Coke Goes Green With CO2-Cooled Vending

   
Coke Goes Green With CO2-Cooled Vending

There’s a lot of talk these days about how bad carbon is for the environment. Well, soft drink seller Coca-Cola (KO) is fighting fire with fire by using C02 to combat climate change in a new line of green vending machines. Unilever (UL) and PepsiCo (PEP) will likely soon follow suit.

These new self-serve stations chill drinks without the use of harmful refrigerants known as hydrofluorocarbons (HFCs). About 10 years ago, research emerged linking HFCs to global warming, and the fact that KO execs have taken the research to heart is proof that the movement has really gone mainstream.

This is just the latest move Coke has made to green up its image. But don’t think Coke’s mission is purely in the interest of the environment — it’s also about the bottom line. As a result, a number of other companies are racing to roll out similar green technologies.

Back in December, Coca-Cola made a splash as it revealed a line of eco-friendly, plant-based bottles. The containers were meant to reduce use of petroleum products and boost the company’s green image by using 30% plant material. With crude oil prices up about 75% since bottoming out in early 2009, this move away from petroleum-based bottles makes good fiscal sense for Coke in the long run. (Coke is one of the top 10 Dow dividend stocks … find out the other nine!)

Same for the “natural refrigerants” in Coke’s vending machines. While compressed CO2 must be kept at a higher pressure and demands stronger pipes, the cost of those systems can be offset by how cheap and abundant carbon dioxide is. And as pipe technology improves, this method of refrigeration will become even more cost-effective.

Kert Davies, director of research for Greenpeace, has said that Coke opted for carbon dioxide, but other gases like ammonia and propane can be used. Davies said other companies working on the technology right now include Unilever (UL), which sells Lipton iced tea and Ben & Jerry’s ice cream via vending machine, and PepsiCo (PEP). In fact, Pepsi installed 35 HFC-free vending machines in Miami during the Super Bowl a few weeks back. (Related Article: Pepsi dividend boost adds fizz to shares.)

Coca-Cola claims that about 40% of its carbon footprint came from its refrigeration equipment, so it began testing HFC-free technologies to combat this. But with such a huge amount of money being spent on equipment and electricity, you can bet Coke wouldn’t be making this move if it didn’t impact the company’s bottom line. Same for Unilever and Pepsi.

The new HFC-free vending machines appear to be here to stay. Coke’s goal is for all new equipment to be HFC-free by 2015.

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Article printed from InvestorPlace Media, http://investorplace.com/2010/03/coca-cola-ko-green-vending-machine-pep-ul/.

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