Senior VP, PepsiCo Advanced Research
In 1934, Henry Ford, the “industrial genius of modern times,” declared to Modern Mechanix magazine that in the future we will be able to grow annually “most of the substances needed in manufacturing…When that day comes…[c]hemistry will reunite agriculture and industry.”
While it is too soon to suggest that Mr. Ford’s prophecy has been fulfilled, a combination of changing consumer demands, concerns of climate change, and a desire to reduce our reliance on fossil fuels are pushing us ever closer to the day he envisioned.
In particular, there has been accelerating interest from industry in developing sustainable packaging and reducing our reliance on petroleum. The environmental benefits of replacing petroleum products with bio-based substitutes are clear: they could sequester carbon dioxide, put less burden on landfills and, in some cases, even break down faster. But, bioplastics currently make up less than one percent of the U.S. plastics market. So, while the industry is excited about the potential, there are practical challenges yet to address.
That is in part because developing and commercializing bioplastics present a host of difficult challenges. The chief obstacle facing the industry is petroleum’s price advantage – it is often much cheaper to make plastic from petroleum. We’ve confronted this economic challenge firsthand in the decade we’ve been investing in sustainable packaging. In order for bioplastics to be become the norm, the price of their manufacture needs to come down substantially. Large companies like PepsiCo can play an important role in creating the demand that will allow new, innovative technologies to reach scale, adaptation and cost-effectiveness.
PepsiCo’s “green” bottle is a 100 percent plant-based PET bottle made from fully renewable sources – a first in the world – and has the identical molecular structure to petroleum-based PET, resulting in a bottle that looks, feels and protects its product identically to existing PET beverage containers. This bottle far surpasses existing industry technologies and helps us address the petroleum issue because we anticipate being able to manufacture the bottle for our beverage business by using the agricultural waste from our foods business. For example, our Tropicana business generates 1.3 billion pounds of orange peels every year. Eventually, we’ll use this and other agriculture waste to make our beverage bottles and other packages. The bottle breaks our dependence on petroleum materials and actually pulls carbon dioxide out of the atmosphere. The next horizon will be packages that are renewable, recyclable and degrade quickly into innocuous components.
As the Milken Global Institute’s report on industrial biotechnology puts it: “The industry for petroleum-based products has achieved economies of scale over the past 100 years; meanwhile, the young technologies used in bio-based product manufacturing are still being developed. With increased scale and experience, lower costs can eventually be achieved.”
That said, moving to full-scale commercialization of sustainable packaging is no easy task.
Three things need to happen to make the price of bioplastics competitive with petroleum-based plastics:
- R&D Investment: Research must continue to:
o Create better and better materials
o Simplify their synthesis
o Maximize the pool of potential starting bio-materials
These developments will make future bioplastics more valuable and less expensive.
- Supply Chain Scale: No single enterprise can provide the scale needed to commercialize these materials. Companies need to collaborate on technologies and development costs, and pool demand to create scale faster. Maximizing existing capital infrastructure leverage can also speed the way.
- Establish Effective Government Policies: With effective government policies that support biotechnology’s long investment horizon, we will encourage private investment. A recent Milken report suggests that the government establish a tax credit at the state level for bio-based products.
As many of us know, there are huge opportunities in industrial biotechnology but we have work to do before we can proudly reduce – and at some point, replace – our reliance on petroleum. I am hopeful that if large companies and entrepreneurs continue to develop, adopt and commercialize bioplastics, we will create the technology needed to synthesize them and the economics needed for scale up. Someday soon these materials will be available broadly to consumers around the world. We are on our way.
Rocco Papalia is Senior Vice President, PepsiCo Advanced Research at PepsiCo.