The 25% tariffs on aluminum announced by Donald Trump have generated concern in the beverage industry, but their impact on consumer prices will be minimal.
Coca-Cola’s CEO, James Quincey, noted that the company could reduce the use of aluminum and prioritize other materials, such as plastic bottles, to keep costs affordable. Moreover, according to economist Adam S. Hersh, companies have sufficient margin to absorb the slight increase in production costs.
In 2023, Coca-Cola packaged almost 50% of its products in plastic, 25% in aluminum and the rest in glass or other packaging. Keurig Dr Pepper used 27% plastic, 13% aluminum and 8% glass.
Quincey downplayed the impact of the tariffs, stating that they would not significantly alter the U.S. beverage industry. Hersh, on the other hand, explained that the cost of producing a can would increase by only one cent, which would barely affect the final price.
Bottlers, who are responsible for procuring the aluminum and defining the packaging strategy, have the flexibility to adjust their production lines between cans and bottles as appropriate, said analyst Filippo Falorni.
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