PepsiCo announced accelerated plastic waste reduction efforts last month, including a new 2025 target to cut the company’s use of virgin plastic for packaging by 35%. Such targets are becoming more critical for beverage makers as consumer backlash against single-use plastic grows. In addition, China’s decision last year to no longer take the world’s plastic waste for conversion to fiber and other uses has exposed a lack of global and US recycling infrastructure. “We’ve set ourselves a very clear responsibility within PepsiCo to absolutely be one of the leading companies in creating a world where plastic need never become waste,” PepsiCo Global Foods President Simon Lowden told BD recently. “That’s led to three big strategies. One is around reduction, one is around recycling, and one is around reinvention. We’re being incredibly purposeful.” We wanted to know more. The following Q&A with Lowden has been edited for clarity and space.
BD: Why is plastic packaging such a big priority, in terms of risk factors to the business?
SL: Let’s start with the consumer. Ever since the news about China came out, consumer questions around the plastic dilemma that the world faces has gone from third-gear to fifth-gear. That’s starting to lead to action. Number two, there’s been a daily rigour of media platforms that are showing what plastic is doing to the world. When you start seeing the imagery and the sheer amounts of plastic the world has been producing, it becomes more tangible. The younger generation doesn’t expect us just to produce great products, they expect us to do it in the right way. And that will absolutely lead to business success, or not. The third point, and maybe it should have been first, is it’s the right thing to do.
BD: How do you balance that with the fact that the PET beverage packing is probably one of the better single-use plastics in the market?
SL: We’re absolutely not trying to demonize PET. And you’re right, it’s versatile and it’s one of the safest packaging forms one can use. It provides freshness, shelf life. For us, it’s less about the material and more about what you do with it, which is why we’re so passionate about the circular economy. Our challenge is not just about incorporating recycled PET into our packaging, but how we educate people and how we support infrastructure build. That circular economy is something that we fundamentally believe in and that’s the nirvana.
BD: You have said PepsiCo would buy more recycled plastic (rPET) if it could. What’s the barrier?
SL: In many parts of the world, such as India, Thailand, China, Saudi Arabia, regulation prevents you from using recycled PET in food grade products. So we have a collective industry job to demonstrate to legislators and local governments that the use of recycled PET is a very good thing in beverage and food packaging. Secondly, in markets like Western Europe, the US and Latin America, where recycled PET is supported by governments, we have to build infrastructure to collect plastic and educate consumers on how to recycle it in the correct way. In India, we’re working with the government and many industry partners to make sure that whatever bottle we put into the marketplace, we collect. But what we can’t do right now is convert those collections into recycled PET for bottles. We can only recycle it into fiber, roadways, etc. We recognize that progress is everything. Perfection is difficult.
BD: What about in the US?
SL: When you look at the recycling rates in the US, they’re pretty low. We’ll look back in five years and think the China news was the best thing that could have happened to us as an industry, because it’s now forcing us to act. Success is going to be predicated on us working with PET suppliers, collectors, retailers, competitors, and consumers to ensure that we build this circular economy.
BD: So if there were more collections to create more rPET, could PepsiCo go even faster on its rPET goals?
SL: Yes, we could. There’s two things. One is making sure the stuff gets collected. But we also want to make sure that the recycling industry, those people that actually collect the bales of PET, have enough machinery to convert that into recycled PET.
BD: Is that true in other developed markets?
SL: My general sense is we’ve almost been going backwards on the recycling piece in the US. Europe’s been at this for a bit longer. So you’ll find the European industry is a bit more advanced than the North American industry. And we all take collective responsibility for that, right? I’m English and my mother still lives in England, and she has four trashcans. She has compostable, she has plastic, she has paper, and she has stuff that can’t be recycled at all. If she puts stuff in the wrong bin, she will get fined. She’s 80 years old. Now, in the US, how many bins do you have at home? That’s the challenge.
BD: Will the reinvention of plastic packaging using technology be a significant part of the solution and how soon?
SL: It’s going to probably take a couple of years until we understand whether bio PET is going to be scalable. The one thing we feel very confident in -- and we’re proving out -- is a SodaStream model. Which we know is in build mode in the US but is a massive business in Europe and other parts of the world. And that’s the idea of reuse. The SodaStream business will basically prevent 65 billion bottles going into the marketplace over the next five years or so. That is one model that we know can work, and you’ll see us absolutely building our SodaStream business and providing a new habit form.
BD: What kind of internal conflict does that cause when you’ve got one side of the business advocating for a solution beyond the bottle, and then you’ve got a whole business built around bottles and cans?
SL: We want to make sure we’re consumer centric. And ultimately, we’re letting consumers decide. We’ve done that with soda, whether it’s regular soda or diet soda. We’ve done it with non-carb products. We are providing consumers with a set of options and solutions, and letting them decide how, where, and when. We as an organization feel very comfortable with that. Ultimately, we live in a country where per caps of CSDs are very high and there’s still going to be plenty of consumption of our core products at home and away. But as people look for different choices, different occasions, different types of products, SodaStream is much more of a light, sparkling product. As people look for those options, it broadens our portfolio, both from a product point of view and from an occasion point of view.
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