In 2018, Starbucks designed a new service innovation that will be addressing several environmental concerns. The business organization developed a plan to eliminate its iconic green straws by replacing them with strawless sipping lids from more than 28,000 of their stores worldwide. Their innovation of the strawless lid is composed of a sippable protrusion that removes the use of plastic straws. Hence by reducing waste and safeguarding the environment, it is evident that Starbucks innovation is participating in partnership to the UN Sustainable Development Goals 6, 12, 14, 15 and 17 where active steps are being taken to clean water and sanitation, responsible consumption and production, life below water, and life on land.
Rutgers Business School
In 2018, Starbucks designed a new service innovation that will be attacking several environmental concerns. The business organization developed a plan to eliminate its iconic green straws by replacing them with strawless sipping lids from more than 28,000 of their stores worldwide. Their innovation of the strawless lid is composed of a sippable protrusion that removes the use of plastic straws. Unlike straws which are too small and lightweight to be captured by recycling equipment, the strawless lid is made from polypropylene plastic; this plastic is a commonly recyclable plastic that can be easily recycled and reused for production of other plastic products (Starbucks). Starbucks feel that the new lids will make them more environmentally friendly and help their customers to become environmentally conscious as well. Their service to the environment is already taking place in stores across the U.S., Canada and overseas. The innovation has already been used and tested on a small number of drinks including the Draft Nitro, Cold Foam and other iced drinks. By 2020, the strawless lid will become the standard lid for all iced drinks except Frappuccinos. In an effort to eliminate all non recyclable straws from their stores, Starbucks designed a straw “made from paper or PLA compostable plastic manufactured from fermented plant starch or other sustainable material” for their Frappuccinos which require a straw to consume (Starbucks). Therefore, Starbucks’ service innovation of the strawless lid is their first step to becoming a more socially responsible business in an effort to preserve and safeguard the environment.
Starbucks' strawless lids innovation relates to the mission of the company which is reducing waste and safeguarding the environment. Starbucks decided that they needed a recyclable alternative to plastic straws as their sale of cold beverages increase every year. According to Starbucks, only 37% of Starbucks drinks sold required plastic straws five years ago. However, by 2017, 50% of Starbucks drinks sold required plastic straws and that is when Starbucks realized they needed to create a change before harming the environment more than they already were. Following research and innovation, the company designed the strawless lid as their recyclable alternative. Starbucks purpose to reduce their worldwide plastic footprint is hoping that their competition will follow suit with similar initiatives in helping the environment.
Starbucks’ service innovation took a team of engineers to design the strawless lid that attempts to create an environmental impact by reducing the amount of plastic that gets wasted by plastic straws. The person involved with developing the strawless lid is Emily Alexander, an engineer in Global Research & Development at Starbucks. Designing the future of Starbucks’ standard lid was not an easy task. She sketched and worked with a supplier in Wisconsin that turned her designs into prototypes which were shared with upper management “who would sit around, sip creamy foam through the lids and analyze their aesthetic” (Starbucks). The final product that they ultimately developed was the strawless lid that featured a thumbprint size opening. Additionally, the company has developed a motto for the innovation, “give a sip”, as a marketing strategy to share with customers their approach to creating a small positive change in the environment. The innovation will be implemented by becoming the new standard lid on all iced beverages in order to reach their goal of eliminating all plastic straws by 2020.
Since Starbucks’ announcement to become a socially responsible business, it was not hard for internal and external stakeholders to accept and invest in the new innovation. A proposal filed by As You Sow for the new service innovation that was presented by UN Environment Goodwill Ambassador, Adrian Grenier, was voted on by stakeholders in March. The proposal received the support of nearly 30% of shareholders, with shares worth $54 billion (As You Sow). In addition, Kevin Johnson, the CEO of Starbucks, was presented with 1 million signatures from environmental groups for the proposal to be passed and for action to be taken to reduce Starbucks’ global plastic footprint.
The innovation was linked to the UN Sustainable Development Goals and presented by the UN Environment Goodwill Ambassador and environment groups at the shareholders meeting. The shareholder resolution mentions its leadership commitments to the environment and its policy on sustainable packaging to reduce waste, making cups and straws recyclable. In addition, Starbucks' goal of becoming a greener and sustainable business aligns with the UN Sustainable Development Goals 6, 12, 14, 15 and 17. Their innovation of the recyclable strawless lid is their first of many to clean water and sanitation, responsible consumption and production, life below water, and life on land.
Starbucks was able to secure funding and other resources for their innovation by pairing up with other businesses that align with the Starbucks goal of protecting the environment. Starbucks itself has committed to $10 million to produce the innovation that can be composted or recycled (MarketWatch). In addition to the funding of the innovation, Starbucks has paired off with McDonalds and Closed Loop Partners to launch the NextGen Cup Challenge which provides creative minds with the opportunity to design and offer ideas to make their cups environmentally friendly. Winners of the challenge will be able to win a prize of monetary value and have their product be produced at a market level. Although the Starbucks and McDonalds are usually at odds with each other, they are pairing up for the sake of the environment (FoxNews).
Starbucks did not become a socially responsible leader among other businesses overnight. The innovation emerged after a video of a rescuer removing plastic straws from the noses of endangered sea turtles went viral. Starbucks’ motivation for this innovation was based on their consideration for the environment by reducing the use of plastic that ultimately ends up on land and in bodies of water. The purpose of creating the new strawless lid is to combat the problem of increasing plastic and plastic litter in oceans. "Plastic straws that end up in our oceans have a devastating effect on species," said Erin Simon, director of sustainability research & development and material science at World Wildlife Fund, US, in a statement. By reducing the use of plastic straws, Starbucks’ innovation makes an effort in ocean conservation, protection of marine life and safeguarding the life on land.
Starbucks’ strawless lids initiative has been inspiring not only to customers. but to employees and managers within their organization as well. The store manager at Starbucks’ at Rutgers Newark felt inspired by the lids because Starbucks’ innovation is good for the environment. He stated that he “took notice of the lids as they were distributed in the store last July. Their impact will be tremendous once they’re implemented in all Starbucks stores”. The manager agrees that although the implementation of the innovation is not creating a big impact at the moment, it will for the future as it will make a positive difference to the environment in the future. The team also interviewed Newark Barista Alex Townsend who felt inspired by the strawless lids. Townsend stated, “I feel inspired because overall I feel this is a good innovation. It shows that a big corporation cares and focuses on small things. I feel that it’s made a huge impact because our customers care and will even tell me how they feel when I give them their drinks. Our company cares and our customers care, that’s a great thing”. Starbucks’ innovation is making management and customers alike more environmentally conscious.
Starbucks’ goal to completely phase out plastic straws by 2020 is already under action. Their innovation of strawless lids is already in use in about 8,000 stores located in the United States, Canada as well as their other locations located around the world. The sippy cup lids are now used on Starbucks’ cold beverages including the nitro coffee, cold foam brew and other iced drinks under customer requests. The movement to eliminate plastic straws is showing a tremendous global impact as consumers are more environmentally conscious and expressing concern towards the increasing amount of waste that ends up on land and in water. While switching to strawless lids does not solve the overall problem of plastic litter, Nicholas Mallos, the director of Ocean Conservancy Trash Free Seas program says that “Starbucks decision to phase out single-use plastic straws is a shining example of the important role that companies can play in stemming the tide of ocean plastic. With eight million metric tons of plastic entering the ocean every year, we cannot afford to let industry sit on the sidelines, and we are grateful for Starbucks leadership in this space.”
The short-term effects the company has on its business and environment is that they are beginning the process of phasing out cups that require plastic straws. The Starbucks location in Newark began distributing the strawless lids in July according to the store manager. According to the employees at the Newark store, there is a high demand for the strawless lids from their customers. Newark barista Alex Townsend said, “our customers prefer the strawless lids over our traditional cups, it’s definitely had a positive impact on business here.” This suggests that even customers understand the harm that straws create on the environment and are willing to also be a part of Starbucks positive change. The long-term effects the strawless initiative has had on the business and environment is that the company will standardize the strawless lid in order to completely eliminate their use of plastic straws. This will create a positive in the environment as Starbucks straws will be a part of the large accumulation plastic litter on land or end up in the noses of endangered sea turtles.
The benefit is that Starbucks’ image is increasing with their environmentally friendly innovation. When asked about the mission of the innovation, the employee of Starbucks stated that the innovation was “to help the environment and improve our company’s public image”. Starbucks has already started to create an impact in customers minds as their perception of the brand and value have increased. Now customers will perceive Starbucks as an environmentally friendly business and think of Starbucks when asked which businesses have extended a hand to preserve the environment. It will also allow customers to join the movement in protecting the environment such as recycling and reducing their use of plastic straws with other beverages. Likewise, the quantitative impact that the innovation is creating is that their use of strawless lid is eliminating 1 billion straws by 2020. This is beneficial to the business and its customers because they have noticed that “the cups are lighter and more efficient. The company will be using significantly less plastic with production of these cups”. Reducing the percentage of plastic used by Starbucks will have an impact once the innovation of the strawless lids is implemented.
The qualitative impact the innovation has had on Starbucks’ business is positive. It is showing customers that Starbucks is environmentally conscious and aware of the negative impact their business has done on the environment. By sharing a global common goal with its customers and business partners, Starbucks’s positive image will increase and as a result create more business. Similarly, the strawless lid benefits society because it follows the universal conservation of reduce, reuse and recycle. The innovation of the strawless lids allows Starbucks to be socially responsible as it will help conserve the ocean and reduce the use of plastic litter on land and in water. The continued use of plastic as one of the main means of storing products such as a beverage for one time use is unsustainable. Likewise, the innovation is creating a positive environmental impact that helps to reduce the demand for plastic and reducing plastic waste. Plastic straws are non recyclable, and thus, most of the plastic ends up in the ocean and ultimately end up in the noses and stomachs of marine animals. “An estimated 10m tonnes of plastic ends up in the ocean every year”, adversely harms bodies of water, wildlife habitats, plants and life below water. It is examined by scientists, Denise Hardesty and Chris Wilcox, that there are approximately “7.5m plastic straws lining the country’s beaches of the US coastlines”. Not only is plastic lethal to many fish and marine life, but it can also accumulate and clog waterways. This may lead to polluted waters and as a result, also hurt life on land. Animals and humans on land may not be able to have clean drinking water or sanitary water to use. Therefore, the qualitative impact of Starbucks’ innovation benefits its business and society as it serves to protect the planet by cutting back on the use of plastic which is also accepted by many of its consumers.
Alex Townsend, Barista
Carl Dickerson, Manager
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Newark, NJ, US
Business Website: https://www.starbucks.com
Year Founded: 1971
Number of Employees: 11 to 50
Starbucks was founded in Seattle, Washington in March of 1971 and has become a worldwide organization in the 47 years since its founding. Starbucks around the world and including the one located on the Rutgers Newark campus sells coffee, tea, spices, hot chocolate, assorted bakery items, and Starbucks branded merchandise to consumers. Starbucks' stores offer a clean and relaxing environment along with free Wi-Fi for customers. Starbucks’ mission statement is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”.