PepsiCo production line

With the European Union aiming to be climate-neutral by 2050, companies’ net zero strategies are more important than ever. Frances Butler takes a closer look at how beverage brand owners PepsiCo and Coca-Cola are tackling their emissions, what role packaging plays in their net zero strategies, and the progress being made towards these goals.

A closer look at PepsiCo

In January 2021, PepsiCo pledged to reach net zero emissions by 2040. To find out what progress PepsiCo is making towards its net zero targets, we hear from PepsiCo Europe’s Katharina Stenholm, chief sustainability officer (at the time of interview).

“Packaging counts for approximately 20% of our GHG emissions, with PET being the biggest contributor,” said Stenholm, emphasising that circular, non-fossil-based packaging will play a vital role in achieving PepsiCo’s net zero emissions goals.

Stenholm highlighted packaging design as a key element of this, such as the brand’s aims to design 100% of packaging to be recyclable, compostable, biodegradable or reusable by 2025; cut virgin plastic from non-renewable sources per serving across food and beverage portfolios by 50% by 2030; and scale new business models that avoid or minimise single-use packaging materials.

She also mentioned its goal to achieve 50% recycled plastic (rPET) by 2030 across Europe, and consumer trials of 100% recyclable or renewable snack packaging which began in 2022 “in line with our new goal of eliminating virgin fossil-based plastic in crisp and chip bags by 2030”.

Stenholm underlined Pepsi Co’s support for ambitious recycling targets, increased recycled content targets and deployment of Deposit Return Schemes (DRS), saying:

“These DRS are key to ensure a high degree of recycling for our beverage packaging – as producers, we should have priority access to this food grade material to achieve true circularity.”

PepsiCo committed to eliminating all virgin plastic from Pepsi brand bottles by 2022 in an effort to lower carbon emissions per bottle by approximately 40%. In September 2021 Pepsi Max announced the switch to 100% rPET for its 500ml and 600ml bottles, but the use of 100% rPET bottles was scaled back for some UK brands in July 2022, citing supply issues.

When we asked Stenholm how this issue was overcome, she explained that whilst 11 markets across Europe have 100% rPET Pepsi bottles (excluding cap and label) already, “we are struggling to enough rPET to continue the roll out at this pace.”

One the reasons Stenholm cites for this is less advanced return systems in some European countries. However, she points out that in Slovakia “return rates have reached over 80%” which has increased the rPET supply, and the company is going ahead with DRS in many countries.

Katharina Stenholm PepsiCo Europe

Katharina Stenholm, previous chief sustainability officer at PepsiCo Europe.

Achieving net zero: what are the main packaging challenges for Pepsi Co?

Following on from the difficulties with rPET availability, we asked Stenholm for her opinion on the main packaging challenges that need to be tackled to achieve net zero.

She stated that PepsiCo is focusing on business models requiring little or no single-use packaging ahead of various reusable bottle schemes due for rollout this year, with SodaStream “expected to eliminate the need for nearly 200 million virgin plastic bottles globally by 2025”.

Stenholm says that in 2022, PepsiCo Labs (which works with tech startups to test industry needs and scale ideas) identified 12 start-ups which may unlock potential solutions to help PepsiCo’s sustainability agenda across its supply chain, including “a physical and digital tracking system for sorting and recycling of waste, a bio-based thermoplastic converted entirely from household waste – including unrecyclable plastics and all organics, and an AI-based failure detection technology for manufacturing plants.”

She added that trials in Europe and North America throughout 2022 and 2023 would test these technologies to help PepsiCo identify which can be scaled long-term.

In January 2021, the company stated its plan to reduce Scope 1 and 2 absolute GHG emissions across its value chain by 75% and Scope 3 by 40% by 2030 (against a 2015 baseline). We wanted to know what progress has been made with this so far.

Stenholm said that 12 European markets eliminated Scope 2 emissions by transitioning to 100% renewable electricity for their own manufacturing operations, and the reduction of Scope 1 emissions is being tackled through piloting new technologies like “biomass, biogas, renewable natural gas, electrification, and hydrogen opportunities, as well as investing in capability-building and knowledge-sharing internally to quickly identify and deploy low-carbon solutions.”

She underlined the importance of reducing Scope 3 emissions in the food industry, saying: “our efforts to reduce value chain emissions focus on our three largest emissions drivers: agriculture, packaging, and third-party transportation and distribution. Meeting our net-zero goals requires that we move quickly and significantly on these, in collaboration with our upstream and downstream partners from whom these emissions originate.”

Joe Franses CCEP

Joe Franses, vice president of sustainability at CCEP.

A closer look at Coca-Cola

Another brand owner aiming for net zero is Coca-Cola, who have set science-based targets to reduce absolute emissions by 25% by 2030 against a 2015 baseline and achieve net zero by 2050.

As part of its World Without Waste campaign the brand is planning to make 100% of packaging recyclable globally by 2025, and use at least 50% recycled material in its packaging and collect and recycle a bottle or can for each one it sells by 2030. It also claims that 90% of its packaging is recyclable globally.

We spoke to Joe Franses, vice president of sustainability at Coca-Cola Europacific Partners (CCEP) - which markets, produces and distributes drinks including Coca-Cola products – about its own climate strategy and plans to increase recycled content.

He outlined CCEP’s plans to make sure all packaging is recyclable; use as much recycled content to make that packaging as possible (such as recycled PET or working with can suppliers to use recycled aluminium in a can); and making sure that packaging can be collected and recycled.

In Europe, “around 53% of all the plastic we used at the end of 2021 was recycled PET,” he said, with around 60% in Australia and 40% in New Zealand. He added that between 75%-80% of packaging in Europe is being collected for recycling, which differs by market, with Great Britain and France being lower and some markets with DRS being much higher.

According to Franses, the company’s science-based targets and climate strategy is value chain based, with estimates of around 20-25% of total value chain emissions being ingredients; 40% being packaging; 10% from all its operations in commercial sites; 10% for transportation; and about 10-15% for cold drinks equipment.

He notes that markets will make a difference here, too – “in a market where the carbon footprint of the local grid is higher than the proportion of the value chain emissions attributed, our cold drinks equipment will be higher - simply because it’s using higher carbon intensive electricity.”

CCEP Carbon Neutral UK site in Morpeth

Reducing emissions across the supply chain for Coca-Cola Europacific Partners

CCEP has its own goal to achieve net zero by 2040, with around 90% of the bottler’s GHG emissions coming from the supply chain. We asked Franses to explain what steps are being taken towards this, and how packaging can play a role in achieving it.

Franses stated: “Supplier engagement is a fundamental part of how we will proceed on our journey to net zero. We will not be able to reduce our emissions unless we can reduce our Scope 3 emissions”.

He set out 3 things CCEP has asked suppliers to do: set their own science-based targets; shift to using renewable energy; and share their data with CCEP. For example, making sure the electricity a PET producer is using to make a can is coming from renewable sources.

Sharing data is a key point for Franses. “If you’ve got a can supplier doing excellent work to reduce the carbon footprint of the can, we need to be as close to their data as possible so we can incorporate that into our carbon footprint numbers.

Most big companies will use average data for the entire sector or for a reason. We want to move to using supplier specific data that will help reflect the carbon reductions our suppliers are engaged with.”

In addition, he mentioned CCEP’s sustainability linked finance chain with Rabobank, which will incentivise and reward suppliers for improving their performance in this area, as well as the Supplier LoCTS programme run by the consultancy Guidehouse (which the bottler and many of its packaging suppliers are involved in) which helps to “upscale and upskill supplier activity on carbon reduction.”

In 2021, 98%.3 percent of CCEP’s primary packaging in Europe was recyclable, and the company aims to ensure that 100% of packaging is recyclable by 2025. Franses said that in Europe there are still some elements that don’t meet the requirements, such as some of the pouches used for Capri Sun, which are not always easily collected for recycling.

Investing in PET recycling plants has taken place in France, Australia and Indonesia, and there is a single-use plastic directive in Europe that requires 90% collection of plastic bottles by 2029.

There is also proposed Packaging and Packaging Waste regulation which will introduce minimum requirements for DRS and make them mandatory across EU member states. Franses underlined CCEP’s support for this infrastructure “as long as it’s well designed, because it will help us to get in excess of 90% of our packaging back.”

In terms of collection, he stated that as a global Coke system, CCEP has a commitment to collect a bottle or can for every one it sells, and while “we can’t possibly collect every single pack we put onto the market, we will be looking at equivalents. That depends upon not just recyclability, but the collection functioning well across all those markets.”

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