From plans to turn coffee grounds and uneaten pastries into bioplastics to energy efficiency competitions among its stores, Starbucks understands that the future is sustainability and that companies demonstrating cost-cutting energy efficiency and innovation will have the investment advantage.
After a rough spell that began with a change in CEO, the company is now scrabbling back up the rungs and it’s all about energy—from energy drinks to energy efficiency, and the unveiling of its single-brewer coffee maker doesn’t hurt, either.
Starbucks’ latest newsworthy innovation is still experimental, but promising. Starbucks Hong Kong has engaged a biochemical engineer to come up with a way to turn all those used coffee grounds and unconsumed pastries into chemicals that would be used to make bioplastics. So far, this has been a success. The research is being supported by the Climate Group, of which Starbucks Hong Kong is a corporate partner.
Specifically, engineers are blending pastries and other baked goods destined for the trash with fungi that secrete enzymes, which in turn break down the carbohydrates in the pastries to simple sugars which are then fermented and exposed to bacteria. The end result is a succinic acid that can be used in bioplastics production, as well as in the production of other substances, such as medicines and laundry detergents.
Starbucks biorefining efforts not only produce useful and efficient chemicals, but hope to reduce the amount of waste and the pollution generated from burning that waste. And it’s no small amount of waste: Starbucks Hong Kong alone is said to generate around 10 million pounds in coffee grounds garbage every year (that’s without the uneaten pastries).
Commercializing the process will be the next challenge, and this waste-recycling program has all the components of a solid investment. Not only will it be attractive to other massive-waste-generation businesses like Starbucks, but the chemicals produced by the “Starbucks process” are also of interest elsewhere. Succinic acid, as it turns out, is also a valuable coolant, attractive for its low level of toxicity, high efficacy and reduced energy requirements for refining.
This is just the latest in the Starbucks clean practices quest. The company’s forest carbon program and its cup recycling industry have made considerable headway in recent years, and it has managed to grab headlines with its hosting of an energy efficiency competition among 10 of its stores. The ultimate objective of the competition is to prove that changes in energy behavior can result in continual energy savings.
In 2010, Starbucks launched a program to see all of its stores built to LEED certification standards. So far, 75% of its new stores have met this standard.
Recycling has also been a primary target for Starbucks. As of 2011, Starbucks has managed to implement a strategy to get its customers worldwide to use personal cups, with some 2% of all beverages served by Starbucks now served in personal cups. The goal is 5% by 2015. The company is also working to develop recyclable and reusable cups, and has implemented store-front recycling in nearly 20% of its North American branches.
In terms of energy efficiency, Starbucks has reduced its electricity usage by nearly 8% since 2008, and seeks a 25% reduction by 2015. Water usage has been more challenging, though the company has managed to reduce usage to almost 18% from 2008.
Financially, Starbucks’ potential for a rebound is underestimated. The company continues to have problems with its branches in Europe, the Middle East and Africa, and competition from other key names in fast coffee (like McDonald’s and Dunkin Doughnuts) as well as rising coffee prices haven’t helped. However, September has been solid, and we predict strong growth over the coming years. Particularly, Starbucks’ energy efficiency and waste-to-bioplastics endeavors will give it the advantage in the longer term.
By. Oilprice.com Analysts