Coffee Cup Woes: Starbucks’ Environmental Sustainability Challenge

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Excerpts

In 1990, Starbucks started ‘contributing positively to the community and environment’ and had included this as one of the guiding principles in conducting its business. In 1992, the company also framed its Environmental Mission statement, in which it pledged that, “Starbucks is committed to a role of environmental leadership in all facets of our business.” Since then, it had integrated environmental policies and programs in all its operations, and held its partners accountable for the cause. The company fulfilled this environmental commitment by understanding the prevailing environmental issues and sharing the information with its partners and then developing innovative and flexible solutions to bring about change. It bought, sold, and used environmentally friendly products and encouraged its partners to share its mission.

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Around 60 million customers walked into Starbucks stores every week, according to the company. Around 80% of Starbucks customers in the US took their beverage on the go, while only 20% of customers did the same in other markets. Starbucks had been using disposable paper cups to serve its customers on the go for a long time. It claimed that it had little option other than paper cups. Starbucks discarded an estimated 3 billion paper cups and I billion plastic cups each year, which bought the company under intense scrutiny. Nearly 80% of the paper cups ended up in landfills or as litter...............

In the 1990s, Starbucks formed a relationship with Environmental Defense Fund to work out a solution to this problem. At that time, the company used 100 percent bleached virgin paperboard and also used double-cupping on a regular basis. The company tried to increase the use of reusable ceramic or glass cups and dishes in its stores. In comparison to paper cups, ceramic cups and glass cups were better for the environment after 70 and 36 uses respectively. Moreover, Starbucks’ financial analysis showed that the company could save more than US$1 million per year if it served its in-store customers their beverages in serverware made of ceramic......

To come up with a solution to the cup problem, Starbucks hosted a series of Cup Summits. In May 2009, Starbucks hosted the first Cup Summit with representatives from its paper and plastic cup value chain. The goal of the summit was to prioritize and address the obstacles and opportunities of coming up with a recyclable cup. The company through the summit strove to achieve its long-term commitment to reduce the environmental impact of its cups......

In January 2013, Starbucks rolled out a US$1 reusable plastic cup at its cafés. Customers could carry the cup while on the move and have it refilled with a drink whenever they required. Reusable mugs and ceramic cups had been available at the Starbucks stores for a long time, but the company had been unable to achieve its targets for customer adoption......

While many applauded Starbucks’ various initiatives to address the issue with its cups, there were also many skeptics. Since 1985, Starbucks had offered a 10 cent discount to customers who brought their own reusable cups. However, the company was thwarted by the customers’ force of habit. Starbucks claimed that, in 2012, 35.8 million beverages were served in reusable cups brought in by customers. .....

Exhibit I: Starbucks’ Financial Summary
Exhibit II: Break-up of Company-operated and Licensed Stores
Exhibit III: Starbucks’ Growth in Company-operated Stores
Exhibit IV: Country-wise Breakup of Starbucks Licensed Stores
Exhibit V: Starbuck’s Global Responsibility Goals and Progress
Exhibit VI: Image of the US$1 Reusable Cup
Exhibit VII: Summary of the Results of the YouGov Omnibus Survey Conducted on January 4-6, 2013