Innovation

Until 2023, PepsiCo used only primary plastic for the production of bottles for their drinks on the Central Asian market. Firstly, this approach was caused by the absence of governmental regulations in many countries of the region (except Kazakhstan) regarding recyclability of plastic packaging and the usage of recycled materials for it. Secondly, PepsiCo’s competitors such as Coca-Cola also did not introduce innovations regarding more sustainable packaging on this market. Thirdly, awareness of the population in Central Asia about problems of plastic packaging used to be quite low, so there was no demand for more sustainable solutions from its side. Fourthly, PepsiCo does not have its own facility in Uzbekistan, where the drinks for the Central Asian region are produced, they have a bottler there (International Beverages Tashkent (IBT)), so it usually takes more time to develop and introduce new initiatives.

However, PepsiCo took a step forward and incorporated rPET in the production of their 1.5 liters Pepsi bottles in Uzbekistan in September 2023. The company acted as a first-mover on this market. PepsiCo had to work closely with IBT and conduct an extensive adjustment of production technologies for the implementation of the project, strongly supporting partnerships for the goals (SDG #17). Investments in the production of local preforms containing recycled plastic amounted to more than $ 3 million. Pellets of recycled plastic are produced by a local supplier of a company from Uzbekistan.

PepsiCo also wants to educate consumers about their innovation on the market, its purpose and potential benefits. Moreover they want to show that using recycled materials for packaging is absolutely acceptable in the food industry, because there is a widespread opinion that “Garbage is often perceived as waste that cannot stand next to a food product”. In order to address this concern and show benefits PepsiCo organized a blogger-tour on IBT site in Uzbekistan where they invited green eco-activists who shot videos there and posted them on social media. “We organized a special area where the guests could feel the pellet, look at preforms, and take it with them. We also had a technologist who explained the entire technological process”, says Olga Ivanova, PepsiCo Sustainability Director in Central Asia. Also technologists demonstrated what is the difference between a recycled bottle and a non-recycled bottle, not only from the standpoint of waste, but also from the standpoint of climate footprint.

Inspiration

Generally, the widespread use of rPET in various markets is a part of PepsiCo's packaging management strategy, included in PepsiCo Positive (pep+) worldwide strategy. All over the world, the company and its partners are working to ensure that packaging never becomes garbage. PepsiCo has ambitious KPI’s like the conversion of all plastic packaging to the principles of a circular economy, so that packaging fully consists of recycled materials. “Our goal in this case is to achieve 100% by 2030”, highlights Olga Ivanova, so the general company’s sustainability agenda that is derived from 17 UN SDGs motivates managers to come up with new solutions.

The company has already accumulated profound expertise in sustainable packaging solutions, and it is ready to share this knowledge with their bottlers and even competitors like Coca-Cola and stretch it to the markets where this issue has not been yet addressed like Central Asia. Moreover, there is a trend in Central Asia that countries such as Uzbekistan are a growing market for FMCG multinational companies, the consumption is growing there. The more the consumption grows, the more packaging is inside the consumer basket. This requires action from the leading players in the industry to set a sustainable packaging trend in order to control the amount of generated waste.

Overall impact

PepsiCo’s usage of rPET in Pepsi bottles in Uzbekistan where there is currently no such state regulations, is a showcase that can show local green organizations, local consumers, and the local government that there is a need to deal with the topic of plastic packaging on multiple levels. “The number of landfills is growing, the amount of garbage is growing. Plastic usually ends up in landfill sites, so in our case it was also an attempt to encourage and push the state to adopt special regulation. By the way, they have it in draft form for 4 years”, says Olga Ivanova. The competitors such as Coca-Cola and local drinks producers also already asked PepsiCo to share their experience of incorporating rPET in Central Asia, what will support partnerships for the goals in the future (SDG #17). Overall, the expected impact of PepsiCo’s innovation is the overall transformation of the plastic packaging industry in Central Asia with the help of governments and major FMCG producers in the coming years.

Business benefit

Usually at the starting point, recycling is almost always a more expensive process. But PepsiCo focuses on the long-term mitigation of risks of various kinds. Even though it is hard to estimate the financial benefit from introducing such initiatives, they can come from at least 2 sides. First, when legislation on waste management arises and the state wants to raise money for the potential disposal of packaging, if you start preparing for this in advance and are engaged as a company in collecting, processing, and using recyclables in packaging, you can avoid paying extra fees (sometimes reaching millions) and making unexpected large investments in developing these technologies from scratch. Second, there is a potential to improve the reputation of the brand or consumer perception. If PepsiCo minimizes the amount of bottles that can be seen in trash and also communicates that the bottles are made from rPET on the packaging, consumers might become more loyal to the brand. Hence, sales and revenues are likely to grow. Overall, this initiative supports responsible consumption and production goal (SDG #12).

Social and environmental benefit

In terms of environmental benefit, PepsiCo expects that the introduction of 20% rPET into packaging will reduce the use of primary plastic by about 2.500 tons in 2023. This amount approximately equals to the weight of 125 trucks. PepsiCo is actively supporting the climate action goal (SDG #13) with the carbon footprint of a new rPET bottle being 38% less than of the regular one. Moreover, PepsiCo expects that other big players such as Coca-Cola will follow their example and also invest in and introduce more sustainable packaging solutions. This joint effort will significantly improve the use of primary plastic and climate footprint metrics values across the whole industry in Central Asia.

In terms of social benefit, PepsiCo’s efforts to support its innovation with educating consumers about the usage of rPET and its effects on the environment is likely to raise ecological literacy and increase the number of people concerned about sustainability agenda. Moreover, heavy investments in plastic processing facilities generate new jobs, supporting decent work and economic growth goal (SDG #8). “An average processing enterprise has from 50 to 100 workers. If you build a large processing infrastructure, it creates a large number of jobs in a niche in Central Asia that still does not exist”, remarks Olga Ivanova. This boosts countries’ economies as the appearance of this new niche or segment attracts investments, and major European, American or other companies might enter these markets and safely build sustainable sites there.

Interview

Olga Ivanova, Sustainability Director, PepsiCo Central Asia