The food and beverage industry could be the most exposed to the impacts of climate change. Changes in weather patterns, water availability, and growing conditions for crops may have long term consequences on the business and supply chain of the companies in this industry. Currently, more than 2 billion people live in water stressed areas. That figure is projected to rise significantly over time due to population growth and climate change . Executives at The Coca-Cola Company have taken notice. Water is the main ingredient in most of their products, making water quality and availability critical to the business . Coca-Cola is working to be a more responsible global citizen by sustainably sourcing agricultural ingredients, reducing its carbon footprint, recovering and recycling bottles and cans, and improving its water-use efficiency .
Coca-Cola is seriously considering ways to reduce their greenhouse gas emissions across the entire value chain: ingredient sourcing, packaging, manufacturing, distribution/delivery, and refrigeration. These efforts are measured in the “drink in your hand” goal, in which the company set out to reduce its carbon footprint of the Coca-Cola “drink in your hand” by 25% by the year 2020 against the 2010 baseline . And, they have made great progress! In 2016, Coca-Cola was able to reduce the carbon footprint embedded in a drink by 14% below 2010 levels . To achieve this progress, the company has employed several initiatives in the short-term.
Contributing to the 2016 progress was an innovation in packaging . Polyethylene terephthalate (PET) is a strong, lightweight plastic that many food and beverage companies use for the packaging of its soft drinks, juices, and water. PET plastic is completely recyclable; however, its raw materials are derived from crude oil and natural gas . Coca-Cola created the PlantBottle packaging, replacing one of the fossil based ingredients in PET plastic with renewable materials made from plants. Eight percent of Coca-Cola’s global packaging volume is now made with the PlantBottle material, which allows them to tout themselves as the world’s largest consumer of bioplastics .
An innovation in refrigeration has also contributed to 2016 progress. Hydrofluorocarbons (HFCs) are organic compounds that are primarily used as refrigerants. HFCs are powerful greenhouse gases with a much higher global warming potential than carbon dioxide . Coca-Cola found that refrigeration was the biggest source of the value chain’s carbon footprint . In 2016 alone, the company introduced over 623,000 units of HFC-free coolers, fountains, and vending machines into the marketplace. This figure contributes to the 2.5 million pieces of HFC-free refrigeration equipment that have already been introduced since 2009 .
Long term, Coca-Cola has set out to advance their renewable energy program. Executives have provided local teams with a tool called the Clean Energy Toolkit. This tool will guide local teams through the decision-making process on potential investments in renewable energy. At year end of 2016, Coca-Cola was actively pursuing 50 renewable energy projects in addition to the 81 projects that were already operational .
Another example of Coca-Cola’s long-term strategy is the community water projects. Coca-Cola is replenishing 100% of the water used in their finished beverages back to nature and the communities in which they operate. In 2016, they replenished 221 billion liters of water through organizations such as the World Wildlife Fund, Water & Sanitation for the Urban Poor, and the United Nations Development Programme .
Lastly, Coca-Cola recognizes that the greenhouse gas emissions of the distribution/delivery trucking fleet accounts for about 5%-10% of the value chain carbon footprint. The company plans to add delivery trucks powered with alternative fuels to the fleet to reduce the carbon footprint in the distribution/delivery value chain .
In June 2015, Coca-Cola released a new innovation on the PlantBottle packaging, replacing both of the fossil based ingredients in PET plastic with 100% renewable plant materials. This new iteration of the PlantBottle has not been commercialized yet . My recommendation to Coca-Cola’s management is to begin using this new packaging as soon as possible. This industry leading innovation will make Coca-Cola’s stance on sustainability clear in the food and beverage industry.
Although Coca-Cola has made much progress, they have also experienced some setbacks. In developed countries, 2016 emissions levels from manufacturing operations were 21% below the 2004 baseline. However, the total emissions levels were 13% higher than the 2004 baseline, suggesting that there is still much work to do in developing countries . Is the Coca-Cola “drink in your hand” goal too ambitious to reach by 2020?
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