Dive Brief:

• Coca-Cola extended a loan to the Netherlands-based recycling company Ioniqa Technologies to develop the tools to process otherwise hard-to-recycle types of PET plastics, according to a company release. The terms of the deal were not disclosed.
• The loan comes as Coca-Cola pursues plans to transition to at least 50% recycled packaging materials by 2030. Most forms of PET are easy to recycle, but the Ioniqa technology targets the outliers that may have been excluded from recycling streams, such as colored plastic bottles.
• "Our investment in new and pioneering recycling technologies is an opportunity for significant movement toward closing the loop and creating a circular economy for PET," Robert Long, chief innovation officer for Coca-Cola, said in the release.

Dive Insight:

Consumers are driving the demand for recycled plastic bottles. Eager for more environmentally friendly products, many shoppers want to see companies transition their packaging to recycled alternatives. Coca-Cola’s loan to the plastics recycling start-up suggests the beverage company wants to boost its image as a sustainable brand — and it thinks consumers will appreciate that effort. 

But the dynamics of recycled plastics are anything but simple. Recycled PET faces competition on a global scale. Studies show it can be cheaper and easier to produce new PET rather than processing different types of bottles — especially when oil prices are low. If the start-up company can provide a viable and successful route forward, this loan could be well worth it. 

PET is one of the most commonly used plastic resins in food and beverage packaging, but recycled PET accounts for just 12-14% of the plastic packaging produced. The material recycles well, but it isn't easy to achieve food-grade plastic from recycled goods. Most often, plastic bottles wind up in carpets or clothes. Each pass through the recycling process degrades the quality. Ioniqa says it solves this problem by producing a food-grade PET from post-consumer recycled material.

It isn't alone. Montreal-based Loop Industries partnered with Evian earlier this year to develop 100% recycled bottles. Loop is also working with Coca-Cola to integrate recycled plastics into European bottling plants. More beverage companies are getting involved in recycling efforts to get ahead of competition and show consumers they prioritize sustainability efforts. Coca-Cola isn't Ioniqa's only likely client in the major CPG world. Unilever also announced a partnership with the same start up earlier this year.