REDUCE, RECYCLE, REPLENISH

NTUST MBA Team

Gemita – Ignatius – Isabella – Stephen

Towards Zero Net Impact

Agenda

Agenda

• Focus Issues

• 1st Solution: “Coke Stream”

• 2nd Solution: “Return & Restore”

• Implementation

Issues Coke Stream Return & Restore Implementation

Swire Beverages environment impact

CO2

Greenhouse

Gas

Emission

WaterSolid

Waste

Only 1.3%

from Beverages

Division

A vast 70.5%

from Beverages

Division

1 billion unit cases*

sold in 2013*a unit case = 24 servings

Source: Swire Pacific 2013 Annual Report

Focus issues:

Issues Coke Stream Return & Restore Implementation

The impacts of waste

Environment Public Health

1.Causing air and water

pollution

2.Landfill sites

which can damage the

plants and trees

1.Causing diseases,

e.g. water borne diseases

2.Causing breathing

problems

Issues Coke Stream Return & Restore Implementation

Current sustainability approaches

Packaging design

• Materials: rPET, PlantBottle

• Lightweighting

Educating consumers

to recycle with the

innovative

Reverse Vending Machine

Issues Coke Stream Return & Restore Implementation

But, more needs to be done

China

360 million tons

Hong Kong

1.9 million tons

Taiwan

8.3 million tons

Source: chinadialogue, FEHD-HK, EPA-TW

Annual domestic waste:

Issues Coke Stream Return & Restore Implementation

Swire Beverages water consumption

Beverages

70.5%

Trading &

Industrial

1.3%

Marine

services

0.6%

Property

11.1%

Aviation

16.5%

By divisionWater consumed (cbm thousands)

2013

Source: Swire Pacific 2013 Annual Report

Issues Coke Stream Return & Restore Implementation

Current sustainability approaches

Improving water efficiency Treating wastewater

Regenerating water sources

Treated wastewater is transported

through 2430 m pipeline to Lianhu

Park artificial lake

By using air system to rinse bottle,

epoxy floors, filterbed wash water

recovery, returnable bottle washer,

water use ratio has been decreasing

Source: Swire Pacific 2013 Annual Report

2.87

2.562.33 2.23

1.95 1.9 1.81 1.75 1.74 1.76

-39%

Issues Coke Stream Return & Restore Implementation

Still, more can be done

Drought in China's Gansu Province has left about 7,000 people and 420,000 cattle lacking adequate drinking water

Farmers in China’s Henan Province have been forced to irrigate their fields with wastewater, because groundwater sources have dried up

Source: CRI, Epoch Times

Proposed solutionsReduce, Recycle, Replenish: Towards ZERO Net Impact

Coke Stream Return & Restore

Issues Coke Stream Return & Restore Implementation

Coke Stream: zero waste Coca-ColaNot just an ordinary vending machine

Insert the money

Select the item

Ordinary vending machine: Coke Stream:

Take the bottle/can

Insert the

money

Select the

item

Fill your

bottle

Bring your

own bottle

Issues Coke Stream Return & Restore Implementation

Free extra drinkRewarding consumers for bringing their own bottle

Extra drink for the same price

Persuade consumer to use

personal bottle more often

• Reduce packaging consumption

• Less waste impact

Issues Coke Stream Return & Restore Implementation

Target consumerAiming for consumers in two specific target areas

Universities Residential

buildings

Many universities students have no

problem bringing their own bottles

to campus

Bottles are readily available for

consumers in residential buildings

1

2

Reasons:

Issues Coke Stream Return & Restore Implementation

Benefits of Coke StreamReducing waste, cutting cost

Reduce the use of plastic and aluminum packaging

Core benefits

• Minimize the Post

Consumer Material (PCM)

waste

• Reduce the impact to the

environment

Core benefits

• Lower production cost in

the long run

• Improve profitability

Issues Coke Stream Return & Restore Implementation

Return & Restore campaignEngaging the most significant stakeholder

Consumer

Engagement

Increase people’s awareness

for the environment

Intention to help other

people in need

1

2

Aims:

Issues Coke Stream Return & Restore Implementation

Leverage consumer engagement

Return empty

packaging to RVMs

Earn points

online

Redeem the points:• Reusable tumbler

• Free Coke Stream

Donate for

Coca-Cola’s

charity projects

Encouraging consumers to take part in sustainability goals

Issues Coke Stream Return & Restore Implementation

Collection of recyclable packagingUtilizing Swire’s existing technology

Reverse Vending Machine

Strategic location

• Near to the regular vending machines

• Places where Coke Stream is not viable

Collection method

• Partnership with waste collector/recycler

in target markets

Issues Coke Stream Return & Restore Implementation

Reward points systemGiving incentives to encourage participation

Consumers earn 1 point

for every empty

packaging returned

Points are accumulated

online and manageable

via a smartphone app

35 35

263133

49

32

4447

63

5156

0

10

20

30

40

50

60

70

China Hong Kong Taiwan USA

Smartphone Penetration (%)

2011 2012 2013

Source: Our Mobile Planet

Issues Coke Stream Return & Restore Implementation

Offering flexibility for consumersLinking the incentives to sustainability goals

Redemption Donation

► Redeem the points for gifts ► Donate the points for charity

1.Free Coke Stream (X points)

Persuade consumers to try the

new zero waste Coca-Cola

2.Reusable tumbler (X points)

Further encourage consumers

to try the Coke Stream

Allows consumers to contribute to

Coca-Cola’s charitable water

replenishment projects:

• Irrigation infrastructure in Henan

• Clean water for people in Gansu

Issues Coke Stream Return & Restore Implementation

Consumer awareness

“Consumers are willing to contribute and play a role in companies’ efforts to abate critical environmental issues”

“They want to interact and engage with the brands they buy”

Aiming the consumer behavior trend

American

consumers

Consumers in

Greater China Region

92% U.S. consumers would buy a

product with social and/or

environmental benefit

83% of Chinese consumers try to

buy products made by companies

that do good things for the

environment or community

Source: Cone Communications, Echo Global, KRC Research

Issues Coke Stream Return & Restore Implementation

Twofold benefits of Return & RestoreAddressing both waste and water issues

Encourage consumers

to recycle their waste

Core benefits

• Help Coca-Cola to obtain

more recyclable materials

• Reduce the impact from

waste to the environment

Provide a platform for

consumers to contribute

Core benefits

• Moving consumers to

repeat usage

• Accelerate Coca-Cola’s

charitable water

replenishment projects

Issues Coke Stream Return & Restore Implementation

Criteria to evaluate launch marketWhere to launch the solutions?

Ease of launch Cons. behavior trend Market size

Geographic proximity

Distribution capability

(new Coke Stream)

Partner availability

(collector/recycler)

Use of personal

reusable bottle

Recycling habit

Philanthropic spirit

Existing consumers

Potential new

consumers

FEASIBLE LAUNCH MARKET WITH THE MOST SIGNIFICANT RESULTS

In order of importance

Issues Coke Stream Return & Restore Implementation

Evaluating the launch market

Ease of launch Cons. behavior trend Market size

China

Hong Kong

Taiwan

USA

Where to launch the solutions?

Source: Swire Pacific 2013 Annual Report, Team Analysis

1

1

2

3

Launch

priority

Issues Coke Stream Return & Restore Implementation

Launch of solutions to marketsPhased time launch

SELECTION

CRITERION

Ease of

launch

Consumer

behavior trend

Market

size

Time phases:

Phase 3

Phase 2

Phase 1 Coke Stream

• Universities

• Residential buildings

Return & Restore

• Airports, stations

• Stadium, public places

Locations:

Issues Coke Stream Return & Restore Implementation

Main investmentInvesting for sustainability

Coke Stream: Return & Restore:

RVMsCoke Stream

machine

Distribution App and database

to store the points

Marketing

Issues Coke Stream Return & Restore Implementation

Suggested performance indicatorsMeasuring progress with KPIs

KPI (within 1 year)

Ratio between sales from Coke Stream

and regular vending machines

Reduction in PCMs waste %

%

Coke Stream

Reduction in total production cost

%

Reduction in carbon and water footprint %

Issues Coke Stream Return & Restore Implementation

Suggested performance indicatorsMeasuring progress with KPIs

KPI (within 1 year)

Percentage of sold packaging that are

returned

Accumulated amount from donated

points

%

HK$

Return & Restore

Issues Coke Stream Return & Restore Implementation

Moving forward to sustainability goal

Coke Stream Return & Restore

Reduce the environment

impact from packaging

waste even further

• Recycle more PCM waste

• Replenish water for those

in need

Q&A

AppendixAdditional slides

Issues Coke Stream Return & Restore Implementation

Smartphone application

The smartphone app presents a limitless possible uses beyond managing points.

The app can also allow the consumers to:

• Compete with their friends on their recycling points and share their achievements to social media.

• Find the nearest RVM machines.

Achieve maximum engagement and impact

Leveraging the mobile and social trend

Social marketing

Use social media for inviting and encouraging the mass audience to try Coke Stream and participate in Return & Restore campaign

Minimum investment, maximum impact

Sina Weibo

Qzone

Tencent Weibo

Facebook

Sina Weibo

Facebook

Plurk

Sina Weibo

Facebook

Twitter

PinterestSource: GO-Globe, Business Insider,

Fashionbi, eBizMBA, Alexa

Issues Coke Stream Return & Restore Implementation

Risk mitigationPrepared for unfavorable possibilities

Risk Mitigation

Coke Stream

Poor take-up rate of Coke Stream

by target consumer groupProvide periodical promotions

Unwillingness of partners to take-

in Coke Stream machineGive trial period

Return &

RestoreLow packaging return rate

• Search for next promising

places to put the RVMs

• Registration bonus

Thank You