Their commitment to becoming a better environmental steward has wide-ranging implications across the food industry. Other chains have made similar announcements. McDonald’s aims to cut emissions by 36 per cent from 2015 levels by 2030. Yum! Brands, which owns KFC and Taco Bell, seeks to reduce emissions by 10 per cent by the end of 2025.
All these efforts have merit, but Starbucks’ call is different.
The baseline year will be 2018, based on an audit the company conducted.
Starbucks has a massive global network of stores. There are over 31,000 locations in more than 80 countries. The company is responsible for emitting almost 17 million tonnes of greenhouse gases a year, using one billion cubic metres of water and dumping 868 kilotonnes of coffee cups and other waste.
But Starbucks aims to become “resource positive” by storing more carbon than it releases, eliminating waste and providing more fresh water than it uses. Everything coming out of a Starbucks store will be served in recyclable or compostable containers, from coffee to lunches to treats.
These measures will help but their plans won’t stop there.
The biggest surprise comes from what Starbucks will do to its menu and the products it sells. Dairy is on its way out at Starbucks and dairy alternatives will be the standard. Whipped cream, cream and milk will all be gone soon.
While dairy supplies are typically cheaper, the company is banking on its buying power and the volume it represents to gain access to lower-priced alternatives.
The dairy industry is sure to have issues with Starbucks’ move away from its products, but the science is compelling. Based on a study published by Science in 2018, milk production requires more land and more water, and emits more carbon than any alternatives to milk.
Plant-based alternatives have been offered at Starbucks for a while but this announcement makes it official. Dairy is as healthy as any option but that doesn’t seem to matter to Starbucks. It’s about the planet.
Given Starbucks’ clout, other chains could follow if dairy alternatives become more affordable, as Starbucks is predicting, to the peril of the dairy industry.
Starbucks has two things going for it:
- Sustainability has always been part of the company’s DNA. Under former CEO Howard Schultz, Starbucks prioritized using renewable energy, invested in climate-resistant coffee trees and gave discounts to customers who brought in their own reusable mugs. That was long before the plastic crisis, which really started only a few years ago. Kevin Johnson, CEO since 2017, only invests in green bonds and options. The track record is there.
- Starbucks is known to sell products with higher price points than its competitors. Customers expect to pay more. That gives the company an edge and will help the chain absorb some of the extra costs. Demand at Starbucks is typically more elastic since its customers are not as price sensitive as customers at other coffee shops. Starbucks’ brand equity is second to none and it charges for it, with no apologies.
Reaching these environmental goals won’t be easy. In fact, the chain’s stock price is down since the announcement.
Maple Leaf Foods committed to becoming carbon-neutral just a few weeks ago. With some responsible accounting, it can can get it done without significantly tweaking its operations.
Starbucks, on the other hand, opted to go further and commit to changing how its operations impact the environment. Instead of looking at the arithmetic of climate change, the Seattle-based giant is changing everything it does, from how it procures ingredients, to menu design, to how stores are managed on daily basis.
Starbucks’ bold move on sustainability points to the pressure the food service industry is under to save the planet. For many consumers, especially younger ones, political leaders have failed to respond adequately to the climate crisis. While governments face their electorates once every few years, food service providers face customers every day. And customers expect industry to step up.
Accountability is key for companies making bold commitments and companies are known to fail the market on sustainability. For example, Starbucks promised in 2008 that it would be serving a quarter of its beverages in reusable containers by 2015. By 2016, only two per cent of all beverages were served in reusable containers.
The public won’t be as forgiving this time and will consider any half-hearted emission-reducing initiatives as greenwashing.
Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.