PepsiCo Inc. (NASDAQ:PEP) has signed a long-term partnership deal with Yara International ASA to equip farmers with advanced crop nutrition programs and decarbonize the food value chain across Europe.

The collaboration will provide farmers with best-in-class crop nutrition products, precision farming digital tools, and expert advice to improve nutrient use efficiency, boost yields, and reduce the carbon footprint of their crops, the company claims.

As part of this partnership, Yara will supply PepsiCo with up to 165,000 tons of fertilizer annually, covering about 25% of their crop fertilizer needs in Europe by 2030.

These fertilizers will include Yara Climate Choice fertilizers, which have a low carbon footprint and are produced from either renewable ammonia or low-carbon ammonia via carbon capture and storage (CCS).

This effort supports farmers through transition costs, ensuring their livelihoods are maintained.

Also Read: Salmonella Saga: FDA Reportedly Uncovers Years of Contamination at PepsiCo Plant

The partnership will initially focus on potatoes, a significant crop for PepsiCo, and expand to other crops such as oats and corn. It will involve approximately 1,000 farms and cover around 128,000 hectares in the EU and U.K.

It will also scale up sustainable nutrient management practices across PepsiCo's farmer groups, including full-season crop and soil data capture and monitoring using PepsiCo's CropTrak and ML Analytics tools, complemented by Yara's digital solutions.

Natural gas serves as both a feedstock and an energy source in nitrogen fertilizer production. Green ammonia, an alternative, is made by combining hydrogen from water electrolysis using renewable energy with nitrogen, reported Bloomberg.

While the production of green ammonia is energy-intensive, companies like Yara are working to increase its availability.

Pepsi reported second-quarter sales growth of 0.8% year-on-year to $22.501 billion, missing the analyst consensus estimate of $22.599 billion.

PepsiCo stock has lost about 11% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Consumer Staples ETF (NYSE:IYK) and Consumer Staples Select Sector SPDR Fund (NYSE:XLP).

Price Action: At the last check on Tuesday, PEP shares were trading lower by 0.13% at $163.65.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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