Frito-Lay bets on future energy cuts

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Sunday , November 18, 2007 at 2301 hrs At Frito-Lay’s factory in Casa Grande, Arizona, more than 500,000 pounds of potatoes arrive every day from New Mexico to be washed, sliced, fried, seasoned and portioned into bags of Lay’s and Ruffles chips. The process devours enormous amounts of energy, and creates vast amounts of wastewater, starch and potato peelings.

But Frito-Lay is embarking on an ambitious plan to change the way this factory operates, and in the process, create a new type of snack: the environmentally benign chip.

Its goal is to take the Casa Grande plant off the power grid, or nearly so, and run it almost entirely on renewable fuels and recycled water. Net zero, as the concept is called, has the backing of the highest levels of corporate executives at PepsiCo, the parent of Frito-Lay.

There are benefits besides the potential energy savings. Like many other large corporations, PepsiCo is striving to establish its green credentials as consumers become more focussed on climate change. There are marketing opportunities, too. The company, for example, intends to advertise that its popular SunChips snacks are made using solar energy.

“We don’t know what the complete payoff for net zero is going to be,” said Indra K Nooyi, PepsiCo’s chairman and chief executive. “If this works even to 50 or 60% of its potential, that is fantastic, and it’s so much better than what we already have.”

From coast to coast, more companies are thinking about how much fossil fuel they use and ways to conserve energy. Venture capital money is also pouring into fledgling green technology.

PepsiCo has become the nation’s biggest buyer of renewable energy credits, a financial instrument that stimulates the development of renewable energy sources, and its subsidiaries are retrofitting plants and distribution centres to reduce energy.

The net zero concept, however, is the company’s most ambitious environmental venture to date. Reaching its goal of taking it almost completely off the power grid will not be easy.

Over the next several years, Frito-Lay plans to install high-tech filters that would recycle most of the water used to rinse and wash potatoes, as well as the corn used to make Doritos and other snacks, and then burn the leftover sludge to create methane gas to run the plant’s boiler.

The company will also build at least 50 acres of solar concentrators behind the plant to generate solar power. A biomass generator, which will likely burn agricultural waste, is also planned to provide additional renewable fuel.