Pepsi’s chickpea challenge in east Africa
Ethical Corporation spoke to PepsiCo’s Derek Yach about how chickpeas can help ease malnutrition and boost small farm incomes
Q: When it comes to sustainable agriculture, why do chickpeas matter to PepsiCo
A: Enterprise EthioPEA is about performance with purpose. While chickpeas have the potential to address food and economic insecurity in Ethiopia, they are also a critical commodity for PepsiCo’s business. PepsiCo’s has a thriving dips and spreads business, which includes chickpea-dependent hummus products. These are an important part of our global nutrition group, which we aim to grow from $13bn to $30bn in sales by 2020. Additionally, Enterprise EthioPEA will provide us new insights into a fast growing market.
Even without more modern farming techniques, Ethiopia produces 46% of Africa’s chickpeas, and 2% of the world’s, and so we see tremendous opportunity for growth that benefits both PepsiCo and the farmers and consumers of Ethiopia.
At the same time we aim to benefit the long-term health and nutrition of the people of Ethiopia, as well as potentially benefiting the economic livelihoods of millions of smallholder Ethiopian farmers and their families
Q: What’s the problem PepsiCo wants to contribute to solving here?
A: There are approximately 13 million people suffering from famine and malnutrition in the Horn of Africa. Enterprise EthioPEA is an important step to addressing the long-term nutritional needs of the region.
First, Enterprise EthioPEA will help create a new, more sustainable type of food aid. Chickpeas have an average of 22% protein and can serve as a more sustainable and affordable alternative to meat. They are a great source of unsaturated fats, calcium and iron, while yielding a higher gross margin for farmers than cereals. Given their health benefits, chickpeas are an important, innovative ingredient for new ready-to-use supplementary foods (RUSF) – often called food aid.
The cost structure of current food aid products – particularly plumpy’nut [a peanut-based paste for relief of acute malnutrition] – limits how they are used in humanitarian situations. Produced internationally and purchased by aid organisations for distribution to hungry communities, food aid often perpetuates reliance on foreign assistance rather than building internal and sustainable food security.
Therefore in the short term, Enterprise EthioPEA will allow World Food Programme and other humanitarian actors to feed many more children utilising the same budget. Over the long term, it will increase the ability of communities in the developing world to generate sustainable hunger solutions locally.
Second, chickpeas can support the livelihoods of a great many farmers. They are mainly grown by subsistence farmers at the end of the rainy season (September – January) using residual soil moisture. Their production allows farmers to practice double cropping, increasing productivity from scarce land resources, and serving as an additional income source while fixing nitrogen and reducing the need for commercial fertilisers.
Enterprise EthioPEA will not only help to alleviate famine and malnutrition, but it will also stimulate economic development in Ethiopia, primarily through the provision of additional work and guaranteed income for local farmers. In addition, the project will eventually contribute to healthier food options for consumers worldwide.
Q: How will farmers benefit, and will it cost them anything?
A: There will be no cost to Ethiopian farmers that participate in Enterprise EthioPEA. Increasing chickpea yields requires technical and institutional interventions. Working with the Ethiopian ministry of agriculture and our partners, we will introduce farmers to more modern approaches including around optimising soil quality, selecting seed varietals, considering seasonality and improving growing strategies. We will also explore the implementation of modern technology in irrigation, new research to improve seed quality and varieties and transfer of best crop practices to help increase yields.
Q: Who are the partners in Enterprise EthioPEA and who will be doing what, exactly?
A: PepsiCo, USAID and WFP are the lead partners in Enterprise EthioPEA, with critical support from the Ethiopian government’s Agricultural Transformation Agency (ATA). We will also partner with a local manufacturer.
USAID is the lead agency for the US president’s global hunger and food security initiative, Feed the Future. As part of this, USAID will support smallholder chickpea growers in improving production through its comprehensive value chain development program.
PepsiCo and the PepsiCo Foundation are piloting production in two areas with the Ethiopian Institute for Agriculture Research to determine optimal growing conditions. PepsiCo is also providing $3.5m in funding to support WFP and a local processor to produce a chickpea-based food aid product.
WFP serves as implementing partner in this project. In addition to providing programme guidance in the product development process and oversight of the pilot, WFP is also leading the government approval process and conducting of acceptability and efficacy trials.
Q: What are the specific targets and what is the business case for PepsiCo to be involved?
A: With Enterprise EthioPEA, PepsiCo hopes to use chickpeas to address famine and malnourishment in the Horn of Africa, stimulate economic development in Ethiopia, and establish PepsiCo’s market leadership in a truly emerging market. At the same time, we hope to secure an important raw commodity for our growing dips and spreads business. Chickpeas are central to the company’s efforts to grow revenues from healthy foods and beverages to $30bn by 2020.
Other specific targets for this initiative include the following:
- Enterprise EthioPEA hopes to more than double farmer yields from 1.2 tonnes per hectare to 2.9 tonnes per hectare, targeting 10,000 farmers in our pilot phase.
- We hope to identify an Ethiopian food manufacturer to sustainably manufacture a new RUSF to deliver locally-grown and produced food aid that contains the same or better nutritional value as established, more costly food aid products.
- We will prove the business case for investment in low-cost food products intended for both commercial and humanitarian use, reaching 40,000 Ethiopian children, aged 6-23 months during the initial phase.
- The programme will contribute to the agriculture-led economic growth of Ethiopia by increasing the value of a key crop to yield more markets for smallholder farmers.
Derek Yach is senior vice-president of global health and agriculture policy at PepsiCo.