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Tobacco Farmers Could Pivot to Chickpeas, Thanks to PepsiCo

| Sunday May 5th, 2013 | 0 Comments

tobacco farmers might grow chickpeasIn answer to a tidal wave of consumer demand for hummus, more U.S. farmers are beginning to grow chickpeas, and that trend comes with an interesting twist. As reported by David Kesmode of The Wall Street Journal, currently the Pacific Northwest leads the U.S. in chickpea cultivation, but the East Coast’s tobacco country could be the next hotspot in the hummus supply chain.

If that does happen, much of the credit could go to PepsiCo. The iconic beverage company has been practically pickled in chickpeas for the past couple of years, and its interest in U.S. chickpea production demonstrates how CSR goals can go beyond performing the role of add-on, to play a vital role in a forward-looking business model.

PepsiCo and chickpeas

Picking up on the profit side of the equation, as Kesmode reports, PepsiCo foresaw growth in the hummus market several years ago, when it joined with leading Israeli food company the Strauss Group of Israel to form Sabra Dipping Co. The hummus line also launched into new overseas markets last year, under the brand Obela.

That in turn has lead Pepsico and Strauss to an intensive research and development effort to help broaden the U.S. agricultural base for chickpeas. Just last month, Sabra officially opened a new facility that it calls the Center of Excellence in Chesterfield, Virginia, which also happens to be the namesake of Chesterfields brand cigarettes.

In addition to developing Sabra’s product line, the facility will also focus on supply chain research in partnership with the Virginia academic research community, with the aim of creating strains of chickpea that can thrive in Virginia’s humid climate.

That research could be critical to Sabra’s U.S. operations, which recently expanded in Virginia. By sourcing East Coast chickpeas, the company could gain a significant advantage in terms of lower shipping costs, which also translates into an effective greenhouse gas management strategy.

The transition to chickpeas could also prove to be a plus for tobacco farmers, both for the potential cash stream and for the ability to transition out of dependency on a crop with a dark public health history.

PepsiCo, Chickpeas and EthioPEA

That brings us to the “pure” CSR part of the equation. In 2011, PepsiCo announced an initiative called Enterprise EthioPEA, with the aim of improving chickpea cultivation in Ethiopia.

The high-powered project is supported by the U.N. World Food Programme (WFP) and the U.S. Agency for International Development, and it was officially launched at the annual meeting of the Clinton Global Initiative in 2011.

The main goal of the project is to introduce modern agricultural methods to help double the chickpea yield, leading to improved soil conditions as well as the potential to develop new products and markets.

The increased yield will also help to leverage WFP’s nutrition efforts in the Horn of Africa, by serving as the main ingredient in an enriched food supplement for infants and toddlers.

CSR and sustainable business

Clearly PepsiCo is thinking about the sustainability of its profits far into the future, and that brings us to the full integration of a “pure” CSR project like EthioPEA with business practices that make bottom line sense for the long run and not just for the next quarter.

Keeping in mind that PepsiCo is a major food producer as well as a global beverage company, EthioPEA falls squarely into sustainable agriculture initiatives that include soil, water and energy management, and minimizing the use of agrochemicals.

Promoting long term local economic development and well-being among farmers and their communities is also included in PepsiCo’s CSR package, which echos the Levi-Strauss call for stepping CSR up to the next level.

U.S. tobacco farmers looking for alternatives

That brings us around to the current situation for U.S. tobacco farmers. The prospect of further declines in the U.S tobacco products market could be offset to some extent by increased demand overseas, but that is not necessarily a sure thing. Globally, the tobacco market is complex and constantly evolving, to the extent that uncertainty over long-term prospects has made some farmers reluctant to invest in new infrastructure.

In that context, PepsiCo’s position as a reliable, local customer for chickpeas could provide farming communities with the kind of long term security that tobacco can no longer offer.

For the record, let’s also note that PepsiCo’s sustainability endeavors reach into urban areas, too. In 2011 the company was among the first five major vehicle fleet owners to launch President Obama’s Clean Fleets initiative, which is part of the Clean Cities effort to reduce air pollution and improve public health by focusing on transportation.

[Image: Chickpeas courtesy of USDA]

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