Eco war: Coca-Cola and Pepsi fight to out-green each otherhttps://en.majalla.com/node/312831/business-economy/eco-war-coca-cola-and-pepsi-fight-out-green-each-other
Eco war: Coca-Cola and Pepsi fight to out-green each other
Plastic bottles contribute a quarter of the pollution affecting seas and oceans. The biggest two companies are trying to out ‘green’ each other, but doubts are being cast over their recycling plans.
Sara Gironi Carnevale
Coca-Cola and Pepsi have faced mounting pressure to reduce their carbon footprint and pollution.
Eco war: Coca-Cola and Pepsi fight to out-green each other
The World of Coca-Cola Museum is a 15-minute walk from the company’s headquarters in the heart of Atlanta, Georgia.
There, visitors learn how Dr John S Pemberton came up with the drink’s famous formula in 1886 and then kept it a secret, only ever sharing it with a select few.
At some point, it was allegedly written down and locked up in the museum’s vault, which visitors can see today, with its stunning entrance.
Elsewhere in the museum, tourists learn about the evolution of the bottle, its design, and its manufacture, now done with advanced machines. Where once a bottle cost a cent, now it is a little more.
Wandering around, the company's emphasis on marketing its “environmentally friendly” products becomes quickly clear. Visitors are peppered with details of its “World Without Waste” campaign, which has been running since 2018.
The soda duo has faced mounting pressure to reduce their carbon footprint and pollution.
Who's the greener
Being eco is a competitive business, with Coca-Cola's rival PepsiCo also striving to have better green credentials when it comes to manufacturing and packaging.
Like other food and beverage companies that use natural resources in their production and packing processes, the soda duo has faced years of pressure to reduce their carbon footprint and their contribution to pollution and the climate crisis.
Yet competing to be the most successful at recycling their waste is merely the latest extension of the ongoing 'Cola War' between Coca-Cola and PepsiCo.
They vie for the best retailers in the world using smart advertising (engaging songs, celebrities, consumer reward programmes...) while adapting to changes in food marketing trends, lobbying policymakers, and funding medical research.
Heavy hitters
This has contributed to their success as the world's leading beverage suppliers, which is reflected in their share price: Coca-Cola is worth around $259bn, while PepsiCo is worth around $227bn.
Coca-Cola exceeded Wall Street's expectations in the last quarter of 2023, with net revenue rising to $10.8bn, meaning 2023 revenue was $45.8bn. Net profit was $11.6bn, up 5% on 2022.
The Coca-Cola Bottle exhibition, held for the 100th time, at the High Museum of Art in Atlanta, February 26, 2015.
Meanwhile, PepsiCo generated revenue of almost $91.5bn in 2023, up from $86.4bn in 2022, with a net profit of almost $9.1bn, up from $9bn in 2022.
Both companies produce and distribute more than 500 brands each, including beverages, foods, snacks, and services.
Analysts think PepsiCo will see a significant jump this year, with its shares expected to rise by 20%, boosting its market value to around $277bn. This would let it hurdle Coca-Cola to become the bigger company for the first time in two decades.
Plastic pollution
Behind these staggering statistics are some alarming figures on plastic pollution caused by these two companies, which could account for up to a quarter of the pollution affecting the world's oceans and seas.
Despite what we now know, the production of plastic packaging is still increasing, and so are its consequent environmental effects. This has raised concerns among legislators, conservationists, and consumers.
Coca-Cola sponsors major international environmental initiatives, including the United Nations Climate Change Conference (COP). It also sponsors the upcoming Olympic Games in Paris, being hailed as the most environmentally friendly Games ever.
Coca-Cola and PepsiCo have both undertaken packaging transformations, which have had serious environmental consequences, not least in terms of litigation.
Both companies have poured time and money into their sustainability plans, driven partly by consumers who are becoming better educated on the environment and switching to less polluting products.
Coca-Cola and Pepsi have poured time and money into sustainability plans, driven in part by consumers who are switching to products that pollute less.
Judging by the dozens of reports on sustainability, environmental governance, and social responsibility, each company is taking it seriously.
Experts have looked at all areas, from packaging and recycling to reduced carbon inputs, increased reliance on renewables, raw materials of plant origin, and water conservation policies.
Bottles in the Buffalo
In November 2023, the State of New York sued PepsiCo after an investigation found that 17% of all plastic waste in the Buffalo River came from products of the soft drinks company and its Frito-Lay subsidiaries.
Attorney-General Letitia James said: "No company is too big to ensure that their products do not damage our environment and public health.
"New Yorkers have a basic right to clean water, yet PepsiCo's irresponsible packaging and marketing endanger Buffalo's water supply, environment, and public health."
The state argues that microplastics (pieces less than 5mm in length, which could be harmful if ingested) and secondary plastics resulting from the destruction of PepsiCo's plastic bottles have harmed people and wildlife.
PepsiCo was accused of providing false data on the recyclability of the plastics used in its packaging (claiming they were infinitely recyclable) and misleading data on progress in reducing its plastic production.
Plastic bottles float on the heavily polluted San Juan River, a tributary of Pasig River in Mandaluyong City, Philippines, June 21, 2021.
The company said it was serious about "plastic reduction and effective recycling" but did not comment on the specific lawsuit.
Greenwashing
This case has sparked debate over the extent to which Coca-Cola and PepsiCo have made progress towards sustainable packaging, including its recyclability.
Both have been accused of "greenwashing" over the claims they have made, which has led to lawsuits to increase pressure on companies over the climate crisis.
In the United States, only 24% of plastics are recycled. According to Bloomberg, US beverage companies produce 100 billion plastic bottles annually. Coca-Cola alone produces 4,000 bottles every second.
These bottles are made from polyethene terephthalate (PET), a material derived from oil and natural gas, before undergoing energy-intensive processes.
Both Coca-Cola and PepsiCo have committed to achieving a 50% usage rate of recyclable packaging by 2030. Still, according to 2022 statistics, this usage rate has not yet exceeded 13.6% for Coca-Cola or 11% for PepsiCo.
Figures like these fuel scepticism about the effectiveness of the companies' plans for plastic reduction. Campaigners say they have fought fiercely for decades against laws restricting the use of PET plastic bottles.
In 2023, the State of New York sued PepsiCo after 17% of all plastic waste in the Buffalo River was found to come from its products.
Health and climate
In 2019, soft drink companies led by Coca-Cola and PepsiCo announced a $100mn ten-year investment to improve plastic packaging collection and recycling, partnering with the American Beverage Association, local governments, and the Global Wildlife Fund.
However, eyebrows were raised as to the timing, given that a year earlier, China said it would significantly reduce the recycling of plastic waste from the US.
Others point to an analysis by Bloomberg Green, which confirmed that the drink companies only allocated $7.9mn of the $100mn pledged in 2022. Their actual allocation represented the firms' combined profits every three hours.
Americans have plenty of quips about Coca-Cola and PepsiCo. One is that those who say baseball is America's favourite pastime are lying—drinking soda is. Another likens their competition to that of Democrats and Republicans.
According to TIME magazine, Americans spend a massive $65bn on soda yearly, equating to $850 per household. That market faces challenges from growing awareness of health risks and climate damage.
Yet, despite that, the soda market is expected to grow at an annual rate of around 4.7% in the coming years. It seems that fears over plastic pollution have not yet killed the fizz.
