Coca-Cola ko announced Wednesday that it will pour $44 million into its first U.S. plastic-bottle-recycling plant as part of a larger $60 million effort to give the company a "greener" environmental image.
"It's important to consumers, it's important to our system and our employees, and it's the right thing to do," says Sandy Douglas, president of Coca-Cola North America.
The "bottle-to-bottle" plant — it recycles collected bottles into new bottles — will be built in Spartanburg, S.C.
Environmental groups have increasingly criticized beverage marketers for the oil use and landfill impact from billions of plastic bottles they use worldwide each year.
"In the scheme of things, (Coke's plan) is not a huge investment, but Coke and Pepsi are continuing to fight a public-relations battle on recycling," says John Faucher, beverage analyst at JPMorgan. "When you are relying on the brands' imagery to drive value, you have to be proactive. You can't sit there and take all the punches on it."
Recycling rates have only recently begun to turn up after falling for years. The rate — 23.1% in 2005, the latest available — is 16 percentage points below the 1996 rate, according to the National Association for PET Container Resources, the trade group for the polyethylene terephthalate (PET) plastics industry.
Coke's plastic bottles currently contain about 10% recycled PET. The company has a goal of 30% by 2010 and hopes to eventually approach 100%. "We have a lot of work to do, but setting the goals creates the energy that results in achieving goals," says Douglas.
More of Coke's plan to spend green for green recycling goals:
•The 30-acre plant to open in 2008 is being built in a venture with recycling company United Resource Recovery. It will add up to 50 jobs when it is in full operation in 2009 and is expected to recycle about 100 million pounds of PET annually, equal to about 2 billion 20-ounce beverage bottles.
•An additional $10 million will be invested in a dedicated recycling joint venture formed last year by Coke and its largest bottler, Coca-Cola Enterprises. Coca-Cola Recycling will create nine centralized recycling centers throughout the USA this year and add 35 in 2008. The centers will create and use a uniform recycling process for packaging that Coke produces and packaging that it receives from suppliers.
•An additional $6 million will be added to an investment Coke made in a curbside collection program in Philadelphia, New Jersey and Delaware run by recycling company RecycleBank. The program provides incentives, such as coupons, to encourage consumer participation. It has helped boost the recycling rate in Philadelphia to 50% from 15% since 2003. Coke will expand the program with RecycleBank this fall to Upstate New York, Vermont and Massachusetts.
Coke already is trying to raise recycling awareness with its Eco-Fashion line of apparel, wallets, shoulder bags and jewelry — including a $110 bracelet made from a Tab can and sterling silver. They are sold at www.cokestore.com.