PepsiCo was formed 55 years ago from the merger of two completely different businesses – the Pepsi-Cola Compa-ny, a beverage manufacturer, and Frito-Lay, a manufactur-er of potato and corn snacks. Today the company’s prod-uct portfolio includes a wide range of foods and beverages with 23 megabrands that generate more than $1 billion each in annual retail sales.
PepsiCo is the largest food and beverages manufacturer in Russia. The company operates 23 plants and direct-ly employs more than 20,000 people. Over the past 15 years, we have invested more than $10 billion in Russia. We purchase about half a million tons of potato from lo-cal farmers, positioning ourselves as the largest industrial buyer of potato in Russia.
Agriculture is in the heart of what we do. Therefore, as part of our efforts to build a more sustainable food system we invest in farming practices advancement to optimize crop yields, respect human rights, improve farmer livelihoods, improve soil conditions and secure supply.
In Russia we work directly with agricultural enterprises and farms, helping them to introduce innovative solutions, sharing experience and knowledge and best practices that enable our partners to increase the quality and quantity of their crops. We are working with farmers around the world to provide training for on-field agronomy, resource-effi-cient use of fertilizers and irrigation, plant protection tech-niques, workers’ rights, and other issues. For us, working with strong local partners who have the best practices and technologies is a crucial part of a long-term strategy for market success. Our work in Russia is part of the global program for sustainable agricultural development, which allows us to contribute to the long-term transformation of the agricultural system in the local market.
We have made huge investments in local raw potato cul-tivation. Over the last 10 years alone, the capital expendi-tures for Agro Leaders program exceeded $ 50 million. There are several investment streams when we cooperate with local farmers:
- long-term supply contracts and advance payments fo future crops;
- support in the procurement of the necessary agricultural equipment and vegetable storages;
- providing partners with high-quality seed material;
- consultations of our own team of agro managers who have gained serious theoretical and practical training in Russia and abroad;
- educational seminars and master classes for our part-ners on the use of modern technologies for working on the field – drones to control fields, satellite monitoring, artificial intelligence to analyze the soil condition, calcu-late irrigation and fertilizing processes.
We strive to develop agriculture throughout Russia and un-derstand its importance for the country. We started a large investment project in Novosibirsk in September, where we will build a snack plant for 12+ billion rubles. It will also require local raw materials, so we already started to work with local potato farmers. We invited them to Kashira so they can learn the basics of our business, they visited our partnering farmers in Central and Southern Russia, and they started test seeding of potatoes. Agricultural work in Siberia will be challenging due to difficult climate condi-tions, farmers will have to do both seeding and harvesting during the very narrow windows of good weather. So that will require a very well-built logistics and coordination. But this is a great opportunity for the region development in terms of agriculture, industry and, as a result, the creation of new jobs.
We are proud that we as the largest potato buyer in the country has an opportunity to support the development of the agricultural sector, help our partner farmers to blos-som, and implement modern technologies and best prac-tices of sustainable agriculture. We are happy that with our support, many local farmers could build a profitable business, create new jobs and improve lives of their local communities.
Developed by the materials of Gaidar Forum 2021