Sweet

Some years ago in this space I brought you the story about Coca-Cola selling bottles made entirely out of ice on beaches in South America. At the time, I noted that the whole idea was a stunt, and not a very well-chosen one, either. While it is certainly interesting and memorable to have a product package that just melts when you are done with it, the actual ice bottles were problematic both because ice does not make a good, contaminant-free package, and because it’s much too expensive to keep your entire supply of product refrigerated at all times. Even worse, though, was the fact that in many of the countries where they tried this stunt, clean drinking water is hard to come by…

To be fair, the ice bottles were never really intended as anything more than a publicity stunt, and once it was pointed out the company that this was actually much worse for the environment than relatively clean and easily-recyclable glass would be, they abandoned the idea. But this week there’s word of a new type of Coke packaging that looks to be quite a different matter. If the story available off the Fortune website is correct, the new bottles are made from plastic derived from sugar cane…

I’m not enough of a chemist to understand (let alone explain) how you can make plastic out of plant matter, but the business implications of this article are staggering. Coke started experimenting with plant-based plastics back in 2009, and initially released a bottle that was 30% plant-based plastic later that year, but the new version does not use petroleum plastics at all, and the company claims that just over the last six years they have already saved the equivalent of over 36 million gallons of gasoline – and even more importantly, kept 315,000 metric tons of carbon dioxide out of the atmosphere…

It’s not clear from the article, or from the original source on CNN Money’s web page, how well the new packaging will hold up for other kinds of products, or if the process will be commercially viable for companies smaller than Coke. The company is apparently being a bit cagey about the process, but CNN reports that they are using sugar cane from Brazil and waste products left over from sugar cane refining operations in India to make the new plant-based plastic. This may require a global logistics base beyond the reach of some organizations, but any chemical company that can develop a similar process shouldn’t have any problem finding a wealth of customers who will want to order packaging in the new plastics. Assuming, of course, that the new material is actually as economical as Coca-Cola is claiming it is…

Now, one could reasonably ask why companies wouldn’t want to use a more environmentally friendly packaging material, even if it was slightly more expensive than conventional plastic. Surely the knowledge that you are helping to save the planet – and the positive public relations you can realize by doing so – would be worth the smaller profit margin. Unfortunately, this isn’t always the case, especially in industries that do not feature a large profit margin in the first place. When we consider this development from a business standpoint, it is important to remember that not only does Coke already have a massive international infrastructure to make the operation less complicated, and vast amounts of capital (and income) available to cover the expenses, they also have one of the highest profit margins in the world – two or three cents worth of water, sugar and flavoring that one can sell for $1 at McDonald's and $5 at a football game…

I don’t know if this is a game-changer, or something that will flame out and disappear as quickly as the ice bottles did. But if plant-based plastics turn out to be viable in both a financial and a manufacturing sense, then things are about to get interesting – and we’d all probably be well advised to start paying more attention to agribusiness…