Coca-Cola plans to adjust its packaging strategy by increasing its use of plastic bottles over aluminum cans in response to the recent tariff hike on aluminum. According to a CNBC report, CEO James Quincey stated that the company is focused on maintaining affordability and demand. The tariff increase, announced by President Donald Trump, will raise duties on aluminum and steel imports to 25% from 10%, effective next month.

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Quincey emphasized that while the tariffs represent a notable rise in aluminum costs, the impact on Coca-Cola’s extensive U.S. operations would not be drastic given the company’s diversified packaging options, including PET plastic bottles. Data from IndexBox indicates that the U.S. beverage container market has increasingly relied on alternative materials, with PET being a cost-effective choice despite its lower recycling rate of 29.1% compared to metal cans.

Despite its move towards aluminum in recent years to offer more recyclable options, Coca-Cola has faced criticism from environmental groups. The company has been under scrutiny from Greenpeace, which has named it the world’s largest polluter due to its reliance on single-use plastics. In a recent revision of its sustainability goals, Coca-Cola reduced its recycled materials target from 50% to 35%-40% by 2035, reflecting the challenges in increasing the use of recycled components.

While the tariff is seen as a move primarily targeting Chinese imports, Coca-Cola sources some of its aluminum from Canada. The company is also exploring options to mitigate increased costs by sourcing aluminum domestically and adjusting pricing strategies. As the industry navigates these economic pressures, the transition to more plastic packaging could influence the beverage market landscape.

Source: IndexBox Market Intelligence Platform