Sunday, April 3, 2011

The Pepsi Generation - - Doing More With Less and Making Money

PepsiCo has pushed a strategy called "Performance with Purpose" - -the idea is to link green efforts in all businesses to the bottom line.  Consider the examples that were discussed in the April 4, 2011 issue of Bloomberg Businessweek:

In Leicester, England, employees at Walkers - - the Lay's chips of Europe --  have worked with academic and outside engineers during the past year to build a contraption that will attach to rooftop exhaust stacks.  Cooling tubes being tested inside the stacks or other gear will condense the steam and return 80% or more of it as water to the plant.  A second device in development would strip cooking oil, previously trapped in the steam during frying, from the condensed water for reuse or sale.

PepsiCo hopes to create technologies that can be replicated in its other facilities, multiplying the savings.  The goal is to pull one U.K. chip plant off the public water grid by 2013 and four more by 2018.  The environmental impact would be large: The Leicester plant alone uses 185 million gallons of water a year, enough to fill all the tanks at the London Sea Aquarium 350 times over.

The beverage giant's Frito-Lay unit, which operates the world's seventh-largest private delivery fleet, is putting 176 all-electric box trucks on the road in places such as California, Texas, and the Pacific Northwest.  The tucks are expected to cut PepsiCo's diesel consumption by 500,000 gallons a year while curbing greenhouse emissions by 75% over combustion engines.  At a conservative $3 a gallon, PepsiCo would save $1.5 million a year on fuel, says Mike O'Connell, the snack division's fleet director.  "It's an insurance policy against volatility."

The trucks will also cut annual maintenance costs by as much as $700,000.  An additional 150 trucks a year could be converted to electric as PepsiCo, which wants to cut its corporate fuel costs in half by 2020, works to replace half its 4,000 medium-duty vehicles.  Thanks to government grants, the electric trucks are only slightly more expensive than their diesel counterparts.  O'Connell says.  Since diesel trucks are rising in price while the cost of electric technology is falling, he says electric vehicles may reach parity in a year or two, even without government subsidies.

PepsiCo's calculations also show the electric trucks will cost less to own than its diesel vehicles over the same 10-year life span.  "We are able to do the right thing for the organization from a financial return and significantly reduce our greenhouse gases," he says.  "We find the sweet spot in both."

PepsiCo's Chief Executive Officer, Indra K. Nooyl, discusses Performance with Purpose - -

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