PepsiCo’s Amy Chen: Doing Good for the Bottom Line — and the World

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As a newly minted MBA from Stanford, Amy Chen’s first job was as a marketer for Stacy’s–PepsiCo’s pita chip brand — based in “a satellite office of 30 people in Randolph, Massachusetts.” She was nowhere near company headquarters, “the nucleus of where all the decisions were made.” Nevertheless, she started thinking about how she could use her position to help make a difference in the world. “What if PepsiCo could be on the cutting edge of figuring out … new business models that were revenue-generating but had social impact?”

Chen came up with a plan for a social business incubator and presented it to her boss. Uncertain what action to recommend, her boss referred her to an HR representative who called her idea “on point” since PepsiCo had a new focus on “performance with purpose” and on health and wellness. But the HR rep added, “This [idea] is kind of crazy, so I can’t really say yes.”

Finally, Chen was granted one hour with PepsiCo’s CEO, Indra Nooyi, to make her case. “I spent the next couple of weeks [leading up to the meeting with Nooyi] putting together the most airtight business plan you can imagine,” said Chen, who sent the plan to Nooyi in advance. She asked friends to help her rehearse the meeting and prepare a response to every possible question and objection. At the meeting, Chen was “ready for battle” and pitched her plan “in like, a minute.” To her complete surprise, the CEO’s immediate response was, “I’ve read your document. I think it’s great. We should do it. So, what do you need?”

Chen noted that of course, she hadn’t thought about that part, and had to tell Nooyi she’d have to get back to her. “As a side note, always be prepared to ask for something if you get the sale.”

“How much more powerful is … hearing that one story than reading 50 reports about what it’s like to be in an inner-city community and to struggle with health and wellness?”

In addition to supporting her idea, Nooyi put Chen in touch with a PepsiCo group at Frito-Lay in Dallas that was also interested in social initiatives. That, Chen told the audience at the recent Wharton Social Innovators Conference, was how Food for Good was born, in 2009. According to the initiative’s website, Food for Good’s mission is “to make healthy food physically and financially accessible for low-income families through sustainable, business-driven solutions.”

Seeing the Faces of Poverty

To find out firsthand about low-income individuals’ food and health challenges, the newly formed team spent six months in Dallas visiting poor communities. The meetings were facilitated by non-profit organizations, pastors, neighborhood associations and other partners. Chen said that although she had extensively researched the statistics on poverty in the U.S. (“I could rattle off any number you wanted”), she was deeply affected by the face-to-face encounters.

She vividly recalled a mother of three young children, diagnosed with diabetes and hypertension, who told how stunned and frightened she had been by her doctor’s statement that if she didn’t dramatically change her habits she “might not be around to see her kids grow up.” The woman was told that she needed to eat more fruits and vegetables, cook her own food at home, and stop eating fast food. The doctor also advised that she needed to get exercise and join a gym. “That’s when I lost it in the doctor’s office,” the woman told Chen. She knew she couldn’t make these changes that the doctor had called “simple,” said Chen. The woman worked two jobs and had no car, there was no nearby grocery store, no time to cook, no access to a gym, and she couldn’t even take walks around the neighborhood since the streets weren’t safe.

“How much more powerful is … hearing that one story than reading 50 reports about what it’s like to be in an inner-city community and to struggle with health and wellness?” Chen asked. “I could tell you a million more stories like that that I hold so close to my heart and that give me passion every day Twitter .”

The Food for Good Initiative

PepsiCo’s Food for Good continues to partner with communities, government agencies and non-profit organizations to bring meals to children at risk of hunger, and to improve access to fruits and vegetables for those in food desert neighborhoods, according to the initiative’s information. Operating in eight cities nationwide, it has provided almost four million meals to date.

Chen discussed specific tactics taken by the initiative, such as the conversion of “a dilapidated football field in Texas” into an urban farm. There is also a mobile meals program that operates during the summer, when many children go hungry for lack of school breakfasts and lunches. Chen also described a farm stand program “where we equip community members with tools to become their own change agents.” She explained that these individuals are given tools and access to a distribution and supply chain network so they can sell fruits and vegetables, and help educate the community about healthy eating.

“The task of selling oatmeal to someone is a lot harder than getting them to eat a bag of Doritos.”

Big Corporations and Doing Good

Chen was asked how she “fought the stigma” of trying to have a social impact while working for a powerful food and beverage corporation like PepsiCo. What about the viewpoint that Food for Good’s efforts weren’t truly impactful or that the company was not doing it honestly? Chen answered that the public’s thinking about this issue has “really evolved.” She described how a few years back, if a company claimed to be “trying to do good and do well,” it was considered “greenwashing” and people assumed the firm was “just going to make a lot of money on the backs of whomever.” She drew a parallel with environmentalism, noting that a few decades ago when environmentally minded employees within PepsiCo spoke up, colleagues were generally dismissive. “They said, ‘OK great, do your little project and figure out how to create a better world, you tree-hugger you,’” Chen recalled.

But PepsiCo has had many positive experiences around environmental concerns, said Chen, which has helped lay the groundwork for an understanding of “legitimate areas that no one would disagree about, where things that are good for the bottom line are also good for the world.” One such experience involved the company’s adoption of hybrid trucks, which save the corporation money while also decreasing its carbon footprint. And decreasing the footprint, added Chen, also helps PepsiCo build stronger relationships with “places that have agriculture and other strong needs for water,” water sources being a major concern for a beverage maker.

“People have started to understand that ultimately, the profit motive and the revenue generation model is the only way to be truly sustainable within a large company,” stated Chen. “The charitable model can take you so far, and almost every major company now has a great foundation, and does great work with funding NGOs … but it’s hard to get the scale.” She also noted that in the specific case of Food for Good, the initiative operates on a break-even basis so it does not actually generate profits.

Another audience member asked, “How do you tell someone to eat more fruits and vegetables and also say ‘come buy our soda’? How do you ‘sell’ both under the same brand name?” Chen said that as a food and beverage company, PepsiCo takes issues such as obesity “really seriously…. I think we’ve had the benefit of foresight, and saw the writing on the wall 20 or 30 years ago,” she said, describing how the company had moved from being solely a soda-and-chips company to acquiring healthier brands like Quaker Oats and Tropicana. “It’s been a model of diversifying our portfolio enough that we actually would love for everybody to eat healthier, because those items deliver great margins and great profits at the same time.”

“There’s a day when I hope we … don’t have to talk about social entrepreneurship and how [it is] different from normal business, because all business will be good business.”

But, she noted, the road has not been easy. “The task of selling oatmeal to someone is a lot harder than getting them to eat a bag of Doritos.” She added that PepsiCo is exploring, both from an innovation and a marketing perspective, “how you take some of those insights about how to make food delicious and irresistible, and apply that to the healthy food space.”

‘Thinking Differently About the Bottom Line’

Chen handed over the reins of Food for Good in 2012 and is currently PepsiCo’s general manager and senior director of sales for the CVS customer team. She said that she has been surprised by all the different ways she has found to “push health and wellness and nutrition from a completely different vantage point and a completely different perspective” throughout her career at the company.

Chen said she hopes that Food for Good will eventually become part of a whole “movement” of “people and companies thinking differently about the bottom line and the impact of business.” She stated, “As you start getting a lot of these blue-chip companies experimenting … I think there will be a tipping point. There’s a day when I hope we … don’t have to talk about social entrepreneurship and how [it is] different from normal business, because all business will be good business.”

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