Quotation
Trump's Tariffs Force Coca-Cola's Hand: Aluminum Cans Make Way for Plastic
“To ensure affordability and meet consumer demand, if one packaging type faces higher costs, we can switch to other packaging options,” Quincey explained during the company’s earnings conference call. “For example, if aluminum cans become more expensive, we can emphasize PET plastic bottles.”
Impact of Trump's Tariff Policy
Trump’s latest policy raises aluminum tariffs from 10% to 25%, which is expected to increase the price of aluminum materials, particularly those sourced from countries like Canada. While aluminum is a premium material known for its high recyclability, it is significantly more expensive than plastic. As a result, Coca-Cola may shift to more cost-effective plastic bottles (PET) to offset the increased cost.
PET Bottles: A Cost-Effective Alternative
Although aluminum has a higher recycling rate than PET (with the EPA reporting a recycling rate of 50.4% for aluminum cans in 2018 compared to 29.1% for PET bottles), PET still has a higher recycling rate than other plastics. PET’s high functionality—being lightweight, durable, and offering excellent preservation qualities—has made it the most widely used material in beverage packaging. With global restrictions on aluminum circulation, PET presents an alternative that balances both cost-efficiency and environmental benefits.
Coca-Cola's Sustainability Goals
Despite the shift towards more plastic, Coca-Cola has continued to increase its use of aluminum packaging, particularly for bottled water and sparkling water. However, PET bottles still dominate the market due to their cost-effectiveness and high recycling potential.
The decision also aligns with Coca-Cola’s updated sustainability targets. The company has adjusted its goal for recycled material content in packaging from 50% by 2030 to 35%-40% by 2035. Additionally, it has revised its recycling targets, now aiming to collect 70%-75% of the bottles and cans it releases annually.
Conclusion
This move highlights Coca-Cola’s balancing act between economic pressures and environmental challenges. While aluminum’s higher recycling rate is significant, the global restrictions on aluminum and rising production costs make plastic bottles (PET) a viable alternative. Coca-Cola’s decision reflects the ongoing tension between cost-efficiency and sustainability, as the company strives to meet both economic and environmental goals.
References
China Is at Heart of Trump Tariffs on Steel and Aluminum - The New York Times