Starbucks, Dunkin’ Seek the Perfect Coffee Cup

In addition to holding hot coffee, it must be recyclable or biodegradable.

May 01, 2019

BERKELEY, Calif. – The liberal city of Berkeley, just east of San Francisco, was one of the first U.S. cities to adopt curbside recycling, ban Styrofoam and battle plastic shopping bags. Now, the Berkeley city council is taking on the to-go coffee cup, according to Bloomberg.com.

The city council claims that about 40 million disposable cups get tossed away in the city each year, or about one per resident per day, and in January, the city said it will require coffee shops to charge an additional 25-cents for each take-away cup. “Waiting is no longer an option,” said Sophie Hahn, the Berkeley city council member who wrote the legislation.

Overwhelmed by rapidly accumulating trash, jurisdictions worldwide are banning single-use plastic takeaway containers and cups. Europe says plastic beverage cups must go by 2021. India wants them gone by 2022. Surcharges like Berkeley’s are likely to get more common in order to quickly change consumer behavior before more outright bans.

For Starbucks Corp., which goes through about six billion cups a year, this represents no less than an existential dilemma. Dunkin’ makes close to 70% of its revenue from coffee drinks, and it’s also a pressing problem for McDonald’s Corp. and the rest of the fast-food industry.

Foodservice providers knew this day would come. Separately and together, they’ve been working on a more environmentally friendly alternative to the plastic-lined, double-walled, plastic-lidded paper cup for more than a decade. But it’s not gone well.

“It nags at my soul,” said Scott Murphy, chief operating officer of Dunkin’ Brands Group Inc., which goes through one billion coffee cups a year. The chain has been working on a cup redesign since it pledged to stop using foam in 2010. This year, its stores are finally making the transition to paper cups, and Dunkin’ continues to tinker with new materials and designs.

“It’s a little more complicated than people give us credit for,” says Murphy. “That cup is sort of the most intimate interaction with our consumer. It’s a big part of our brand and our heritage.”

Disposable cups are a modern invention. About 100 years ago, Lawrence Luellen patented a wax-lined throwaway cup that he billed it as an innovation in hygiene, a prophylactic measure to counter diseases like pneumonia and tuberculosis.

To-go coffee culture didn’t emerge until later. McDonald’s rolled out breakfast nationwide in the late ‘70s, and a decade later, Starbucks opened its 50th store. Together with Dunkin’, the three now sell close to $20 billion in coffee annually.

The U.S. accounts for about 120 billion paper, plastic and foam coffee cups each year, or about one-fifth of the global total. Almost all of them, 99.75%, end up as trash, where even paper cups can take more than 20 years to decompose.

Despite highly publicized plastic bag bans, food and beverage containers are a much bigger problem, sometimes generating 20 times the garbage that plastic bags do in any one locale. While reverting to reusable cloth bags is relatively easy, substituting to-go coffee cups is a bigger challenge. Berkeley encourages residents to bring a travel mug to the coffee shop, and both Starbucks and Dunkin’ give discounts to those who do.

Reusable cups seem like a good solution, but they can be sort of an “operational nightmare," says Dunkin’s Murphy. Servers never know if a cup is dirty or if they should wash it, and it’s hard to know how much to pour into a large mug for a small- or medium-sized coffee.

A decade ago, Starbucks pledged to serve up to 25% of its coffee in personal travel mugs. It has lowered its goal. While the company gives a discount to those customers who bring their own mug, only about 5% of customers do. It temporarily added a five-pence surcharge to disposable cups in the United Kingdom last year, which it said increased reusable cup use 150%.

Paper coffee cups are difficult to recycle. Recyclers worry the plastic linings will gum up their machines, so they nearly always send them to trash. ​​​​​​There are only three “batch pulper” machines in North America that are capable of separating plastic lining from paper.

If cities can improve recycling on a mass scale, about 1 in 25 coffee cups could be recycled in just a few years, up from 1 in 400, reports the U.K.’s Paper Cup Recovery & Recycling Group. However, consumers usually toss their coffee cups attached to their plastic lids, which must be separated before they can be recycled, separately.

Dunkin’ says it’s working with municipalities to make sure that cups that can be recycled actually will be. “It’s a journey—I don’t think it will ever be over,” says Dunkin’s Murphy. 

McDonald’s Corp. recently teamed with Starbucks and other quick-serve restaurants to back the $10 million NextGen Cup Challenge, which aims to develop, accelerate and scale a more sustainable to-go cup. In February, the contest announced 12 winners, including cups made of compostable and recyclable paperboard; the development of a plant-based lining that could keep liquid in, and schemes aimed at encouraging reusable cup use.

“We’re looking for solutions that are near-term commercially viable and things that are aspirational,” said Bridget Croke, vice president of external affairs at Closed Loop Partners, a recycling-focused investment firm which is managing the challenge.

A cup that can degrade more quickly would be one solution, but even if such a cup were readily available and cost-effective, the U.S. doesn’t have enough of the industrial composting facilities needed to break them down. In that case, they head to the landfills, where they won’t decompose.

Governments, like Berkeley’s, aren’t waiting. The municipality surveyed residents before it imposed the 25-cent surcharge and found it would convince more than 70% to start bringing their own cups, said Miriam Gordon, program director at nonprofit group Upstream, which helped Berkeley write its legislation.

The charge is an experiment in human behavior, not a traditional tax. Berkeley coffee shops keep the extra fees and may even lower their prices so that what the consumer pays the same price. However, they are required to communicate that there is a surcharge. “It has to be visible to the customer,” Gordon said. “That’s what motivates people to change behavior.”

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