- Diageo announced the creation of a $20 million fund to support Black communities and businesses disproportionately affected by COVID-19. PepsiCo will be committing $400 million during the next five years through a set of initiatives targeted to increase the representation of Black Americans in both the company and community.
- Diageo has already pledged more than $1 million to the National Urban League, the NAACP Legal Defense Fund and 100 Black Men of America Inc, according to West Fair Online.
- As part of its efforts to support Black communities, PepsiCo CEO Ramon Laguarta said in an essay in Fortune the company will double its spending with Black-owned suppliers, invest $50 million in Black-owned businesses and expand the number of Black managers in its ranks by 30%. The company also pledges to have at least 100 Black executives by 2025.
After the killing of George Floyd, CPG companies of all sizes are professing their solidarity with the Black Lives Matter movement and the community it represents.
Tweets about unity from a corporate account are one thing. Actually putting money toward these goals is another. In the food and beverage space, a sizable number of companies are pledging to do just that. While Diageo and PepsiCo are the latest to outline their financial commitments and long term diversity goals for their companies, there are a number of other companies that have already announced similar initiatives.
From large conglomerates like Coca-Cola to small startups like Miyoko’s Creamery, CPG brands are financially supporting the Black community through donations to organizations involved in the movement. Miyoko’s Creamery donated an unspecified amount to the NAACP and Black Lives Matter. Emmy’s Organics pledged 100% of its online profits from June 8–10 to the NAACP Legal Defense and Education Fund. Coca-Cola committed $2.5 million to the Equal Justice Initiative, the NAACP Legal Defense Fund and the National Center for Civil and Human Rights.
Diageo and PepsiCo have outpaced these household names with their substantial commitment of funds to supporting Black businesses and communities. Both of these organizations have previously supported national non-profits like the NAACP, but this increase in funding is indicative that perhaps the companies are becoming more serious about diversity.
PepsiCo took another big step in this direction Wednesday, announcing it would rebrand Aunt Jemima products. The 131-year-old brand, with a name taken from a character in a minstrel show, started out embodying the old South with its matronly black housekeeper mascot. Although portrayals of Aunt Jemima became less prevalent through the decades, a picture of a Black woman remained on packaging and its name was linked to the stereotype. The move will be costly, both financially and in brand equity, and the company said it will begin by taking Aunt Jemima's image off of packaging this year.
In addition to financial support, PepsiCo will also restructure its organization to include more outreach and career opportunities for its Black employees. This additional commitment to changing the makeup of its ranks within the next five years is notable because few other companies have pledged to push for internal change. Coca-Cola noted the percentage of Black employees in its leadership ranks is low, but said without specificity, “We’re appointing leaders in our business to drive the development and implementation of additional business actions.”
Lack of diversity is something that has plagued corporations in the food and beverage industry for years. Not only are minorities lacking within the upper echelons of these companies, but gender diversity is also limited. Women occupy fewer than 30% of senior leadership positions and only 13% of C-suite roles in the consumer goods industry — less than any other industry, according to the Network for Executive Women.
Companies have been working to change that. PepsiCo, which owns Stacy’s Pita Chips, sponsors the Stacy’s Rise Project. In this competition, five finalists from female-owned businesses receive $20,000 prize, business advice and development support. The competition has a $100,000 grand prize. Chobani has used its incubator program to promote diversity. In the company’s 2019 class, 75% of companies had an underrepresented minority founder and 63% had a female founder or co-founder.
Efforts to change from the inside rather than throwing money at outside organizations could be beneficial to companies of any size. A report from McKinsey found companies in the top quarter for racial, ethnic and gender diversity were more likely to have financial returns above their national industry medians — 35% for those with racial and ethnic diversity, and 15% for those with gender diversity.
Companies should take a deeper and introspective look into the makeup of their employees. Not only will it benefit their bottom line, but it might also help the companies engage in a more constructive dialogue of solidarity with movement like Black Lives Matter rather than send out hollow messages.