Packaging plays an essential role in safely delivering our products to customers and consumers. As a business, we design our packaging materials around several critical criteria, including compliance with food safety regulations, freshness and quality of the product, environmental sustainability, affordability, and consumer preferences, including convenience. At the beginning of every packaging design effort, we balance these criteria to arrive at a final packaging design.
We recognize that packaging is often disposed of improperly after a product has been consumed, and we share the concern that plastics and other wastes are accumulating in the marine environment and on land. These materials have value, and we are working on a broad set of solutions to ensure that they do not end up as litter or in a landfill. We are continually improving our packaging designs and supporting increased recovery of packaging material. In 2017, we re-stated our suite of packaging sustainability goals as part of our Performance with Purpose 2025 agenda:
- Strive to design 100 percent of our packaging to be recyclable, compostable or biodegradable,
- Increase recycled materials in our plastic packaging,
- Reduce packaging’s carbon impact, and
- In partnership with the PepsiCo Foundation, work to increase recycling rates.
Our work on sustainable packaging is a cross-functional effort that includes our business groups and brands, research teams, procurement, operations and public policy specialists. Our Sustainability Office brings all of this together, supporting alignment throughout our global organization, identifying priority areas and tracking progress. Packaging is a priority subject for senior executives as well as our Public Policy & Sustainability Committee of our Board of Directors.
The problem of waste and litter is a challenging issue that involves a complex system of actors, including many companies along the packaging value chain, the waste management and recycling industry, governments and consumers. As a result, PepsiCo engages in a variety of programs and initiatives that bring stakeholders together to create broad solutions in order to shift the whole system in a more sustainable direction.
PepsiCo recognizes that policy makers are also looking for solutions to the litter problem, especially marine plastics, while promoting the efficient use of valuable resources. In addition to the broad set of actions and investments we are making on sustainable packaging, we have adopted a proactive and pragmatic stance in our discussions with policy makers. We believe it is critical for PepsiCo and other industry members to be part of the policy discussion and are especially eager to engage when a policy proposal is broad based, delivers strong environmental outcomes, provides incentives for sustainability and gives us a seat at the table in designing and implementing programs.
At the same time, we believe that recycling and composting industries should be viewed by governments as a vital opportunity for clean technology investment and growth. In addition to the investments that PepsiCo and other companies make in research and development, purchasing recycled content, consumer education, and financial contributions to improving recycling collection, we encourage policy makers to support the recycling industry in further ways. In particular, policy makers can support public funding and incentives that encourage collection of post-consumer material, expand and modernize processing capacity, use more recycled material in infrastructure projects, promote greater private-sector investment, and help inform consumers on effective recycling practices.
Since launching our new goals around sustainable packaging, we have been working to collect and analyze global data to better understand how our packaging fits with the recycling process and where redesigns are needed. We have also been evaluating our use of post-consumer recycled material, especially recycled PET (rPET), which presents a closed loop solution for our beverage containers and carries a lower carbon footprint than virgin PET, and developing a deeper understanding of the opportunities and challenges in specific local markets. We highlight the following areas of progress:
- We estimate that approximately 90 percent of our beverage packaging worldwide is fully recyclable based on 2017 data. For food and beverage packaging combined, we estimate this number to be approximately 85 percent.
- In 2017, PepsiCo was one of the largest users of food-grade rPET in the world, resulting in an average of approximately 9 percent rPET use across our company-owned beverage portfolio in the U.S. and approximately 16 percent in our company-owned beverage operations in Europe.
- In 2017, the PepsiCo Recycling Program collected 72 million post-consumer containers for recycling in the U.S., an approximately 160 percent increase in container collections as compared to 2016.
- To help lift recycling rates in the United States, we made a $10 million investment in The Recycling Partnership to launch “All in On Recycling,” an industry-wide challenge to raise $25 million to improve recycling for 25 million families across the country, while supporting a circular economy, simplifying recycling, and creating stronger, cleaner communities. In addition to contributions from other corporations, the more than 2,800 communities that participate in the initiative are expected to triple the collective investment, catalyzing roughly $75 million in municipal funding, and bringing the total amount of support to $100 million.
Our work toward increased packaging sustainability is complex, requiring business discipline, cooperation among many stakeholders, and technological breakthroughs that can be executed and scaled in financially sustainable ways. We have a variety of partnerships, and initiatives demonstrating our progress towards our PwP goals and beyond.
Developing Solutions to Flexible Films
Flexible films, the packaging used for our snacks, are a beneficial material for transporting our products to consumers. They are lightweight and ensure food reaches consumers in a safe and fresh condition. Flexible films are critical for our snacks packaging, yet across the industry these films are not yet recyclable or compostable. To address this challenge, PepsiCo is leveraging our R&D expertise to create innovative packaging and working with partners to improve technology to recycle or compost flexible films.
In 2017, PepsiCo announced an agreement with biotechnology firm Danimer Scientific to develop biodegradable film resins to be used for next-generation snacks packaging. In contrast with traditional plastic, Danimer’s Nodax™ PHA bioplastic, which is produced using renewable biomass, can be incorporated into this next-generation packaging, which is compostable under a variety of conditions.
We are piloting the use of bioplastic bags in three geographic locations. In 2017, we began packaging Tostitos in these bags for certain food service accounts in the United States. In 2018, we will launch pilots in Chile and India using the same bag for select lines of our Lay’s potato chips. These bags are made with renewable resources and are compostable in industrial composting facilities.
While using renewable resources for packaging can be a more sustainable alternative to non-renewable resources, these biofeedstocks must be sourced in a responsible and sustainable way, ensuring sufficient land use for food sources and being mindful of environmental impact. To this end, PepsiCo has joined the Bioplastic Feedstock Alliance, a multi-stakeholder alliance convened by the World Wildlife Fund, which aims to improve awareness around the environmental and social impacts of sources for bioplastics.
We are also collaborating with organizations such as the Materials Recovery for the Future Collaborative in the U.S. and Circular Economy for Flexible Packaging (CEFLEX) in Europe to find solutions for recovery of flexible snacks packaging, working to make it a part of the circular economy.
Improving the Environmental Footprint of our Beverage Containers
While much of our beverage packaging is recyclable, we recognize that there are components of our packaging that may inhibit recyclability. To address this, our R&D team is actively engaged in projects to develop new packaging that fits current recycling infrastructure. For example, within our Tropicana line, we have successfully converted non-recyclable labels on all 89oz and 118oz bottles. Learnings from this project will be critical in our efforts to transition our global beverage portfolio to be 100 percent recyclable, compostable, or biodegradable.
We also use significant amounts of rPET in beverage containers. PepsiCo is currently one of the largest U.S. users of food grade rPET, and we are working to qualify new rPET suppliers and technologies to further increase rPET usage in our packaging. One such example is our Naked Juice brand, which uses 100 percent rPET in its containers.
Using rPET lowers the carbon footprint of our packaging. We also light-weight our packages, reducing the amount of material used. In order to further decrease the carbon footprint of our beverages, we are innovating with alternative delivery mechanisms. For instance, PepsiCo recently released Drinkfinity in the United States and Europe after piloting the product in Brazil. Drinkfinity is a customizable hydration system. It uses pods containing dry and liquid ingredients, such as chia seeds, spirulina, and coconut water that pop into the top of a reusable vessel to be mixed with water. These pods contain up to 65 percent less plastic than a comparable 20oz ready-to-drink beverage bottle. Additionally, a 20oz Drinkfinity beverage in the U.S. shows a savings of at least 35 percent in life cycle greenhouse gas impacts (as compared to a 20oz ready-to-drink Gatorade beverage). To ensure recycling of the pods, we have introduced a program for U.S. consumers to mail used pods straight to a recycling facility in North America. We are working to set-up a similar recycling program in Europe.
Improving Recycling Rates
While we work on designing sustainable packaging, we acknowledge that just as important is the infrastructure that enables recycling and promoting a culture that encourages it. Recovery and recycling rates throughout the world have significant opportunity for improvement, and while we cannot change those rates on our own, we have a role to play in supporting them through our own investments and partnerships with industry peers, NGOs and governments.
In the United States, for example, PepsiCo Recycling works in local communities to implement various on-the-go programs and partnerships to improve recycling infrastructure and raise awareness. PepsiCo Recycling is able to test new approaches and expand relationships with recycling agencies through its nearly 500 programs with municipalities and commercial sites. Since 2014, PepsiCo Recycling has succeeded in increasing the number of bottles and cans from our recycling bins sixfold, to more than 72 million bottles and cans in 2017.
In Poland, we were instrumental in launching a first-of-its-kind industry packaging recovery project executed by the Rekopol Packaging Recovery Organization. The goal of this project is to increase the amount of PET bottles collected and recycled across Poland. This will take place in conjunction with a public educational campaign. This initiative was driven and founded by the four participating companies: PepsiCo, Coca Cola HBC Polska, Nestlé Waters and Danone Waters.
Consumer Activation and Education on Recycling
As we work to increase the sustainability of our packaging, it is important for consumers to understand how and why to properly dispose of used packaging. We are engaged in many projects globally to improve communication and education around recycling for our consumers.
PepsiCo’s Recycle Rally is a free recycling program designed specifically for K-12 schools across the U.S. It provides exclusive access to resources and incentives to inspire students and their communities to recycle. Nearly 6,000 schools – including 4,000 schools currently enrolled – have participated in Recycle Rally over the past eight years (2010-2017) to collect approximately 130 million plastic bottles and aluminum cans.
We have leveraged the connectivity of our brands to high-profile events to encourage recycling, such as Super Bowl LII in Minneapolis, Minnesota. Rush2Recycle was a partnership with PepsiCo, the National Football League (NFL), Aramark, the Minnesota Vikings, and U.S. Bank Stadium. The effort engaged fans both inside the stadium and nationwide through a green ambassador program and by sharing tips and encouraging recycling at Super Bowl parties through the Rush2Recycle webpage. With a 91 percent waste diversion rate, Super Bowl 2018 became the first zero waste Super Bowl, diverting nearly 63 tons of game day waste from landfills.
In order to encourage and educate consumers on how to recycle our beverages, PepsiCo also communicates these important messages through on-pack labels. For example, in France we are part of a consumer awareness initiative called Pensez au Tri. This is a labeling system designed to give on-pack recycling instructions for each product. We have successfully transitioned 100 percent of our packaging in France to include information on waste sorting.
In Austria, we participate in a European recycling initiative, Every Can Counts, to encourage consumers to properly recycle beverage cans. PepsiCo became the first company to add the Every Can Counts (Jede Does Zaehlt) mark on Pepsi Cola and 7UP cans in Austria in 2016.
Similarly, in the U.S. our Quaker brand uses the How2Recycle label. How2Recycle is a simple on pack logo indicating in a clear and concise way, how to recycle each component of a package, with additional information on its website about local recycling resources and consumer education videos.
Engagement and Partnerships
To strive for sustainable change in the waste management value chain, we are engaged in strategic partnerships with organizations focused on improved recycling and supporting a circular economy. Below is a list of organizations we engage with. Please see our packaging partnerships and engagement document for more details.