Dive Brief:

• In response to pressure from public and environmental groups, both Coca-Cola and PepsiCo announced they are withdrawing from the Plastic Industry Association this year, reported CNBC.
• Both companies cited disagreements with the policy and advocacy work of the trade association, but would not elaborate on the policies with which they disagree.
• Exiting the association aligns with the companies’ sustainability policies. Coca-Cola aims to have its packaging recyclable, reusable or compostable by 2025, while PepsiCo is working to have its products be recyclable, compostable or biodegradable by the same year.

Dive Insight:

Despite both soft drink companies claiming they now disagree with the Plastic Industry Association’s policies, a more likely reason the soda giants pulled out is pressure from consumers and other companies.

As water consumption among individuals continues to rise — U.S. consumption of bottled water jumped 284% between 1994 and 2017, according to Beverage Marketing Corp. statistics cited by The Wall Street Journal — consumers are now beginning to support brands like Just Water, Boxed Water is Better, Icebox Water and Rethink Water, which offer more environmentally friendly paper-based cartons.

In previous decades, plastic was considered the future of packaging. Today, concerns about the environment are prompting companies to rethink this – Coca-Cola and PepsiCo included. Last year, Greenpeace found Coca-Cola, PepsiCo and Nestlé are the world’s biggest producers of plastic trash — most of which is used in their bottles and containers, according to CNBC.

Although both Coca-Cola and PepsiCo have had sustainability pledges for quite some time, it is only recently that the two companies have begun acting on these promises. Just this month, PepsiCo said it would begin testing its Aquifina water in cans and said it will switch its bubly sparkling water brand from a mix of cans and plastic bottles to all cans. According to the company, these changes will eliminate more than 8,000 metric tons of new plastic and about 11,000 metric tons of greenhouse gas emissions.

In another initiative, both companies are looking to forego packaging entirely in favor of launching interactive water coolers that allow customers to choose flavor and carbonation levels.

While these two titans have pulled out from the plastic lobbying group, others like SC Johnson and Toyota remain, according to 2018 committee lists reviewed by CNBC. Still, this act by Coke and PepsiCo is a power move. The two soft drink giants have great influence within the industry and may encourage other companies to follow suit. It also signals to the public that their demands for more sustainable packaging are being heard.

There is still a long way to go for these companies to deliver on their sustainability promises and for plastic to be phased out in a big way. Legislation is the new battleground to preserve the dominance of this packaging choice, with 15 states proposing laws preventing local governments from banning or taxing plastic packaging, according to Greenpeace. At the same time, the group said, some states are moving in the opposite direction, passing legislation that bans or taxes bags and other plastic packaging.

In any case, the status quo is no more. Companies like Coca Cola and Pepsi are actively — and visibly — considering ways to reimagine their packaging to resonate with the modern consumer.