Lisa McTigue Pierce, Executive Editor — Packaging Digest, 7/15/2013 9:58:11 AM
Jim HannaHow do you use packaging to communicate your sustainable strategy to customers? Come and find out.
On July 17, 2013, Jim Hanna, director, environmental impact, Starbucks Coffee Co., will speak at the Packaging Digest Global Food & Beverage Packaging Summit conference in Chicago. His topic: “How we build successful sustainable packaging.”
Here, he gives us a preview of some key points in his presentation. For more information about the conference and/or to register, visit www.fbpackaging.com.
Q: What is the Starbucks approach to sustainable design in packaging?
Hanna: Our approach is to focus on the entire life cycle of the packaging from raw material sourcing all the way to end of life and to where we can use the life cycle approach assessment to determine the true sustainability of packaging. A lot of folks focus on materials or on end of life specifically. As a company that is focusing pretty heavily on climate change as one of our primary environmental drivers, the climate footprint of our packaging is one of the essential pieces that we take a hard look at.
Q: Why is this holistic approach so successful?
Hanna: It’s successful because it’s credible. Unfortunately, there’s still lot of green washing in sustainable packaging out there. Our approach is agnostic to type of material. It looks really at where the true inputs are going into manufacturing and packaging. How do we design packaging in the best way to not only reduce all the environmental impacts of it but make it appropriate for existing end-of-life management infrastructures out there?
We’re not a company that has a zero-waste goal because zero-waste goals are often the distraction from reality. We will always create some waste. We’re not a company that focuses on landfill diversion as the only definition of sustainable packaging because, again, landfill diversion doesn’t necessarily equate to environmental efficacy or environmental mitigation. We try to take a credible, long term approach and not get trapped into a lot of the fads and trends we see out there today, which play a role at raising awareness of the issues of packaging’s footprint—but often don’t tell the complete story by locking on to one specific metric of a package’s sustainability.
Also, we’ve always taken a collaborative approach to defining sustainable packaging because, if we’re going to be successful as an industry, we have to be working together as an industry to create the necessary scale and break down some of the largest barriers to issues like waste management and harmonization of materials. We’ve done number of initiatives over the years that have brought stakeholders into the room from up and down the entire value chain to create a sense of thinking like an integrated system toward a common purpose.
Q: Why do you think it’s beneficial to engage the community in your sustainability efforts?
Hanna: When we define our community, it’s the 60 million people that walk through our doors as customers every week, it’s the places where we operate our stores and the impact that we have on those towns, as well as the place that we hold within those communities as a contributor to their livelihoods. It’s also the nearly 200,000 partners that put on the green apron as employees of Starbucks every day.
Finally, we see our community as the stakeholders who have influence in our company and are keen on how our company operates because of the size and the ubiquity of our brand and the reach it has on a global scale. Whatever their area of focus, these stakeholders have a key interest in the betterment of our world and they are looking to corporate leaders to solve these tough global issues.
If we’re not engaged with those folks, then we’re not relevant with them. Obviously, from a customer base, that impacts sales. But from a community base, it impacts the place that we hold within those neighborhoods, and our ability to operate successfully within them. It’s beneficial for every company to be directly engaged with their communities—however they define them—because it’s critical to their success.
Q: How do your customers influence your sustainable packaging initiatives?
Hanna: That’s an interesting question because often I think that we, as companies, aren’t necessarily aligned with what our customers expect from us around sustainable packaging.
Here’s a good example: We were the first large company in the world to take the use of food-contact post-consumer fiber to scale. With our supply chain partners, we went through the challenges of getting FDA approval (to the FDA, “approval” is defined as a “no objection”) for food-contact post-consumer fiber. It took us a number of years to make that happen and, although we’re still one of the only companies out there using post-consumer fiber at scale for food contact in our hot paper cups, we haven’t necessarily seen a significant resonance within a customer base around that leadership model.
You don’t see customers out there asking “Why are you only 10 percent PCF Starbucks? You really should increase that to 20, 30, 40, 50 percent” or whatever the number is.
Consumers, especially in the U.S. and Canada, define sustainable packaging by focusing on end of life. That’s caused us to focus a lot of effort and resources into creating solutions for our packaging because we know that’s what resonates most with our customers. Yes, we work to mitigate the footprint of our packaging from cradle to grave. But we need to realize that our customers, and most consumers, are locked in on end-of-life as their definition of sustainable packaging today.
We need to create solutions for our customers so we can have broader conversations about the true sustainability of packaging and about the sustainability of our businesses.
Here’s another example: Around 75 percent of our environmental footprint comes from the operation of our stores. Three years ago, we made a commitment to reduce that operating footprint and set out to build every company-owned store in the world to be LEED-certified. If you’re familiar with the challenges of the U.S. Green Building Council’s LEED certification system, that’s a really big deal. That being said, if you ask any customer what is Starbucks’ greatest environmental footprint, most of them will assume it’s our cups.
I always jokingly say, I would much rather customers come into our stores and say ‘I choose to shop at Starbucks because you guys have this super-efficient HVAC system, because as a conscious consumer, I get that this is where the rubber hits the road when we talk about Starbucks’ environmental impact and good for you guys for addressing it!’
I know to even attempt to get to that point, what we’re going to have to do is solve for the most pressing and prominent issue in their eyes-which is our packaging. It’s essential that we at Starbucks, and that we as an industry that’s using single-serve packaging, solve these end-of-life issues for our customers regardless of the contribution they make to our total footprint, so that we can shift the conversation to more pressing environmental issues.
If you look at the global problems we face around environmental degradation, climate change, water scarcity and other pressing issues, citizens and consumers have to be focused on what really matters if they are to play an impactful role in shifting the direction of current negative environmental trends. It’s our job as businesses to help them understand where the real impacts lie and how the choices they make every day as consumers have a huge impact on the environment.
If we as a business sector are just placating their current perception of environmental impact—which we often do, unfortunately—we’re not going to be able to cross that hurdle to really focus on solving the true and massive environmental issues we face. Yes, we cannot downplay the importance of solid waste management, including the impact that recycling and diversion have on climate change. But the conversation can’t end here.
Q: How can packaging help show a brand’s commitment to environmental responsibility? How can your packaging communicate all of what you just said?
Hanna: Packaging is that tangible, touchable, seeable thing that is our first and primary touch point with our customers. Packaging must tell the right story to begin the conversation around sustainability.
Packaging is the starting point and is the gateway to great conversations. It’s essential that we get that part right because that puts our customers and consumers on the path of either trusting the brands they’re using or not trusting them. If we can build that level of trust, if we’re doing the right thing around packaging, then that gives us the ability to engage in deeper conversation around our total environmental footprint and how our customers can play a role in driving that impact down by “voting” with their dollar.
Addressing end-of-life specifically, and how we should think about brands’ “responsibility,” it’s no longer acceptable for the business community to simply accept a lack of recycling infrastructure in the communities where they operate or assume that we have no influence in driving development of that infrastructure to move our single serve packaging out of the landfill pipeline. We know the necessary pieces in solving the infrastructure puzzle, including market development, material optimization, creating material scale for recyclers to invest in their capacities, along with local policies that catalyze the factors and drive consumer behaviors. But, frankly, we don’t tap into the power we have as a business community to proactively impact local environmental policy.
Sure, we are great at playing defense and activating our trade associations to (rightly) oppose material bans or Draconian fees on packaging. But we’ve never been effective at sitting down with local lawmakers ahead of time to hash out good policy that drives infrastructure development and acceptance of our products into recycling streams, leaving us vulnerable to bans, fees, extended producer responsibility (EPR) and other last-resort policies to divert our products from landfills. We need to take a second look at our engagement strategies as an industry.
For example, I can’t tell you how many cities I’ve gone to that, when I walk in their doors, they weren’t accepting Starbucks cups into the recycling system at either the commercial or residential level. By educating and helping policy makers understand that our business goals actually aligned with the city’s/county’s environmental goals, and by aligning all of the players within the local recycling “system” we’ve been able to break through those barriers in a number of cities and get our cups accepted. What we can’t do is sit on the sideline and just throw up our hands and say “The infrastructure or the markets don’t exist”—because it’s our job to make sure that, if they don’t exist, we do everything we can to drive those markets.
That was a longwinded answer to how packaging can demonstrate brands’ environmental leadership, but that’s really one of our commitments here at Starbucks: To lead the initiative to ensure that our packaging, and our industry’s packaging, is able to reduce its environmental footprint in every way from cradle, to use, to end of life.
Q: How does Starbucks balance the need for packaging that’s eco-responsible with packaging that fulfills the consumer’s desire for convenience?
Hanna: We try to take a holistic approach to our packaging in a way that, rather than focusing on the packaging, it focuses on the needs. Starbucks’ need is to deliver the best cup of coffee we can to our customers in a way that creates brand connection and elevates the experience for our customers every day beyond what our competitors can do.
We’ve taken the approach of focusing on our packaging goals from a broader perspective of how to deliver this great cup of coffee to our customers in a way that reduces our environmental footprint while enhancing (or at least maintaining) their experience.
We have a three-pronged approach at Starbucks.
Number one is—and this may not sound too exciting to the folks in the single-serve packaging industry—we’re trying to get our customers to use fewer of our paper and plastic cups. We have a program to incentivize people to bring their own reusable cups into our stores. When they do that, we’ll wash it for them and prepare their beverage in those cups, whether it’s a tumbler or a travel mug and we’ll give the customers a discount for their efforts. We have a target at Starbucks that, by 2015, 5 percent of all of our transactions occur with customers who bring in their own reusable mugs.
Unfortunately, we’ve hovered around 2 percent since the inception of the incentive program. The numbers dance around that a bit, but that’s been where we’ve been locked in for years. What we discovered is that the discount we offer is great, but it’s only a driver for a limited number of consumers. Most consumers are bringing in their own mugs because they simply enjoy the beverage that way or they have their own sense of environmental consciousness and this is how they’re doing their part every day to reduce their environmental footprint, regardless of whether or not they get a discount.
It’s also a convenience issue, as carrying around a big bulky mug that may or may not be clean or may have been sitting in your car for a week, often negatively impact people’s ability or choice to bring in their own reusable mugs.
In January 2013, we introduced a new concept. It’s a $1 reusable mug that’s made out of 100 percent polypropylene, the lid and the cup. The cool thing is the convenience factor is solved and the cost factor is solved because it’s only a buck, instead of our standard price between $10 and $18 for our mugs. It looks and feels like our existing paper cup, maintaining the brand attachment and Starbucks experience. For folks who were previously comfortable with our single-serve cups, this gives them an option for a reusable cup. And, because it’s only a buck, if you forget it at home or in your car or office, you can buy another one. After the introduction of the $1 reusable cup, we saw a significant bump in the purchase of reusables overall. But, more importantly, we also saw a marked increase in the number of people bringing their mugs back into the store to be reused.
Number two is encouraging our store managers to learn which customers typically enjoy their beverages in the stores and serve them in ceramic mugs, again, to reduce the use of single-serve packaging. You’d be surprised at how many customers don’t even know that we offer ceramic mugs in our stores.
Number 3 is, for customers who choose to use single-serve cups, how do we do that in a way that provides that great Starbucks experience they’ve come to expect, delivers their beverage safely and conveniently every time, and has the lowest environmental footprint.
That’s where we can really look at materials innovations, such as the post-consumer fiber we already use, innovation in coatings on the paper to impact recyclability and industry-wide material standardization to create scale for recyclers. Finally, when I talk about our 2015 goal of declaring our cups recyclable, what I’m talking about is access to recycling. The industry often defines recyclability or compostability based on the materials of our packaging, when we should be defining it based on access that our customers have to recycling or composting services. This isn’t Jim Hanna making up his own definitions. It’s the Federal Trade Commission’s Green Guide that defines recyclability in that way and that’s the definition we use for our target.
For Starbucks, we define recyclability as follows: When our customer chooses to dispose of their cups—whether it’s in our stores, in their homes, in their offices or in a public space, if they don’t have access to recycling at that point, then the cups aren’t recyclable. They’re going to go into a landfill. That’s what we’re focusing on—building those infrastructures for recycling and end of life so that, hopefully, by 2015 we can actually cross the Federal Trade Commission’s 60 percent access threshold and declare victory.
Q: How do your packaging designs used in the foodservice environment at the point of consumption differ from some of those used in your retail products and why?
Hanna: They don’t—and that’s a good thing. We take a holistic approach to packaging design whether it’s for retail stores or in our foodservice operations.
We also look at our transport packaging, the movement of packaging from our distribution centers into our stores or the packaging that comes directly into the stores. We have significant focus on our supply chain to be able to help them minimize over packaging—which has been a pet peeve of our store partners (employees). Nothing galls them more than to get a small delivery in a big box. We know that cubing efficiency and standardization of packaging sizes is essential for efficient transportation, but we know there’s a significant footprint associated with transportation that can be significantly reduced if done right.
We’ve been making significant progress in balancing efficient transportation with minimization of packaging, while balancing the need to maintain integrity of the items being transported. This includes introduction of durable, reusable transport packaging across our distribution network. While we’ve made huge progress, other retailers out there live and breathe this stuff, especially the ones that own their entire distribution systems, and have had significantly more leadership in this area that we can learn from.
We want to be game changers in the industry. But we’re also willing to follow game changers in areas where they either have more influence, more exposure to the issue or a greater ability to be those game changers. That’s one exciting culture of our company: We put a stake in the ground where we think we can change the world. We also know that there are many other companies who can do the same thing and we’re glad to follow them.
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