Coca-Cola supply chain sustainability: A look at achievements and challenges up to 2024

Coca-Cola, the renowned beverage giant, has long been committed to sustainability in their supply chain operations. With a global presence and a vast network of suppliers and distributors, the company recognizes the importance of minimizing their environmental impact and ensuring the long-term viability of their business. However the journey towards supply chain sustainability is long and complex for Coca -Cola. In this article, we will delve into the Coca-Cola supply chain sustainability journey so far, the company’s goals and achievements. Alongside this, we’ll also explore their initiatives to reduce carbon emissions, sustainable sourcing practices, waste management efforts, collaborations for supply chain sustainability, and – of course –  the challenges they face in these areas. By the end, you will gain insight into the efforts made to date by Coca-Cola to achieve supply chain sustainability.

Importance of supply chain sustainability in the beverage industry

Firstly, let’s take a look at the importance of supply chain sustainability in the beverage industry in particular. We are living in a world where environmental concerns are ubiquitous.  Correspondingly, supply chain sustainability has become a critical aspect of business operations, particularly in the beverage industry. 

Companies like Coca-Cola have realized that sustainability is not just a moral obligation but also a strategic imperative. Above all, they recognise that by implementing sustainable practices throughout their supply chain, they can reduce costs, enhance brand reputation, and gain a competitive advantage. Sustainable sourcing of ingredients and packaging materials, reducing carbon emissions, and efficient waste management are key components of achieving supply chain sustainability. and this is no exception for Coca-Cola. The bottom line is that the beverage industry, with its vast consumption and production, has a significant opportunity to make a positive impact on the environment through sustainable practices.

Coca-Cola supply chain sustainability: Goals and achievements

Coca-Cola has set ambitious sustainability goals for their supply chain operations. Significantly, by 2024, they aim to achieve a 25% reduction in carbon emissions across their entire value chain compared to 2015 levels. Additionally, they strive to ensure that 100% of their packaging materials are recyclable or reusable by 2025. These goals reflect their commitment to reducing their environmental footprint and promoting a circular economy. Coca-Cola has made notable progress in their sustainability journey. They have already achieved their 2020 goal to reduce their relative carbon emissions by 25% against a 2010 baseline. But of course, there is plenty more work to be done here.

Initiatives to reduce carbon emissions in the supply chain

To reduce carbon emissions in their supply chain, Coca-Cola has implemented various initiatives. One notable effort is the optimization of transportation routes. By analyzing data and leveraging technology, they have succeeded in streamlining their distribution network, reducing the distance traveled and consequently lowering emissions. Alongside this, they have adopted alternative fuel vehicles, such as electric and hybrid trucks, to further minimize their carbon footprint. Last but not least, Coca-Cola has invested in renewable energy sources, such as wind and solar power, to power their manufacturing plants and facilities. These initiatives not only contribute to their sustainability goals but also showcase their commitment to combat climate change.

Conversely, some critics argue that Coca-Cola’s carbon reduction strategy has a limited scope, primarily focusing on direct operations such as manufacturing and bottling, while potentially neglecting the broader supply chain. Notably, agriculture and ingredient sourcing, which can significantly contribute to emissions, may not be adequately addressed in Coca-Cola’s plans. 

Additionally, there has been a shift in how Coca-Cola approaches its emission reduction targets. Previously, the company aimed to reduce emissions per unit of product sold, a metric that could be misleading if overall production volumes increased, thereby potentially leading to an overall growth in emissions. More recently, Coca-Cola has adopted a science-based target that emphasises absolute emission reductions. However, this shift may be perceived by some as overdue. Lastly, there are concerns regarding the transparency of Coca-Cola’s emission calculations and the effectiveness of their methods in holding suppliers accountable for meeting emission reduction goals.

Sustainable sourcing of ingredients and packaging materials

Coca-Cola appears to recognize the importance of sourcing ingredients and packaging materials sustainably. On the one hand, they have worked closely with their suppliers to ensure responsible agricultural practices, including the efficient use of water and protection of biodiversity. Additionally, they prioritize sourcing from local suppliers to reduce transportation distances and support local economies. In terms of packaging materials, Coca-Cola has also made progress in committing to increasing the use of recycled content in their bottles and cans. Additionally, they have introduced innovative packaging solutions, such as PlantBottle, which is made partially from renewable plant-based materials. These efforts not only minimize the environmental impact but also promote a circular economy by reducing waste.

On the other hand, Coca-Cola has faced criticism for pausing its reporting on the sustainable sourcing of ingredients in 2021, which hindered progress tracking and cast doubts on its commitment to sustainability. Despite resuming reporting in 2022, concerns remain. Moreover, Coca-Cola’s efforts in increasing the use of recycled PET (rPET) in their bottles have not shown significant progress, purportedly because it sorely lacks demand , casting doubt on their ability to meet the 2030 target of incorporating 50% rPET across all packaging.

Critics also argue that Coca-Cola’s focus on recycled content may divert attention from the more critical goal of reducing overall plastic usage, suggesting that more emphasis should be placed on reusable packaging and plastic reduction strategies. Simultaneously, the methods Coca-Cola employs to hold suppliers accountable for emission reduction goals are not clearly communicated. As such, these issues highlight the necessity for Coca-Cola to hasten their sustainability initiatives and improve transparency in their sustainable sourcing efforts.

Coca-Cola supply chain sustainability: Waste management and recycling efforts

Proper waste management and recycling are key pillars of Coca-Cola’s supply chain sustainability strategy. They have implemented comprehensive waste reduction programs in their manufacturing plants, aiming to minimize the generation of waste and increase recycling rates. Coca-Cola has also actively supported community recycling initiatives, partnering with local organizations and governments to promote recycling education and infrastructure development. By encouraging consumers to recycle their beverage containers through effective labeling and awareness campaigns, Coca-Cola is working towards creating a more sustainable and circular system.

On the contrary, concerns have been raised about several concerns regarding Coca-Cola’s waste management and recycling initiatives in recent years. Despite launching the ambitious “World Without Waste” initiative in 2018, with the goal of collecting a bottle or can for every one sold by 2030, Coca-Cola reported only a 61% collection rate in 2022, falling short of their target. There’s an argument that the company places too much emphasis on collecting plastic for recycling, rather than on reducing plastic usage from the outset.

Questions have also been raised about the effectiveness of Coca-Cola’s recycling efforts, particularly given the global lack of efficient plastic recycling infrastructure, which leads to collected plastic potentially ending up in landfills or the ocean. Additionally, there’s criticism that Coca-Cola shifts too much responsibility for recycling onto consumers, through confusing labeling and the lack of recycling facilities in many areas, which may undermine their collection goals.  Despite these criticisms, it’s acknowledged that Coca-Cola has made some progress in improving the recyclability of their packaging and investing in collection infrastructure, yet there’s a clear call for a more robust approach that focuses on plastic reduction as much as on recycling efforts.

Collaborations and partnerships for supply chain sustainability

The good news is that Coca-Cola recognizes that achieving supply chain sustainability requires collaboration and partnerships. They actively engage with suppliers, customers, NGOs, and governments to drive sustainable practices throughout their value chain. Coca-Cola has been actively engaging in various collaborations and partnerships to enhance supply chain sustainability in recent years. They have a long-standing partnership with the World Wildlife Fund (WWF) aimed at improving environmental performance, including better water resource management and emissions reduction. 

Additionally, in collaboration with the Ellen MacArthur Foundation and UN Environment, Coca-Cola supports the New Plastics Economy initiative, striving to eliminate plastic waste and promote recyclable packaging solutions. Likewise, a notable €600 million sustainability-linked supply chain finance programme with Rabobank encourages suppliers to lower emissions through renewable energy use and carbon footprint sharing. Meanwhile, Coca-Cola’s partnership with Ioniqa Technologies focuses on converting difficult-to-recycle plastic waste into high-quality, food-grade PET. By the same token, Coca-Cola Hellenic Bottling Company (CCHBC) works with suppliers on several sustainability initiatives, like developing eco-friendly cold drink equipment and boosting local beet sugar production. In essence, these efforts are part of Coca-Cola’s broader strategy to address sustainability challenges within its supply chain.

Coca-Cola supply chain sustainability: Challenges 

Despite the achievements highlighted in this article to date, Coca-Cola faces several key challenges in achieving supply chain sustainability, highlighting the complexity of managing sustainable practices across its broad supply chain. In summary. these include ensuring responsible water use, reducing reliance on fertilizers, and upholding fair labour practices in ingredient sourcing from agriculture, such as sugarcane and corn. As previously highlighted, a major concern is the company’s dependence on single-use plastic bottles, compounded by the limitations of current recycling infrastructures, which poses significant environmental challenges. Although progress is being made in this area, critics would argue there is not being done enough, and not quickly enough.

One thing that is simply undeniable is that accountability and transparency in supplier collaboration are crucial for promoting sustainable practices across the supply chain, necessitating clear communication and effective collaboration strategies. Accurate environmental impact measurement and transparent reporting standards are vital and consequently, the company must balance its focus between collecting and reducing plastic use to avoid detracting from essential reduction strategies. As such, achieving ambitious goals, such as incorporating significant recycled content and reaching high collection rates, remains a challenge. This means that Coca-Cola needs a comprehensive approach that includes collaborating with suppliers, investing in innovative and sustainable packaging solutions, clearly communicating its progress and challenges back up with robust data to avoid the pitfalls of greenwashing, and prioritising both plastic reduction and recycling efforts to address these sustainability challenges effectively. It’s a long journey ahead. 

Coca-Cola supply chain sustainability: Final thoughts