January 27, 2010



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Starbucks’ quest for the recyclable cup
by Glenn Ostle

With more than three billion hot paper cups and one billion cold plastic cups flowing out of stores in the hands of thirsty customers globally, Starbucks Coffee Company has a huge stake in reducing its global footprint.

The entrepreneurial company, which leapt onto the national scene in the 1980s by infusing a commonplace product with designer qualities, has always had a long term commitment to environmental stewardship through energy and water conservation, recycling, and green construction, according to Jim Hanna, Starbucks’ Director of Environmental Impact.

Hanna, who will be keynote speaker at TAPPI’s PaperCon 2010 conference in Atlanta in May, heads up Startbucks’ quest for the perfect recyclable cup as well as ways to prevent more of the company’s product from ending up in landfills. “Management of solid waste and our ability to recycle are our customers’ most important metrics,” he says.

Starbucks purchases its cups, which have 10% post consumer content, from a few suppliers in North America, and ships them internationally. Two primary suppliers are International Paper (which produces the board and converts it into finished cups) and Solo which converts board produced by MWV MeadWestvaco.

“We were the first company to introduce post consumer recycled fiber into our cups,” says Hanna. “One difficulty we face is that there’s only one company in the U.S. that has been approved by the FDA for food contact post consumer fiber. We’d like to have multiple suppliers of our product, not only for dependability but also for continuity of the supply chain itself.”

Starbucks was also the first to come out with cardboard “sleeves” as a lot of their customers were asking for double cups to more comfortably carry hot beverages. “The sleeves significantly reduce the amount of paper going into each beverage and they can be easily recycled,” says Hanna.

Are there any revolutionary cup ideas on the drawing board? “I have a shelf of innovative breakthroughs,” laughs Hanna. “A lot of our existing partners, as well as a lot of entrepreneurs, are working diligently on innovations, but I haven’t seen any silver bullets yet. But there’s a lot of research going into the next generation of cup and packaging. We’d like to see something that fits into recycling as well as composting systems.”

Starbucks also wants innovators to evaluate the entire lifecycle cost of the product. “While designing for recycling, we also need to be cognizant of cost and environmental impact,” says Hanna. “If it is some exotic material that breaks down well in a recycling plant, that’s great. But if it contains toxic, expensive or rare materials in production, for instance, it won’t work for us. At three billion cups a year, any incremental change in the cost of those cups will have a significant impact on our bottom line.”

Starbucks has a stretch goal that by 2012, 100% of its cups will be recyclable or reusable. “That’s where the opportunity for designing for end-of-life, really comes into play,” says Hanna.

Starbucks works hard to differentiate itself on sustainability. “Every store we build around the world will be LEED [an internationally recognized green building certification system] certified, will use 25% less water and energy, will source materials locally, and will have a much smaller footprint,” says Hanna. The company also lobbies for climate change policies in Washington, and from a customer standpoint feels it needs to resolve how it handles the issue of solid waste.

“We definitely believe that our social responsibility, the way we treat the players in our supply chain, our ethical sourcing standards, and our community programs, have a positive impact on our company’s bottom line. Reducing our environmental footprint can also result in quantifiable reductions in operating and energy costs. Operating sustainability has a positive impact on our cash flow.

“We employ tens of thousands of people around the world. We need to attract and retain the best. One of the primary reasons many employees stay with us is that the company’s values are often the same as their own personal values. We can actually measure the impact of that.”

About 70 percent of Starbuck’s waste is generated in “back of the house,” according to Hanna. The company can generally successfully recycle its OCC and milk jugs, which have a high value, and has established a way to recycle old coffee grounds as plant fertilizer with their “Grounds for your Garden” program. But the company is less successful in “front of the house” as most recyclable product goes out the door.

“Intuitively people want to do the right thing,” says Hanna. “But if a customer has to carry around a cup all day, that won’t work. Cups are more difficult to recycle, not due to design, but due to contamination from dairy products and coffee.

“Our solution for the cups is not simply about setting up recycle containers in our stores, as 80 percent of customers walk out the door with their beverage in hand,” says Hanna. “Instead we need to work with our value chain to bolster infrastructure in homes and businesses where lack of a recycling structure is difficult. That’s where our cups are being disposed of.”

Starbucks has taken a leadership role in bringing together stakeholders to find common solutions to reduce the growth of cups and packaging going into landfills.

“The way we define recyclability is not necessary what our cups are made out of but whether our customers have a way to recycle that cup,” says Hanna. “It is a bit of a higher bar. But we feel it is very misleading for anyone to call a cup or a package recyclable unless they know that a customer actually has an opportunity to recycle it.”

In May, 2009, Starbucks brought together the entire value chain of their cups including raw material suppliers, paper manufacturers and converters, government officials, NGOs and other stakeholders associated with Starbucks cups.

“The meeting was very eye-opening for me, specifically as relates to the lack of communication across the value chain,” said Hanna. “If we are going to solve recyclability, everyone needs to understand that they play an important role within the system. Our goal is to get folks to understand how different players within chain can impact success or lack of success.

“We look for consistency of regulation and for ways to cooperate with local governments when they are crafting regulations. They need to understand that we share a common goal of stopping the flow of cups and packaging into landfills.”

According to Hanna, one problem is that local governments often write regulations without a lot of input from the people they will affect. “As a result, we spend a lot of time debating the merits of the regulations instead of partnering with local leaders to help craft those regulations and laws in the first place,” he says.

A lot of local governments are also starting to explore a higher level of regulation of the recycle market. Communities in California and Canada are starting to place more responsibility on the private sector. Quebec’s recycling efforts, for instance, used to be funded 50:50 by government and the private sector. They are now shifting to a system whereby the private sector has total responsibility. Hanna refers to this as a European model and one that is gaining traction in the U.S. whereby the same collection systems are used but costs are borne entirely by the private sector.

“Those companies producing the products would be ultimately responsible for management of those products under what is known as Extended Producer Responsibility (EPR) programs,” he says. “Under these EPR systems, if a company sells a product, it will have to take responsibility for making sure that product can be recycled. The intention is that costs can be offset by finding ways to reduce the amount of the product, finding more markets for the recyclable product, or passing costs onto end consumers. Unfortunately, the jury is still out on whether EPR programs have any impact on achieving their primary goal of reducing packaging production and waste, or whether they simply shift the cost of managing solid waste from citizens as taxpayers to citizens as customers.”

The question is: how will the private sector respond in these tough financial times? “If nothing else, businesses need to take an active role in being part of solution in reducing the environmental impact of their products, being key players in designing for recycling, and having negotiations and dialogue with the entire value chain,” concludes Hanna.

Jim Hanna joined Starbucks in November 2005. Previously he served as Director of Environmental Affairs for Xanterra Parks & Resorts at Yellowstone National Park, and before that as Director of Operations for Teris Environmental in Los Angeles. A native of Olympia, Washington, Hanna earned a BS in Environmental Sciences from Washington State University and is a U.S. Green Building Council LEED-accredited professional. He can be reached at: [email protected].

Hear Jim Hanna in person when he keynotes TAPPI’s PaperCon 2010 conference in Atlanta, May 2-7. To register or learn more, go to: www.papercon.org.

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