PepsiCo Tests AI, Digital Twins to Optimize Plants, Warehouses

PepsiCo is piloting artificial intelligence and digital twin technologies to simulate, validate and optimize manufacturing plants and warehouse facilities before making physical changes, as part of a broader effort to modernize its supply chain and improve capital efficiency. The branded consumer packaged goods company has launched an early-stage pilot with AI chipmaker Nvidia and industrial technology company Siemens, according to a Jan. 6 press release. The initiative is part of a multi-year collaboration aimed at reshaping PepsiCo’s plant and supply chain operations through a digital-first planning strategy.

“The scale and complexity of PepsiCo’s business, from farm to shelf, is massive—and we are embedding AI throughout our operations to better meet the increasing demands of our consumers and customers. Our work with Siemens and NVIDIA will help accelerate our continued journey of becoming a future-fit company, operating with agility and foresight,” said Ramon Laguarta, Chairman and CEO of PepsiCo.

As demand for production and distribution capacity rises, PepsiCo is using physics-based digital twins and AI agents as co-designers of facility layouts. The company is leveraging Siemens Digital Twin Composer, built on Nvidia Omniverse AI libraries, to simulate upgrades to its facilities in the United States, with plans to expand globally, beginning with its largest markets in 2026 and 2027.

A digital twin is a real-time virtual model of a physical asset, system or process. PepsiCo and Siemens have converted selected U.S. manufacturing and warehouse facilities into high-fidelity 3D digital replicas to establish a performance baseline for plant operations and the end-to-end supply chain. Teams use these virtual environments to test and validate new configurations intended to increase capacity and factory line throughput.

Using AI agents and physics-level simulations, PepsiCo can recreate every machine, conveyor, pallet route and operator path with high accuracy. According to the companies, this approach allows PepsiCo to identify up to 90% of potential plant design issues before making any physical changes. Initial deployments have delivered a 20% improvement in factory line throughput, nearly 100% design validation and a 10% to 15% reduction in capital expenditures by uncovering hidden capacity and validating investments virtually.

“Working with NVIDIA and Siemens, PepsiCo is re-architecting its operations, using physically accurate digital twins and AI to reinvent how it designs, optimizes, and runs its global operations,” said Jensen Huang, Founder and CEO, Nvidia.

Siemens said its Digital Twin Composer enables companies to combine 2D and 3D digital twin data with real-time physical information in a secure, photorealistic virtual environment. The software is designed to support industrial AI applications across the full lifecycle of a product, process or facility, forming the foundation for large-scale industrial metaverse environments.

“We are proud to partner with PepsiCo and NVIDIA to digitally transform their manufacturing facilities using physics-based digital twins and AI from design to engineering to operations. This collaboration sets a new standard for all industries,”  said Roland Busch, CEO, Siemens AG. 

Athina Kanioura, CEO of Latin America and Global Chief Strategy and Transformation Officer, PepsiCo, said the initiative is intended to create a unified, AI-powered operating model across the company’s global footprint. “With a unified, AI-powered digital foundation, PepsiCo is building toward a world where every plant and warehouse operates as part of a single, intelligent ecosystem,” she said. “In this future, our facilities don’t just respond to demand, they anticipate and then adapt to it.”

The collaboration was formally announced during the opening keynote at CES 2026, underscoring PepsiCo’s focus on digital transformation and supply chain innovation as it seeks to improve speed, flexibility and capital efficiency across its operations.

AI Is Transforming the Food Industry

Artificial intelligence is increasingly reshaping the food industry across the value chain, from agricultural production and manufacturing to logistics, food safety and consumer engagement. Companies are adopting AI-driven tools to optimize production planning, improve quality control and reduce waste, while advanced analytics help manufacturers respond more quickly to shifting demand and supply constraints. 

In parallel, AI is accelerating product development by enabling faster formulation testing, predictive maintenance of equipment and more efficient use of raw materials, helping food companies balance cost pressures with sustainability goals.

This technology also plays a growing role in food safety, traceability and personalization. Machine learning systems are being used to detect contamination risks, monitor production environments in real time and support regulatory compliance, while consumer-facing applications leverage data to tailor nutrition recommendations and product offerings. 

“AI is no longer experimental in food, it is becoming foundational. The companies gaining the most value are those using AI to connect data across operations, supply chains and consumer insights, allowing them to anticipate challenges, reduce inefficiencies and innovate faster,” wrote Daphne Ewing-Chow, Food Systems Analyst, for Forbes.