Coca-Cola Signals Shift to Plastic Bottles Amid Aluminum Tariffs

Coca-Cola's CEO explains the company's possible pivot to plastic packaging, citing the impact of tariffs on imported aluminum as a significant factor in their upcoming business strategies.

Coca-Cola's chief executive, James Quincey, recently indicated that the beverage giant may be compelled to market more drinks in plastic bottles if tensions over aluminum pricing escalate due to tariffs established by former President Donald Trump. During a discussion with investors, Quincey addressed concerns regarding the 25% import tax on all steel and aluminum entering the United States, suggesting that this could lead to inflated prices for canned beverages.

In light of this development, Coca-Cola has revised its sustainability goals, reducing its aim of utilizing 50% recycled materials in its packaging by 2030 to a more modest target of 35% to 40% by 2035. This decision has drawn criticism from environmental advocates who have dubbed Coca-Cola the "top global plastic polluter" for six consecutive years.

Despite the potential cost implications of aluminum tariffs, Quincey remained optimistic, highlighting the company's flexible packaging strategy. "If one package suffers some increase in input costs, we continue to have other packaging offerings that will allow us to compete in the affordability space," he stated, referring specifically to PET plastic bottles as an alternative should aluminum prices rise.

Meanwhile, Quincey downplayed the overall impact of these tariffs, explaining that packaging constitutes only a minor fraction of Coca-Cola's overall costs. In recent years, the company has sought to elevate its marketing and sustainability efforts through increased use of aluminum containers, which are generally more recyclable compared to plastic.

The United States Geological Survey reveals that approximately half of the aluminum employed in the U.S. is imported, implying that a 25% tariff could significantly raise the expense of aluminum cans. Historically, various can-makers secured exclusions from previous tariffs, but Trump announced that this round would not offer exemptions for individual products or countries.

Adding further complications to the issue of plastic pollution, Trump also signed an executive order terminating ongoing efforts to replace plastic straws with paper alternatives, a move that flips a directive from former President Joe Biden, who labeled plastic pollution a "crisis."