PepsiCo's Supplier Diversity Program Grows Its Commitment
The company will increase overall spend through new forums, mentorship, partnerships, and resources.
PURCHASE, N.Y. — In commemoration of the 40th anniversary of its Supplier Diversity Program, PepsiCo is upping its commitment to the cause.
PepsiCo currently spends more than $1 billion annually on its Supplier Diversity Program with certified, diverse suppliers, including women, Black, Hispanic, Asian, LGBTQ+, Native American, individuals with disabilities, and U.S. veterans.
The anniversary marks a milestone for the company, from an initial spend of $5 million in 1982 to nearly $30 billion spent over the past 40 years across PepsiCo's entire value chain.
Furthering its commitment, PepsiCo will expand its base and increase overall spend through new forums, mentorship, partnerships, and resources, including increased support around the supplier certification process to help businesses grow and sustain their economic impact for years to come.
"As one of the leading convenient food and beverage companies in the U.S., we have a responsibility to leverage our size and reach to help address the systemic barriers that too often limit or exclude diverse suppliers from developing and expanding their businesses," said PepsiCo Global Chief Procurement Officer Melani Wilson Smith. "We've been on this journey for decades and we are committed to growing with our diverse suppliers and procuring new ones. Working with diverse-owned businesses is one of the more important ways we can help build a more inclusive supply chain which, in turn, strengthens the communities where we operate and yields greater value for our consumers and customers."
As part of its expanded commitment of the Supplier Diversity Program, PepsiCo is:
Increasing Spend With Black & Hispanic Suppliers
In 2020, PepsiCo doubled-down on its support for Black and Hispanic suppliers as part of its Racial Equality Journey, a more than $570-million investment in a set of commitments over five years to increase representation within its workforce, leverage its scale and influence across suppliers and strategic partners, and help drive long-term change by addressing systemic barriers to economic opportunity and advancing economic empowerment for Black and Hispanic Americans.
As part of this journey, in 2021, PepsiCo spent nearly $500 million with Black and Hispanic suppliers, including adding more than 10 Black-owned and Hispanic-owned marketing agencies to its roster. This resulted in leveraging an award-winning Black woman-owned agency for the rebrand strategy of the Pearl Milling Co. and the development of the P.E.A.R.L. (Prosperity, Empowerment, Access, Representation, Leadership) Pledge, which provides grants to nonprofit organizations working to empower Black women and girls across the country, in addition to an award-winning Hispanic women-owned agency to launch "Juntos Crecemos," a multi-faceted platform to support small Hispanic-owned businesses.
Additionally, PepsiCo has increased its spend with Black and Hispanic media companies by more than 50 percent of its 2020 spend through its diverse-owned media days.
Removing Barriers to Economic Advancement
PepsiCo hired Pink Patch Group, a Black-woman-owned certification consultancy, to help with the diverse supplier certification process and remove barriers to economic advancement.
A recent Massachusetts Institute of Technology study revealed that the certification process taxes the companies that supplier diversity programs seek to help. Only about 1 percent of diverse companies achieve certification despite meeting the required criteria. PepsiCo has since assisted several companies with the process, including Webber Marketing & Consultancy LLC and Extrategic Culture, a culture-first social experience agency.
"We know that minority certification will allow diverse businesses to work with many Fortune 500 companies beyond PepsiCo," said Christina Tyson, director of Supplier Diversity at PepsiCo. "Hiring a third-party consultancy to assist small diverse-owned businesses with the certification process is one of several steps we're taking to drive racial equality and create systemic change in the communities we serve."
Diversifying Spend Through Partnerships, Advocacy & Mentorship
Through existing partnerships with organizations such as the National Minority Supplier Development Council and the National Black Growers Council (NBGC), PepsiCo also advanced its efforts to create opportunities for these diverse businesses, deepen their relationships and identify potential new partners. The company has nearly doubled its spend among Black growers within the agriculture segment and continues to mentor growers on expanding their acreage and capacity available to purchase.
"As farmers in underserved communities, we typically find ourselves isolated and concentrated," said P.J. Haynie, a fifth-generation farmer from Virginia and board chairman of the NBGC. "Having relationships and mentors, and knowing you can call another grower to share information that will help your operation — whether they're 100 or 1,000 miles away — is a priceless tool in our toolbox. Companies like PepsiCo understand that."
Purchase-based PepsiCo generated more than $79 billion in net revenue in 2021, driven by a complementary beverage and convenient foods portfolio that includes Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream.