After an unprecedented year, Keurig Dr Pepper’s 2020 Corporate Responsibility Report reveals how partnerships, innovation, transparency and investment allowed the company to achieve goals and launch industry-first new commitments.
Keurig Dr Pepper (KDP) — with its broad portfolio of more than 125 beverages and nearly 27,000 employees — is rife with opportunities to be a catalyst for good across its value chain. The company’s Drink Well. Do Good. corporate responsibility platform focuses energy and resources on areas where KDP can have the greatest impact — including environmental stewardship, supply chain, health & wellbeing, and people & communities. After an unprecedented year, KDP’s 2020 Corporate Responsibility Report reveals how partnerships, innovation, transparency and investment allowed the company to achieve goals and launch industry-first new commitments.
Building sustainable supply chains
KDP’s history with responsible supply chain engagement began in 2014 when Keurig Green Mountain committed to responsibly source 100 percent of its coffee and Keurig brewers and to engage people within its supply chain to improve their livelihoods by the end of 2020. KDP adopted those goals after the merger between Keurig Green Mountain and Dr Pepper Snapple Group in 2018 to carry on that sustainability legacy.
Forging ahead even in a year marked by a global pandemic, and labor and supply challenges, KDP achieved its goals of responsibly sourcing 100 percent of its coffee and improving the lives of one million people in its supply chain. Reaching these milestones represents a significant achievement — not only for the company, but for all businesses hoping to positively impact their entire value chain. The lesson: It can be done.
KDP’s success didn’t happen overnight. It required years of strategic stakeholder engagement and collaboration, a dedicated team focus and a clear commitment from the organization to sustainability — not to mention a lot of starts and stops along the way.
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“Reaching these longstanding milestones is a testament to KDP’s long-term commitment to sustainability,” Whitney Kakos, a senior manager of sustainability at KDP, told Sustainable Brands™. “Even with organizational and leadership changes — and the continuity challenges that can sometimes go with that — we’re proof that meaningful progress can happen if you have the entire business and leadership understanding and prioritizing sustainability. We also had the benefit of strong partnerships to drive momentum through the years.”
Now looking to the future, KDP is setting more ambitious goals to further invest in workers' and farmers' livelihoods. This includes advancing inclusion by addressing barriers to entry and prosperity in its supply chain. Additionally, the company is extending its responsible sourcing commitments into its ever-broadening supply chains.
“We're going to build on the work we've done and the lessons we’ve learned with coffee farmers over the last 20 years, and apply the successes and learnings across what is now a much bigger and more diverse company,” Kakos said.
One of KDP’s new commitments is to responsibly source 100 percent of its cocoa by the end of 2021, along with additional pledges to responsibly source 100 percent of its priority ingredients — including corn and apples. Although too early to establish a timeframe for those, KDP is strategizing what responsibly sourced corn and apples will look like. Each supply chain is unique; and unlike coffee — which has established third-party verification organizations such as Rainforest Alliance or Fairtrade certification — KDP will have to build its working definition for corn and apples and then regularly report progress over time.
The one area of interrupted progress was in the company’s goal to responsibly source its Keurig brewers. At the end of 2020, Keurig brewers were 86 percent responsibly sourced, as opposed to the goal of 100 percent. The pandemic made auditing extremely difficult due to facility shutdowns and travel restrictions, though the Company is confident it will reach its goal in 2021.
“We learned a lot about what we can't control, as well as the importance of open dialogue and consistent expectations with suppliers over time,” Kakos said. “We're going to keep a high bar and remain committed to being transparent about how we're doing and what we're achieving year-on-year.”
Creating a circular economy
KDP understands that packaging waste — particularly plastic waste — is a pressing global challenge. That’s why the company has set numerous, ambitious packaging commitments.
At the close of 2020, 90 percent of KDP's packaging was recyclable or compostable — progress on a goal of 100 percent of packaging to be recyclable or compostable by 2025. The most visible marker of that work was the 2020 achievement of KDP’s longstanding commitment to make 100 percent of K-Cup pods recyclable, as they are now made of #5 polypropylene plastic — a material that can be processed in many recycling systems and is in high demand as a recycled material.
“Our vision is a circular future in which our packaging is recycled and repurposed to remain in use and out of the environment,” said Charlie Schwarze, a director of packaging sustainability at KDP. “To accelerate this shift, we are focused on smart design — which involves the reduction of materials used and the ability to recycle or compost those materials after use.”
Equally important to closing the loop is incorporating post-consumer recycled content (PCR) into packaging; and KDP’s goal is 30 percent PCR in its total packaging portfolio by 2025, reaching 22 percent of that at the end of last year.
In 2020, the company began producing Core Hydration, 16 oz. Snapple and 500 mL Aquafiel Natural in bottles made of 100 percent recycled polyethylene terephthalate (rPET) plastic. With those transitions now complete, the company expects to eliminate approximately 47.5 million pounds of virgin plastic used annually and will also produce about 30 percent less greenhouse gas (GHG) emissions compared to using virgin plastic — the equivalent of taking 7,700 cars off the road annually.
Ensuring environmental stewardship
In addition to reusing resources for a circular economy, KDP is committed to reducing its environmental impact — evident through its efforts to support water and soil health.
By the end of 2020, KDP had replenished 79 percent of its cumulative water use in six operating areas facing high water risks. Recognizing stakeholder dependence on shared resources, the beverage giant works with key local partners, with an end-goal of replenishing 100 percent of water use in these areas by 2025. Water efficiency and conservation are just as important as replenishing at the source, so KDP is on track to improving water efficiency across its operations by 20 percent by 2025.
KDP also has a forward-looking eye on regenerative agriculture because it touches on so many foundational points in its corporate responsibility strategy: water security, healthy and productive soils, climate and livelihoods. As a new goal this year, KDP aims to support regenerative ag and conservation on 250,000 acres of land, equivalent to half of the area used to grow KDP priority inputs, by 2030. While much of this land may be outside of KDP’s supply chain, the goal is to engage as many suppliers in regenerative practices as possible.
“KDP has an incredibly diverse supply chain supporting it. Regenerative agriculture as a focus for us makes a lot of sense, because soil is universal across all of our ingredient supply chains,” Kakos said. “We’re choosing to prioritize it now because there’s a movement building with greater recognition of soil health. It's a linchpin topic that's connected to others.”
While it’s clear that regenerative practices will play a pivotal role in supply chain engagement, standardized metrics and language are lacking; so, an early focus for KDP is to work with peers and experts to set clear standards. Kakos is working directly with peers in the Sustainable Agriculture Initiative Platform to create definitions and metrics that will help businesses across all markets define and measure regenerative agriculture impacts.
Prioritizing health & wellbeing
Consumer health and wellbeing took on a whole new pertinence during 2020. That’s why KDP worked closely with external health and wellbeing advisors and collaborated with the Partnership for a Healthier America to develop a new commitment: By 2025, 60 percent of KDP’s product portfolio will provide “positive hydration,” defined as:
Contains one serving of fruit or vegetable (without added sugar); or
< 40 calories per serving and at least 10 percent Daily Value of a nutrient to encourage (protein, fiber, vitamin A, vitamin C, calcium, iron, vitamin D or potassium) or a functional attribute (e.g., hydration with water; antioxidants to help fight cellular damage; immune support with vitamins A, C, E and zinc; healthy digestive system support with dietary fiber; energy with caffeine and relaxation with L-theanine).
KDP is the first major beverage company to put forward this type of commitment. Rather than only focus on sugar reduction, KDP is looking at its entire beverage portfolio to give consumers more transparency and choice.
KDP’s health and wellbeing focus also extends to its employees and their families. During 2020's unprecedented health crisis and demands for social justice, KDP adapted quickly to provide enhanced health benefits and implemented stringent safety protocols. The company also accelerated its work in areas of career development, training, and Diversity & Inclusion — which included announcing two new workforce goals: By 2025, KDP will show a 25 percent increase in representation of women and a 25 percent increase in representation of people of color in leadership positions.
Moreover, KDP launched a formalized D&I initiative structure with executive sponsorship, strong governance processes, and clear goals and milestones to measure progress and hold themselves accountable. A big part of that was the introduction of eight executive-supported Employee Resource Groups that are building connection, fostering community and ensuring inclusion.
The trials of 2020 exposed the interconnectedness, strengths and weaknesses across all value chains. Drink Well. Do Good. emerges from 2020’s workbench as a more meaningful, measured tool demonstrating the resolve of KDP to help address the world’s most pressing issues.