The recent aluminum tariffs imposed by President Donald Trump have not affected the prices of soda for American consumers. Concerns were raised when the tariffs were announced, but beverage companies quickly assessed the situation and found alternatives to mitigate any potential price increases. Coca-Cola CEO James Quincey mentioned that the company could shift towards using more plastic bottles if aluminum prices rise. Economists believe that the tariffs will have minimal impact on consumer prices, as companies have the flexibility to absorb minor cost increases. Data from beverage companies like Coca-Cola and Keurig DrPepper show a varied packaging mix, with options for plastic bottles, aluminum cans, and glass bottles. Despite the tariffs, Quincey reassured that the impact on large corporations like Coca-Cola would be manageable. The cost of producing a can is estimated to increase slightly, but investors remain confident that the tariffs will not lead to significant cost hikes. Bottlers play a crucial role in packaging decisions, and they have the autonomy to adjust strategies based on raw material costs. While transitioning to plastic packaging may offer cost benefits, smaller beverage companies may face challenges in making such changes. Overall, the industry is prepared to navigate through the implications of the aluminum tariffs on soda pricing.
“Making a transition like that successfully normally takes a period of years,” said William Pietersen, a professor at Columbia Business School and former CEO of Lever Foods, Seagram USA, and Tropicana. Since Trump announced the new tariffs, aluminum prices have climbed over 4%, which Hersh called “relatively stable.”
The Coalition of American Metal Manufacturers and Users (CAMMU) said 25% tariffs on steel and aluminum could directly harm domestic manufacturers. “Re-imposing 25 percent tariffs on steel and aluminum imports from our allies and without a workable exclusion process puts U.S. manufacturers directly in harm’s way,” according to a statement from CAMMU.
“Foreign customers are shifting their supply chains away from U.S. producers. Once removed, especially for smaller, family-owned businesses, it is difficult to regain that lost business,” the statement reads. In 2024, the United States imported about 47% of the aluminum consumed domestically, according to the US Geological Survey.
Different strategies
But when combining the tariffs from Trump’s first term, the price of aluminum traded on the market, and the domestic production of aluminum have seen a real impact in recent years, Falorni said. Within the beverage industry, companies adapt to price hikes in different ways.
Companies like Coca-Cola, with only 25% of their revenue coming from the United States, can offset rising costs by leveraging earnings from other markets. This flexibility makes the company less vulnerable to aluminum tariffs than companies like Keurig Dr Pepper, which relies heavily on the US market and is more exposed to domestic price fluctuations, Falorni said.
While about a quarter of Coca-Cola products come in aluminum cans, consumers are also accustomed to plastic and glass bottles. Energy drinks like Monster and seltzers like White-Claw are predominantly sold in cans, with few viable alternatives. For these brands, shifting to other materials could hurt demand, leaving them with little choice but to pass higher costs on to consumers, according to Falorni.
Environmental impact
While switching to plastic and glass packaging would have a minor financial impact on soft-drink companies like Coca-Cola, it could be “devastating” for the environment, according to Judith Enck, the president of Beyond Plastics and a former regional administrator at the Environmental Protection Agency.
“Any significant shift toward more plastic bottles is a huge environmental problem,” Enck told CNN. Refillable glass containers are the most sustainable packaging option for beverage companies, followed by aluminum cans (because they can be easily recycled) and then single-use glass bottles. Plastic is one of the least sustainable, as about 16,000 chemicals are used to produce plastics, according to Enck.
Coca-Cola bottles are the world’s No. 1 source of plastic pollution. In December, the company announced a drastic reduction of its packaging sustainability goals. Beverage corporations likely won’t feel much blowback from the Trump administration should they choose less sustainable packaging.
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