Newsletter

Reformulation and innovation

We're committed to reformulating our existing products - reducing the amount of salt, sugar and fat found in our standard ranges - and to developing new products that deliver positive nutrition.

Innovation and change

In a fast-moving consumer environment, our research and development capability is crucial to provide the new healthier products that we need to succeed in the market. Focusing our research and development on shifting to healthier products will enable us successfully to address changing consumer needs and public health challenges.

First, we will renovate our existing core brand portfolio, invest in healthier oils, and reduce salt levels and sugar levels.

Second, we will deliver nutritionally-enhanced products focusing on the introduction of more fruits, vegetables, wholegrain, fibre and relevant micronutrients.

By leveraging public health and nutrition science, knowledge and understanding, as well as consumer, stakeholder and technical insights, we can develop foods and beverages that can play a positive role in impacting on public health.

Reducing saturates, salt and sugar

Through setting clear targets, and investing in R&D and technical innovation, we have significantly reduced salt levels in Walkers products. Since 2005 we have reduced salt levels by between 25 and 55% across the Walkers range. We removed 2,400 tonnes of salt from the British diet between 2005 and the end of 2008. But we know there is more to do. By the end of 2009 we will reduce salt levels by another 10% in Walkers Crisps. From 2009 we will also remove artificial flavour enhancers such as monosodium glutamate, and flavour will be enhanced, where appropriate, with herbs, spices and other ingredients.

(Figure 10) Reformulation - Saturates

Saturated fat GDA - Walkers Crisps (34.5g standard bag)

We have also significantly reduced the level of saturates in Walkers crisps by 70-80%, removing over 40,000 tonnes of saturates from the UK diet from 2005-2008. In total, we have invested over £20 million in R&D to reduce salt and saturates levels across our crisps and snacks ranges.

(Figure 11) % research spend on developing products defined as healthier**

PepsiCo UK and Ireland Health Report 2010, % research spend on developing products defined as healthier**

Savoury snacks reformulation on saturates PepsiCo UK’s breakthroughs in reducing saturates and salt are being adopted and rolled out in many other PepsiCo markets around the world, including countries in Europe, Asia and the Americas.

Innovation and new product development

Walkers Baked was launched in September 2006 as a lower-fat alternative for consumers who like crisps. PepsiCo has invested over £15 million to develop the technology to allow crisps to be baked rather than fried, reducing levels of total and saturated fat. Walkers Baked have 70% less total fat than regular Walkers crisps, and 50% less saturated fat.

Dilemma - How do we reduce salt further without reducing taste and quality?

In 2007 PepsiCo UK launched SunBites, a new savoury snack designed to provide 16g of wholegrain in each portion. SunBites were developed to include a significant level of wholegrain in recognition of the fact that average wholegrain intakes in the UK are low and decreasing.* SunBites are 30% lower in fat than standard crisps, providing a truly healthier snacking option.

* Thane, C.W. et al. (2007) 'Comparative whole-grain intake of British adults in 1986-7 and 2000-1', British Journal of Nutrition.

Key fact (2008): • Total servings of wholegrain across PepsiCo UK: 1.669billion† • Totalportionsthatdelivera significant amount of fibre across PepsiCo UK: 860 million

In February 2008 we launched Tropicana Smoothies, to complement our core not-from-concentrate juice range. Tropicana Smoothies deliver the equivalent of two portions of fruit per serving, and provide an extra opportunity for consumers to increase the variety of fruits they consume.

Key fact (2008): • Totalservingsoffruit and vegetables across PepsiCo UK: 1.683billion

(Figure 12) PepsiCo UK investment in healthier oil (SunSeedTM) 2004-2008

Improving our capability in research and development

Delivering our reformulation and new product development presents major resource and technical challenges. Since 2006 PepsiCo has increased global R&D spend by 40%. Our future agenda will require a continued heavy investment in new food and beverage science and technology.

In line with the principles of our global Performance with Purpose values, we will develop and leverage the depth and breadth of our R&D capabilities to help address the issues posed by both over and under-nutrition.

Dilemma - How do we encourage greater government support for R&D funding on food innovations to improve public health?

Led by our Chief Scientific Officer, the Senior Vice President of Global Health Policy and the Vice President of Nutrition we are building an internal PepsiCo-wide network of clinical scientists, nutritionists, food scientists, chemists, engineers, public-health and behavioural-science specialists to focus on evidence-based initiatives. PepsiCo's R&D function in the UK comprises talented and experienced graduate and post-graduate scientists in these disciplines. Collectively, we are developing global policies and guidelines, based on science and designed to incorporate local relevance, to support further product development and innovation to meet better the food and nutritional needs of our consumers.

Key fact (2008): • Increase in PepsiCo R&D spending since 2006: 40% • R&D headcount in the UK: 60 full- time employees

Stakeholder feedback “PepsiCo UK is changing. It’s great that it wants to focus its growth on healthy products and help people make better choices about what they eat and drink. I’d like to see more of the food industry, both in the UK and globally, setting these kind of ambitious targets.” Peter Madden, Chief Executive, Forum for the Future

"PepsiCo UK is changing. It's great that it wants to focus its growth on healthy products and help people make better choices about what they eat and drink. I'd like to see more of the food industry, both in the UK and globally, setting these kind of ambitious targets."

Peter Madden
Chief Executive, Forum for the Future

Richard Evans health vision for PepsiCo UK