IDB news, Feb 22, 2011
Inaugural agricultural project will benefit 850 farmers by reviving Mexican sunflower production
MEXICO CITY – PepsiCo, Inc. (NYSE: PEP), one of the world's largest food and beverage companies, and the Inter-American Development Bank (IDB), the largest multilateral provider of development financing for Latin America and the Caribbean, today announced a landmark partnership to spur social and economic growth in 26 countries across Latin America and the Caribbean.
The partnership’s inaugural project was launched in Mexico with an agriculture initiative that seeks to significantly expand commercial sunflower production. The project is to create a sustainable market for sunflowers – a once-thriving commercial crop which has diminished in recent years – while providing loans and a source of income for some 850 Mexican farmers and their families. For PepsiCo, the sunflowers will provide a source of heart-healthy high-oleic sunflower oil (HOSO) for cooking potato chips, biscuits, nuts and other snacks PepsiCo produces in Mexico under the Sabritas and Gamesa-Quaker brands.
The five-year partnership between PepsiCo and the IDB will mark the first time a private-sector organization has participated in the IDB's innovative regional trust funds for development activities. The agreement was signed at a ceremony in Mexico City attended by Mexican President Felipe Calderón, IDB Group President Luis Alberto Moreno and PepsiCo Chairman and CEO Indra Nooyi.
“PepsiCo has a long history of doing business throughout Latin America and the Caribbean, and we’re proud to demonstrate our commitment to this vitally important region through our first-of-its-kind partnership with the IDB,” said PepsiCo Chairman and CEO Indra Nooyi. “Our initiative to develop the Mexican sunflower market is a powerful example of how we can bring together the resources of public and private sectors to work together to deliver real value for local communities, for our consumers and for our business. We look forward to collaborating with the IDB on a wide range of sustainable development projects across the region.”
“We joined forces with PepsiCo because of its strong presence in Latin America and the Caribbean and because of our shared view that investing in strategic social development initiatives will yield tangible economic benefits for a wide range of communities,” said Luis Alberto Moreno, President of the IDB. “Together, IDB and PepsiCo can have a greater impact in addressing the critical needs of the region than we can separately, and I’m excited to accelerate our work through this landmark joint effort.”
As part of the sunflower production program, PepsiCo has committed to purchase 100 percent of the crop, for an estimated $52 million over seven years. Additionally, PepsiCo will invest $2.6 million to support management of the Mexican sunflower crop and will provide technical training to the small farmers. Financial partner Agrofinanzas, an institution specializing in supply chain finance, will make available $40.4 million for microloans to provide the farmers working capital. The IDB, through its Opportunities for the Majority Initiative, will provide Agrofinanzas a partial credit guarantee for up to $5 million.
In addition to the Mexican sunflower program, the partnership will expand on successful projects across the region, such as the Waste Pickers program launched two years ago in Peru and Colombia. Waste Pickers promotes recycling by creating a sustainable market for recycled materials and providing the training local recyclers need to generate a sustainable income stream. Waste Pickers will roll out in Argentina, Bolivia, Ecuador and the Dominican Republic as part of the new partnership.
Through the broader regional partnership, the PepsiCo Foundation and the IDB will collaborate to address a variety of critical issues in Latin America and the Caribbean, including water and sanitation, recycling, youth development, disaster relief and recovery, sustainable agriculture, nutrition and food security, and sharing knowledge and best practices about sustainability. These focus areas are consistent with previously-stated PepsiCo sustainability goals – including commitments to provide access to safe water to three million people in developing countries by the end of 2015, to provide technical support and training to local farmers, and to help address global nutrition challenges. Through this partnership, PepsiCo will leverage the IDB's technical andfinancial strengths to maximize program impact and achieve scale, while the IDB will leverage PepsiCo Foundation resources on behalf of its development agenda for Latin America and the Caribbean.
Additional programmatic elements of the public-private partnership, as well as financial terms of the agreement, will be released in the coming months.
PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generate more than $1 billion in annual retail sales. Our main businesses – Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade – also make hundreds of other nourishing, tasty foods and drinks that bring joy to our consumers in more than 200 countries. With annualized revenues of nearly $60 billion, PepsiCo's people are united by our unique commitment to sustainable growth, called Performance with Purpose. By dedicating ourselves to offering a broad array of choices for healthy, convenient and fun nourishment, reducing our environmental impact, and fostering a diverse and inclusive workplace culture, PepsiCo balances strong financial returns with giving back to our communities worldwide.
About the Inter-American Development Bank (IDB)
The IDB is the main source of multilateral financing and expertise for economic, social and environmental sustainable development in Latin America and the Caribbean. The IDB priorities are reducing poverty and inequality; ensuring sustainable development; addressing sustainable energy and climate change, addressing the special needs of the poorest countries, promoting regional integration, and fostering development through the private sector. The IDB offers exceptional opportunities for partnership in areas of high social impact, leveraging its unique financial strength as the largest source of development financing for Latin America and the Caribbean.
The IDB Opportunities for the Majority Initiative promotes and finances market-based, sustainable business models that engage private sector companies, local governments and communities in the development and delivery of quality products and services for the majority of the population of Latin America and the Caribbean. Its purpose is to improve the quality of life of low-income communities