PepsiCo has committed to spend more than $400 million annually on supplier contracts with Black-owned and Hispanic-owned businesses.
The pledge is in celebration of the 40th anniversary of its Supplier Diversity Program, according to a press release. The program aims to increase contracts with diverse suppliers, including those who are women, Black, Hispanic, Asian, LGBTQ+, Native American, individuals with disabilities, and U.S. veterans.
The food and beverage company is looking to partner with diverse suppliers across multiple product categories and all areas of procurement, such as farmers, construction services and transport providers, PepsiCo Chief Procurement Officer Melani Wilson Smith said in an email.
“Working with diverse-owned businesses is one of the more important ways we can help build a more inclusive supply chain,” she said.
PepsiCo spent more than $1 billion last year on contracts with certified diverse suppliers, Smith said.
Across the market, more companies are expanding their supplier diversity programs — in 2021, 53% of North American companies in a Jaggear-Tealbook survey called such initiatives a “high priority,” and that the biggest benefit is “positive reputational impacts.” Spending on diverse suppliers increased an average of 54% between 2017 and 2020, according to research from Bain & Company and Coupa.
In the food and beverage space in particular, companies including Papa John’s and Starbucks are building and expanding their diverse supplier programs. In January, Starbucks announced its plans to nearly double its spending on diverse suppliers to $1.5 billion by 2030.