Approach

We distribute our products through a complex network of company-owned and third-party fleet operations. Our approach varies country-to-country, with the predominance of company-owned vehicles operating in North America. We try to work with transportation partners, both third-party logistics operators and vehicle manufacturers, to demonstrate the viability of a sustainable future with zero- and near-zero emission technologies at scale. To decarbonize our fleet operations, we are striving to:

• Improve vehicle efficiency, routing and driving by:
  • Investing in energy saving technology and advanced aerodynamic devices, using low rolling resistance tires, reducing weight and improving powertrain efficiency in our new equipment;
• Transition to zero-emission vehicles;
• Use cleaner fuels; and
• Develop and share best practices with third-party partners to encourage them to do the same.

Progress

In 2023, our company-owned fleet accounted for 35% of our global Scope 1 and 2 emissions. In 2023, the company-owned global fleet traveled approximately 1.2 billion miles and consumed nearly 19 million Gigajoules of fuel, of which approximately 2% was from renewable sources. Overall, emissions associated with transporting our products (including third-party transport) made up 13% of our total GHG emissions.

Efficiency

Given the complexity of our fleet operations, optimizing the efficiency of our trucks, routes and scheduling can significantly impact the emissions from transporting our products. We use technology like Advanced Driver Assist Systems and smarter routing programs to encourage fuel conservation. Additionally, we train our drivers in gentler acceleration and the avoidance of unnecessary braking and idling.

In 2023, we continued to optimize and right-size our PepsiCo Beverages North America (PBNA) delivery vehicles. Load optimization can reduce the number of vehicles, miles driven and ultimately fuel used.

PepsiCo Foods North America (PFNA) introduced tractors with liftable tandem axles which deploy or lift the second axle as required by the weight of the load, resulting in reduced rolling resistance, reduced tire and brake wear and an expected improvement to miles per gallon (MPG).

Cleaner fuel sources

Today's zero-emission vehicles are not always a feasible option for our logistics needs. As we continue to test new technologies, we are also exploring the use of lower-emission fuels. These fuels, like renewable natural gas and hydrotreated vegetable oil, typically have lower tailpipe emissions compared to traditional fleet fuels. In 2023, approximately 75% of CNG purchased for our PFNA fleet was from renewable sources. We are establishing fueling contracts in an effort to ensure that all future fleet natural gas will be from renewable sources.

Decarbonization

In both our on-road and on-site fleet, we are continuing to expand our use of zero-emission vehicles. In 2022, we took delivery of the first all-electric Tesla semi trucks in production. In 2023, Frito-Lay deployed over 700 electric delivery vehicles in the U.S., including the Tesla semi trucks and electric vans.

At our Modesto, California site, we continue to upgrade our fleet to incorporate advancements in sustainable technology and reduce environmental impact, while also offering employees on-the-job training to maintain and operate the new high-tech equipment. These updates include:

• Electric yard tractors;
• Forklifts powered by lithium-ion batteries;
• Electric Tesla semi trucks;
• Electric box trucks for last mile delivery into the Modesto community; and
• Employee electric vehicle charging stations.

Combined, these updates help us to reduce our Scope 1, 2 and 3 tailpipe emissions and serve as a testing ground to identify solutions that can be scaled across PepsiCo.

Outside of the U.S., we deployed electric vehicles for our fleet in Mexico and hybrid vehicles in both owned- and third-party fleets in Romania. The new electric vehicles deployed in Mexico aim to enable PepsiCo to reduce an estimated 2,800 metric tons of CO₂ annually when compared to the gas-powered equivalent. By the end of 2023, 80% of PepsiCo Romania’s owned- and third-party fleets transitioned to hybrid vehicles.

Third-party transport

In 2023, Frito-Lay North America products were delivered through third-party transportation on an electric vehicle (EV) for the first time, in partnership with Schneider National. As the first to contract transport on Schneider’s eCascadia fleet, our collaboration serves as a blueprint for how we can work alongside our transportation partners to help build a sustainable food system and reach our climate ambitions.

Strategic partnerships

We believe it is important to engage in and support multi-stakeholder alternative energy initiatives. We are an original signatory of the Sustainable Fuel Buyers’ Principles. These Principles encourage accelerating the transition to sustainable, low-carbon fuel and related technologies.

In the U.S., PepsiCo is a certified member of the U.S. Environmental Protection Agency’s SmartWay initiative, formed to improve fuel efficiency and the environmental performance of goods-movement supply chains.

What's next?

In the coming year, we expect to continue our transition to a cleaner, advanced, more efficient fleet increasingly powered by renewable sources. We plan to continue our investments and initiatives that focus on:

• Safety: Leveraging advanced technologies that improve the safety performance of our fleet operations;
• Connectivity: Utilizing data and technologies that improve efficiency; and
• Electrification: Increasingly deploying electric vehicles to reduce emissions.