More so than many other types of businesses, restaurants have been bashed by COVID-19. In fact,The New York Times reported last year that as many as 75% of independent restaurants could close permanently because of the pandemic. ABC News disclosed last year the review site Yelp cited there were 26,160 total restaurant closures as of July 10 and 15,770 of those have shut down for good.
But food and beverage giant PepsiCo is aiming to avoid a similar fate for restaurants of color. Its “Dig In” effort aims to generate $100 million in sales for Black-owned restaurants over the next five years. The Purchase, a NY-based company stated in a news release that the drive also is inviting Black restaurateurs to use resources PepsiCo is offering such as business services, training and mentorship. PepsiCo hopes that aid will support Black-owned eateries facing systemic barriers, obstacles aggravated by the pandemic.
Pepsi teased the platform with a new TV ad spot, “Savor the Sound,” which spotlights four Black-owned restaurants. PepsiCo reported the ad debuted during the Dec. 26 NFL playoff games and will run through Super Bowl Sunday on NFL Network.
“Our mission to connect Black-owned restaurants with the access, business acceleration, and visibility needed to thrive requires a clear call to action: Dig In,” stated Scott Finlow, Chief Marketing Officer, PepsiCo Global Foodservice. “Dig In to the vibrant, delicious menus of Black-owned restaurants. Help build this moment into a sustainable movement that enables businesses to continue serving as cornerstones of our communities.”
PepsiCo informed BLACK ENTERPRISE of other announcement details, including:
- Black Restaurants Deliver program – Pepsi rolled out an eight-week, no cost consultancy that optimizes and builds online ordering and delivery capabilities for select restaurants. The program will serve 400 restaurants in more than 40 communities over five years.
- Building on Existing Efforts – Dig In is part of PepsiCo’s $50 million commitment to supporting Black-owned businesses, building on announcements including sponsoring Black Restaurant Week, working with the PepsiCo Foundation and National Urban League to create the Black Restaurant Accelerator and investing in the Pathways to Black Franchise Ownership program.
The Breakfast Klub in Houston is one of the restaurants featured in the ad.
Statement on Pepsi Website
As people around the world demand justice for George Floyd, Ahmaud Arbery, Breonna Taylor, Rayshard Brooks, and far too many others, we have been thinking hard about how PepsiCo can help dismantle the systemic racial barriers that for generations have blocked social and economic progress for Black people in this country. We know that the first step toward change is to speak up, so I want to be very clear: Black Lives Matter, to our company and to me.
Even though I wasn’t born in the United States, I am passionate about this issue. My parents raised me to believe that all people are equal, that diversity is a reflection of our common humanity. This is true both in companies and the larger society. Yet despite my parents’ optimistic view, we know that all people are not treated equally and that the problem of systemic racism is very real. The struggle for equality exists in many forms around the world, from religious freedom, to gender equality, indigenous people’s rights, LGBTQ+ rights, Latino rights in the U.S., and other racial and ethnic discrimination. After living in Georgia and Connecticut for several years, I have come to better understand the urgent need for racial and social justice in this nation, and I am committed to using my position as CEO to lead this change.
A letter I received recently from a long-time PepsiCo associate expressed some of the pain many of our colleagues feel. She spoke of Black Americans’ struggle with everything from sub-standard housing, to racial profiling, to under-funded education. She was disappointed in some of PepsiCo’s past decisions and called us to action, saying: “PepsiCo at this time has an opportunity to look at our African American employees and community with wide open eyes and heart, and to work hand-in-hand to address the plagues many of us all too often face each day.” I couldn’t agree more.
During the past few weeks, the senior leadership team and I have been doing a lot more listening than talking. I met with several different groups of Black community leaders, as well as our MOSAIC employee resource group. These conversations were humbling and enlightening. I came away from them more conscious of the insidious nature of systemic racism and even more committed to using PepsiCo’s resources for good.
The journey for racial equality has long been part of our company’s DNA, going back to our first Black sales team in 1947 and the legacy of Harvey Russell. We’ve also been long-time contributors to the NAACP Legal Defense Fund and will continue to support their work for social justice. But the recent protests in all 50 states and around the world have called on us to honestly assess our efforts. Whilst there are areas we have made progress in the fight against systemic racism and inequality—including pay equity and the diversity of our frontline workforce—we know we cannot keep pointing to what we did decades ago. The promise of our journey remains unfulfilled. We have much work to do going forward, and to echo Dr. Martin Luther King, Jr., “The time is always right to do what is right.”
So today, I am announcing the next step in PepsiCo’s journey for racial equality: a more than $400 million set of initiatives over five years to lift up Black communities and increase Black representation at PepsiCo. These initiatives comprise a holistic effort for PepsiCo to walk the talk of a leading corporation and help address the need for systemic change.
“Our restaurant has stood strong with open doors for 19 years as a Houston mainstay, feeding locals and visitors alike,” stated Marcus Davis, founder and owner of The Breakfast Klub and member of the PepsiCo Black Restaurant Advisory Council.
“With the national exposure that Pepsi is providing to businesses like mine, I hope to see a boost in active interest and support of the many Black-owned restaurants shaping the culture and food scene in neighborhoods across America.”
Our journey will now focus on three pillars—People, Business, and Communities.
When it comes to People, we are focusing on increasing representation; recruitment; and education, internships and apprenticeships. That means dramatically rethinking our approach to talent, starting by:
- Expanding our Black managerial population by 30% by 2025 through internal development and recruitment—we will add more than 250 Black associates to managerial roles by 2025, including adding a minimum of 100 Black associates to our executive ranks. Whilst 14% of our U.S. workforce is Black, we know we need to increase representation in leadership.
- Accelerating our recruitment efforts with Historically Black Colleges and Universities and increasing partnerships with diverse organizations at our core schools.
- Establishing scholarship support for students transitioning from 2-year to 4-year programs, and scaling our existing efforts to support trade/certificate and academic 2-year degrees through community colleges for 400 Black students per year—these funds will also provide wrap-around support, including money for books, transportation, housing, and more.
- Activating associates to help drive ongoing change in our organization, with a focus on internal mentoring, coaching, and continuous development—we know that many of you want to get involved, and we will need your support to see our journey through.
- Mandating company-wide unconscious bias training, followed by continued training aimed at reducing biases in the workplace; including PDR objectives on representation; and requiring diversity on executive candidate slates—we’ll also expand our programs dedicated to supporting Black talent throughout critical career stages.
When it comes to Business, we will leverage our scale and influence across our suppliers, marketing agency partners and customer base to increase representation and strengthen Black-owned businesses. That means step changes in our spending and approach to partnerships, starting by:
- More than doubling our spending with Black-owned suppliers; expanding the supplier pipeline through advocacy and outreach; and building supplier capability targeting growth across services, agriculture, sustainable packaging, and operations.
- Using our buying power to create more jobs for Black creators at our marketing agencies and making them part of our content development—we will implement a Creative Agency Diversity Policy modeled on our existing policy for the selection of legal services, including an annual audit.
- Investing $50 million over five years to strengthen local Black-owned businesses.
When it comes to our Communities, we’re working to drive long-term change by addressing systemic barriers to economic opportunity, investing an incremental $20 million over five years. That means broadly increasing our efforts to create opportunity and advance economic empowerment for Black Americans, starting by:
- Accelerating our support for social programs that impact Black communities, including delivering $6.5 million in community impact grants to address systemic issues; investing $1 million to replicate our holistic community support program, Southern Dallas Thrives, in Chicago; expanding our Food for Good initiative providing jobs and access to nutrition to more Black communities; and increasing our contribution to the NAACP Legal Defense Fund to support the struggle for social justice.
- Supporting Black-owned restaurants as part of our Small Businesses Program, including mentoring, management training and help obtaining financing.
- Investing $5 million to launch a Community Leader Fellowship program for Black non-profit CEOs. We will provide grants to participants’ organizations, executive education, and connections to PepsiCo leaders and partners.
The bottom line is: this moment calls for big, structural changes, and we’re committed to being agents of that progress. As we continue our journey, we are going to keep listening—to leaders, communities and all of you—and we will work to do the right thing. We are committed to this work because we know the American society has placed the burden disproportionately on Black people. Injustice and inequality are problems for us all, and we all must do our part to defeat them. These efforts will also inform and positively impact our broader diversity efforts beyond our Black associates, as we look to be an actor in addressing other types of inequality going forward.
A summary of the actions we’re announcing today is attached. I encourage you all to familiarize yourselves with these efforts, discuss them among your teams, and, if appropriate, share them with your networks.
Thank you to everyone who has voiced their opinion fearlessly to advance this important conversation. I hear you loud and clear and, as CEO, I aspire to ensure that all associates are proud to work at PepsiCo. We still have a ways to go, but our journey is gathering speed. Together, I am confident we can work to build a stronger, better company that actively supports racial equality, more fully serves our communities, and lives up to our highest ideals.
Not Pepsi’s First Rodeo In The Negro Community
The Pepsi corporation’s first attempts to increase sales to blacks were in the 1940s and 1950s. Though focused foremost on profits, Pepsi’s “special markets” program fostered the business careers of a diverse group of black men, drew attention to the economic importance of what was then referred to as “the Negro market,” and projected a more progressive view of black life. Opposing racism turned out to be good for business.
Walter Mack, president of Pepsi during the 1940s, noticed that the company’s marketing strategies too often either ignored black customers or portrayed them in unflattering and stereotypical ways. Pepsi was struggling at the time and needed a strategy for increasing sales. The company had been portraying itself as a value leader, largely because its nickel bottles contained 12 ounces of soda, as compared to Coke’s 6 ounces. However, the lower per-ounce-cost led some to conclude that Pepsi was a lower-quality product, and the extra costs of production were eating into bottler’s margins.
Mack called for a team of black marketers to promote sales in black communities. The team was notable for its diversity. The first recruit, Hennan Smith, had worked in newspaper advertising. Later in the decade, other formidable recruits included Jean Emmons, who had been unable to find a suitable job despite holding an MBA from the University of Chicago, and Richard Hurt, who covered Jackie Robinson and the integration of blacks into major league baseball for a Harlem newspaper. Their charge? To enhance the relationship between black communities and the Pepsi-Cola corporation.
The team, which eventually numbered more than a dozen members, crisscrossed the USA, encountering racism at every turn. In the south, team members had no choice but to drink from “colored only” fountains, ride in the back of buses, and stay with families, because hotels refused to accommodate them. To avoid eating in segregated areas while traveling by train, they would sometimes take their meals in Pullman cars. They faced demeaning comments from fellow Pepsi employees and even threats from the Ku Klux Clan.
The work itself was long and hard. Team members often worked seven days a week. They paid visits to bottlers, civic organizations, churches, and business and professional meetings. Their message was unmistakable. The Coca Cola corporation was perceived as reluctant to hire blacks to play such roles, and its chair had endorsed the re-election campaign of a segregationist governor of Georgia. By contrast, visits by team members made it clear that Pepsi took a different stance on race and was actively courting the black community.
Instead of pandering to popular stereotypes, Pepsi promoted a different image of blacks in its advertising. The team persuaded popular entertainers such as Duke Ellington to endorse Pepsi. They featured profiles of prominent black citizens, such as Ralph Bunche, whose diplomacy had garnered him a Nobel Prize. Its ads depicted middle-class citizens who cared about their families, their jobs, and their communities, and who knew a good value when they saw one. One prominent print ad featured future US Secretary of Commerce Ron Brown as a child, reaching up for a bottle of Pepsi.
The effects were not immediate, but during the 1950s Pepsi’s sales increased dramatically, eventually outselling Coke in the black community by a margin of three to one. Years later, the technique would come to be known as “niche advertising,” an approach for carving out a distinct place in the market. More importantly, the biographical portraits and the like were so inspirational that teachers started using Pepsi ads in the classroom, awakening students’ imaginations to the types of lives they could lead.
Yet Pepsi’s focus on the black community was tempered by a determination not to offend its white customer base. Early in the 1950s, Mack left the company, which soon adopted a different marketing structure. The special markets team was disbanded, and many of its members were integrated into regional sales teams or left the company. One, Harvey Russell, remained with Pepsi and eventually rose to the position of vice president, becoming one of the first blacks to attain such a high position in a large American corporation.
The story of Pepsi’s special markets team is admirably told in Stephanie Capparell’s 2007 book, “The Real Pepsi Challenge.” Though motivated primarily by profit, Pepsi’s efforts to expand sales by focusing on the black community helped to show that blacks could perform at least as well as whites in a major corporation. It showed that corporations disregarded minority communities only at their own economic cost . And it showcased for all races a new and different image of the lives of blacks in American society. Sometimes good business and good social policy coincide.