PepsiCo Inc. (PEP) has developed the world’s first entirely plant-based PET plastic bottle. This new bottle is made of fully renewable resources, thereby enabling the company to manufacture a beverage container with significantly reduced carbon footprint.
PepsiCo’s green bottle is 100% recyclable and outpaces all the existing industry technologies. This new bottle is made out of bio-based raw materials, such as switch grass, pine bark and corn husks.
The company expects to further broaden its renewable sources that are used to manufacture the new green bottle to orange peels, potato peels, oat hulls and other agricultural byproducts from its foods business. Through this process the company further emphasizes its “Power of One” advantage by driving a strategic innovation via a food-based solution.
The new molecular structure created out of plant is similar to the old PET and is expected to protect the contents inside the same way as the conventional PET bottles did. PepsiCo intends to start production of the new bottle by 2012 and once comfortable, it plans to move to full-scale commercialization.
PepsiCo’s arch rival Coca-Cola Company (KO) manufactures 30% plant-based bottle and has plans to convert it into a 100% plant-based bottle.
The cost of the new bottle is expected to remain the same and management believes that in the long run it would even save money for the company. The traditional PET plastic is made using fossil fuels, the cost of which is rising. Hence, by using plant material instead the company will save costs along with reducing the environmental impact.
A 100% plant-based PET is expected to change the industry standard for plastic packaging. The conventional PET is used in beverage bottles, food pouches, coatings and other common products.
Headquartered in Purchase, NY, PepsiCo, Inc. is the leading global snack food company and the second largest soft drink company, providing food and beverage products in more than 200 countries. The company currently has Zacks #4 Rank, which translates into short-term Sell rating. However over the long term we remain Neutral on the stock.
COCA COLA CO (KO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
Zacks Investment Research
