Frito Lay Presentation

solutions

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From Shop Floor to Top Floor:

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Best Business Practices in Energy Efficiency

by William R. Prindle ICF I n t e rnat I onal

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CASE STUDY

Supply Chain

Headquarters: CEO: Revenues (2008): Energy Costs (2007): Energy Savings Target: Purchase, NY Indra K. Nooyi $43.25 billion $1.1 billion Company-wide targets are for 2015 using a 2006 baseline:

PepsiCo

• Electricity—20 percent • Fuel—25 percent • Water—20 percent • Reducing carbon dioxide (CO2) emissions per unit of production 4.5 percent over the two-year

period covering 2006–2008, avoiding 170,000 metric tons of CO2 equivalents, and saving about $100 million in avoided costs. Since inception of its energy efficiency program in 1999, Frito-Lay manufacturing has cut energy intensity by 36 percent;

Key Efficiency Strategy Successes:

• Using energy efficiency goals to drive innovation in reducing other resource consumption,

especially water, and in improving productivity across many facets of company and supplier operations;

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• Engaging major suppliers in performance measurement system, goal setting, resource

conservation and other sustainability initiatives;

• Utilizing lifecycle carbon footprint analyses of products to drive both energy efficiency goals

and supply chain engagement.

PepsiCo Overview

Sustainability leaders at PepsiCo have known conceptually for some time that the company’s supply chain energy and carbon footprint was large. But their initial energy and carbon efforts were almost all internally focused— partly because internal operations are the easiest to measure and to affect, and partly because they felt it was necessary first to demonstrate the company’s commitment to environmental sustainability before asking suppliers for similar efforts. As is true for most companies, energy is not a big cost factor for PepsiCo, accounting for less than three percent of revenues. What has made energy a priority driving innovation across the...