PepsiCo Inc. could face much more scrutiny about its lack of recycled PET in bottles and its opposition to bottle bills, and no longer will enjoy the "free ride" it got when attention was focused on Coca-Cola Co., environmental and shareholder groups told the company May 2.
The groups delivered that message at Pepsi's annual shareholder meeting in Dallas. They got 7.8 percent of shareholders to vote for their resolution asking the company to use 25 percent recycled content and set a recycling-rate goal of 80 percent.
The shareholder groups said that sends a "strong signal" and ensures that the resolution will be voted on at next year's annual meeting. The groups said they emerged with a sense that Pepsi officials now are willing to start a dialogue.
Activists pointedly called Purchase, N.Y.-based Pepsi a "laggard" and noted that rival Coke recently announced it will use 10 percent recycled content by 2005.
But Pepsi officials, who fought shareholders' efforts to get the resolution on the ballot, said repeatedly that using recycled content would cost them money.
"We will continue to work with suppliers and others to find the right technology that can enable us to increase the use of recyclable plastic — again, provided we can do it in a safe way and one that is economical and doesn't put us at a competitive disadvantage," Steve Reinemund, who took over as chairman and chief executive officer from Roger Enrico, said at the meeting.
"At the same time that such technologies are commercially feasible, we will be gladly willing to promote this in the marketplace," he said.
Reinemund provided no details about Pepsi's plans, and the company officials declined to expand on his comments. He met with the shareholders briefly afterward and expressed interest in shareholder claims that using recycled PET could save the company money, said Ken Scott, research analyst with Walden Asset Management, a Boston investment firm that describes itself as socially responsible. Walden Asset sponsored the resolution.
"The tone today was simply one that gave me the hope that there is a possibility for dialogue," said Pat Franklin, executive director of the Container Recycling Institute in Arlington, Va.
If dialogue does not work, though, the GrassRoots Recycling Network reminded Pepsi it could face the same tactics used against Coke: embarrassing full page ads in the New York Times and Wall Street Journal, grass-roots campaigns and local government pressure.
"GRRN and others working with us will now start to shine a light on Pepsi," said Bill Sheehan, network coordinator for Athens, Ga.-based GRRN. "Pepsi has gotten a free ride up to this point."