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What would it cost Coke & Pepsi to do the right thing?
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Date: Sat, 10 May 1997 04:48:08 -0700 (PDT)
From: "David A. Kirkpatrick" <david@kirkworks.com>
Subject: What would it cost Coke & Pepsi to do the right thing?
WHAT WOULD IT COST COCA-COLA, PEPSI TO PUT 5 PERCENT RECYCLED CONTENT IN
THEIR BOTTLES?
(Excerpted from Plastics Recycling Update, April 1997, with permission.)
Editorial Comment: What would it cost Coca-Cola and Pepsi to put 25 percent
recycled content in their battles? The price premium for PET PCR is about 6
cents per pound more than virgin resin. However, only 25 percent PCR is
blended with virgin resin to make recycled-content bottles, which reduces
the effective price premium to 1-5 cents per pound. With virgin resin
selling for about 45 cents per pound, the premium on raw material cost is
about 3.3 percent to add PCR.
Can these companies afford to close the loop with PCR? One way is to look
at profit levels.
One pound of resin makes about 15 single-serve, 20-ounce containers, so the
cost per bottle is 0. 1 cents. One beverage industry publication indicates
the soft drink bottlers are making a profit of more than $5 per case of 20
ounce bottles, or 21 cents per bottle. Thus, adding 25 percent PCR would
reduce Coke and Pepsi's profit by less than 0.5 percent.
By comparison , the soft drink companies have realized a windfall profit in
1996 of about 35 cents per pound, or 1.5 cents per 20ounce bottle, due to
the severe drop in PET virgin resin prices. Thus, Coke and Pepsi would have
to allocate one-fifteenth of their windfall profit to put recycled-content
into one year's worth of their bottles.
With numbers like these, it's not surprising that Coca-Cola refuses to
acknowledge the Grassroots Recycling Network, which has challenged the
company to live up to a 1990 promise to put PCR in its PET bottles. It is
sad to see Coca-Cola, named as the most admired corporation by Fortune
magazine, reinforcing a growing trend in industry, especially with
plastics-related companies, that it is okay to ignore recycling and
stonewall public interest groups until legislative pressure is applied. It
is even sadder because, in this case, it does not cost that much to do the
right thing.
Plastics Recycling Update, Editor: Steve Apotheker, P. O. Box 10540,
Portland, OR 97296, Business (503)227-1319, Fax (503)227-6135,
resrecycle@aol.com.
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End of GreenYes Digest V97 #105
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