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A possible side effect of tariff? Shape-shift packaging.
Speaking to Wall Street analysts on Tuesday, Coca-Cola CEO James Quincy said that the drink company could accommodate its packaging mixture in response to the rising cost. In particular, this may mean separating aluminum cans and using more plastic.
“If a package faces some increase in input costs, we will have other packaging offerings that will allow us to compete in the strength,” he said during the company Earning call“So for example, if aluminum cans become more expensive, we can give more emphasis on pets bottles, etc.”
President Donald Trump announced this week 25% tariff on aluminum and steel imports It will be effective on 12 March. We can worry manufacturers that, without discounts, it will increase their cost, and consumers will eventually pay more for canned goods. Trump also planned last week Different tariffs Against China, Canada and Mexico.
Nevertheless, Quincy tried to have cost effects and Coca-Cola’s ability to reduce it in perspective.
“I think we are at risk of increasing the impact of an increase of 25% in aluminum value relative to the total system. It is not insignificant, but it is not fundamentally a multicibilian-dollar American business, ”he said. “It would be better that it’s not … but we are going to manage in our own way.”
Coca-Cola’s exposure for aluminum and steel is slightly higher than a quarter of the company’s packaging mix, As 2023Meanwhile, if Coca-Cola moves more products in plastic, it would expand a substrate that is already responsible for about half of the packaging.
On Tuesday, Coca-Cola’s earnings release, the company also highlighted the growing role of “cheap and premium” backable glass bottles in its portfolio in international markets. Coca-Cola reported that in 2024 it added 1.6 billion “unit case” in that format, the growth rate for RGB in the total company’s volume, overtook the total company’s quantity.
“In 2018, the company launched a universal refund glass bottle in Latin America, which aims to reduce the input cost further. Collectability And expanding the drink offerings, ”the company wrote. “The universal bottle has rapidly expanded markets around the world including Germany, South Africa and Vietnam, with more opportunities.”
It is already offering home away from home in western Europe, the company said. And in emerging markets, RGB Coca-Cola “help consumers recruit and develop commercial beverage industry,” said this.
