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Certain of our food and beverage products are sold in plastic or other packaging designed to be recoverable
for recycling but not all packaging is recovered, whether due to lack of infrastructure or otherwise. In addition,
certain of our packaging is not currently recyclable, compostable or biodegradable. There is a growing concern
with the accumulation of plastic, including microplastics, and other packaging waste in the environment,
particularly in the world’s oceans and waterways. As a result, packaging waste that displays one or more of
our brands has in the past and could continue to result in negative publicity (whether or not valid) or reduce
consumer demand and overall consumption of our products, resulting in adverse effects on our business,
financial condition or results of operations.
In response to these concerns, the United States and many other jurisdictions have imposed or are considering
imposing regulations or policies designed to increase the
sustainability of packaging,
encourage waste
reduction and increase recycling rates or facilitate the waste management process or restrict the sale of
products in certain packaging. These regulations vary in scope and form from taxes or fees designed to
incentivize behavior to restrictions or bans on certain products and materials. For example, 24 countries in
the European Union (EU) have established extended producer responsibility (EPR) policies, which make
manufacturers such as us responsible for the costs of recycling beverage and food packaging after consumers
have used them. EPR policies are also being contemplated in other jurisdictions around the world, including
certain states in the United States. In addition, 10 states in the United States as well as a growing number of
European countries have a bottle deposit return system in effect, which requires a deposit charged to consumers
to incentivize the return of the beverage container. Further, certain jurisdictions
have imposed or are
considering imposing other types of regulations or policies, including packaging taxes, requirements for
bottle caps to be tethered to the plastic bottle, minimum recycled content mandates, which would require
packaging to include a certain percentage of post-consumer recycled material in a new package, and even
bans on the use of some plastic beverage bottles and other single-use plastics. These laws and regulations,
whatever their scope or form, have in the past and could continue to increase the cost of our products, reduce
consumer demand and overall consumption of our products or result in negative publicity (whether or not
valid), resulting in adverse effects on our business, financial condition or results of operations.
While we continue to devote significant resources to increase the recyclability and sustainability of our
packaging, the increased focus on reducing plastic waste has required and could continue to require us to
increase capital expenditures, including requiring additional investments to minimize the amount of plastic
across
our packaging, including to increase the use of alternative packaging materials (e.g.,
glass and
aluminum)
in certain markets; increase the amount of recycled
content in our packaging;
and develop
sustainable, bio-based packaging as a replacement for fossil fuel-based plastic packaging, including flexible
film alternatives for our snacks packaging. Our failure to minimize our plastics use, increase the amount of
recycled content in our packaging or develop sustainable packaging or consumers’ failure to accept such
sustainable packaging has in the past and could continue to reduce consumer demand and overall consumption
of our products and erode our competitive and financial position. Further, our reputation can be damaged for
failure to achieve our sustainability goals with respect to our plastics use, including our goal to reduce 35%
of virgin plastic content across our beverage portfolio by 2025, or if we or others in our industry do not act,
or are perceived not to act, responsibly with respect to packaging or disposal of our products.
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