Smarter Business: Case Studies

pepsi bottle

Photo: PR NEWSWIRE

Challenge

2.57 million tons of petroleum-derived PET (polyethylene terephthalate) beverage bottles were thrown away in the United States alone in 2009. Although recycling rates are increasing, only 28 percent of bottle waste in the U.S. that year was recycled. Petroleum-derived PET bottles are composed of nonrenewable fossil fuels, meaning they carry the environmental costs of petroleum extraction and shipping. As discarded trash, plastic bottles clutter public spaces and contribute to the floating ‘garbage patches’ that plague the world’s oceans.

PepsiCo, the world’s second largest food and beverage business, has worked to lower the environmental impact associated with petroleum-derived PET bottles. The company lowered the amount of plastic used in its Aquafina water bottles and debuted a 100% recycled bottle for its Naked Juice line in 2009. To boost bottle recycling, PepsiCo launched the ‘Dream Machine’ project in 2011, an initiative that included public-private partnerships with municipalities like Washington, D.C.

Yet the company’s research and development team kept pushing for an even better solution. What if it were possible to design and mass-produce recyclable bottles made 100 percent from renewable materials?


Strategy

After about a decade of study, in 2011 PepsiCo’s in-house Research and Development team figured out how to manipulate fermented plant material into the molecular structure of PET.

In the past, plant-based bottle initiatives faced an environmental challenge: they were impossible to recycle within the PET waste stream, confusing eco-conscious consumers and doing little to solve the problem of accumulating landfill waste. PepsiCo’s breakthrough material is 100 percent plant-based, except for the cap, and fully recyclable within the current PET stream.

Prototype plant-based bottles were made using switchgrass, pine bark and corn husks, among other plant-based materials. Eventually, PepsiCo expects to be able to incorporate wastes from its food businesses, including orange peels, potato peels and oat hulls. PepsiCo’s food portfolio includes the Frito-Lay line of potato and tortilla chips, the Tropicana juice line, and the Quaker brand of oatmeal, cereals, granola bars and rice snacks. The plant-based bottles are not currently manufactured using sustainably sourced organic materials.

Because the new plant-based bottles are identical to petroleum-derived PET bottles on the molecular level, the plant based bottles can be blown, filled and labeled the same way— avoiding the need for major capital investments on the factory floor. PepsiCo merged with its two major bottlers, The Pepsi Bottling Group and PepsiAmericas, Inc. in 2010, giving the company direct control over the manufacturing process.

PepsiCo plans to test a few hundred thousand of the plant-based bottles in 2012, in order to make sure it can mass-produce the bottles at scale. After pilot testing is complete, the company will decide which markets and brands will feature the new technology. As implementation moves forward, the company will also track the life-cycle environmental impacts of the bottles in order to account for environmental savings.


Results

Although initial research costs were high, PepsiCo anticipates that the plant-derived bottles will cost roughly the same to produce as petroleum-derived PET bottles. The bottles will come at no extra cost to consumers, will look and feel exactly like conventional plastic bottles, and can be recycled like any other PET bottle.

The bottles would easily integrate with existing recycling systems, conserve fossil fuels and help PepsiCo reduce both bottle and food waste. As a massive corporation with an extensive supply chain and access to worldwide markets, PepsiCo is positioned to have a major impact on the entire plastic packaging industry--proving to competitors that change is possible, and positioning itself as a premier environmentally responsible brand.

“PepsiCo is in a unique position, as one of the world's largest food and beverage businesses,” says PepsiCo Chairman and CEO, Indra Nooyi, “to ultimately source agricultural byproducts from our foods business to manufacture a more environmentally-preferable bottle for our beverages business.”


About

PepsiCo, a multinational corporation created by the merger of Pepsi-Cola and Frito-Lay in 1965, is the world’s second largest food and beverage business. PepsiCo beverage brands include Pepsi, Mountain Dew, Gatorade, SoBe, Lipton and Aquafina. Annual revenues exceed $60 billion worldwide, with beverages comprising 51 percent of total sales. Social and environmental goals are among PepsiCo’s core values, and the company has launched various nutritional, social entrepreneurship, recycling, waste reduction and charitable initiatives.


Resources

last revised 6/17/2011

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