Brian Hefele

Starbucks didn’t invent the disposable coffee cup, but few other brands are as tightly married to their container. From Brooklyn to Bangkok, the Seattle-based roaster’s white cups are instantly identifiable. More than four billion containers crossed the company’s counters last year, and only a small percentage were recycled.

The person charged with finding a way to increase that share is Jim Hanna, Starbucks’s director of environmental impact. He joined the company in 2006 and has tackled a host of issues, from improving coffee farming, harvesting, and processing techniques to greening the chain’s 17,000-plus stores. He has a lot of success to show for those efforts: Starbucks hit its goal of buying half of all the energy for its North American stores from renewable sources in 2010, years ahead of schedule, for example. But cups, especially the amount of virgin paper they consume, are proving to be one of his greatest challenges.

The company is tackling the problem with its own version of the three R’s: recycling, reuse, and reinvention. Starbucks has piloted recycling efforts city-by-city, working out kinks with trash haulers and paper mills. It has run a nationwide contest to design better reusable mugs. And it has worked to share its findings with the industry, bringing together McDonald’s and Dunkin Donuts, for example, at a series of Cup Summits. But the heat is on. Starbucks has pledged to have cup recycling available in all of its North American outlets by 2015. Modest as this target may sound, it requires that Starbucks more or less remake the paper recycling business.

Hanna, 43, holds a degree in environmental science and has worked in environmental consulting. He says the long-term costs of corporate inaction on pressing environmental issues can be enormous, which is why Starbucks’s hunt for the perfect cup is a voluntary, but critical, initiative. By moving aggressively, the company hopes to win and retain customers, boost employee morale, and maybe even outflank competitors. On March 21, Starbucks released its 2011 Global Responsibility Report, documenting both its progress and ongoing challenges. Recycling efforts made gains: the share of North American stores that can recycle hot cups has more than tripled since 2010 to 18 percent. Yet the push to avoid paper use, by spurring more consumers to use tumblers or in-store ceramic mugs, saw almost no improvement.

Hannah spoke with OnEarth’s Adam Aston about Starbucks’s successes and its struggles to solve the coffee cup problem.

What steps has Starbucks taken to lower paper use? It wasn’t so long ago that Styrofoam was the standard.

Our effort goes back to the company’s earliest days, in the 1980s. There was a period, for instance, during which customers would always get two cups to prevent them from burning their fingers. In late 1990s, we introduced the sleeve, which is made of Kraft paper. It is made from recycled content, plus it uses far less material than a whole cup. And because it doesn’t touch the beverage, it can be more easily recycled.

Why not make the whole cup out of that material?

This is where you see how the business side of the paper industry, as well as food safety rules, really complicate this challenge. It is possible to make cups out of unbleached Kraft paper, but there are a couple of limitations. First, most Kraft paper is made from recycled content and, to maintain consumer safety, the Food and Drug Administration regulates the use of post-consumer recycled paper in packaging that comes into contact with food.

Second, whatever sort of paper you use, it has to be made waterproof by lining it with another material. Wax is used in some food applications. Along with most of our competitors, we use a thin lining of food-grade polyethylene plastic.

I’m guessing that the plastic lining complicates the recycling process?

To recycle beverage cups, the cups have to be ground up. From that pulp, the plastic lining is separated using a combination of mechanical force and heat. All of this adds complexity, and cost, to the recycling process. If a paper mill has a cheaper source of fiber -- one that demands less processing -- it is not going to want beverage cups. And paper mills vary wildly in their abilities. Some are six months old and can handle a wide variety of materials; others are a century old and are easily gummed up by impurities like plastic. So if Seattle, say, has a modern paper mill, you may be able to recycle cups, but if New York has an older mill, or no mill, you can’t.

Working with GlobalGreen [a sustainability focused non-profit established by Mikhail Gorbachev], we ran a trial in Manhattan in 2010, sending poly-coated paper cups from a number of stores to a paper mill on Staten Island. We had mixed results: When we introduced the cups, they generated more unusable byproduct and really slowed down the mill’s processes. When we ended the trial, we had learned a lot. But we’re still looking for paper mills near New York. In other cities, we’re seeing more promising results, and in time we hope to copy and adapt those success stories elsewhere.

This suggests there are a lot of economic factors driving what can be recycled.

Yeah, the New York City pilot illustrates this point. Quite often, it’s not strictly a question of whether the process is possible, but whether there’s enough economic incentive for various parties to take on the challenge. That’s why our challenge is not only to come up with a better recipe to make the cups more easily recyclable, but also to help develop viable markets for the resulting paper.

Where are you having success with these trials?

In Chicago, we’re doing a test where we’re sending all of our paper cups to a mill in Wisconsin that makes our napkins. So the cups come back as another Starbucks product. We’d like to scale that up and test it out elsewhere. We’ve also got an industry group, the Food Services Packaging Institute, to take on this effort. By doing that, it evolves from being a Starbucks-centric project to an industry-led initiative with a much bigger potential for change.

And recycled paper can’t be used to make new cups again, right?

The FDA has rules strictly controlling the use of recycled materials in food-grade containers. The idea is to prevent impurities or disease that could sicken the public. But it dates back to a period when waste handling and paper processing technology was less advanced. Starbucks started working with the FDA about 10 years ago. We were able to make a case to use recycled paper in our coffee cups by showing that the mills we were working with could consistently make sanitary recycled containers. In 2006, we got the FDA to OK a cup with 10 percent recycled content, and that’s been our standard ever since. Ten percent may not sound like a lot, but it was a big step. Given the billions of cups we use, it saves a lot of trees from the mill.

That leads to another solution you've tried: getting customers to use fewer cups in the first place, especially since so many of them carry their cups out the door, rather than drinking and discarding them in stores where your recycling receptacles would be located. Yet the share of beverages you sell in reusable containers, such as tumblers that customers bring in, is surprisingly small: just 1.9 percent in 2011. That amounts to a savings of about 34 million cups, but the rate has been growing very slowly. What makes this such a challenge?

It’s harder to shift customer preferences than you might expect. We’ve always sold reusable mugs. And we offer customers a 10 cent discount if they use a tumbler. That’s more than the unit cost of a paper cup. Yet, in practice, we see that people value the convenience of having a cup when they want it and may not always want the hassle of handling and cleaning a tumbler.

Consumers are famously fickle. Attachment to plastic bags and plastic water bottles lingered for years before efforts to get rid of them caught fire. How are you trying to spark these changes?

We’re exploring many approaches to help consumers opt for alternatives to paper cups. In 2010, for instance, we ran a contest. Called the Betacup Challenge, entrants included everything from better designs for collapsible cups [such as the Cupup] to fully biodegradable designs [such as the Betacup]. The finalists stood out by including social networking and reward features that help shift behaviors. The Karma Cup, which was the overall winner, encourages customers to bring in reusable mugs by offering rewards and public recognition of the benefits of doing do. But when we tried some of these techniques out at a Seattle test store, we found there was less enthusiasm than we had seen in the online community.

We've increased our focus on shaping behaviors as a way to lower cup use. For example, this year we’re working to redesign stores to make ceramic wear more visible to customers, by positioning it in sight, right behind the baristas. Customers who want to enjoy their drink in the store will be reminded that they can do so in a ceramic mug that we wash and re-use. This is something that’s widely available today, but opted for less often than we'd like.

Are others in the industry collaborating with you on this challenge?

Yes. Big as we are, Starbucks still accounts for a tiny share of the 500 billion or so cups used industry-wide every year. So we’ve convened three "Cup Summits," the first in Seattle, and the others at the Massachusetts Institute of Technology, to bring together manufacturers, government officials and retailers -- including our competitors -- to devise solutions that have the potential to shift the industry.