STiR coffee and tea magazine

32 STiR coffee and tea / Issue 6, 2018 (December / January 2019) Fully recyclable and compostable cups are the symbolic next generation solution to single-use beverage waste. While the tonnage of beverage cup trash is modest compared to the total amount of discarded waste, a cup- in-hand is a reminder to conserve that prompts many to make an extra effort to toss their cups into recycle bins. When it comes to hot drink cups, that effort is usu- ally wasted. The 600 billion hot drink cups discarded an- nually contain high quality fibers worth recycling but most (99.75%) end up in landfills. This is because the plastic film lining these cups – essential to retaining liquids and keep- ing them warm – adheres so tightly to fibers that recycling requires an expensive, process used in only a few US cities (Seattle, San Francisco and New York). The NextGen Cup Challenge offers $10 million in grants for design ideas and materials for an easily recy- clable cup. Closed Loop Partners, an investment group that funds the development of sustainable goods and recycling technology, devised the challenge. OpenIdeo will judge the competition which began in September. McDonald's, Starbucks, and Yum! Brands are funding sponsors (as well as rushing to create plant-based plastic linings of their own). No solution in sight. Starbucks markets a reusable plastic cup that is refilled at a 10% discount. But after 10 years of trying they have not been able to produce an acceptable take-away hot cup that is compostable and easily recycled. The Next Generation Cup Photo courtesy Starbucks. In 2008 Starbucks predicted 25% of its cups would be recycled by 2015. That never happened. The 4 billion cups Starbucks currently send out the door contain 10% post- consumer recycled fiber but that is insufficient for what recy- clers need at scale. Fortunately every fast-serve restaurant and coffee and tea shop faces the same problem which makes their combined purchasing power a big incentive. This is why the decision by McDonald's to team up with competitor Starbucks was widely acclaimed. Together they produce 4% of the world's discarded cups. "This is an issue for society, for the environment," says McDonald's chief supply chain officer Marion Gross, "It's a societal issue, and there's a way that we can come together, not as competitors, but as problem solvers. We can use our collective scale to make a difference." Keep your trash A policy decision in China adds new urgency to the task. In 2017 more than 30% of US recyclables and half of the world's recyclable paper and plastic were exported to China for processing. In 2018 China revised its rules to permit no more than 0.5% impurities in recyclables shipped to its shores. Mixed paper and plastics were banned. US recy- clers who once paid $80 a ton for China-bound mixed paper and cardboard now pay haulers $22 per ton to take their recyclables to the landfill. Learn more: www.nextgenconsortium.com Consumer research conducted in 2014 by Surveylab for PLMA made the following observations: • Almost half of millennials surveyed believe that supermarkets, food stores, drug stores, and discount stores will look dramatically different in the future. • A third of those surveyed believe many well-known national brands will no longer exist. • Half of them buy more store brands than their parents. • Brand loyalty is not a major reason to buy. When a specific national brand they wish to purchase is not on the shelf, 4 in 10 choose the store brand. • Value is the most important reason they opt for store brands. Most coffee brands now have e- commerce portals and that's a good thing because studies indicate that more than 70% of millennials frequently shop from their laptops and mobile devices. "There's no question that Amazon is ripe for tremendous growth in the private brand space," Dockery says. "There's no doubt in my mind that they'll win in the marketplace with their brands." Gorney agrees, indicating that he sees online businesses taking more market share. "The store chains have been forced to be more competitive and have to offer more value for the consumer," he says. "The gap has narrowed and the percep- tion of store brand vs. national brand has become much more acceptable. Millen- nials are price conscious while keeping quality in mind." "Millennials seek out a specific coffee origin. If they love Ethiopian they seek out high quality Ethiopian, not a specific brand's Ethiopian," Campanella adds. "If you follow what happened in craft beer, Millennials are doing the same thing with coffee. They are willing to pay more per pound because they want to understand the transparency, the sustainability, and the local story of their coffee. That's a boon for local roasters," he said. It's the price, not the brand. In the end, it's not what you buy but where you buy it and how much you pay. "A lot of the national brands have significant ad- vertising budgets. Marketing, advertis- ing, it all costs money," Campanella says. "Private brands start with the cost of the product. We're leaving it up to the retailer to decide how much they want to spend [to promote] their private brand." To make a point, Campanella com- pares two major US retail chains with their own successful private label brands. "Once you trust Costco's Kirkland Sig- nature brand, you can trust it across the store. The same thing is true with Trader Joe's," he says. "[Consumers] trust the Trader Joe's brand. That's the difference. And the price advantage is a key benefit Costco and Trader Joe's offer to their shoppers." "The American consumer is realizing a brand is simply just a brand," Campan- ella says. "At the end of the day, some- thing like coffee is about the consumer's experience and not the brand itself." Learn more: www.plma.com Club Coffee's PurPod100 units move on the company's production line

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