Strategies for Innovating with PepsiCoSameer Talsania, Senior Manager, R&D External Innovation PepsiCo

Anne McLaren, OI Portal Coordinator, yet2

February 17, 2021

Anne McLarenOpen Innovation Portal

Coordinatoryet2

Sameer TalsaniaSenior Manager,

R&D External InnovationPepsiCo

Network• Targeted Marketing• Accessing Multiple

Innovation Communities Across The Globe

The Portal• Customized, corporate

branded portal.• Interactive yet2 & client

submission management

Service• Single point of entry• Protection from IP

contamination• Expert submission management• Anti Fatigue

yet2 Open Innovation Portal Services

By applying the formula, yet2 believe you can expect 3x higher Resourced Evaluationso yet2 clients averaged 2 resourced evaluations in 2020, Best client received 6 RE’s last year.

Key inputs of formula:• Higher bar for filtering criteria, yet2 have a license to be more ruthless sifting through junk submissions.

− On average yet2 rejected 90% of submissions that come through all our portals. − Best clients yet2 rejected 97-98%, reducing fatigue and preventing pile up

• Key contacts in charge of the portal need to be great at triaging with yet2− Average initial go or no go is 3 weeks faster than yet2 client average

• Built up good relationships with internal clients. Decision to next step (intro call) go/no improves by 2 weeks compared to yet2 average• High up buy in (CTO and deputy CTO review metrics quarterly and summarise annually resourced evaluations.)

• Getting more traffic to the portal - Link placement on key sites (has shown submissions almost double), linked in posts by main corporate site, Redesign/Improvement in SEO for organic searching?

yet2 has found a formula to enable OI portals to drive value in external technology

Resourced Evaluation = High cost/time investment on technology solution/submission

About PepsiCoPepsiCo products are enjoyed by consumers more than one billion times a day in more than 200countries and territories around the world. PepsiCo's product portfolio includes a wide range ofenjoyable foods and beverages, including 23 brands that each generates $1 billion or more inestimated annual retail sales.

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GLOBAL FOODSGLOBAL BEVERAGES

PERFORMANCE BRANDS SCALE PEOPLE

23 billion-dollar

brands*

More than $67 billion

net revenue in 2019

More than 265,000

employees

More than 200 countries

& territories

*Based on 2019 estimated annual retail sales

Strong Portfolio of Iconic Brands

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MORE THAN 30 $250 MILLION–$1 BILLION BRANDS

23 $1 BILLION BRANDS

These brands generated more than $1B or $250-$1B in 2019 estimated annual retail sales.

*Logos shown are not all inclusive.

Create more smiles with every sip and every bite

Be the global leader in convenient foods and beverages by winning with purpose

FASTERWinning in the marketplace, being

more consumer-centric and accelerating

investment for topline growth

STRONGERTransforming our capabilities, cost, and

culture by operating as one PepsiCo, leveraging

technology, winning locally and globally enabled

BETTERIntegrating purpose into our business

strategy and our brands, and doing even more

for the planet and for our people

WINNING WITH PURPOSE

MISSION

VISION

THE

PEPSICOWAY

Helping to Build a More Sustainable Food System

PepsiCo’s sustainability agenda focuses on six priority areas where we believe we can have the most impact:

AGRICULTURE

WATER

PACKAGING

PRODUCTS

CLIMATE

PEOPLE & PROSPERITY

PepsiCo R&D

External Innovation (XI)

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Internal PepsiCo R&D Capabilities – Seed to Shelf

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Food Science Packaging Food Safety, QualityAgriculture Nutrition Science

Culinary Sensory

Process Engineering

Flavors Clinical Science Regulatory

Equipment

DevelopmentSustainability

Water Technology

Data Science

Innovation

Management

Sports Science

XI complements & augments internal R&D capabilities

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XI Mission:

Provide a seamless external partnering capability to accelerate

PepsiCo’s innovation agenda, mitigate development risk and

uncover unique new business opportunities

EXTERNAL INNOVATION (XI)

3 PepsiCo teams engage externally to solve critical needs

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COMMERCIAL

TECHNOLOGYBRAND

BEVERAGE

MACRO SNACKS

BEYOND THE BOTTLE

AGRO/INGREDIENTS

PROCESSING

PACKAGING

INSIGHTS (AI)

SALES & MARKETING

SUPPLY CHAIN

IDENTIFY I NURTURE I PARTNER

MINORITY INVESTMENTS I STRATEGIC PARTNERSHIPS

EXTERNAL

INNOVATION

XI is part of PepsiCo R&D

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Venture

PartnersStartups, Funds,

Accelerators, etc.

Invention

NetworksOpen Innovation

Networks

Academic

PartnersUniversities,

Research

Organizations

ConsortiaPublic-Private

Partnerships

Strategic

Suppliers

• WHO: 12-person Global team comprised of Technology Scouts & Analysts

• HOW: XI leverages the Want/Find/Get/Manage open innovation framework

• WHERE: XI manages the partner ecosystem across the following pillars:

XI – A Successful Story: New Packaging Technology

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PepsiCo R&D & Danimer Co-Develop

and Tests Solutions

2017

2016Partnered with Danimer

ADVANTAGE SUSTAINABLE RESINS FOR FLEX BAGS

PepsiCo Conducts First in Market Test

2018

Partnership with PEP R&D to dramatically accelerate timeline for

market solution

Danimer went public in Dec 2020 (DNMR)

Needs and Opportunities

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Focus Areas for PepsiCo R&D

Packaging/

Materials

Gas/Moisture Barrier

Bio-based, Reduced-

carbon Plastics

Advanced Recycling

Enhanced Consumer

Experience

Disruptive Materials/

Platforms

Ingredients/

Nutrition

Sugar/Salt/Fat

Reduction

Flavor Technology

Functional

Ingredients

Label Simplification

(e.g. flavor, color)

Microbiome

Digital

Transformation

Artificial Intelligence

for Product

Development

Automated Sensory

Analysis

In-line Process

Sensors

Health Management

& Monitoring

Provenance/

Traceability

Supply Chain/

Sustainability

Rapid Food Safety &

Quality Testing

GHG Reduction

Technologies

Water Footprint

Reduction

Advanced Agriculture

Zero Waste/

Circular Economy

Processing/

Equipment

Novel Sterilization

(e.g. non-thermal)

Novel Food

Manufacturing

Processes

Manufacturing

Efficiency (speed,

water, energy, etc.)

Biotransformation

Retail Equipment

(dispensers, coolers,

vending)

Some specific technical needs in 2021

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• Zero sugar tools (new ingredients, aftertaste mitigation, mouthfeel modification, etc.)

• New natural preservatives, colors, flavors, and functional ingredients

• Differentiated packaging (e.g. multi-sensory, connected, functional)

• Advanced recycling (non-bottle PET, multi-layer films)

• Economical gas/moisture barrier for PET, paper & films while maintaining recyclability or compostability

• High efficiency heating; gentle dehydration; novel biotransformation (e.g. enzymatic modification)

• Circular water, minimal liquid discharge; Atmospheric water generation; Improved water efficiency

• Advantaged and novel sterilization technologies

• In-line process sensors (flavors, microbial, sugar, texture, oil or other quality metrics)

• Economical and/or advantaged cooler/vending solutions

• Rapid allergen or pathogen detection

• Microbiome understanding/improvement and other wellness & health management technologies

PepsiCo Open Innovation portal has additional technical needs

https://pepsico.yet2.com

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Tips for a Successful Submission

Technology / Product

Comparative Value Proposition (CVP)

Efficacy Data

• Brief, non-confidential summary of the technology or product

• What are the key benefits?• How is your technology / product an

improvement on existing technology?• Why is this of interest to PepsiCo?

• Do you have test or trial data to substantiate the CVP? Safety data?

Intellectual Property • Patents, trademarks or other forms of protection.

Submit to: pepsico.yet2.com

Tips on what NOT to submit

Confidential Information

Consumer ComplaintsCareersMedia InquiriesSponsorships/Donations

Contact Us

Long submissions with little content

Broken Links/Invalid websites

PepsiCo Tech Needs currently published

Process & Equipment

• Bottle & Closure Sanitation• CIP Sensors for Flavor Identification• Thermal Processing Innovation

Product & Ingredients

• No Added Sugar, No Added Fat Coating & Binder Syrup

• Pea Proteins for Low pH Beverages• Revolutionary Plant Protein Sources

Packaging & Materials

• Connected Packaging• Cutting Edge Packaging Materials• Moisture Barrier for Bio-Based Films• Moisture Barrier for Paper Substrate – Flexible

Packaging

Sustainability

• Positive Water Impacts – Technologies for Water Replenishment

• Reducing GHG Emissions

Submit to: pepsico.yet2.com

General Submissions

Anne McLarenAnne.McLaren@yet2.com

Submit to:

PepsiCo.yet2.com

Questions?

A copy of the slides and recording will be distributed in the coming days.