You might be wondering just what in the world a “BHAG” is—never fear. Al Halvorsen, Senior Director of Sustainability at Frito-Lay North America is just the guy to tell you all about them. Accomplishing BHAGS—or “big, hairy, audacious goals”—is Al and his team’s specialty. In just over a decade they’ve fundamentally changed the way Frito-Lay does business by integrating sustainable best practices into the corporate culture and operations. In this Green Line Series Interview, Al tells us how they turned their BHAGs into reality and saved the company millions in the process.
GoGreen Conference: When did sustainability and efficient energy use hit Frito-Lay’s radar and what was the initial motivation for the company to get started in this? Did it come from the employees at the grassroots level or was it something the leadership embarked on from the top?
Al Halvorsen: We started with a program back in 1993 when we created green teams in all of our facilities. The primary responsibility of those green teams was to ensure the environmental compliance position of our manufacturing facilities was met. But out of that initiative came a focus on resource conservation as well as environmental compliance.
Officially, Frito-Lay created our own department of energy in 1999. At the time, we were focusing mostly on energy efficiency and water efficiency—plus helping to drive costs out of the system and improve the bottom line results of our manufacturing operations. We set some pretty aggressive goals in ’99 to shoot for drastic energy reductions and we put a team in place alongside our global productivity initiatives.
GG: You’ve achieved those original goals for the most part. Have your sustainability initiatives been profitable as well as socially responsible? Do you find that sustainability and profitability can be uttered in the same sentence?
AH: Yes, absolutely. So your first question was about profitability— and I would say that our sustainability initiatives have been very profitable. Back in ’99 we set targets to reduce our water usage by 50 percent per pound of product produced; our natural gas use by 30 percent; and our electricity use by 25 percent. Right now, we have achieved a 45 percent reduction in water, 33 percent reduction in natural gas and about a 25 percent reduction in electricity. This goes along with our initiative to drive efficiencies in our motor fuel usage, which we started a few years later. Overall, if you combine all of those reductions, Frito-Lay, as a company, would have spent about 80 million dollars more on those commodities to run our business and operations if we had not put those sustainability measures in place. When you look at profitability, these sustainability initiatives are delivering daily to the bottom line.