Say “Pepsi” and most folks think of the nose-tickling cola that has been Coke’s archrival for over a century. Or chips: About half of PepsiCo’s $58 billion in yearly sales comes from snack foods such as Lay’s and Doritos.
But chickpeas? Also known as garbanzo beans, the protein-rich legumes are a key ingredient in hummus, one of PepsiCo’s fastest-growing products. In 2007, the food and beverage giant inked a joint venture with Israel’s Strauss Group to sell Sabra-brand hummus and other foods in North America. Led by demand for the garlicky blend of chickpeas, olive oil and sesame, PepsiCo’s sales of dips in its Sabra line soared by 45 percent in 2010. In early 2011, the partners agreed to extend the deal to sell Sabra hummus and other spreads globally.
This lip-smacking growth gives PepsiCo a new challenge: How to secure a steady supply of chickpeas. In 2012, the company expects to buy several thousand tons; two years later, the shopping list calls for roughly twice that amount.
To help meet this need, PepsiCo is combining its business agenda with the development goal of helping 10,000 Ethiopian farmers double their production of chickpeas in a program it’s calling Enterprise EthioPEA. “This initiative will positively impact the livelihood of local farmers, address the critical issue of famine in the Horn of Africa and create sustainable business opportunities for PepsiCo,” said Indra Nooyi, chairman and CEO of PepsiCo in a statement.
The strategy is as unconventional as it ambitious. After all, Ethiopia is better known for famine than for food export. Enterprise EthioPEA aims to reverse that condition by bringing together international partners with local stakeholders. From overseas, PepsiCo, the United Nations World Food Programme and the U.S. Agency for International Development are joining forces. Within the country, the effort is led by the Ethiopian Institute for Agriculture Research, the Ministry of Agriculture and Omega Farms.
For Ethiopia, where half of all kids are stunted by malnutrition, chickpeas offer a familiar but underexploited dietary option, explains Tara Acharya, PepsiCo’s director of global health and agriculture policy.
With around 22 percent protein, chickpeas offer a nutritious alternative to meat and require fewer inputs to grow. The crop is also a rich source of complex carbohydrates, fiber, minerals and vitamins.
Ethiopian farmers routinely grow chickpeas today, but typically as a secondary crop between regular harvests of grains. In addition, dependence on less-productive seed strains and a paucity of irrigation limits harvests, says Acharya. As a result, yields have historically been too low to ensure stable market prices, and farmers tend to keep most of what they grow, for food and as seed stock for future crops. In 2008, Ethiopian farmers produced 287,000 tons of chickpeas, exporting roughly 14 per cent of that. For most farmers, chickpeas “haven’t had significant commercial importance,” says Acharya.
But with PepsiCo’s commitment to buy excess production, if all goes to plan, both output and prices will rise. Working with farmers in Ethiopia’s wetter, more fertile north, Enterprise EthioPEA is introducing more vigorous seed strains along with technical and financial assistance to deploy low-cost flood irrigation. “Irrigation would also allow farms to add a second crop of chickpeas, during the dry season,” Acharya says, “and once installed, irrigation will help other crops, too.”
As harvests grow, Enterprise EthioPEA is working with local food processors to create an affordable supply of chickpea-based ready-to-consume supplementary food that will be used to feed 40,000 malnourished Ethiopian children.
Famine continues to take a toll in Ethiopia and neighboring countries. Rains did not fall in southern stretches of the country or in neighboring regions in late 2010, nor did they come in time in 2011 to save spring plantings. In parts of Kenya and Ethiopia, 2010–11 was one of the driest years since 1950–51. The tragic result is that today, some 13 million people face famine across the region. In Ethiopia’s southern provinces, 3.7 million are receiving food assistance from WFP.
Making a dent in these numbers will take time. Enterprise EthioPEA started last fall, and is slated to last through August 2013. By the following year, PepsiCo hopes crop yields will have doubled, producing enough to not only supply Ethiopia’s domestic needs, but also allow for export of about one-fifth of the crop, thereby doubling export income to farmers. By that time, PepsiCo hopes it can count on Ethiopia for about a tenth of its global chickpea needs.
Should Enterprise EthioPEA succeed, PepsiCo hopes to copy and repeat the strategy with other crops in other developing markets, says Acharya. A recipe that successfully blends profit with sustainable development is one few would want to keep secret.
Please check out the original article at Momentum, here: http://environment.umn.edu/momentum/issue/4.1w12/connections.html