Coca-Cola may shift a larger share of its packaging from aluminum to plastic bottles if President Donald Trump’s latest tariff hikes take effect, CEO James Quincey said Tuesday.
Speaking during the company’s earnings conference call, Quincey explained that Coca-Cola has alternative packaging strategies to manage affordability and consumer demand.
“If aluminum cans become more expensive, we can put more emphasis on PET [plastic] bottles,” he said, as reported by CNBC.
25% tariff starting next month
The comments come after Trump announced a sharp increase in tariffs on all aluminum and steel imports, raising duties from 10% to 25% starting next month.
While the move is largely seen as targeting China, the US sources relatively little steel directly from the country.
Despite the potential cost pressures, Quincey downplayed the overall impact on Coca-Cola’s business.
“It’s not insignificant, but it’s not going to radically change a multibillion-dollar US business, and packaging is only a small component of the total cost structure,” he said.
Coca-Cola could mitigate the tariff effects by sourcing more aluminum domestically or passing on some costs to customers, Quincey noted.
However, the shift to more plastic packaging may draw scrutiny, as the company has faced criticism over its environmental impact.
Greenpeace has named Coca-Cola the world’s worst plastic polluter for six consecutive years.
While aluminum is more expensive, it is also highly recyclable, with a 50.4% recycling rate for beverage cans in 2018, compared to just 29.1% for PET bottles, according to the Environmental Protection Agency.
Despite increasing its aluminum packaging options in recent years, Coca-Cola recently scaled back its sustainability targets, now aiming for 35% to 40% recycled content in packaging by 2035—lower than its previous goal of 50% by 2030.
As the tariff changes loom, Coca-Cola faces tough decisions about balancing costs, sustainability, and consumer demand in an evolving economic landscape.
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