Pursuing an OptimizedSystem through the eKOsystem (Coca-Cola (Japan)Co.)

JFS Newsletter No.44 (April 2006)
"TOWARD A SUSTAINABLE JAPAN - CORPORATIONS AT WORK" ARTICLE SERIES Article No. 40
http://www.cocacola.co.jp/corporate/eko/index.html (Japanese Only)

Coca-Cola (Japan) Co. (CCJC) was established in 1957 as the Japan-based subsidiary of The Coca-Cola Company. It manufactures and supplies the concentrates used to make Coca-Cola Company products, while planning and marketing soft drinks for the domestic market. Its 14 separately-managed bottling partners are located throughout Japan. These partners offer services ranging from manufacturing and sales of Coca-Cola Company products to collecting and recycling used containers. One of these, the Mikuni Coca-Cola Bottling Co., was reported in the December 2005 JFS Newsletter.

CCJC, its 14 Japanese bottling partners and Coca-Cola affiliated companies comprise a business system, known as the "Coca-Cola system in Japan." Today this system has about 23,000 employees and 31 plants in total. The system offers Coca-Cola, and other carbonated soft drinks, green tea in PET bottles, canned coffee and other beverages. Coca-Cola National Beverage Co. manages procurement of raw materials, production and logistic operations on a nationwide scale; Coca-Cola National Sales Co. carries out sales activities to national chain stores headquarters; and FV Corporation is responsible for sales activities to large-scale vending customers. The system also includes the Coca-Cola Tokyo Research and Development Co..
http://www.cocacola.co.jp/corporate/family/index.html (Japanese Only)

10 Promises to Refresh Person to Person

"We want to be a company that helps refreshing human relations as well as one that satisfies thirst." This new focus for the Coca-Cola System of Japan was announced in August 2005, as noted our article on Mikuni Coca-Cola Bottling in JFS Newsletter #40.
http://www.japanfs.org/en/mailmagazine/newsletter/pages/027889.html

This message expresses the system's aspiration to coexist in harmony with the society, and not only pursue profitability. The Coca-Cola System in Japan has been refreshing the marketplace with its beverages. It hopes, moreover, to refresh people by strengthening the bonds among them, through good communication and human relationships in every aspect of its business activities.

In response to the announcement of this new slogan more than 10,000 comments were received from all around the country, of which 80 percent were favorable and 20 percent were requests and other opinions. All employees read the comments and discussed possible improvements in each department for a month; the result was an 80-page action plan. Based on the plan, in January 2006, the Coca-Cola system publicly released its commitment under the title, "10 Promises to Refresh Person to Person."
http://www.cocacola.co.jp/uruosu/ (Japanese Only)

It includes six promises related to reducing environmental impacts. To help enrich relationships among people and create a sustainable society, the Coca-Cola system places high importance on reducing environmental impacts throughout the life cycle of its products and containers, from manufacturing to marketing, including use of vending machines. The system as a whole has been working on environmental management and activities.

The eKOsystem Promoted by the Entire Coca-Cola System in Japan

The eKOsystem, developed by The Coca-Cola Company in 2000, is a unique environmental management system designed for the soft drink industry. It is now being applied by the worldwide Coca-Cola system with a common focus on three areas needing improvement: water and energy use, and waste creation.
http://www.cocacola.co.jp/corporate/eko/this/index.html (Japanese)
http://www2.coca-cola.com/citizenship/eKOsystem.pdf (English)

Aiming to Reduce CO2 Emissions 10 Percent by 2010

On April 4, 2006, Japan's Coca-Cola system announced its mid- to long-term target of reducing carbon dioxide (CO2) emissions ratio by 10 percent from 2004 levels by 2010. CO2 emissions in manufacturing processes account for 70 percent of the total CO2 emissions from the Coca-Cola system. Achievement of the target will mean an annual reduction of about 40,000 tons of CO2 emissions, equivalent to 8,000 hectares of newly created CO2-absorbing forest.
Note 1: "CO2 emissions ratio" is an indicator that shows the amount of CO2 emitted in producing one liter of product.

Out of 31 plants in the Japanese Coca-Cola system, 13 plants changed their fuel from heavy oil to natural gas and five plants installed cogeneration systems for effective use of heat and electricity, as of the end of 2005. By having 20 plants change to gas and 10 install cogeneration systems, the Coca-Cola system expects to achieve 90 percent of its CO2 emission reduction target, and estimates total investment for these changes between 2006 to 2010 at one billion yen (about U.S.$8.5 million).

Achievements in 2005--15,000 tons of CO2 Emissions Reduced

The soft drink market in Japan has been experiencing a major trend shift over the past 10 years - a growing demand for tea beverages, especially for green tea. People used to drink green tea at home, brewing it with tea leaves in a teapot. However, when canned green tea appeared about 20 years ago, it began to attract consumers steadily. The market for green tea is now nearly as big as the markets for carbonated soft drinks or coffee beverages. Now, tea products are among the major items handled by bottling partners in the Coca-Cola system.

The production of tea beverages requires more energy than carbonated soft drinks, due to processes such as extracting from green tea leaves and thermal sterilization before bottling. Thus, CO2 emissions from all 14 bottling partners have been increasing every year in proportion to the expansion of the tea product market.

The Coca-Cola system searched for the most effective ways to reduce CO2 emissions through improvements in all manufacturing processes, based on product data and energy consumption at each plant. As a result, five plants installed cogeneration systems and 13 plants switched to natural gas instead of heavy oil. Some of these plants invested their own money in construction of pipelines for this fuel shift.

For example, the Tosu Plant of the Coca-Cola West Japan Group introduced both a cogeneration system and natural gas, and achieved a total reduction of CO2 emissions amounting to 6,000 tons a year. The North Tokai Plant of the Coca-Cola Central Japan Group utilizes methane fermentation processing equipment that generates methane gas for fuel by making use of the natural decomposition processes of coffee grounds, used tea leaves and other residues that used to be disposed as industrial waste. Using this methane gas as an energy source simultaneously contributes to reducing industrial waste and conserving energy.

Through these efforts, the Coca-Cola system has achieved a reduction in CO2 emissions of 15,000 tons annually over all phases of production. This amount is equivalent to a 2 percent reduction in CO2 emissions ratio.

In the Coca-Cola system overall, in addition to reductions during the manufacturing phase, reducing CO2 emissions during the vending machine sales phase is also an important agenda item. The system tries to optimize the number of vending machines deployed through more efficient placement, and to shift to energy-saving models. For related approaches, please refer to the initiatives being taken by the Mikuni Coca-Cola Bottling Co.
http://www.japanfs.org/en/mailmagazine/newsletter/pages/027889.html

Moving Ahead through Two-way Communication

The Coca-Cola system plans to pursue system-wide optimization with its eKOsystem. It recognizes the particular importance of two-way communication with consumers in achieving its goals.

This is because the 10 promises mentioned earlier encompass targets that cannot be achieved by the Coca-Cola system alone. For instance, collecting, recycling and preventing littering with post-consumer containers all require consumers' cooperation.

The Coca-Cola system takes the position that communicating its message widely among consumers is one important way to gain their understanding of its initiatives. Thus, the company sets up opportunities for people to visit sites where post-consumer containers are collected and recycled as a way of increasing face-to-face communication with consumers. In addition, it regards environmental education for the next generation as essential, and focuses on activities with close ties to local communities such as supporting the maintenance of biotopes at elementary schools and holding nature camps for children.

Coca Cola (Japan) hopes to accomplish its corporate mission by optimizing its entire corporate system while also trying to contribute to making the society as a whole environment-friendly and refreshing.

(Staff writer Eriko Saijo)