Pepsi Bets Cashew Juice Can Change the Game
Published earlier today on Triple Pundit.
When you stock up on cashews at your favorite store, those fatty and delicious nuts have long left behind heaps of agricultural waste. But that waste, in the form of fruit attached to the nut often called a cashew apple (or cashew fruit), is full of nutrients, especially vitamin C. Cashew fruit also has plenty of other potential uses -- meat substitute, animal feed and even booze among them.
Now PepsiCo is working with farmers in India to source cashew apples and use the crop as an ingredient in its products. The long-term result for Pepsi could be the next coconut water, pomegranate juice or hazelnut milk -- and in the words of one of the $66 billion snack and beverage giant’s newer slogans, could “change the game” in the beverage industry.
Pepsi launched a project earlier this year in Maharashtra, India to source the cashew fruit. In a partnership with the Clinton Foundation, the program will work with small farmers to improve their farming techniques, increase yields and therefore, boost incomes for farmers and their families. This is nothing new for Pepsi: The company has launched similar sustainable agriculture programs with chickpea farmers in Ethiopia and sunflower growers in Mexico.
Some of the big challenges in commercializing cashew fruit include storage, transport and shelf life. The fleshy fruit must be picked up off the ground or collected in nets drawn out under the trees, not picked off branches. Once collected, they have to be processed within 24 hours — and if the nut is separated from the fruit, that timeframe is slashed to six hours. If the fruit is going to be sold whole, as in a supermarket, then it must be stored at a temperature no cooler than 41 degrees Fahrenheit (5 degrees Celsius). That is one issue growers have in Brazil, which is where the cashew originates: Most of the growers sourcing stores in Sao Paulo and Rio de Janeiro are almost 1,900 miles (3000 km) from those large markets. The fruit, called caju, is ready available at Rio’s ubiquitous juice stands, but even then the creamy cashew fruit used to make the drinks is often frozen because of its short shelf life. Therefore only 12 percent of all cashew fruit in Brazil is processed, including the portion that ends up in animal feed.
Pepsi is hoping improved farming practices and a supply chain that can deftly handle the fruit will pay dividends for both the company and its farmers in India. At first the juice will be used as an ingredient in some of Pepsi’s Indian juice products. But the company has bigger and quite realistic goals to harvest more of this fruit for exports to other markets.
After all, consumers are looking for the next best nutritional, and for many younger buyers, a more sustainable drink. Changing habits, not to mention the fact that soft drink sales have been flat for a few years, are among the reasons why pomegranate juice is no longer only in Middle Eastern grocery stores and coconut water has moved from those bulky cans found at Asian grocery stores to boxes of one-liter Tetra-Paks at Costco. Pepsi has an opportunity to market a new drink that would actually benefit farmers — who for years have simply discarded what they thought has no value.
Such a product also nudges Pepsi closer to its goals of becoming more of a “nutrition” company. The company’s claims it was moving in that direction have elicited more yawns and raised eyebrows than nods — and CEO Indra Nooyi, while one of the more inspiring business leaders to have emerged the past decade, elicited a fair amount of guffaws a few years ago when she said, “Doritos are not bad for you.” But in a world where we have to feed more people — and overall more affluent and demanding people at that with the growing middle class — big companies like Pepsi will be part of this ongoing conversation. Turning farm waste into a marketable drink, while improving the bottom line of small farmers, is a positive, and delicious, step.
Image credit: Poderdasfrutas.com