Green Bean Co. Partnering with Starbucks to make a

Greener Planet

A proposal for100 percent compostable paper cups

Presented to the Starbucks Environmental Responsibility Committee

Prepared by:

Cory Griffin

Michelle Clabby Esime Dzata

Bethany Willis Mishi Boyd

June 3, 2010

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Green Bean Environmental Consultants 1122 NW Davis St.

Portland, OR 97209

June 3, 2010

Starbucks Environmental Responsibility Committee

PO Box 3717

Seattle, WA 98124-3717

Dear Committee Members:

The attached proposal report, requested by the Starbucks Corporation, describes the

environmental impacts Starbucks coffee cups create on a global scale. We believe you will find

the information provided very useful in evaluating the future of your company.

This proposal was designed to cover three main areas:

Background information covering current trends, news, and companies using

compostable paper products

Benefits and risks involved with making this transition

Implementing our proposal and a step by step timeline of events, including initial

investments and an expected increase in revenue

Primary research includes insight from Starbucks employees and managers, as well as interviews

with the Stalk Market Corporation. Secondary research sources include plant based paper

products manufacturers, composting techniques and requirements, statistics of consumers wants for green products. All of which are significant resources for making a positive impact

upon your corporation.

We would be pleased to discuss this proposal and its conclusions with you at your request. My company and I thank you for your time in considering us for assisting you in this big change.

Sincerely,

Cory Griffin Director of Operations, Green Bean Co.

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TABLE OF CONTENTS

Executive Summary ........................................................................................................................................................... 4

Introduction ........................................................................................................................................................................ 5

Background Information................................................................................................................................................... 5

Discussion: Benefits, Risks, Timeline, and Financials ................................................................................................. 6

Benefits .................................................................................................................................................................. 6

Risks ........................................................................................................................................................................ 9

Timeline............................................................................................................................................................... 10

Financials ............................................................................................................................................................. 11

Conclusion......................................................................................................................................................................... 12

References ......................................................................................................................................................................... 13

LIST OF FIGURES

Figure

1. THE BIODEGRADABLE PRODUCTS INSTITUTE CERTIFIED COMPOSTABLE LOGO ....................................... 6

2. BAGASSE LIFECYCLE .............................................................................................................................................. 7

3. COMPOSTING TIME TABLE .................................................................................................................................. 9

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EXECUTIVE SUMMARY

The Starbucks Corporation can benefit from the transition into 100% compostable paper cups. Today’s

consumer is demanding environmentally friendly business practices and products. The cups currently

being used by your company are made of partially recycled paperboard. This does not allow for

recycling; therein causing high waste levels and higher costs for waste removal. In collaborating with

Green Bean, we will consult you along the way to a greener way of operating and running your business.

Our confidence comes from our in depth research and deep understanding of the materials at hand. We

have specialists dealing specifically with the plant-based materials used in the new compostable cups. We

have collaborated with all the businesses along the way of the transition from the production company,

to the commercial composting plant.

Analysis of research and gathered data:

Benefits. The new cups are made out of the renewable resource: sugarcane. This allows for

biodegradation. Environmentally friendly cups attract a new consumer base.

Risks. Composting facilities are not always available. These new cups will only biodegrade

under the correct composting circumstances. Without the proper disposal it will become just

another cup in the landfill.

Financial Incentives. In comparing current cup costs with the new cup costs, your return on

investment will still surpass the $400 million mark. Higher cup prices will peril in the shadow of

your new audience and customer base.

It is with these findings that we see the Starbucks corporation as the perfect candidates for this positive

change. Your company will benefit from compostable paper cups in many different aspects. We believe

that it will make stem positive growth and become an inspiration for other companies to do the same

kind of environmentally friendly business practices.

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INTRODUCTION

The green movement has been in the works for a long time now. Everywhere you look, companies are

hopping on the green wave establishing environmentally friendly business practices with sustainable

products or ways of operating their businesses. Starbucks is no stranger to the green wave, they have

taken great strides in establishing green business practices. One area they fall short on is their waste production, specifically; cups.

Starbucks bought 2.5 billion cups for stores in North America in 2007.

The 10% recycled paper cups used by Starbucks are not recyclable, because the plastic coating

that prevents the cup from leaking also prevents it from being recycled.

The solution to this problem is simple: compostable paper cups.

BACKGROUND

Environmental awareness has been in existence for quite some time. The idea of how our culture and

society affects nature is something we face every day. Caring for the environment is directly focused on

human interaction with the natural world, and is meant to deepen our understanding of how humans

have been affected by the natural environment as well as how we have affected the environment. The

history of how to better our planet came into being during the 1960s and 1970s. It stemmed from the growing awareness of worldwide environmental issues such as: pollution of air and water by pesticides,

depletion of the ozone layer, and the enhanced greenhouse effect caused by human activity (Oosthoek).

To understand the concept of being environmentally friendly, we must understand the interaction

between the environment and us as humans. There is a human intellectual realm consisting of

perceptions, ethics, laws, myths, and other mental constructions related to the natural world. Ideas about the world around us influence the way we deal with the natural environment. These ideas also

have an impact on politics, policies and the economy through which ideas materialize in the natural

world.

The environment is affected by our actions, which influences the material world. If we as humans gain a better understanding of the natural realm, we will see just how important our actions against the

environmental really are.

In order to gain a better understand of how this all began, let us look at the history of recycling. Recycling has always been a matter of helping the environment in regards to economic reasoning. The

process of recycling has been around for thousands of years. The concept of recycling even dates back

to the time of WWI and WWII (Oosthoek). A major part of the war effort included organizing metal

drives in order to gather materials that could be used for recycling purposes. People understood the

importance of recycling, even before the green movement became popular. These drives are what sparked the beginning of organized recycling programs that began to happen around the world. The idea

of landfills came about in the 1940’s and 1950’s, when major depositories became available to the public.

Recycling was such an important part of everyday life even at this time in history (Grabianowski).

History teaches us very important lessons if we let it. When people come together for a cause, it

emphasizes how important it is to do what we can as a whole and preserve the planet. History is meant to keep us from repeating mistakes, and what a better time than now to start thinking about our future.

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DISCUSSION: BENEFITS, RISKS, TIMELINE, AND FINANCIALS

The results of the research indicate the major benefits and some risks that Starbucks will attain by

switching to 100 percent compostable cups.

BENEFITS

Starbucks will attain their goal of developing a comprehensive recyclable cup by 2012. Starbucks will

distribute 100% Compostable cups, because our cups are made from an annually renewable source,

sugar cane. What is composting?

Composting is a natural process that turns organic materials into a dark, rich substance. This substance, called compost or humus, is a wonderful conditioner for your soil. As an organic-

matter resource, compost has the unique ability to improve the chemical, physical, and biological

characteristics of soils or growing media. While compost or humus contains plant nutrients, it is

typically not characterized as a fertilizer.

Starbucks will be a credible distributer of compostable cups. Ever since the introduction of

"biodegradable plastics" in the late 1980s, confusion and skepticism about claims and product

performance have prevailed. Although touted as "environmentally friendly," several so-called

biodegradable plastic products did not biodegrade as expected. Manufacturers of these products were able to make claims of biodegradable because no scientifically based test methods and standards existed.

Now that has changed. Beginning in 2002, specifications and tests exist that scientifically prove materials

will biodegrade, leaving no persistent synthetic residues. These standards are ASTM D6400 and ASTM

D6868 , which use biodegradable coatings. (Sustainability - Product Testing | World Centric) More

importantly, technology has advanced to the point where there are plastics that have the functionality of existing products, yet will biodegrade completely and safely when composted, leaving no residues. The

Biodegradable Products Institute has created the Compostable Logo, which is designed to address the

confusion that had existed for decades.

Figure 1

THE BIODEGRADABLE PRODUCTS INSTITUTE CERTIFIED COMPOSTABLE LOGO

The Compostable logo builds credibility and recognition for products that meet the ASTM D6400

and/or D6868 standards so consumers, composters, regulators and others can be assured that the

product will biodegrade as expected. The logo is designed to be easily recognizable and able to be placed on the actual product as well as packaging materials and sales literature.

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Starbucks will meet the Standards of several leading international organizations that have established

standards and testing methods for compostability, namely:

• American Society for Testing and Materials ASTM-6400-99 • European Committee for Standardization (CEN) EN-13432

• International Standards Organization (ISO) ISO14855 (only for biodegradation)

ASTM, CEN and DIN standards specify criteria for biodegradation, disintegration and eco-toxicity for a plastic to be called compostable. Biodegradability is determined by measuring the amount of CO2

produced over a certain time by the biodegrading plastic (Sustainability - Product Testing | World

Centric). The standards require 60% conversion of carbon into carbon dioxide within 180 days for

resins made from single polymer, and 90% conversion of carbon into carbon dioxide for co-polymers

or polymer mixes.

• Disintegration is measured by sieving the material to determine the biodegraded

particulate size. Less than 10% should remain on a 2mm screen within 120 days.

• Eco-toxicity is measured by having concentrations of heavy metals below the limits set

by the standards and by testing plant growth by mixing the compost with soil in different concentrations and comparing it with controlled compost.

Figure 2

BAGASSE LIFECYCLE

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Sugarcane is one of the most efficient of all plants at photosynthesis. It can convert up to 2% of incoming

solar energy into biomass. This, and the ease with which sugar is extracted from the cane, give sugarcane a huge advantage over competing crops. Compared to corn, sugarcane has a sevenfold

advantage for energy it yields versus the amount of energy needed to produce it. (Renewable

Corporation).

Sustainability defines our products and how we operate. We are committed to leaving the planet in

better shape than we found it. Unfortunately, our natural resources are being exploited at an alarming

rate. What is worse, much of our consumption results in solid waste – discarded cups, straws, plastic

bags and food containers – that stay in the environment for centuries, often after only minutes of use.

Americans generated over 413 million tons of waste in 2006, according to the Environmental Protection Agency, of which nearly 12% or 48 million tons was plastic waste. This amounts to 464 million kWh

hours of electricity (enough to power your house for 43,552 years). Plastic waste that is not incinerated

or illegally dumped into the oceans is put into landfills or recycled into lower quality plastic. Annually,

more than 20 million tons of plastic is placed in U.S. landfills (Biodegradable Products Institute).

In an effort to minimize waste, we chose to make our products out of potato or cornstarch, wheat

straw and bagasse (sugarcane) as alternatives to plastic. Our life cycle assessment shows that bioplastics

like PLA need less manufacturing energy and water and generate less waste. In contrast, petroleum-

based plastics use more energy and water, and emit large amounts of carbon and solid waste. Choosing products made from plants, not petroleum conserves oil resources and supports cleaner production

while protecting our health.

Bagasse is now an important source of fuel in Brazil. Brazil expanded its sugar industry in the 1970s to

make sugar to produce ethanol. The ethanol plants use bagasse to power their machinery. Brazilian sugar growers sell excess bagasse to other industries, such as juice and vegetable oil factories, which

burn it instead of fuel oil (Biodegradable Products Institute). This saves the nation several million dollars

a year in oil import costs.

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RISK

Bagasse is biodegradable and compostable disposable tableware that is made from sugarcane fiber

leftover after juice extraction. Normally, this residue is burned after pulping, thus creating air pollution.

However, this sugarcane fiber can be re-used - by being made into disposable products normally made

from plastic or virgin paper. The tableware has no plastic or wax lining applied to it and can be used for both hot and cold items (The Renewable Corporation - Sugarcane as Feedstock). However, the

tableware is soak proof; hot items will cause moisture/precipitation to form at the bottom of the

tableware. Still, a far superior alternative to both plastic (non-biodegradable, petroleum derived,

pollution causing) and paper (causing the destruction of millions of acres of forests) tableware.

Figure 3

COMPOSTING TIME TABLE

The rate of biodegration for different biocompostables is dependent upon the composition and

thickness of the material as well as composting conditions. Commercial composting facilities grind the

materials, turn over the piles and reach high temperatures, thus reducing the amount of time it takes to

compost and, is thus, the recommended method for composting these products. Home composting rates are slower and can vary, depending on how frequently; the pile is turned over, the moisture and

material content and the temperature.

Bagasse produces few greenhouse gases. However, burning any renewable biomass fuel causes smoke

that can seriously cloud the air in the immediate area. Sugarcane cutters often burn cane fields before cutting down the sugarcane and the resulting smoke can linger in nearby towns for weeks.

Commercial Composting may not be available. A typical commercial composting operation collects

waste from restaurants, grocery stores, and other commercial facilities, which handle food. It may also collect yard waste from nurseries and landscaping companies. Some commercial composters handle

green waste bins from individual citizens, as well, with people putting yard and food waste into a

separate container, setting that container out for regular collection along with garbage, and recycling.

Some commercial composting facilities work side by side with municipal garbage and recycling agencies

to make it easy for people to take advantage of the services of the composter, while others are privatized (What Is Commercial Composting?).

The compost produced at a commercial facility can be very high-grade, especially if the staff is

conscientious about handling and sorting their compost. In the case of a municipal agency, the compost

can be used on city landscaping, or distributed free to citizens who ask for it. Privatized companies tend

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to sell their compost, or they engage in cooperative agreements with farms, which supply raw organic

waste and receive finished compost in return.

In some cities, commercial composting has started out as a volunteer-organized effort of citizens who want to promote composting. Over time, many of these free composting cooperatives have been turned

into commercial operations, in response to growing demand for composting services (What Is

Commercial Composting?).

TIMELINE

Our goal at Green Bean is to help companies like Starbucks to convert their cups and packaging to

100% recyclable material within two years. We know it can be done based on our research of other products on the market and the positive impact that it will have on our environment. Below is a time

line of how we will make this goal a reality.

The Green Bean cup is made from a sugarcane fiber-based paperboard called bagasse. Bagasse is the

remains of sugar cane pulp after juice is extracted, used to make bi-products such as packaging, paper and absorbent products.

The material is made from upcycled sugarcane waste recovered from sugar refineries. The crushed

stalks are taken to a processing plant where they are converted into paperboard in much the same way as wood pulp is used for cardboard. Bagasse can be molded in to a variety of shapes and continues to be

used in many of our products. These products are biodegradable and compostable. Biodegradable is the

chemical breakdown of materials by a physiological environment. Biodegradable matter is generally

organic material such as plant and animal matter and other substances originating from living organisms,

or artificial materials that are similar enough to plant and animal matter to be put to use by microorganisms.

2010:

Cup Summit Starbucks met with experts from every facet of the cup supply chain, including raw

material providers, cup manufacturers, cup converters, environmental NGOs, waste management companies, Starbucks’ peer companies, academics, and municipalities.

Partner up with environment friendly companies at the local level and target eco-friendly

consumers.

Work side by side with core 77 and beta cup to create a challenge for coffee drinkers to create

a 100% recyclable cup. By doing this, people are directly doing their part to reduce the number

of non-recyclable cups that are thrown away every year by creating a more convenient

alternative to the reusable coffee cup.

Business Development: Team up with Far West Fiber a Portland based recycling plant to start

the process of recycling our cups on a commercial level.

Start testing the Starbucks Green Bean cup at the National Sanitation Foundation Laboratories.

NSF is known for the development of standards, product testing and certification services in the

areas of public health, safety and protection of the environment.

2011:

Register our cups so that they are registered with a sustainable or biodegradable seal. We will

connect with BPI - Biodegradable Products Institute.

Sponsor the US Composting Councils Annual Conference in January. Highlight our Green Bean

biodegradable cup.

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Start implementing our Green Bean cup campaign by having events at festivals and store

sampling events.

Start to phase out old cups

Create panel groups and have round table discussions regarding our new Green Bean cup; likes

and dislikes of the overall design and function.

2012

Have all of our Starbucks stores using the new Green Bean compostable cup.

Start ordering the cups

Team up with Cedar Grove Composting to start the commercial process of composting the

Green Bean Cup with in 90 to 120 days.

Team up with Engineered Compost Systems in Seattle to eventually build and design our own

Composting facilities for Starbucks, which will cut out the intermediary.

FINANCIAL INCENTIVE

After going through the details of the process and the details of our plan in implementing these new

compostable paper cups, it comes down to money. Of course, you would have concerns about putting

this into effect and having it pay off in the end. Here are a few facts to put your mind at ease.

An average American drinks 3.1 cups of coffee a day totaling 400 million cups. Turning that

number into an annual figure, it becomes 146 billion cups just in the US (Coffee Statistics).

Currently you sell 2.5 billion cups yearly.

12 ounce paper cups Yearly cost of cups Avg. cost of coffee Total cups sold Revenue

Current $108 million $1.90 2.5 billion $2.75 billion

New compostable $118 million $1.90 3 billion $3.24 billion

Difference $10 million $0 500 million $490 million

The chart above shows an estimated profit increase. The increase in revenue is strictly from the

increase in cups of coffee sold. This increase in sales would be from your new customer base. The

current percentage of coffee cups sold by Starbucks is only .425% of the total cups of coffee sold worldwide. With these new cups, Starbucks is tapping into a bigger market and increasing that

percentage.

A new audience will crowd into stores after marketing events held by current Starbucks locations and a

new advertising campaign featuring the new biodegradable cup. This will also have a price. We estimate the fees for this new marketing strategy to be $50 million. The only other additional costs would go to

any new designs for the cups themselves, those of course are variable depending on what you want

them to look like.

Bringing it all together you can see that you are looking at least a $400 million return on investment.

That is only for one year, imagine what it will look like the year following or even five years down the

road. This will only take you one direction, up.

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CONCLUSION

In gaining a deeper understanding of the environment and the importance of transitioning into compostable paper cups, it is imperative that Starbucks make the change now. The change is necessary

and waiting will not do anything but help Starbucks achieve an even greater global standing.

Compostable cups have already been created through the use of plant materials

We have set up every step of this transition for optimal functionality

You will see a great return on investment in the long run

The green generation is upon us and converting into new compostable cups will boost business and

create new higher revenues over time. A new demographic will be included into the target audience,

and business is certain to expand.

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REFERENCES

"Biodegradable Products Institute - Other Information about Certified Compostable Products."

Biodegradable Products Institute - Certified Compostable. Biodegradable Products Institute, Inc.,

2010. Web. 31 May 2010.

“Coffee Statistics.” E-Imports, Espresso Business Solutions. E-Imports, 2010. Web. 8 June 2010.

Grabianowski, Ed. “How Recycling Works.”1998-2010 HowStuffWorks, Inc. 3 June 2010.

“The History of Recycling.” Benefits of Recycling. 5 June 2010.

Oosthoek, K.J.W. “What is Environmental History?” Environmental History Resources. 3 June 2010.

"Recycling | Starbucks Shared Planet Goals & Progress 2009." Starbucks Coffee Company. Starbucks

Corporation, 2010. Web. 31 May 2010.

"The Renewable Corporation - Sugarcane as Feedstock." The Renewable Corporation – Renewable

Solutions for a Sustainable Future. The Renewable Corporation, 2009. Web. 31 May 2010.

"Sustainability - Product Testing | World Centric." Biodegradable & Compostable Products |

World Centric., 2010. Web. 31 May 2010.

"What Is Commercial Composting?" WiseGEEK: Clear Answers for Common Questions. 2010.

Web. 31 May 2010.