In response to a recently announced 25% tariff on imported aluminum and steel by the U.S. government, Coca-Cola is evaluating the possibility of increasing its use of PET plastic bottles for its beverages. The tariff, which affects aluminum sourced from Canada, is prompting the company to explore packaging alternatives to maintain stable production costs, a change that CEO James Quincey discussed during an investor earnings call.
Quincey noted that while the rising costs of aluminum are significant, they represent just a portion of the company's overall expenses and are unlikely to radically alter the business's financial outlook. Despite this, the potential shift toward more plastic packaging could represent a serious change in the company’s efforts to promote sustainability, as Coca-Cola has been gradually increasing its use of aluminum cans in recent years.
The company has committed to making all its packaging recyclable by the end of the year and increasing its use of recycled materials to at least 50% by 2030, although recycled content in PET plastic remains low at 17%. Environmental groups have criticized the reliance on plastic, citing the difficulties of meeting global recycling targets, especially in regions lacking robust waste management systems.
The tariff poses challenges not only for Coca-Cola but also for other industries that depend heavily on aluminum, such as the automotive sector, where rising production costs could have wide-reaching effects. Despite these challenges, Coca-Cola has reaffirmed its commitment to sustainability, aiming to collect and recycle a bottle or can for every product sold by 2030 while maintaining high recyclability rates for its packaging.