PepsiCo is celebrating the 40th anniversary of its Supplier Diversity Program, where it currently spends more than $1 billion annually with certified, diverse suppliers, including Women, Black, Hispanic, Asian, LGBTQ+, Native American, Individuals with Disabilities, and U.S. Veterans. The anniversary commemorates a tremendous 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. The company is also committing to expanding its base and increasing 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 Melani Wilson Smith, PepsiCo's Global Chief Procurement Officer. "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."
Minority Business Enterprises (MBEs) are staples in the American economy, generating more than $400 billion in economic output annually and resulting in the creation and/or preservation of 2.2 million jobs, according to the National Minority Supplier Diversity Council.
Increasing spend with Black and Hispanic Suppliers
Building on the overall growth of its Supplier Diversity Program, 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, which has resulted in leveraging an award-winning Black woman-owned agency for the rebrand strategy of the Pearl Milling Company and the development of the P.E.A.R.L. (Prosperity, Empowerment, Access, Representation, Leadership) Pledge which provides grants to non-profit organizations working to empower Black women and girls across the country; and an award-winning Hispanic women-owned agency to launch 'Juntos Crecemos', a multi-faceted platform to support small Hispanic-owned businesses. Additionally, through its diverse-owned media days, it has increased its spend with Black and Hispanic media companies by more than 50% of its 2020 spend.
Removing barriers to economic advancement
PepsiCo has also 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 MIT study revealed that the onerous certification process taxes the very companies that supplier diversity programs seek to help. In fact, only about 1% 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 would like to give a special thanks to PepsiCo for believing in our capabilities and being an invaluable ally through the certification process," said Jeffrey Duque, Co-Founder of Extrategic Culture. "Their support demonstrates PepsiCo's commitment to developing a robust supplier base that includes diverse-owned businesses that provide quality goods and services."
"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 and mentorship
Through existing partnerships with organizations such as the National Minority Supplier Development Council (NMSDC) and the National Black Growers Council (NBGC), PepsiCo has 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."