Coca-Cola's chief executive, James Quincey, warns investors that potential price hikes from tariffs imposed by former President Trump on aluminium could lead the beverage giant to pivot towards greater use of plastic packaging for its products.
Coca-Cola May Rely More on Plastic Bottles Amid Trump Tariffs
Coca-Cola May Rely More on Plastic Bottles Amid Trump Tariffs
Coca-Cola's CEO indicates that rising aluminium costs could lead to increased plastic bottle sales in response to tariffs.
In light of the escalating costs due to a 25% import tax on steel and aluminium mandated by Trump, Coca-Cola may find itself relying more heavily on plastic bottles for its drinks as CEO James Quincey discussed during a recent investor call. The move follows a strategic shift aimed at addressing the anticipated increase in prices associated with aluminium cans, which have become a popular medium for the company in recent years.
The tariffs on imports are expected to drive up production costs for canned beverages, prompting Quincey to suggest that Coca-Cola could increase its sales of drinks in PET plastic bottles as an alternative. This conversation comes against the backdrop of Coca-Cola's previous sustainability ambitions, which had included a target of using 50% recycled materials in packaging by 2030. This goal was recently scaled back to an aim of 35% to 40% by 2035, raising concerns among environmental groups who have consistently deemed Coca-Cola the largest global plastic polluter.
Despite emphasizing the need for cost-effective packaging solutions, Quincey pointed out that packaging expenses constitute only a small fraction of Coca-Cola's overall costs. The company has traditionally prioritized aluminium for its recyclability, despite the fact that it typically costs more compared to plastic.
The import tariffs on aluminium impact half of the US's aluminium usage, making cans potentially more expensive in stores. Unlike previous tariff implementations that allowed exclusions for certain products, this time, Trump's administration has stated there will be no exceptions.
In another move enhancing concerns about plastic waste, Trump has retracted a federal initiative aimed at replacing plastic straws with paper ones, a reversal of a previous effort by former President Biden who addressed the issue of plastic pollution as a significant environmental crisis.
The tariffs on imports are expected to drive up production costs for canned beverages, prompting Quincey to suggest that Coca-Cola could increase its sales of drinks in PET plastic bottles as an alternative. This conversation comes against the backdrop of Coca-Cola's previous sustainability ambitions, which had included a target of using 50% recycled materials in packaging by 2030. This goal was recently scaled back to an aim of 35% to 40% by 2035, raising concerns among environmental groups who have consistently deemed Coca-Cola the largest global plastic polluter.
Despite emphasizing the need for cost-effective packaging solutions, Quincey pointed out that packaging expenses constitute only a small fraction of Coca-Cola's overall costs. The company has traditionally prioritized aluminium for its recyclability, despite the fact that it typically costs more compared to plastic.
The import tariffs on aluminium impact half of the US's aluminium usage, making cans potentially more expensive in stores. Unlike previous tariff implementations that allowed exclusions for certain products, this time, Trump's administration has stated there will be no exceptions.
In another move enhancing concerns about plastic waste, Trump has retracted a federal initiative aimed at replacing plastic straws with paper ones, a reversal of a previous effort by former President Biden who addressed the issue of plastic pollution as a significant environmental crisis.
