Pepsi's New Ecological Drive

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The Canadian Unit of the world’s leading beverage retail, Pepsico Inc. (NYSE:PEP - News) has announced that it will sell its 7UP soft drinks in 100 percent recycled Pet bottles, food-grade bottle that meets all regulatory requirements and is of the highest quality.

The bottles, which will be introduced in early August, will have the same look and feel as the existing bottles, but will be made of the recyclable material.

This move will save 6 million pounds of virgin plastic in one year, which translates into a 30 percent reduction in greenhouse gas emissions and a more than 55 percent reduction in energy use.

Pepsi will offer its 7UP EcoGreen bottle in all package sizes. The retail giant has said that the bottles will be produced in multiple PepsiCo manufacturing facilities across Canada.

The company pumped $1 million for production enhancements in its facilities, introducing resin handling systems and inspection systems for this project. It has also been revealed that the incremental cost will not be reflected in the pricing of the bottles but rather would remain at par with other soft drink bottles in Canada.

The launch is a part of Pepsico’s campaign of protecting the environment and making America clean. Last month it introduced the ‘Dream Machine Recycling’ initiative under which it introduced 2,500 Free Green Cans throughout the Chicago Park District. The Dream Machines are recycling kiosks that offer residents and visitors with a convenient way to reprocess their plastic bottles and aluminum cans while on the move.

Pepsico embarked on a project of increasing the U.S. beverage container recycling rate from 34 percent to 50 percent by 2018. Currently, PepsiCo recycles an average of 10 percent of its used Pet bottles for its primary soft drink bottles in Canada and the U.S.

PepsiCo, which competes with The Coca-Cola Company (NYSE:KO - News) and Dr Pepper Snapple Group Inc. (NYSE:DPS - News), currently holds a Zacks #3 Rank, implying a short-term Hold rating on the stock. This corresponds with our long-term Neutral recommendation on the stock.

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