SWOF Spotlight: Four Questions with PepsiCo’s Margaret Henry

Article by Matt Lindsay, Marketing + Communications
Banner Photo by Corey McKinney, Senior Marketing and Verification Manager

During the past two years, the Soil and Water Outcomes Fund has partnered with PepsiCo across multiple states to incentivize farmers to adopt new sustainable agricultural practices that improve soil health, reduce greenhouse gas emissions, and improve water quality by preventing millions of pounds of nutrients from leaving enrolled fields.

This partnership is part of pep+ (PepsiCo Positive) – the company’s strategic end-to-end transformation centered on sustainability and human capital to drive growth and value creation. Positive agriculture is a key pillar of the pep+ initiative. By 2030, PepsiCo aims to spread regenerative farming practices across 7 million acres (eliminating 3 million tons of greenhouse gas emissions), sustainably source 100% of key ingredients, and improve the livelihoods of more than 250,000 people in its agricultural supply chain.

PepsiCo CEO Ramon Laguarta (center) with SWOF Managing Directors Dan Yeoman (left) and Adam Kiel (right) in Illinois.

In September 2022, PepsiCo CEO Ramon Laguarta visited with farmers near Kankakee, Illinois, including several participants in the Soil and Water Outcomes Fund, to learn more about the sustainable agriculture practices the growers had implemented. 

Margaret Henry, senior director of sustainable agriculture at PepsiCo

The Soil and Water Outcomes Fund helps partner companies, like PepsiCo, as well as federal, state, and local governments, achieve their sustainability and environmental goals within a framework that enhances cost efficiency and reduces risk on any single entity by bundling together multiple conservation outcomes and partners.

We recently connected with Margaret Henry, senior director of sustainable agriculture at PepsiCo, about the company’s experience partnering with the Soil and Water Outcomes Fund.

The following Q&A has been lightly edited for length and clarity.

To start out, tell me a little about how sustainability has become a core component of PepsiCo and why the corporation works with farmers to help incentivize more sustainable agriculture?

As part of our pep+ journey, we have a broad sustainability mandate – including reducing packaging waste and improving facility efficiency and energy use and sustainable agriculture. Under PepsiCo’s Positive Agriculture agenda, we’re working to source crops and ingredients in a way that accelerates regenerative agriculture and strengthens farming communities.

Agriculture is core to our business, so we’re committed to making sure the farms we source from are able to persevere and thrive through changing climate and financial conditions. Regenerative agricultural practices not only protect our business but importantly, support the farms that are central to our business and the global food system.

The complexity of our global supply chains means partnerships and collaboration with other stakeholders are required to make an impact. We engage with programs like the Soil and Water Outcomes Fund to support farmers in the PepsiCo supply chain, helping to drive the adoption of new farming practices that improve and restore ecosystems while building climate resilience.   

Why did PepsiCo choose to partner with the Soil and Water Outcomes Fund? 

PepsiCo has a number of different initiatives around the United States focused on driving the adoption of regenerative agriculture practices.  To ensure impactful sustainable agriculture projects and partnerships, we focus on three core priorities.

First,  we look for a partner is that can provide our farmers with strong agronomic advice. They often have a staff of conservation agronomists; they know how to support farmers. These practices are challenging and there are so many variables that farmers need to consider as they transition to practices like cover crops. We need to know our partners have the staff and the ability to support farmers through this transition.

The second element we seek is economic support for the farmer. The Soil and Water Outcomes Fund does a great job of building incentives into its program. We want to make sure farmers are getting the economic resources they need to make practice changes and sustain these practice changes over time.

Lastly, we also look at the cultural considerations. For example, we feel some level of farmer-to-farmer networking and peer learning is important because we know having a neighbor or peer who is making the same transition in their operation can be a trusted resource for our farmers.

The Soil and Water Outcomes Fund has become a great partner because we share these same three priorities, and I look forward to strengthening PepsiCo’s work with the SWOF team.  

How important is it to PepsiCo that the Soil and Water Outcomes Fund focuses on both water quality and climate benefits that result from new sustainable agricultural practices?

Water stewardship has long been one of PepsiCo’s top priorities, and it's an important part of building a Positive Value Chain. We’re acutely aware of the critical role water plays in the food system, and it is our vision that wherever in the world PepsiCo operates, water resources will be in a better state because of our presence. Having SWOF focus on water quality and watershed health is one of the many ways we’re driving impact and water-use efficiency best practices.

Similarly, in regard to climate, we not only have an interest in reducing greenhouse gas (GHG) emissions for the benefit of society — it’s also crucial to the viability of our business. We’re already experiencing the impacts of climate change directly within our own value chain, so we continue to scale sustainable agriculture and regenerative practices as part of our mitigation strategy. Ensuring SWOF’s shares our focus in this area is critical to accelerating progress.

A huge strength of the Soil and Water Outcomes Fund model is that farmers are compensated more for practice changes because of the program’s ability to achieve water and climate benefits. That is a really exciting part of the SWOF program and a reason why PepsiCo continues to expand its work with SWOF.  

Also, the Soil and Water Outcomes Fund is one of the only programs where the focus is on outcomes instead of a “pay for practice change” directly. It has been interesting to trial this approach within the PepsiCo supply chain and see the positive reactions from our farmers.

Looking ahead, what are your aspirations for this partnership in the years to come?

We have seen great expansion with the Soil and Water Outcomes Fund in a short amount of time. We have spoken with farmers across the Midwest, and we hear really great reviews about the support provided by the Soil and Water Outcomes Fund and notably, the level of trust that participating farmers have in the staff.

We look forward to continuing our shared mission, and are poised to do even more together through Midwest Climate-Smart Commodity Program, which is funded through the USDA’s Partnerships for Climate-Smart Commodities. This funding award is a testament to how effective our partnership has been to date.

Editor’s Note: Read more about PepsiCo’s regenerative agriculture partnerships in the United States in AgFunder News.