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Wake up and smell the coffee - Starbucks on sustainability

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Wake up and smell the coffee - Starbucks on sustainability

November 14, 2010 - 14:00
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BRUSSELS, Nov. 15, 2010 (RISI) -The pulp and paper industry has made great strides in recent years opening up its doors so to speak to its customers and other interested observers. Perhaps some of this has been forced upon it by the public's increased awareness and knowledge of environmental and sustainability issues. End users are also becoming much more involved with the industry, responding to their own customers' demands.

No matter the reason, this improved access had led to a number of interesting, even fascinating, presentations at industry conferences.

The ubiquitous disposable coffee cup was the topic of one such presentation by Jim Hanna, director of environmental impact (worldwide) for the Starbucks Coffee Company, who spoke at the recent RISI North American Forest Products Conference.

Jim Hanna: An issue much bigger than just coffee cups

As a worldwide retailer, Starbucks goes through a tremendous amount of paper products annually, notably cup stock and tissue. Hanna notes that the company buys three billion hot cups and one billion cold cups annually. It serves 50 million customers weekly at its 16,000 outlets.

As perhaps the world's most famous name in coffee, its success has also led it to becoming a target. One of the problems the company is busily seeking a solution to is the inability to recycle coffee cups. As Hanna said, most communities will not accept them as a recyclable due to food contamination. He added that no cup today is recyclable or compostable in every system. However, convincing the public of this can be a difficult task. During his talk in Atlanta, Hanna described one email he received stating that the problem was something "a kindergarden student could solve". In a way, with its famous logo on every one, cups become the face of the company. Or, to some, as Hanna said in Atlanta, it is a case of: You can't recycle this cup; therefore, Starbucks is an evil company.

But, the company is working with paper producers to find the Holy Grail of a recyclable cup. In October 2009, Starbucks worked with Pratt's New York mill.

"The cup test with Pratt was a great learning experience for our hypothesis (and hope) that polycoated hot cups could be recycled with OCC," says Hanna. "Since most of our stores currently have cardboard recycling services, the opportunity to add cups to an existing, robust infrastructure is exciting. Pratt's mill indicated that adding cups to their mix of OCC and mixed waste paper into the pulper did not impact the final product, but did slow down their batch time and did create additional waste that had to be skimmed off and disposed. For a paper mill, time and yield are key to profitability, so Pratt determined that coated paper was not ideal for their operations."

A future trail will be held with a Georgia-Pacific mill in Wisconsin, using cup stock from the Chicago area? "We'll start that test in January," adds Hanna. "We're still aligning all of our waste haulers and the MRFs to execute the test."

And, Starbucks is not working alone. There are projects completed or planned with other major coffee shop chains such as Dunkin Donuts and Canada's Tim Horton's.

"In Ontario (Canada), we've worked closely with Tim's and other retailers to drive appropriate policies and the city and provincial level," Hanna explains. "We are also using the same recycling facility for our cups with Tim's in Toronto. On a broader engagement level, we've invited Tim's, Dunkin, Green Mountain, McDonalds, Havi (supplier to McDonalds and Starbucks) and other brands to provide the necessary commitment toward momentum and material volumes to eventually demonstrate to the recycling industry and end users that their investments in recycling infrastructure will have positive payoffs. We're still in the discussion stages with other brands on future collaborative projects."

Among the producer companies interested in these projects are Cascades, MeadWestvaco, International Paper and Smurfit Stone.

As Hanna notes, packaging is only a small part of the company's carbon footprint but it is the public's perception that drives the debate, so, "We need to resolve it."

Starbucks is working to reduce the number of single serve cups by defaulting to ceramic cups for in-store customers

It's not just paper

Actually, about 75% of Starbucks' carbon footprint comes from its stores' operations. And, one of the biggest contributors is nitrous oxide, the propellant and emulsifier in its whipped cream used in various coffee drinks.

"Seventy-five percent of our controlled carbon emissions (Scope 1 and Scope 2 in the WRI protocol) are from store operations. We haven't verified our Scope 3 emissions (including cups) with an audited 3rd party analysis, but have performed internal cursory calculations to determine that our cups are a small contributor to our overall footprint, which is typical for most verified studies I've seen for other retailers. ... emissions from our whip cream exceed the emission from all our roasting plants combined.' Hanna says the intent of his comment is to remind fellow retailers to verify their assumptions about where their greatest environmental footprints truly live in their companies. "We had no idea whipped cream was such a huge source of our greenhouse gas emissions!"

But, it's still the disposable coffee cup that is the focus. Starbucks has set a goal to be able to recycle these cups by the end of 2012. And Hanna is optimistic it will be achieved. "Given the momentum we've created in the paper and plastic industry, the level of engagement and commitment from stakeholders across the value chain, the inclusion of our fellow retailers and competitors into our process and emerging market conditions for recycled pulp, we believe were are on track to develop a solution by 2012."

One way to reduce the effect of the disposable cup is to reduce their use. Starbucks sells four billion cups a year and wants to increase the use of personal mugs to 250 million transactions annually. "Our commitment is to decrease the number of single serve cups we use by increasing the number of transactions in customer personal tumblers (travel mugs) and by defaulting to ceramic cup use for our in-store customers," Hanna adds.

In other projects, Starbucks is aiming to have all its new stores LEED (Leadership in Energy and Environmental Design)-certified by the end of 2010. Hanna explains, "Starting at the end of this year, all of our new company owned stores globally will be registered for (applied for) LEED certification. The timeline at which the stores actually become certified depends on the speed at which the USGBC processes those applications.

"We're in the process of greening up our existing portfolio with a global lighting retrofit (just completed) that shaved 7% off our energy use. Additionally, as our existing stores come up for renovation, we'll use that time to incorporate our additional LEED strategies."

Starbucks now has 16,000 stores worldwide, this one in Paris

A threat to all

At Starbucks, Hanna adds, sustainability equals climate mitigation. "Climate change poses a direct threat to our business, and yours," he told delegates in Atlanta.

He makes the business case for sustainability measures: reduced operating costs; greater customer loyalty; prouder, more loyal employees; a hedge against future regulations; a larger share of the emerging demographic; and, Hanna says, a license to operate. That is, it will mitigate negative response to new Starbucks stores, which has become an issue of the present for the company.

Why should the pulp and paper industry care about what Starbucks does? Hanna says it's the reasons are obvious: a good business case; NGO pressure; customer demands and the specter of regulation such as extended producer responsibility. Of this, Hanna says that written well, it is neutral to business, but written poorly, "The public does not share responsibility for waste." Therefore, the industry will need to be aware of potential legislation and ensure its voice is heard.

When done right, Hanna adds, the pulp and paper industry is the "epitome" of sustainability. He notes that in the next few years, the focus will be on end of life, not the amount of recyled content in the cup. But, he adds, this is much bigger than just Starbucks and coffee cups.

What about the negative that some of the public holds, not only of Starbucks but of other large chains? Is that being mitigated? Hanna says there has been a change. "The shift in the tone of conversation within the media, stakeholders and our customers has been exciting to see. Two years ago when we announced our 2012 cup recycling goals and commitments to in-store recycling for our customers by 2015, the general feedback was either: ‘Why will this take so long to accomplish when brand X down the street is telling us they've already solved this issue?' or ‘There is no way you'll ever achieve these goals.' Now we're seeing headlines and discussion that indicate a growing understanding of the complexities of the recycling infrastructure and are recognizing Starbucks leadership for taking on such a difficult, but achievable task."

Hanna left delegates in Atlanta with one very telling remark: "Save our planet; it's the only one with coffee."