March 31, 2005

Pepsi’s Glass-Bottle Line Is ‘All Washed Up’

A failing bottle-washing machine at the Memphis Pepsi-Cola Bottling Company is spelling doom for one of the last returnable glass-bottle soda lines in the nation.

Dwindling numbers of glass bottles set the wheel in motion two years ago, but ultimately the future of one of the last remaining returnable-bottle soda lines in the United States now appears to be washed up because of a piece of machinery.

The nearly 30-year-old bottle washing machine at the Memphis Pepsi-Cola Bottling Company is on its last legs, meaning the future is bleak for the popular product line.

“Unfortunately, the end of the 10-ounce line is near,” said company president Mike Johnson. “Years of rust and condensation have taken their toll on the old bottle washer. Our maintenance staff has tried all kinds of repairs and right now the rust is winning.”

Last week Pepsi-Cola mailed notices to all retailers of the 10-ounce bottle line informing them of the precarious situation and warning that the production line could end any day.

“We have repaired the bottle washer for the last time,” Johnson said. “There simply isn’t enough left of the original machine to fix anymore and we are all out of ideas.”

The company stopped producing 16-ounce returnable bottles two years ago due to a dwindling supply of bottles. Johnson said at that time he believed the same fate would befall the 10-ounce line, which also had number issues.

“Two years ago we ran out of glass, now we can’t keep the 30-year-old bottle washer running,” Johnson said. “We will continue to try to produce, but if the equipment fails - we will discontinue the production of returnable glass bottles.”

But ultimately the smaller bottles will see their decline thanks to a machine larger than a semi-trailer. The bottle washer, which is filled with tanks and a large conveyer, was delivered on a freight car back in 1978. The heavy piece of equipment required two large cranes to unload from the train.

For the past 27 years the machine has performed the exhaustive cleaning process for the glass bottles returned to the company to be filled again.

During this time span, like any machine, the bottle washer has broken down and required repairs. But fixing the washer has become impossible as the company is no longer able to find parts.

“The manufacturer that built our washer has been out of business for several years,” Johnson said. “Even if they were in business, the lead time on buying a new major piece of equipment is usually nine months to a year.”

Even if the company had time to replace the machine and could find a manufacturer that still built that type of equipment, it would still be faced with the shortage of bottles. That ultimately would make it impossible to justify the large capital investment for a line that had no renewable source of glass to run through the washer.

Still Pepsi-Cola was reluctant to simply dismiss the glass line. Johnson investigated other sources for glass, and the possibility of switching to a non-returnable glass bottle.

Unfortunately the only source for clear or green glass bottles is south of the border. The company would have to import the glass from either Mexico or Panama. By the time the product was shipped via ocean freighter to New Orleans and Florida, and then transported by train to Memphis, the cost for the bottles alone would be significantly higher than what Pepsi currently charges for the finished product.

Johnson tracked down non-returnable glass bottle makers in the United States, but they only make dark glass such as beer bottles.

Running out of options, Pepsi-Cola reluctantly notified retailers of the impending end of the 10-ounce line.

The local facility will continue to fill 20-ounce plastic bottles as well as two-liters at the Memphis plant, where workers also fill five-gallon pre-mix canisters. Johnson noted the line closure actually will have little impact on the company’s bottom line, as sales of glass bottles of the soda products represented just 1½ percent of the Memphis plant’s business last year.

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