How PepsiCo is Stepping Up its Regenerative Supply Chain
PepsiCo is expanding its regenerative agriculture programme through a new partnership with fertiliser company Yara International, focusing on scaling low-carbon farming across Latin America and Europe.
The move supports PepsiCo’s wider plan to cut emissions and strengthen food security in the face of climate change and rising global demand.
As a major global food and drink company, PepsiCo sources more than 35 crops from 60 countries.
In 2023, farming made up 37% of its total carbon emissions, so making changes at the agricultural level is central to its strategy for climate and business resilience.
Building a lower-carbon farm network in Latin America
The first step in this collaboration is focused on Latin America. Farmers in Mexico, Colombia, Chile and Argentina are now gaining access to Yara’s low-carbon fertilisers. Around 700 hectares of potato fields are included in the initial phase, with more crops such as corn, wheat, oats, coconut and bananas lined up for future rounds.
The fertilisers used are developed with clean energy or produced using ammonia from carbon capture processes. According to Yara, this can help farmers cut their carbon footprints by anywhere from 40% to 60%, depending on the type used.
That said, this isn’t just about switching products — the programme also delivers practical training on how to use fertiliser more efficiently and protect soil health. That means yield and sustainability go hand in hand.
What makes this especially relevant is that farmers are often left to manage climate-related risk with limited resources. By linking supply chain investment directly to farm-level support, PepsiCo aims to remove long-standing obstacles to adopting regenerative practices. This includes both financial and technical barriers.
PepsiCo Latin America Chief Executive Paula Santilli calls the partnership “a significant advancement in our pep+ (PepsiCo Positive) agenda,” referring to the company’s overarching sustainability plan.
She adds: “We believe that Positive Agriculture — our ambition to support regenerative farming practices, sustainable sourcing and improved livelihoods — will be pivotal in meeting the increasing demand for food as the global population grows, while also addressing the need to protect and enhance our natural resources and promote human well-being.”
Scaling up in Europe and the UK
While Latin America marks the starting point, Europe is next in line.
PepsiCo and Yara aim to transition about 1,000 farms across 128,000 hectares, beginning with potatoes. These are a key ingredient in PepsiCo’s popular Lay’s crisps, and the companies are working towards applying regenerative practices to other main crops as well.
To support the switch, Yara is set to provide up to 165,000 tonnes of low-carbon fertiliser annually - a quarter of PepsiCo’s total fertiliser use in Europe by 2030. These fertilisers will come from Yara’s new low-emissions plants in Norway and the Netherlands, tying product development directly to emission reduction goals.
Advanced tools are also being rolled out to support decision-making on farms. PepsiCo’s CropTrak and ML Analytics will sit alongside Yara’s AtFarm and MegaLab systems, enabling precision in soil diagnostics and nutrient management. This not only improves output but also ensures that environmental benefits are delivered in full.
Connecting climate risk with food system resilience
The backdrop to this partnership is a wider global challenge. Agriculture contributes around 23% of greenhouse gas emissions worldwide.
At the same time, food production needs to rise by 60% by 2050 to meet the demands of a population expected to reach 9.7 billion. With extreme weather already affecting harvests, farming systems must become more resilient fast.
Through this partnership, PepsiCo positions itself as an early investor in solutions that support long-term supply chain stability.
“Low-carbon product research and development requires significant investment and partnership," explains Chief Sustainability Officer Jim Andrew.
"By playing the role of a first mover, PepsiCo helps send demand signals to the market to drive the continual innovation and investment we need to support farmers well into the future.”
In 2023, other companies in the food sector including Mars, McCain Foods, McDonald’s and Waitrose joined PepsiCo to form a shared framework for making regenerative farming scalable and financially workable.
This collaboration with Yara, however, brings direct supply chain investment, farmer training and low-emission inputs together in a clear structure. With this model, PepsiCo is showing how food companies can strengthen their sourcing systems while addressing climate risk head-on.
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