From Scarcity to Solutions 2025

PepsiCo’s water-use efficiency models in ChinaCase study 12 PepsiCo is a global leader in convenient food and beverages, with 500+ brands of products sold in 200+ countries and territories worldwide. In response to water scarcity in high-risk areas, such as Inner Mongolia and northern potato-growing regions of China, PepsiCo has developed precision agriculture programmes that improve water efficiency while supporting farmer livelihoods. These efforts align with local water conservation mandates and reflect PepsiCo’s global commitment to sustainable sourcing. Business model innovations –Farmer support and technical partnerships: PepsiCo collaborates closely with local farmers, offering high-quality potato varieties, agronomic expertise and training in water-saving techniques such as high-efficiency irrigation and soil moisture monitoring. –Stable purchase agreements: To reduce farmers’ exposure to market volatility, PepsiCo enters into pre-agreed contracts that guarantee a fixed price per tonne of produce, creating a stable income stream and encouraging sustainable farming practices. –Infrastructure enablement: PepsiCo co- finances farm modernization efforts that enhance productivity and resource efficiency, with a focus on scalable technologies adaptable to local contexts. Outcomes –Achieved a 15% improvement in water- use efficiency at high water-risk locations in China, compared to the 2015 baseline. Lessons learned –Shared-value models can drive water- efficient agriculture through collaboration and incentives. –However, high infrastructure costs and limited scalability in smallholder systems remain key barriers.Source: PepsiCo interviews and materials review. From Scarcity to Solutions: Food-Water Innovation in Asia and the Middle East 31