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Diversity

How PepsiCo is reinvesting in diversity and inclusion

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During the 1989 Grammy awards, PepsiCo became the first company to air a television commercial entirely in Spanish, without subtitles or dubbing. Years earlier, in the 1940s and 1950s, the company broke barriers by creating an all-Black sales force and electing a woman — actress Joan Crawford — to the board of directors. Despite a strong history of boosting diversity and inclusion, the company still has work to do, according to Merary Simeon, the North America vice president of diversity and engagement at PepsiCo. (The company apologized after a notable misstep with a 2017 commercial.)

“We got to be proactive. Now, PepsiCo has been at it since the 1940s, so, we're kind of good at it,” Simeon said at the MIT Sloan Retail Conference last December. “However, we still have a long way to go. Even the best companies out there still continue to work on this journey.”

For Pepsi, that meant taking stock of where the company stands, setting new goals, and establishing clear steps to achieve them. In June of 2020, the company announced that it would invest $400 million over five years to support Black businesses and communities and increase Black representation at Pepsi. The company was also still working on other goals, including aiming to spend $272 million with Hispanic suppliers by 2020.

The plans are available on the company’s website, part of Pepsi’s commitment to transparency, Simeon said. The company looks at diversity and engagement in three main areas: employees, businesses, and communities.

Simeon offered advice for other companies seeking to update their equity goals.

Set goals — and make a plan to achieve them

Like many companies, Pepsi took a closer look at its diversity and inclusion programs in 2020. Even before that, Simeon said, the organization was working toward benchmarks, including a commitment for women to make up half of the company’s staff by 2025 (the number is now at 41%). In 2016, the company pledged to reach pay equality between men and women, with a comprehensive annual review. By the end of 2018 the difference in salaries for men and women, after controlling for legitimate drivers of pay, was less than 1%, Simeon said.

In June 2020, PepsiCo pledged to invest $400 million over five years to support Black businesses and communities and increase Black representation at the company.

After setting new goals in 2020 to improve diversity among employees, company representatives began to talk with staff, beginning with a cohort of Black employees, to ask what the organization could be doing better, Simeon said. Pepsi then pledged to meet several new goals, including increasing the number of Black managers by 30% and adding at least 100 Black associates to its executive ranks.

The company aimed to do this, in part, by working more closely with historically Black colleges and universities. Simeon said the company is connecting with the schools through executive sponsorship and reaching out to alumni, among other things. The company also has dedicated resources, such as a team dedicated to college recruiting, with campus visits to talk to students.  

To make sure pledges are being met, a task force of Black employees, mostly executives, meets once a month and reports how the company is doing on its commitments.

“This is powerful, one, because they will call us out if we're doing something wrong,” Simeon said. “And two, because we are being transparent on what we're doing and how we're getting there.”

Make sure company leaders walk the walk

Pepsi’s diversity efforts start with buy-in from leaders, Simeon said.

“You want to talk about best practice? It has to start from the top,” Simeon said. This mentality was already in place — when new Pepsi CEO Ramon Laguarta was appointed in October 2018, he sat down with different employee groups — and continued during 2020.

But that doesn’t mean the effort stops with leadership. “If you engage your employees, but the top is not working with you, it's going to fail,” Simeon said. “If the top is engaged, but the middle manager and the frontline doesn't believe it, they're not going to move as fast as you want to.”

Expand focus to the wider community

Pepsi’s efforts extended to business decisions and engagement that affect the greater community, Simeon said.

“We need to make change not just internally but externally,” Simeon said. “We need to really leverage our size and scope to make a difference.”

This meant meeting with community leaders and asking what they need, empowering the company’s 300,000 employees to get involved in their communities, and supporting local businesses and suppliers.

“Engage your employees. You already have the expertise in-house,” she said. “Nobody knows better than they do what it means to live in their communities.”

Pepsi also supports local businesses and suppliers, and makes sure businesses it works with are doing the same. “We've worked really closely with small businesses, and we ask them, ‘How are you supporting diversity? What does your team look like? How are you investing in your local communities?’”  

Provide support

Simeon said the company has also taken steps to make sure underrepresented employees don’t feel burdened having to educate their co-workers, especially when they’re already stressed or overly taxed. Mental health services are available, she said, and the company values allyship, as well.

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In the past, the company has hosted “leading with inclusion” courses — understanding life experiences for people who are LGBTQ+, for example. In 2020 the company hosted a course talking about the lives of Black people in the United States in the last 100 years. “We're educating so that the burden doesn't fall all on the communities,” Simeon said. “The hardest thing that I’ve seen is you're living through everything that's going on … you have family, brothers, sisters that could be impacted. Now you have to educate your nondiverse friends or organizations while doing your job.”

Ultimately, going through these efforts has brought people at the company closer to together, Simeon said. “We are no longer saying, ‘We're so different here.’ We're saying, ‘Here I am. What can I do?’”

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