For many, a bottle of coke represents 500ML of energy and amazing flavour, but in fact it represents much more than the volume it holds. The beverage industry has long since faced pressure from the broader public and the communities in which they operate about its use of water, directly and throughout its supply chain like in the farming of its sugar sources. As climate change increases the occurrence of extreme events like storms and droughts, it’s no doubt that Coca-Cola and the beverage industry as a whole must assess its contributions to the problem and take proactive steps to become client change resilient. The failure to do so would come at the price of its license to operate and even future financial viability.
Water shortage predictions are alarming. While McKinsey[1] predicted that water demand will outpace supply by up to 40% by 2030, the Water Footprint Network[2] estimates that water scarcity currently affects over 2.7 billion people for at least one month each year. The United Nations[3] go one step further to predict that almost half of the world’s population will be living in areas of high water stress by 2030 with the existing climate change scenario. Considering that half a liter of soda takes 170 to 210 liters of water to be produced, beverages companies stand out as examples of a very thirsty industry!
Beverages companies have recognized that global climate change, mostly driven by man-made greenhouse gas emissions, has a long-term impact on their businesses and supply chains and have incorporated climate protection as an important component of their business strategy. Coca-Cola has a goal of reducing the carbon footprint of the “drink in your hand” by 25 percent by 2020. To do so, they have set up programs related to climate protection focusing on three main areas: refrigeration, manufacturing emissions and sustainable packaging.
- Because refrigeration is Coca-Cola’s most important source of carbon emissions footprint, the company has invested more than $100 million over the past ten years to make their coolers more environmentally responsible. They estimate that since 2000, they have “improved their cooling equipment energy efficiency by 40% and have eliminated 75% of direct greenhouse gas emissions by transitioning to HFC-free insulation foam for new equipment”[4].
- Regarding the reduction of manufacturing emissions, the firm has (for now) failed to reach the two emissions reduction targets they announced in 2008: “1) grow the business, not the carbon-system wide, and 2) a 5% absolute reduction in developed countries”[5]. This failure is explained by the company’s failure to improve emission ratios relative to volume growth. The firm has however been working in more than 100 renewable projects around the world to reduce its carbon footprint.
- Coca-Cola Sustainable Packaging goals lie in their “World Without Waste” packaging vision, which entitles collecting and recycling a bottle or can for every one of them they sell globally by 2030 as well as ensuring a more sustainable packaging system by moving toward a circular model.
Coca-Cola partners with local bottling plants to complete its production, thus the ownership of water sourcing and related issues often become murky. Failure to manage relationships and its use of local water sources has led to real impact for Coca-Cola; in 2004, it was forced to close operations in Rajasthan, India after local citizens and NGOs accused the company of excessive water withdraws and water pollution[6]. Since publicly announcing in 2007 its intention to ‘replace every drop of water used’, Coca-Cola has invested in array of projects that focus on one of three goals:
- productive use of water by increasing conservation and reuse
- restoration work like high-tech irrigation
- providing basic services like water filtration within communities
In 2016, it publicly touted its achievement of that goal, but further analysis reveals many caveats. The actual content in the bottles represent 1% of the company’s Water Footprint. The company only accounts for the volume that is shipped instead of the water required to grow its raw ingredients and to produce the plastic packaging. As such, it is quite far from its one for one replenishment goal. It’s also faced criticism of opaque reporting in its investment projects. A project in Mexico done in partnership with its bottler produced 5 million trenches meant to improve irrigation for its sugar saplings, but was ultimately cancelled with questionable efficacy but certain forest degradation and erosion. Water efficient agricultural practices are part of the company’s guidelines for farmers, instead of its water plan. Ultimately, little impact other than public perception campaigns has actually been accomplished.
The core ingredient of the beverage industry is a finite resource, and assuming the entity is a going concern, it should explore ways that reduce its water usage at all steps of the value chain. It must involve the selection and performance of its upstream suppliers, no matter how local, as part of its operational risk planning. Beginning with its raw materials, Coca-Cola could look at partnerships with labs that develop less water-reliant crops or alternative ingredients with less water demand. Through its local bottlers, it could also partner with local farmers to explore sustainable farming techniques that make better use of waste water. Safeguarding its future would require a drastic review of its product portfolio. Instead of selling liquid bottles, it could explore flavour shots that use less packaging and is cheaper to transport. Alternatively, its dispensers could adopt a on-the-spot mixer similar to fountain drinks, whereby achieving the same ends.
While our planet is very blue, drinkable water is concentrated in certain regions necessitating the need for bottled beverages. It’s critical for Coca-Cola, and other industry players, to start evaluating the unique conditions of its markets and adopt water-resilient approaches should it continue to thrive and provide happiness for a thirsty world.
[1]https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/sustainability/pdfs/charting%20our%20water%20future/charting_our_water_future_full_report_.ashx
[2] https://waterfootprint.org/en/water-footprint/what-is-water-footprint/
[3]https://www.un.org/waterforlifedecade/scarcity.shtml
[4] https://www.coca-colacompany.com/stories/cooling-equipment-pushing-forward-with-hfc-free
[5] https://www.coca-colacompany.com/stories/manufacturing-emissions
[6] https://www.theverge.com/2018/5/31/17377964/coca-cola-water-sustainability-recycling-controversy-investigation
It’s interesting to see the difference between companies that go the extra mile to be more sustainable, to the ones that just do it to be seen and accepted by the public. It’s important to have regulation in place for this sort of examples.
Also, as an employee, it must be hard to work at a company like this where the current argument for acting in a more sustainable way it’s just because it’s the right thing to do. I understand that you could think of innovative business models to change this, but it’s easier said than done.
Wow. I knew about the issues regarding plastic bottles, but I didn’t know about the amount of water needed to produce a soda like Coca Cola, and I find the amount perturbing.
Such a large company and with its performance and reach, I think it should really invest more and be a leader of the change.
Great critique of Coca-Cola’s sustainability actions, which I have always seen as a bit of greenwashing. For instance, they also used to say that they are water neutral or water positive (at least in India), but while that may have been the case from a national perspective, it still left several areas in a lot of distress. Coca-Cola was withdrawing water from certain areas and replenishing them in others. An example would be the Rajasthan plant you mentioned – Rajasthan is a very dry, arid, almost desert-like area and if the water that is extracted from there is not replenished there, it would have a severe impact on the agricultural communities in the area. However, most of Coca Cola’s rain-water harvesting (and similar) programs were in areas that received sufficient rainfall in the first place- which also meant that the net effect on an area or community from where Coca Cola’s water is being extracted is not being mitigated.
The article also made me wonder if Coca Cola’s entire business model will come under threat due to increasing water scarcity globally. Great article.
Interesting read. I am shocked by the amount of water required to produce soda and especially curious to understand to which extent this is attributable to sugar production. Is Coke Zero better for the environment? Or do the sugar substitutes leave their ecological footprint in other ways? Considering the amount of sugar-sweetened beverages and food products, how much water could be saved worldwide by using sugar substitutes or less sugar in our food&beverages?
Great article! I’m also shocked with the ammount of water to produce soda! Although changing the source of refrigeration and can recycling are great initiatives, Coca Cola could also focus on substituting plastic bottles. The wrong disposal of those bottles are a bigger environmental issue
Water scarcity is going to become a huge problem facing society. This is a great piece highlighting the use of water in Sodas. We must remind ourselves to be responsible when consuming these products.
I had no idea it takes up to 170L of water to produce a bottle of Soda!
Is there a way/researches about re-usage of this water? Is it possible?