PepsiCo CEO Calls for “Effective Infrastructures For Recycling”

In an interview with, Torben Nielsen, CEO of PepsiCo DACH, takes a stand on a circular economy for packaging, the expansion of the deposit system and consumers’ willingness to pay more for sustainable products.

Do you prefer cans or bottles for soft drinks?

Actually, it depends on the occasion – and sometimes also on the drink. I wouldn’t like to make such a blanket commitment.

PepsiCo is driving the development of a circular economy for flexible packaging. Which step do you think is the most important?

In my opinion, the most important step is to establish uniform and, above all, effective infrastructures for recycling throughout Europe. Politicians are also called upon to set the course accordingly. As a company, we are also pursuing the “Beyond the Bottle” approach. So, we’re working on solutions that will help us not only to use more recycled plastics and recyclable materials ourselves, but also create genuine alternatives to packaging.

You are participating in the digital watermarking initiative, which will see the first tests with PepsiCo food packaging in France and Germany in 2022. What do you hope to achieve with Holy Grail packaging?

Our goal is to contribute to a world where plastics never become waste. That’s why effective recycling is needed. The Holy Grail 2.0 initiative, in which we are participating, relies on the use of digital watermarks to achieve this. The predecessor initiative, Holy Grail 1.0, examined various approaches to recycling post-consumer waste. Digital watermarking proved to be particularly effective. The watermarks are ultimately digital codes that cannot be seen with the naked eye but can hold information about the type of material, for example. Sorting and recycling our snack packaging, for example, is thus made much easier and finally possible.

By the end of the year, PepsiCo wants to use only 100 percent recycled plastic for all its bottles in Germany. Has that goal been achieved?

We had set ourselves the goal of switching bottles across our entire CSD portfolio and Lipton brand bottles to recycled packaging plastic by the end of the year. However, we actually succeeded in making this switch much earlier. Since mid-September, we have been using only rPET at PepsiCo. At Lipton, the switchover took place completely in April of this year. So, we have already achieved our goal 100 days ahead of schedule.

What is your view on the expansion of the deposit system that is planned in Germany?

We already charge a deposit on our beverages, and we see that the deposit system makes an important contribution to recycling. I therefore welcome the expansion of the deposit system. Ideally, we would abolish the deposit-free system completely. That would also be an important contribution to greater transparency and comprehensibility of the system from the consumer’s point of view. In any case, I doubt that the majority of consumers would currently be able to tell offhand which beverages have a deposit on the packaging and which do not.

Packaging design is still immensely important in the consumer goods industry for branded products. Brands invest heavily in marketing and packaging design. How is this in line with the sustainability line?

The crucial question is always which material is used in the process. We use 100 percent recycled PET in our CSD beverage portfolio. Today, the material we use in our snack bags cannot yet be recycled to the extent needed for reuse as food packaging. But we are working on it. We’re working with leading companies to reach higher-quality recycled materials. We’re also converting all materials to CEFLEX guidelines – so we’re making them recyclable. At the same time, we are reducing the amount of packaging and working on alternative packaging materials. As part of the Pulpex consortium, for example, we are working with Unilever and Diageo to develop the world’s first fully recyclable paper bottle. But all of this also means that we are bringing in completely new materials. Packaging design and sustainability are therefore not automatically contradictory but can complement each other in a very exciting way and create new opportunities for creativity.

Can more sustainable products also cost more?

In the short term, investments in sustainability result in higher costs. In the long term, however, these investments help to make us more efficient and resilient. A current look at the global commodity markets shows this very clearly. All those production systems that have not yet made the transition to more sustainability are under pressure. The more we invest in modern recycling processes, the greater the quantity of recyclate available to us. As the supply grows, prices fall. So much for looking to the future. To stay in the present: we see that consumers are demanding sustainability from retailers and thus from us as manufacturers. We believe that this goes hand in hand with a willingness to pay more – If it can be clearly communicated to consumers what this surcharge is being used for. In our own pricing, we are constantly reviewing all the costs of our products. Recycled PET packaging is just one factor among many.

PepsiCo is taking a holistic approach to sustainability. What changes does this require in logistics?

We are indeed pursuing a holistic approach to sustainability. The guidelines for this are provided by our pep+ (PepsiCo Positive) agenda. In implementing this, we are also taking our partners along with us. In logistics, there are three main levers for improving sustainability: optimizing delivery routes – for example, through the use of artificial intelligence – switching to zero-emission transportation, and the “Beyond the Bottle” approach, where we look for ways to eliminate packaging altogether.

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