A returnable Coca-Cola bottle sold in Mexico. (Image courtesy of the author)
You'll likely notice something different when you order a Corona in Mexico — and we're not just talking about the taste. If you look closely at the label, more often than not you'll see it's a little faded, evidence of the container being washed and reused dozens of times. Return and refill systems like this are prevalent across Latin America and around the world, and not just for beer. The world's largest soft drink companies, Coca-Cola and PepsiCo, sell billions of units in refillable plastic bottles every year across Latin America, Asia, Africa and Europe.
To people in other markets, the news that major bottled beverage brands — among the largest producers of single-use plastic globally — are already operating successful refill systems may come as a surprise. "The refillable bottle is a very common packaging type, but one of the reasons why it's not as visible is that it's not present in the U.S. and the U.K.," said Matt Littlejohn, who leads the refillables program as part of his role as SVP of strategic initiatives at the ocean conservation nonprofit Oceana.
About 14 percent of Coca-Cola's global beverage sales were sold in refillable bottles last year. PepsiCo is around 10 percent. And major beer companies like Heineken and AB InBev, which owns Corona, sell upwards of 30 percent of all products in refillable containers globally, Littlejohn said. So, why don't these companies talk about refill more, and why aren't they selling them in the U.S.?
How do refillable bottle programs work?
From Mexico to Chile, Germany to the Philippines, millions of people around the world see bottle return and refill as commonplace. But for the uninitiated, it may sound confusing at first. How does that even work? Really, it's pretty simple.
When people head to their local corner store, they'll see drinks in refillable containers alongside those in single-use bottles. In Mexico, for example, most bottled beers distributed by Grupo Modelo — including Corona, Modelo and Victoria, among others — can be refilled. Customers simply bring their empties back, leave them in a designated place in the store, and pick up new beers for about 15 percent less than what they'd pay if they didn't return the packaging. When the Modelo truck arrives at the store with a new beer delivery, the driver takes the empties back to the bottling plant to be washed, refilled and used again.
Soda and water brands owned by companies like Coca-Cola and PepsiCo have separate containers that are marked as returnable, which are made from a more durable plastic than what's used for single-use. Otherwise, the system is the same: Customers bring their empty returnable bottles back to the store and choose a new product from the shelf.
In Latin America, Coca-Cola products cost up to 25 percent less for customers returning a refillable bottle, said Andres Wainer, chief financial officer of Embotelladora Andina, a major Coca-Cola bottler in Argentina, Brazil, Chile and Paraguay. Around 30 percent of all the soft drinks Andina sells are in refillable containers, Wainer said at a panel discussion hosted by Oceana and HSBC last year. In some markets, such as Argentina and Paraguay, it's even higher — around half of all products sold.
In short: These systems are working, and not just in Latin America. Around half of Coca-Cola's volume in the Philippines is sold in refillable containers, and similar systems are thriving in European countries like Germany, Spain and France, Littlejohn said.
Each refillable container displaces dozens of single-use bottles, reducing the burden on waste processors around the world as well as the chance for packaging to end up as litter in the environment. Durable plastic bottles can be reused around 25 times, and glass bottles can be refilled 50 times or more, according to Oceana.
Returnable bottles also come with a substantially lower carbon footprint compared to single-use, even taking into account transportation and the water and energy needed for wash and refill. Coca-Cola claims its refillable bottle comes with 47 percent less lifecycle greenhouse gas emissions, and Wainer said he's seen estimates as high as 90 percent for some systems.
So, why aren't brands using refillables in the U.S.?
"Really there are two things holding this back from coming to the U.S.," Littlejohn said. "The main thing is money. It's expensive. You actually have to invest."
Bottling plants are typically constructed to move in one direction — sanitizing new bottles, filling them up and sending them out to be sold. Introducing new equipment to process and clean refillable bottles can be costly. Arca Continental, a major bottler in Mexico and Ecuador that accounts for around 12 percent of Coca-Cola's annual refillable sales, says about 20 percent of its capital expenditures go toward the refill system, Littlejohn said.
Though the price-tag on transitioning a bottling plant to process refillables can be in the billions of dollars, it's not insurmountable considering the size and scale of these companies, Littlejohn told us. And he pointed to a straightforward solution: green bonds, sums of money raised from investors that are specifically earmarked for environmental projects.
While many consumer goods companies have issued green bonds, most have gone to purchase recycled plastic or support plastic recycling initiatives. Leveraging those instruments to support refill can help companies cover the upfront cost until the systems are up and running, Littlejohn said. "And it’s an asset," he told us. "You're investing in trucks and bottles and machines. These are depreciable assets. [Bottlers] book the deposits as a revenue source. This is in line with your business. Yes, you have to invest, but you get the money back and there's money for it."
Along with cost, the second challenge hinges on the way companies communicate about refill, which is somewhat curious considering we're talking about firms like Coke and Pepsi that have used the magic of marketing to stay relevant for over a century.
In places like Asia and Latin America, refillables are primarily marketed as a way for customers to save money. In his conversations with leaders at major brands, Littlejohn found that many seem convinced this angle won't work in places like the U.S., particularly as inflation stabilizes.
But even in markets where brands sell reusables on cost, field research from Oceana indicates people can and do recognize the environmental benefit of choosing reusable (check out the video above).
"This is a way to save money. They could sell that asset in the U.S. They think they can't, but they could," Littlejohn said. "And then in addition, they need to market the environmental benefit of this. The only place they sell it on the environmental benefit is in Germany."
Turning the corner on the rise of refillables
While refillables are already working in major markets around the world, they're highly under-leveraged and ready to scale, Littlejohn said. Doing so can come with major environmental benefits: Along with reducing lifecycle carbon emissions, every 10 percent increase in refillable bottle use across coastal countries could yield a 22 percent reduction in plastic bottle pollution in the world's oceans, Oceana estimates.
Brands say they're ready to be part of the transition. Coca-Cola, for example, aims to increase its sales in refillable containers from 14 percent today to 25 percent by 2030. But they have a long way to go when it comes to raising awareness and getting more bottlers and distributors around the world involved.
"They should be telling people about this," Littlejohn said of brands like Coke and Pepsi. "They’re doing this at such a huge level, and no one really knows it."
In a small sign of change, Arca Continental, Coca-Cola's primary bottler in Mexico, also serves Texas and started rolling out refillables in select markets last year. After a successful 2022 pilot in El Paso — the first time Coca-Cola used refillable containers in the U.S. in over a decade — Arca expanded the program to San Antonio this year.
"This is a direction that I think generally a lot of consumer branded companies are going to have to move in, because they're going to have to deal with the waste issue, and this is a way you can do it," Littlejohn said. "It's a simple thing, but it is such a radical simple idea, because it's not single-use."
Mary has reported on sustainability and social impact for over a decade and now serves as managing editor of TriplePundit. She is also the general manager of TriplePundit's Brand Studio, which has worked with dozens of brands and organizations on sustainability storytelling.