Introduction:
Coca Cola produces a quarter of the world’s plastic bottles, reaching 128 billion bottles sold in 2017. Less than half of these bottles are collected for recycling. Less than one tenth of these are then transformed into new bottles.
As a consequence to this, most of the plastic bottles ended up as waste. They accumulate & emit greenhouse gases (methane & ethylene) that indirectly threatens biodiversity & the entire food supply chain – a big threat to the ever-pervasive climate change.
So what did Coke do?
It soon became clear –should Coke continue on this trajectory, it would continue to exacerbate & hurt the planet. From the large volumes of greenhouse gases being emitted through their manufacturing and distribution process, to the huge amounts of plastic waste ending up in oceans and landfills, there was increasing social pressure for them to clean up their act.
In response to this, Coke set up their “World Without Waste” initiative, which outlined their industry-first goal to ‘collect and recycle the equivalent of every bottle or can it sells globally by 2030’. The really interesting thing was that they put the this initiative at the heart of their business strategy, indeed claiming that ‘this initiative on packaging is just as critical as our work on beverage choice’.
This strategy focuses on few core points:
- Better Deposit Return Schemes (DRS), which are easy for the public to use, run by a Not-for-Profit organisation in a professional capacity that refunds customers when they return their packaging
- Investing in R&D in bioplastics to improve the amount of sustainable packaging within the bottles and cleaning up the efforts required to recycle
- Minimising the risk of micro plastic losses both in sites and with suppliers
- Taking an end-to-end view of the supply chain through supporting recycling programmes and investing in infrastructure to better recover bottles and cans
Across the Coke value chain, packaging has the greatest share of carbon at 25-30%, so this is a key target area for Coke to address the issues of climate change.
Impact
Even though Coke has not fully met their goals, there have been advancements made towards this ambitious goal:
- As of January 2018, 88% of Coke’s consumer packaging is recyclable and produced using 30% recycled materials, with a 100% / 50% target for 2025 respectively
- 58% of bottles introduced into the market were refilled, recycled or collected
- $15m committed to partner organisations dedicated to prevention of plastic waste
In their Sustainability report, they do acknowledge that there is a business risk associated with higher cost of packaging materials. However, the business risks associated with climate change are much greater, e.g. lower availability of products or disruption to supply chains.
It is widely recognised that recycling is one of the most important factors to reduce climate change, as it ‘…saves energy, reduces deforestation, minimises greenhouse gas emissions from landfills, and encourages production of more energy efficient products’. Nevertheless, one of the biggest challenges still lies in the reverse logistics associated with recycling, which is a key step in the reduction of new production, and therefore the reduction of production-related emissions as well as greenhouse emissions from landfills. Due to these issues, organisations like Greenpeace still feel that Coke, amongst others, need to do more to reduce their overall plastics input – simply trying to recycle is not enough, rather they feel that companies like Coke need to cut down their overall emissions, or take a lead in coming up with viable alternatives to throwaway plastics.
What’s ahead
There are still headways for improvement. To achieve the 2025 goal, Coca Cola needs to work on improving scalability of this model globally. The challenge is that globally, most of Coca Cola’s growth drivers are in developing markets, where the business is projected to grow 20% YoY (against soft growth in Europe / North America).
Developing markets present its own challenges. Local infrastructures are very unique. Issues related to reverse logistics in recycling needs to be addressed with tailored solutions. As such, partnership with intermediaries familiar to the local market is necessary.
To do so, the company needs to mobilise local communities & NGOs to increase awareness of the program to improve recycling rate. Unique market insights will also enable Coca Cola to figure out a ”strategic heat-map” of recycling points that can minimise the issue (& associated cost) related to reverse logistics.
As one of the biggest ”emitters” of plastic waste globally, Coca Cola can also start to put industry-wide pressure, either within the plastic industry / with competitors. A pilot has recently been conducted to create Ecology and Corporate Commitment (ECOCE), a joint venture between Coca Cola & Mexico’s plastic industry to encourage culture of recycling, spearheaded by the creation of 2 food grade PET plastic recycling facilities. It remains to be seen how this initiative will transpire, but support from public institutions are necessary to ensure success.
Amongst competitors, Coca Cola has gained ”first mover advantage” in the closed-loop fight to combat climate change. Should this success continue, “World Without Waste” can be a model replica for other industries with heavy-packaging structure (e.g. perishable goods / FMCG). Who knows? They can even turn this into a lucrative business opportunity by creating environmentally-friendly packaging recycled from previous waste that are manufactured for other companies’ use.
Created by Cyrus Suntook, Dennis Laurentius & Rafael Breviglieri
Sources
- https://www.coca-colacompany.com/stories/unpacking-cokes-bold-new-sustainable-packaging-vision
- https://www.theguardian.com/environment/2017/jun/28/a-million-a-minute-worlds-plastic-bottle-binge-as-dangerous-as-climate-change
- https://www.coca-colacompany.com/stories/unpacking-cokes-bold-new-sustainable-packaging-vision
- https://www.coca-colacompany.com/worldwithoutwaste
- https://www.breakfreefromplastic.org/2018/10/09/globalbrandauditreport/https://www.coca-colacompany.com/worldwithoutwastehttps://packagingeurope.com/coca-colas-sustainable-packaging-strategy-one-year-on/
- https://www.coca-colacompany.com/stories/position-statement-on-climate-protection
- https://rctom.hbs.org/submission/coca-cola-responses-to-threat-of-climate-change/
- https://www.voanews.com/a/plastics-contribute-to-global-warming-scientists-say/4509787.html
- http://www.arena-international.com/liquipack/-coca-cola-profit-boosted-by-emerging-market-growth/1293.article
- https://www.coca-colacompany.com/stories/world-without-waste
- https://www.greenpeace.org.uk/what-we-do/oceans/coke/
- http://www.gorillabins.ca/blog/how-recycling-can-prevent-climate-change/
I find very interesting the fact that a company like coke feels the sense of responsibility and urgency on the topic of plastic waste, for which the company itself is one of the mayor (indirect) contributor.
Do you think that Coke is somehow also affected by the climate changes, beside being a “cause”? I have in mind, for example, that sugar provisioning is becoming more challenging due to weather unprevedibility and costs of insurance / derivatives on commodities is becoming much higher.
Really good example of a large player implementing a strategy at 360° involving the full supply chain to tackle a relevant issue.
My main concern to ensure success of such initiative for Coca Cola is linked to its ability to involve all suppliers and align their incentives: only if all players of the value chain, and in particular the one involved in the final step of re-collection, are willing to make this change, then a real impact will be achieved.
An idea that Pepsi used to implement 20 years ago was the refill option, so that you would buy glass bottles, and after consumption they were returned to the retailer who would then return them to the supplier to be refilled. Why not going for similar options to help with the sustainability goal?
Thanks for sharing! It’s interesting that Coke put this recycled bottles initiative at the heart of their marketing strategy. A part of me can’t help but wonder what they aren’t showing us that contributes to mass carbon emissions and waste. Regardless, I think that it’s good they’re raising awareness about the issue. If only there was regulation previously in place that mandated big corporations to pre-approve product packaging materials for waste management. Hindsight is always 20/20.
Thanks for highlighting Coca-Cola’s strive for sustainability – I hadn’t heard about this campaign and I think that it’s nice that they aren’t tooting their own horns as propaganda to increase sales.
I appreciate the fact that big companies like Coca-Cola have developed sustainable programs. I think however that the main issues remain in developing countries where there might not be enough infrastructures in place to recycle materials. Coca-Cola should strive to help governments develop those infrastructures!
I think this is a great initial step but Coca Cola has the opportunity to completely transform their modus operandi and move from eco-efficiency (focused on improving the actual system in order to be less bad) to eco-effectiveness. The latter has the main objective of developing new systems or methods that do not generate pollution or deplete natural resources, instead of eco-efficiency, whose main objective is to reduce the environmental foodprint as much as possible. Coca Cola should try to develop innovative ideas about their packaging that maximize economic and ecological benefits.