Coffee Cup Woes: Starbucks’ Environmental Sustainability Challenge

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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. ....

Starbucks relied on high-quality Arabic coffee beans, which grew only in certain environmental conditions. The company had encountered changing soil conditions, increasing pest infestations, soil erosion, changing weather, temperatures, and rain patterns and other threats to the Arabica coffee bean harvest. Starbucks recognized that a change in climate could have a negative impact on coffee-growing communities and the long-term sustainability of its business......

In 1994, Starbucks partnered with Conservation International to draft plans and audit its Coffee and Farmer Equity (C.A.F.E) program. It supported sustainable production of coffee through its C.A.F.E. practices, and socially responsible coffee buying guidelines. In 2000, Starbucks introduced a line of fair trade products. In 2006, 6% of the coffee beans purchased (136,000 metric tons) by the company was fair trade certified (FTC). And since then, the company had become the largest buyer of FTC coffee in North America....

In 2003, Starbucks acquired Ethos – a bottled water brand sold in North America. Its bottle featured a label – helping children get clean water. The brand itself was not incorporated for charity and critics claimed that the label on the bottle misled consumers into thinking that Ethos was a charitable organization. However, the company stated that the brand was intended to raise awareness about clean water issues in developing nations and to provide socially responsible consumers to support the cause. Starbucks then changed the label of the bottle, to include a reference to the fact that 5 cents from each US$1.80 bottle sold were used to fund clean water projects in under-developed countries. ....

Starbucks used targeted internal communication tools – like the weekly Scoop operations bulletin and the monthly Siren’s Tale newsletter – and its Partner Portal online to educate partners about its sustainability efforts and to encourage them to act in a similar way. Major environmental programs were announced through the company-wide voicemail system. The communication system at the company was a two-way channel, where the partners could also ask questions or provide feedback about the environmental programs......

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......

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......

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

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