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[9 comments]

Starbucks has a recycling problem

April 8, 2014

Back in 2004, the soon-to-be CEO of Starbucks, Jim Donald, announced a company plan to use 10 percent recycled material in its coffee cups. Environmentalists saw it as a good first step for the coffee chain.

In 2008, Starbucks set a goal of implementing recycling in all its locations by 2015. Once again, environmentalists applauded the chain for moving in the right direction.

Jump forward to the present day and all is not fine on the recycling front for Starbucks. The company's 2013 Global Responsibility Report makes clear that the coffee chain is not going to meet its 2015 goals to have recycling in all its stores. While the company reported that it has expanded the number of locations with front-of-store recycling by 67 percent over the past year, less than 40 percent of its locations recycle.

The problem, it appears, is not a lack of will on the part of the coffee chain but the complexity of recycling its cups. Recycling requires the paper in the cups to be separated from their plastic linings (there to prevent leaks). The technology exists to remove the plastic, but Starbucks does not collect enough cups to make it worthwhile for recyclers at this point.

According to a Bloomberg View piece written by Adam Minter, Starbucks ran a test program with its 170 stores in the Toronto area in 2010. The stores collected three tons of cups, but that pales in comparison to the 51.5 million tons of paper and cardboard collected in the U.S. that year.

To make recycling its cups economically feasible, it appears as though Starbucks will need to either own the recycling technology itself or find other like-minded companies who will add their cups to the coffee chains.

FINANCIALS:     [NASDAQ:SBUX] [ ]

Discussion Questions:

Do you think Starbucks' failure to meet its goal will be seen as green washing? Will this be an issue for the chain's customers or mostly environmentalists? What would you do to address Starbucks recycling challenge if you were charged with finding a solution?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Should Starbucks continue to pursue its goal of front-of-store recycling in all its locations or should it abandon the effort?

Comments:

Starbucks undertook a commitment without really understanding the requirements to fulfill that commitment. Having talked with one of the largest waste companies in the U.S. about recycling, I found it is far more complicated than most imagine. Unfortunately, Starbucks is finding this out after the fact.

One of the issues Starbucks faces is that while some people use it as the third place, many get their coffee and leave. In order to meet the volume requirement to economically recycle, Starbucks would have to get customers to bring their empty/dirty cups back to the store. While the concept might be something their customers intellectually agree upon, actually doing it is not likely to happen in sufficient numbers to make the program feasible.

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Steve Montgomery, President, b2b Solutions, LLC

Starbucks' intentions were aggressive, and all good, and I have confidence that the majority of Starbucks customers will understand that the entire business of recycling is always based on a lot of changing variables as time moves on. The fact is that much of the marketing of recycling is overstated in all aspects of society because the demand for recycled materials and resins are actually quite small while only a tiny fraction of makes it to the recycling plants are actually purchased or used. It's not what people want to hear but when you do the objective research, it happens to be true.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

Who knew about plastic liners in the Starbucks cups? Quite sure that they were designed well before the green movement.

If the cups are so complex and costly to recycle with the plastic liners, it is possible to redesign the cup to be more easily recycled?

Given Starbucks' brand image, a new style cup that is more green for recycling could be positioned very positively.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

Hey, they are trying. That is what is key. Many of us are "greened out" as vendors push product that is "green" or eco-happy. The key is that they are trying and if their customers see this as an issue, they should buy a Starbucks refillable cup or make their coffee at home.

If I were leading this effort, I would hand the problem over to a top engineering school. Toss them a major grant and let them figure out the answer. The team that they pick to solve the problem gets free coffee for life - if they can bring home an answer.

Tom...Read my new book - "Lean Back - Let the Millennials do it"

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Tom Redd, Vice President, Strategic Communications, SAP Global Retail Business Unit

Starbucks took on the goal of recycling when others were trying to avoid it. Additionally, Starbucks is transparent about its challenges while still attempting to move forward. All consumers will appreciate their efforts and transparency. Not all consumers will be emotionally engaged with this communication, but there's more positive than negative (if any) value.

The technology issues are more challenging. I have confidence as will other consumers that Starbucks will continue to work on this goal and ultimately find better solutions.

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Joan Treistman, President, The Treistman Group LLC

This seems like a problem that makes a great opportunity for some entrepreneur to solve and build a business around. Makes me wish I had a background in materials science.

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Martin Mehalchin, Partner, Lenati, LLC

Clearly, this is a redirection of efforts on Starbucks' part to find the right solutions to recycling paper cups and I appreciate their corporate responsibility, commitment to recycling and transparency in sharing their shortcomings on the company website.

Redesign of the recyclable coffee cup is much more difficult, and expensive, than one would think. Just in terms of recyclable versus compostable paper products, there are significant cost and production differences. The additional consumer safety concern of serving hot liquids needs to be factored in, too.

I like George's suggestion for Starbucks to have their own recycling technology. A global company needs to find global solutions and at least Starbucks is trying.

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Karen S. Herman, Founder & Design Director, Gustie Creative LLC

Starbucks coffee in its current cup, as sweet as love and black as hell, finds itself in a green cup dilemma.

While it is obvious that we are in an era of grievances do Starbucks and its loyal fans have to be in contention with recycle environmentalists ... or are both groups the same? Perhaps we will find out.

In the meantime let's drink up and enjoy what's in our cup of coffee rather than its holder for more specific grievances likely will be forthcoming against Starbucks.

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Gene Hoffman, President/CEO, Corporate Strategies International

All Starbucks has to do is change the parameters of its recycling goals to something that is more achievable.

David Livingston, Principal, DJL Research

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