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Coca-Cola is considering a return to plastic bottles as it grapples with rising aluminum costs from President Donald Trump’s import tariffs.
During the company’s Feb. 11 earnings call, CEO James Quincey discussed how Coca-Cola (KO+1.15%) plans to manage the increased costs from these tariffs. While he acknowledged that a 25% hike in aluminum prices is significant, he emphasized that it wouldn’t drastically affect the company’s bottom line.
“It’s a cost. It will have to be managed,” Quincey said. “It would be better not to have it relative to the U.S. business, but we are going to manage our way through.”
Coca-Cola may take a range of actions to absorb the higher prices, which could impact the beverage giant’s recycling goals. In 2018, Coca-Cola announced plans to recycle all of its packaging by 2030. But in December the company revealed new plans to use 30-35% recycled plastic globally and ensure that 70-75% of its bottles and cans are collected for recycling by 2035.
While supporters say these tariffs are intended to protect and strengthen U.S. industries, the tariff could have wide-reaching consequences for companies that rely on aluminum packaging. While the increased costs are not expected to drastically affect Coca-Cola’s massive U.S. operations, Quincey told investors that the company would adjust its approach to keep prices manageable for consumers.
The Atlanta, Georgia-based company’s decision to shift back to plastic bottles comes amid broader changes within Coca-Cola. The brand saw strong fourth-quarter earnings, driven by price hikes on its soda, energy drinks, and juices.
Healthier options are also growing, with Coca-Cola Zero Sugar up 13% as demand for low-calorie drinks rises, further fueled by the boom in diabetes and weight-loss drugs like Ozempic and Wegovy. The Fairlife dairy line, a key part of Coca-Cola’s pivot away from sugary beverages, also exceeded expectations, with earnings surpassing projections and reaching around $6 billion this year.