Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products, had an increase in its costs related to plastic bottles in 2023, derived from the increase in the price of PET resin.

To be precise: the average price Coca-Cola FEMSA paid for PET resin in U.S. dollars in 2023 increased 32.5% over 2022 in all Coca-Cola FEMSA territories. 

What is PET resin? A type of plastic, a lightweight, durable and versatile material used to manufacture bottles, among other products.

The prices of certain raw materials, such as PET resin, finished plastic bottles, aluminum cans, High Fructose Corn Syrup and certain sweeteners, are paid or determined with reference to the U.S. dollar.

Coca-Cola FEMSA has bottling and distribution operations in Mexico, Guatemala, Colombia, Nicaragua, Costa Rica, Panama, Venezuela, Uruguay, Brazil and Argentina.

Plastic bottles

The company purchases sweeteners, carbon dioxide, PET resin and preforms to manufacture plastic bottles, finished plastic and glass bottles, cans, caps and fountain containers, as well as other packaging materials and raw materials. 

Coca-Cola FEMSA’s bottling contracts state that these materials can only be purchased from suppliers approved by The Coca-Cola Company (TCCC), from whom it purchases the concentrate.

Russia’s full-scale invasion of Ukraine in February 2022 has resulted in sanctions and market disruptions, including regional and global stock market declines, unusual volatility in global commodity markets and significant devaluations of the Russian currency.

Logistics

At the same time, shipping has been impacted by military attacks in the Middle East and by climate change-related problems in crossing capacity in the Panama Canal.

In addition, prices in a particular country may increase depending on changes in applicable exchange rates. 

Coca-Cola FEMSA’s most significant raw material packaging costs arise from the purchase of PET resin, the price of which is related to crude oil prices and the global supply of PET resin. 

As high exchange rate volatility has affected and continues to affect most of the territories where Coca-Cola FEMSA operates, the average price of PET resin in local currencies was higher in all of its territories.