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Starbucks has a climate problem with coffee cups as the explosion of cell phones, drive-thru


Starbucks has allowed customers to order with their personal reusable cups at the store counter since 1985, but expanding this to phone and drive-through ordering is a much bigger deal.

Starbucks

Since 1985, Starbucks allowed customers to order individual reusable cups at the store counter, offering a 10 cent discount to customers who chose this sustainable option. But if you never knew this option existed, lose your reusable cup a decade or so ago, or simply give it up after forgetting to bring it with you and leaving the mushrooms. development milestones, the biggest shift towards reusable coffee cups is still on the way from the coffee chain, which uses an estimated 7 billion disposable cups per year, including (along with lids) approx. 40% of the company’s packaging waste.

By the end of this year, Starbucks is committed to allowing customers to use all of its store locations in the US reusable cups — first launched in March 2022 — for all store visits, whether it’s over-the-counter, in-vehicle or mobile purchases. That’s a big change for a company that as of last quarter said mobile ordering, drive-through and delivery accounted for 74% of revenue. So far, the reusable cup option has only been offered to customers who order in-store.

Starbucks’ business has improved — Starbucks stock is up 27% over the past year, although its stock market performance has weakened this spring. The company says it is now serving more customers during peak hours than it did before the pandemic. But most important to the reusable cup goal is the trend toward increased sales from cold drinks, increased customizability, and increased correlation with the Rewards program. The company says that over the past few years, the number of cold drinks ordered – drinks served in plastic instead of paper – has surpassed the number of hot drinks year-round. Meanwhile, two out of every three drinks ordered have requested customizations like extra flavors and espresso, and 57% of total sales are from loyalty program members. .

The move to mobile and drive-thru comes after years of struggling with long wait times at stores that cost the chain a lot of sales. There is a risk of additional wait times upon arrival as customers have to give their reusable cups to the barista at the drive-thru window and mobile orders will not be taken. It’s also available to pick up as soon as customers arrive at the store if they choose to bring their own cups. The takeaway coffee experience could be reshaped if Starbucks hits its reusable cup goal.

Speed ​​of order fulfillment is key for Starbucks top management. As part of its “innovation plan”, the company has implemented what it calls a “Siren system” to help the complex beverage production process complete faster in stores, requiring employees to move around. Transfer less and machines can make drinks without accessing ingredients from multiple stations.

Before the reuse program rolled out nationally, Starbucks conducted a final test of the all-reusable option in Colorado, starting in mid-April and running through the end of this month at all locations. all Starbucks locations in the state. The Colorado test includes driving orders, but not on cell phones.

“So far in the beta, we haven’t seen any disruptions in the customer experience,” a Starbucks spokesperson said.

Amelia Landers, vice president of product innovation at Starbucks, told CNBC in an interview last year when it first announced the plan, “We’re doing a lot of testing” – among them, the tests included customer convenience, drive-thru line speeds, and employee performance . It also tested the dishwashing technology at stores in Hawaii and on the campus of Arizona State University.

Reusable coffee cup initiative around the world

Starbucks has been testing the reusable cup concept in markets around the world. The most recent test in Colorado looks different from what is being done in other cities and countries.

In Taiwan, Starbucks rolled out a “Borrow Cup” program at 60 stores during last fall, after a successful trial at two stores, allowing customers to borrow cups from Starbucks stores to order drinks. . To encourage customers to return the mug they borrowed, they must pay a refundable deposit of approximately $1.60 per cup. The customer can then return their reusable cup at a participating store or by using the Starbucks app at the cup return counter. The returned cups are then cleaned and disinfected for reuse for future orders.

Similar programs are already in place at specific Starbucks locations in South Korea and Tokyo, while temporary testing of the initiative takes place in Singapore. A returnable cup program is also running in cities including London, Geneva and Paris, and the company plans to offer the program in all its stores in Europe, the Middle East and Africa. in 2025.

Matt Prindiville, CEO of recycling container company Clynk, said: “Reuse helps to significantly reduce climate pollution and waste. On a large scale, reuse also saves money for businesses. company”. “If Starbucks makes reuse the norm in the metro areas where they operate, they won’t need consumers to carry their own cups. It will become the default way they serve coffee. “

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A history of unrealized sustainability goals

While progress is being made, Starbucks has a history of falling short of its sustainability goals by the suggested timelines. In 2008, Starbucks set a goal of having 25% of drinks served in reusable cups by 2015, but a decade after setting this goal, less than 2% of drinks are served in reusable cups. , according to As You Sow.

“They failed miserably,” MacKerron said.

Starbucks previously committed to developing recyclable coffee cups in 2015, but so far, they haven’t done so. It aims to use only renewable energy for its global operations by 2020, and although it has come a long way towards that goal, it has only reached 72% of its company-operated facilities. operating globally in fiscal year 2022.

History makes Starbucks sustainability watchdogs like As You Sow skeptical of the company’s year-end goals.

But the biggest results are still in the hands of the consumer.

“Only a relatively small fraction of consumers are willing to bring in their reusables and it’s hard to turn this around,” said Prindiville.

Consulting firm IGD found that 83% of consumers are willing to make a change to reusable packaging, but they need a push. Offering incentives to choose to reuse, like Starbucks did, can help motivate consumers. However, research shows that fees are actually more effective than discounts, says Prindville. It’s more of a stick than a carrot.

“People’s natural fear of loss initiates and drives different behaviors. The larger the charge, the more likely it is to have an impact,” says Prindiville.

Although the reusable cup option has been around at Starbucks for more than 30 years, many Starbucks consumers and employees are still unaware of its existence. Kelly McBee, As You Sow’s senior coordinator for the circular economy, says that when she tried to buy a reusable cup at Starbucks to order her drink, she ran into a problem. employee confusion with this request.

“Nobody ever asked for reusable cups, and when they had to go get them from the shelf there, they didn’t realize they were more than just decorations,” says McBee.

She says it’s clear that a lack of advertising prevents customers from knowing or feeling encouraged to order their drinks in reusable cups.

“It’s great that Starbucks has this commitment. They’re certainly leading in this way, but are they taking the next step to encourage customers to bring their own? That starts with advertising,” McBee said. .

Starbucks has signage in stores across the US advertising the reusable cup initiative, and as testing continues in Colorado, the company has emailed Rewards members to notify them of the program, along with placing signs at drive-through points to remind customers to let their baristas know if they bring reusable cups.

The future of the Starbucks cup has broad implications.

“This is the iconic Starbucks around the world,” Landers told CNBC last year. “And if we could replace this disposable cup, this symbol of waste, with this reusable one, we’d completely change people’s minds. And at Starbucks, they I can really set an example and change the entire industry.”

Environmental advocates agree. “Smaller coffee shops are looking to these larger corporations to set a precedent for how their cafes operate,” said Grace Lee, ReThink Disposable program manager at Clean Water Action.

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