Appeared September 13, 1999, Page B8
Coca-Cola's Latest Problem Is Return of Recycling Issue
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By BETSY MCKAY Staff Reporter
of THE WALL STREET JOURNAL

Coca-Cola has had its share of bad publicity lately, from a contaminated-drinks scare in Europe to cries of foul play from antitrust regulators around the world. Now a recycling-activist group has been added to the list.

The Grass Roots Recycling Network, an organization uniting recycling activists around the country, went public last month with a campaign to persuade Coke to live up to a 1990 promise to use recycled material in the billions of plastic bottles it uses every year.

The network insists its ads, which have been prominently placed in The Wall Street Journal's print edition and the New York Times, weren't timed to take advantage of Coke's reams of other bad news. "This has nothing to do with Belgium," says Bill Sheehan, the organization's network coordinator in Athens, Ga., referring to the massive product recall Coke was forced to undertake in Europe this summer after hundreds of people claimed its products had made them sick.

The network (www.grrn.org) says it has been waging its campaign for more than two years. It is upping the ante now, it says, because Coke has failed to relent.

The thought of garbage dumps overflowing with discarded plastic bottles is surely an unpleasant one. But why pick on Coke? It is scarcely the only company to eschew recycled plastic in its packaging. Most of the rest of the soft-drink industry, including archrival PepsiCo, does too, according to the National Soft Drink Association in Washington.

The network says it is singling out Coke simply because it is the market leader, both in the U.S. and world-wide. "Pepsi's no better," Mr. Sheehan concedes. "But if Coke keeps its promise and sells soda in recycled plastic, we believe the rest of the industry will have to follow suit."

Picking on the big guy to make a point is nothing new. And the logic isn't hard to understand, either. Most of these groups have limited funds, and people are only going to support a cause they can embrace. So picking one company serves both ends. "You always pick on the winner," says Allen Adamson, managing director of Landor Associates, a branding consultancy in New York. "If you've got one shot to take, the rule of thumb is you always try to get the biggest bang for your buck."

The network is going just for that. The ad targets not just Coke, the company, but also homes in on Chairman and Chief Executive, M. Douglas Ivester. The ad campaign is paid for with a $60,000 grant from the Florence Fund, a Washington nonprofit started earlier this year to fund environmental organizations and other public-interest groups. The Florence Fund has helped the network place the ads strategically on the opinion page of the New York Times to be read by decision makers, notes Mr. Sheehan.

Mr. Ivester's smiling portrait appears on the ads. Just under his photo a recent version carries a quote from a nine-year-old girl: "Dear Mr. Ivester: Why do you hurt the Earth when it's so easy not to?" Other versions of the ad carry Mr. Ivester's 1998 compensation, as well as public statements from 1990 and 1991 touting Coke's new bottles with recycled plastic.

The ads urge readers to call a Coke 800 consumer-information number and also print the company's investor-relations e-mail address.

After launching the recycled-plastic bottle in 1990, Coke quietly stopped using it a few years later, saying it wasn't cost effective. Pepsi did the same with its recycled bottles. The network argues that Coke and other soft-drink companies are hurting the market price for recycled plastic by not buying material for their own needs, even though demand for recycled plastic for other uses, such as clothing and carpet, is high. The network also says using recycled plastic would cost Coke only a fraction of a penny per bottle.

Coke's defenders note that recycled plastic of the quality needed for beverages is more costly than virgin plastic.

Coke itself appears to be taking the deluge in stride. "This is the price you pay sometimes for being the industry leader," says Bill Hensel, a Coke spokesman. "We have been the industry leader for many years in developing packaging technologies that are environmentally friendly, be it glass, aluminum or plastic."

Mr. Hensel says Coke has spent about $10 million since the mid-1990s searching for ways to reintroduce recycled material. Coke currently is using some recycled material, he says, although he declines to estimate how much.

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