• Recognized by 2010 Global Water Awards with

“Environmental Contribution of the Year” Award

• Ranked 28th by Fast Company as one of the

World’s Most Innovative Companies

Deloitte survey confirmed that consumers are influenced by the profile of sustainability

And remain on a learning curve….

Water Consumption: 20%

Electricity Consumption: 20%

Fuels Consumption: 25%

Greenhouse Gases: 25%

2015 Targets

PepsiCo’s Commitment to Environmental Sustainability

Frito-Lay Near Net Zero Plant Casa Grande, Arizona

• RECYCLES 75% OF PROCESS WATER SAVING 110MM

GALLONS OF WATER PER YEAR

• 5 MEGAWATT PHOTOVOLTAIC SOLAR SYSTEM PRODUCES

ALL OF THE DAYTIME ENERGY USE

• LESS THAN 1% OF OVERALL WASTE TO LANDFILL

• LEED EXISTING BUILDING GOLD CERTIFICATION

Climate Change

Reduce the Carbon Footprint of our operations

– Improve our electricity use efficiency by 20 percent per unit of production by 2015.

– Reduce our fuel use intensity by 25 percent per unit of production by 2015.

– Commit to a goal of reducing greenhouse gas (GHG) intensity for U.S. operations by 25 percent through our partnership with the U .S. Environmental Protection Agency Climate Leaders program.

– Commit to an absolute reduction in GHG emissions across global operations.

Sunflower growing

Potato growing

Seasoning

Packaging

17%

17%

2%

17%

53% of Carbon Footprint upstream, outside our

own operations

34% of Footprint from Agriculture

Transport Disposal Processing Cooking

34% 10% 3%

Carbon footprint of a 30g bag of Walkers crisps

Raw materials 53%

Significant natural resources are engaged in producing our crops Carbon footprint for potato chips: Walkers Snack Foods

87% of CF

from raw

materials and

processing

Tropicana completed a Carbon Footprint

• First consumer brand in North America to certify its carbon footprint through the Carbon Trust in 2008

• Results were published on Tropicana’s website and in the NY Times

• We understand our full impact on the environment and how we can reduce our ecological footprint

• Working to reduce our carbon footprint

Carbon

Footprint

The carbon footprint of a product is the total amount of

carbon dioxide (CO2) and other greenhouse gases emitted

during a product’s life, including production, use and

disposal

Tropicana has received the first Carbon Trust product footprint certification outside of the UK

Tropicana is a leader in better understanding the impacts associated with our products

–1st to benchmark packaging footprint

–1st product life cycle assessment

–1st to receive Carbon Trust certification

The certified carbon footprint is 1.7 kg of CO2E/64 oz. carton of NFC OJ

– Includes total product life cycle impacts from grove to end of life disposal. Covers the US, Canada and Mexico

Tropicana NFC Orange Juice Carbon Trust CO2E Calculations

Footprint per 64 oz. Gable-top Carton

Footprint per 8 oz. serving

1662 g CO2E 219.4 g CO2E

Where does 1.7 kg of CO2E come from?

60%

NFC OJ

15%

Packaging

3%

Use and

Disposal 22%

Distribution

34% orange growing

and 26% processing

Greenhouse Gas Reduction Initiatives

Tropicana-owned

refrigerated railcars

Railcars are 3 times more fuel efficient than other road alternatives

Tropicana is exploring opportunities to

make their railcars even more efficient

• Tropicana has preserved more than 405

million square feet (9,200 acres) of

rainforest with the Rescue the

Rainforest Program since 2009

• More than 10 times this amount has

been “saved behind” this acreage

• Benefit of nearly 2 million tons of

carbon dioxide, equivalent to 1.8 million

flights from New York to London or the

carbon footprint of 80 million Americans

• Every carton or package of Tropicana

redeemed saves 100 ft2 of endangered

rainforest in Peru

Tropicana’s Rescue the Rainforest promotion engages

consumers

Sustainable Agriculture

Environmental Sustainability

Pillar

Social Sustainability

Pillar

Economic Sustainability

Pillar

Sustainable Agriculture is built around 3 core pillars.

1. Rainforest Alliance 2. Food Alliance 3. SAI Platform 4. Stewardship Index 5. SureHarvest (Protected Harvest) 6. Keystone Initiative (Field to Market) 7. Assured Food Standard (Red Tractor Farm Assurance) 8. GLOBALG.A.P (and related schemes like SimbaGAP) 9. McDonald’s 10. Leonardo Academy’s Ag Sustainability Efforts (formerly SCS-001) 11. Natural Resources Conservation Service (USDA-NRCS) Environmental Quality Criteria

Certification program:

Built from the consolidation of

leading survey programs and

principles that sit behind our

Agriculture Sustainability

policy

Sustainable Agriculture at PepsiCo

Protecting our local resources engaged in farming today…

Water availability and management

Soil conservation and preservation

Management of Agrochemicals

Energy management

Farm economics and Land management

Social and community dynamics

ENSURE CONTINUED ACCESS TO KEY AGRICULTURAL RAW MATERIALS NECESSARY FOR GROWING CONSUMER NEEDS

WHILE RESPECTING THE ENVIRONMENT AND COMMUNITIES PRODUCING THOSE RAW MATERIALS

Energy/Carbon Footprint Benefit

Closed Loop System

An Orange Peel Based Fertilizer

Natural, Renewable

Potential to reduce use of petrochemical fertilizers

and petroleum sprays

i

i

i

i

Great, comprehensive agricultural sustainability potential

Improved Tree Health Potential to

improve tree health, reduces disease which

can lead to improved yield

and taste

Energy and Carbon Footprint Reduction potentials

Runoff Barrier

Reduce nitrogen leaching and formulate a runoff

barrier

Where does Recycling link in?

Promoting Recycling

Several million pounds reduction

in PET

Zero waste to landfill in the U.K.

Designing packaging for

recycling

Reduce Packaging Weight

Solid Waste Reduction

Continue to lead the industry

with 10% recycled PET

Increase Recycled Content

Minimizing Our Packaging Footprint

• Eliminated millions pounds of

packaging since 2008 and on track to

meet our goal of reducing 350 million

pounds of packaging by 2012

• 100% post-consumer recycled

containers: Naked Juice and 7-Up

Canada were first-to-market

• 10% post-consumer recycled content:

Best-in-market for all US soft drink

containers

PepsiCo has best-in-class sustainable packaging

performance

38% Less

Plastic

38% Less

Plastic

200922.5g

200910.9g

50% Less

Plastic

50% Less

Plastic

20% Less

Plastic

20% Less

Plastic

200818.5g

200931g

20% Less

Plastic

20% Less

Plastic

200921.5g

10% Less

Plastic

10% Less

Plastic

Light-weighting Initiatives

• New Tropicana container is 100%

recyclable

• Developing 100% bio-based bottles out

of plants that can be recycled with regular

plastic

• Dow Jones Sustainability Index ranked

PepsiCo’s packaging performance as

number one

Sustainable Packaging Performance, cont’d

The Dream Machine Recycling Initiative

The Opportunity

• Only 12 percent of public spaces

are equipped with recycling

receptacles

• There is an opportunity to increase

on-the-go recycling and incent and

reward for recycling

• If every U.S. household recycled

just three more plastic bottles, we

could divert more than 23 million

pounds of plastic from our landfills

The Solution

With each bottle recycled in a Dream Machine, PepsiCo will also make a donation to

Entrepreneurship Bootcamp for Veterans with Disabilities (EBV)

When a bottle or can is deposited, the Dream Machine is

activated in three ways:

1. The environment gets greener

2. Consumers earn points redeemable for

rewards

3. U.S. veterans with disabilities receive training

& education on how to start their own business

Create partnerships to increase the U.S. beverage container

recycling rate to 50% by 2018 Mission

www.DreamMachineRecycleRally.com

www.Facebook.com/DreamMachine

Kiosks

Bins

K-12 Schools

• Currently, less than 1/3

of plastic beverage

containers are being

recycled each year

STEP 1

Shoppers register

& deposit empty

beverage

containers into

the kiosk

STEP 2

Kiosk calculates

“reward value”

of the deposit Posts point value to

rewards account and prints

in-store coupons

STEP 3

Consumers

redeem rewards through Greenopolis

rewards platform and

coupons at the store

STEP 4

Shoppers feel good

about their role in

supporting the

environment and EBV

The Dream Machine is easy to use & rewarding

Dream Machine Recycle Rally Program

• Education: Program provides resources and

opportunity for interactive learning.

• Interaction: Students encouraged to collect as

many non-alcoholic beverage containers (plastic

bottles and aluminum cans) as possible.

• Incentives: Scanned cans & bottles provide schools

a chance to earn points redeemable for rewards

such as Amazon gift cards, laptops, iPads, rewards

with local businesses.

• Contests: Monthly drawings and annual school-

year awards encourage recycling. 2011-2012

winning school receives $50,000 Green School

Makeover.

The more a school recycles, the more they can help the environment &

earn rewards!

How Recycle Rally Works

1 2 3 4

1. K-12 schools apply through www.DreamMachineRecycleRally.com

2. Interactive Recycle Rally system set up in school

3. Teachers/school volunteers scan empty non-alcoholic beverage

containers using hand-held scanner; deposit containers into a

recycling receptacle

4. Schools redeem rewards through Greenopolis rewards platform

For bottles and cans recycled through Recycle Rally, PepsiCo will make a

donation to help post 9/11 disabled veterans start their own businesses

We Have Had Great Success !

• Collected and recycled over 110 million bottles and

cans

• Placed more than 6,000 recycling bins and kiosks in

40 states

• Partnered with hundreds of customers, colleges,

municipalities and non-profits

• Driving awareness with billions of program

impressions

• Rewarding thousands of consumers and helping

veterans with disabilities receive training

Financial impact

PepsiCo Florida Operations are Significant

PepsiCo Florida : 1. Employs 7250 employees 2. Payroll over $325 million. 3. Purchases $500 million from local

farmers. 4. Owns/ Leases over 8.3 Million

square ft.

8 Manufacturing Plants: 2 Tropicana – Bradenton / Ft. Pierce 1 Gatorade – Kissimmee 4 Pepsi – Orlando / Tampa /Jacksonville/ Rivera Beach 1 Frito-Lay – Orlando 32 Warehouses / Distribution 24 Bins

Facilities

Bradenton Manufacturing and Distribution

Ft. Pierce Manufacturing and Distribution

Orange Groves

Oranges received at the

plant

Final Grading

Orange Receiving and Grading

Orange Processing

Extraction

• The oranges are washed and graded

• Juice is extracted and passed through finishers to strain out seeds and pulp

• Each extractor can squeeze 700 oranges a minute

• Tropicana can process over 50 million oranges in a single day, making well over a million gallons of orange juice

Citrus Juice Extraction

Orange By-Products

Citrus pulp pellets are made

into cattle feed

Oils used in

perfumes

By products used

in orange

cleaners are

used to clean the

space shuttle

Useful Products from

Every Part of the Orange

Peel Oil

Juice Pulp

Pulp Wash D’Limonene

Oil

Cattle Feed

150,000Tons

Community Relations and Recycling Efforts

• Founding sponsor and active

member of Keep Manatee Beautiful

• Participate in coastal and beach

clean-ups and street beautification

efforts

• Recycled about 46 million pounds of

material this past year at our plants,

including corrugate, scrap metal,

electronics, etc.

A Keep America Beautiful affiliate in our

Bradenton, FL community

Environmental Sustainability

The ZERO Landfill Challenge:

“Cash for Trash”

Bradenton Florida

Key Elements of Initiative

1. Why Is Recycling Important?

Good for the Environment and Good for the Business

2. What are our Recycling Opportunities?

“Expand the EXISTING” and “Capture the NEW”

3. Recyclable Definitions The Devil is in the Detail!

4. Your Department Focus Chase the Fat Rabbit first!

5. Site Recycling Plan

6. Team Member Responsibilities

Your role in Tropicana Recycling

7. Safety and Environmental Reminders

8. Key Learning The “Bad Apple” Analogy

3 Primary Package Formats for Tropicana

Gable Top Cartons

– Cost advantageous

– Materials

» LDPE

» Paperboard

» Nylon

» EVOH

Injection Stretch Blow Molding -

PET Bottles

– Clear bottle

– Material

» PET

» UV Barrier

Extrusion Blow Molding

HDPE Bottles

– Enables pass through

handle

– Material

» HDPE

» Nylon

Packaging Materials needed for TPP Carafe

What are our Recycling Opportunities?

Expand the EXISTING

Cardboard

Mixed Paper

Scrap Steel

Copper

HDPE Bottles

Cartons

Capture the NEW

PET Bottles

Wood

Soft Plastics

Hard Plastics

Stainless Steel

Construction Rubble

Cardboard Recycling: Target 15% increase

Cardboard often called “corrugated”

or OCC (Old Corrugated Containers)

Scrap Steel Recycling: Segregate Stainless Steel

Recycle Special Discards: Call Grounds Maintenance.

Segregate and recycle Copper wiring

– Contact Point Team or EIA

Mixed Paper Recycling: Target: On-site Office Areas

Tropicana’s Janitorial team will collect

mixed paper from 45 gal receptacles

centrally located in each office area.

Each team member should empty their

individual mixed paper can into the

conveniently located 45 gal receptacles.

Plastic Bottle Recycling: Major Focus on PET/ Maintain HDPE

Wood Recycling: Target Pallet Repair & Fruit Rec.

WOODWASTE Recycling: Local Reprocessing

Landscape & Fruit Operations

organic discards converted into compost

.

Scrap pallets, wooden crates and

bad lumber made into “red” mulch

Plastic Recycling: Soft or Flexible Materials

Stop No Plastic

Bands

Plastic Recycling: Hard or Rigid Components

Plastic pallets & drums are typically reused. When hard plastic

components or parts become damaged,

most can be recycled! Check with

Grounds Maint..

Remove

all Labels

What’s your department’s Fat Rabbit?

UFO – PET, Cardboard & Soft Plastic (Stretch Wrap)

Carton Filling – Cartons, Cardboard & Soft Plastic

Diversified – HDPE, Cardboard & Soft Plastic

All Maintenance Teams – Stainless Steel, Scrap Steel, Copper, Wood and Hard Plastic

Fruit Ops. – Wood wastes

JDS – Soft Plastic & Cardboard

Palletizing and DC’s - Soft Plastic (Stretch Wrap) and Cardboard

Material Logistics – Wood, Hard Plastic, Scrap Steel and Special Discards

Quality – PET and HDPE

MRO – Cardboard, Wood, all metals and Soft plastic

Contractor Area – Wood, Cardboard, Stainless Steel and Scrap Steel

Team Member Responsibilities

THINK – Can this material be recycled?

Place the material in the right recycle container!

Use “I have an Idea” form to improve the recycling process.

The “Bad Apple” Analogy

Positive Results

INCREASED EMPLOYEE ENGAGEMENT

69% INCREASE IN RECYCLED MATERIAL REVENUE

– Biggest contributors were corrugated/cardboard and stainless steel

REDUCTION IN LANDFILL FEES

Performance with Purpose The Promise of PepsiCo

THANK YOU!