Sustainability push: Starbucks plans to ditch disposable cups
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Ahead of its annual shareholder meeting today, Starbucks (NASDAQ:SBUX) laid out some steps it could take on the sustainability front. One of those included plans to establish an electric-vehicle charging network with partner Volvo at Starbucks (SBUX) stores nationwide. The other centered around reducing its disposable cup use, which is not only a crucial utensil for coffee giant, but features its iconic green-and-white colors.
Wait, what? Starbucks (SBUX) is embarking on 20 different types of tests - across eight markets - to figure out the best way to ditch the single-use cup. One will test financial incentives for reusable mugs or deterrents for disposables, while another will explore washing stations, where customers will be able to have their personal cups cleaned before ordering a beverage. A borrow-a-cup program is also in the works, where a deposit is paid for a reusable cup until they are returned to stores (plastic straws will additionally be replaced with compostable options).
Starbucks' (SBUX) environmental commitments have made the stock popular among ESG investors, but shares have slipped 35% from highs notched in July as the company battles costs and economic uncertainty. That even prompted the company last month to cut its earnings outlook for fiscal 2022. "Although demand was strong, this pandemic has not been linear and the macro environment remains dynamic as we experienced higher-than-expected inflationary pressures, increased costs due to Omicron and a tight labor market," CEO Kevin Johnson said at the time.
It won't be easy: Back in 2008, Starbucks (SBUX) set a goal to have a quarter of consumers use reusable cups by 2015, but it fell seriously short of the target. The company has also offered a $0.10 discount on every order for a personal cup or mug since the 1980s, but few customers have taken up the offer (or even know about it). "Disposable cups and lids make up 40% of Starbucks' packaging waste," according to its Chief Sustainability Officer Michael Kobori.