starbucks latte levy profit sustainability
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How Starbucks Will Profit on Sustainability

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Starbucks will impose a 5p "latte levy" on every single use paper cup across their 950 UK stores starting on July 26th.

It looks like a great sustainable idea but it’s definitely a greater financial idea.

Approximately 600 billion paper and plastic cups are distributed worldwide each year according to the International Coffee Organization. Starbucks is probably responsible for 1 % of the total (6 billion cups annually).

In 1998 Starbucks was the first coffee chain in the UK to offer a 0.1£ discount for reusable cups before increasing it to 0.25£ in 2008 and 0.5£ in 2016. The overall conclusion was that the take-up rate remained low. In 2014 Starbucks launched a £1 reusable cup, but despite these efforts only 1.8% of its customers used reusable cups.

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Starbucks knows very well that their business model is strongly related to single use cups so the Latte Levy will become a huge financial revenue stream for Starbucks if the UK experiment is replicated to other markets:

6 billion * 0.05£ = 300 Million £ additional revenue. Sustainably speaking, Starbuck is a star in making bucks.

Starbucks is doing other actions to cut down on waste:

  • Customers using reusable mugs receive a discount;
  • in-store customers are encouraged to use ceramic cups;
  • single-use plastic straws will be globally eliminated by 2020. They will be replaced by a strawless lid on all iced coffee, tea and espresso beverages. This new lid has already been launched in 150 stores across Europe, Middle East and Africa and will reach all stores in the future. This is a good example of an innovative design solution.

Creating the ideal sustainable disposable cup is not easy:

  • Disposable cups cannot be recycled by normal waste systems. They’re made from cardboard with a plastic polyethylene (PE) layer that is difficult / impossible to remove. The paper cups are thus, technically speaking, not entirely made from paper.
  • Not every city has the appropriate infrastructure to manage the cups after usage (recycling, biodegradation, compost). For instance: not every industrial composter can or will be able to compost the same items.
  • Customers have to dispose of the cups appropriately.

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