Starbucks invests $10M in Closed Loop Fund

Starbucks invests $10M in Closed Loop Fund

Company invests in the national investment fund to work together as an industry to bring a fully recyclable or compostable cup to market.

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March 29, 2018
Edited by Megan Workman
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Starbucks Coffee Co., Seattle, has announced it has committed $10 million in partnership with the Closed Loop Fund and its Center for the Circular Economy to establish a consortium to launch the NextGen Cup Challenge.

This is the first step in the development of a global end-to-end solution that will allow cups around the world to be diverted from landfills and composted or recycled inti another cup, napkin or a chair—anything that can use recycled material.

Through the NextGen Cup Challenge, the consortium will award accelerator grants to entrepreneurs working on ideas that could lead to the development of more sustainable cup solutions and invite industry participation and partnership on the way to identifying a global solution.

“Our store partners proudly pour sustainably sourced coffee in our 28,000 locations around the world, but everyone wants to take our ability to serve it sustainably to the next level,” says Colleen Chapman, vice president of Starbucks global social impact overseeing sustainability. “No one is satisfied with the incremental industry progress made to date, it’s just not moving fast enough. So today, we are declaring a moon shot for sustainability to work together as an industry to bring a fully recyclable and compostable cup to the market, with a three-year ambition.”

Each year, Starbucks says an estimated 600 billion paper and plastic cups are distributed globally, and though Starbucks cups account for an estimated 1 percent of that total, the company says it is not leaving the problem-solving to others.

“Through this partnership, the Challenge will enable leading innovators and entrepreneurs with financial, technical and expert resources to fast-track global solutions, help get those solutions to shelf, through the recovery system and back into the supply chain,” says Rob Kaplan, managing director of Closed Loop Partners.

Closed Loop Fund, an investment fund that finances scaling recycling infrastructure and sustainable manufacturing technologies that advance the circular economy, is part of the New York-based Closed Loop Partners, which invests in sustainable consumer goods, advanced recycling technologies and the development of the circular economy.

Starbucks recently announced it has joined the Recycling Partnership, the Falls Church, Virginia-based nonprofit that leverages corporate investment to support recycling, as a new funding partner. The company joins Amazon, International Paper and 34 other companies, including Coca-Cola, Target, Pepsico and P&G, to help create more circular economy jobs, more material recovery and stronger, more equitable communities, the nonprofit says.

Starbucks says the need to innovate is recognized industrywide and by leading nonprofits, including consortium member World Wildlife Fund (WWF) and its Cascading Materials Vision. The Cascading Materials Vision was developed by a collaboration spearheaded by WWF that brings together the world’s leading brands, policymakers, materials, management solution providers and environmental nonprofits.

“Through this collaboration, Starbucks and the Closed Loop Partners are undertaking complex issues in the sourcing and recovery of materials, looking to protect the environment and future wealth of our natural resources,” says Erin Simon, director of sustainability research and development (R&D) and material science at WWF. “World Wildlife Fund is excited to support and participate in comprehensive solutions that help tackle the world’s greatest challenges.”

Throughout development, Starbucks says the solution will be open source so that others can benefit and innovate on the path toward the development of recyclable and compostable cups around the world.

“We want to make sure this technology is available to everyone because it’s the right thing to do,” says Andy Corlett, director of packaging R&D for Starbucks. “The idea of environmental sustainability in packaging is not just a Starbucks issue. It’s a global issue. Anything that gets us closer to that goal is not something we want to keep to ourselves.”

As the NextGen Challenge kicks off, internal research continues as Starbucks Research and Development team initiates a trial of a new bioliner, made partially from plant-based materials for its paper cup. The internal trial, expected to take six months, will test not only for environmental impact, but whether the cup’s liner can stand up to stringent safety requirements and quality standards when filled with a hot liquid. This trial marks the 13th internal test of its kind in the last year alone as part of continued efforts to deliver on its goal for a Greener Cup.

Industry leaders such as Lynn Dyer, president of Foodservice Packaging Institute, recognize the challenges that come with striving to improve on the recyclability of cups.

Dyer says, “Starbucks is a leader in the ongoing work to make a recyclable paper cup a reality. However, this takes a great deal of time and effort, and certainly not something that can be done alone or by simply designing a new cup.”

She continues, “The truth is no cup is recyclable until it is widely accepted by communities, recycling facilities and paper mills. We have been fortunate to have Starbucks engagement and partnership in working on this challenge, and we look forward to continued collaboration towards a truly recyclable cup.”

Starbucks paper cups are currently manufactured with 10 percent postconsumer recycled fiber, the first prototype of its kind to be approved by the U.S. Food and Drug Administration in 2006. The inside of the cups is coated with a thin liner designed to meet quality and safety standards, including preventing leaks. The cups are recyclable in many municipalities with the appropriate infrastructure, including Seattle, San Francisco, Washington and New York City. Starbucks says it is pushing for broader acceptance, and the use of a plant-based liner could help more municipal recycling and composting facilities process used cups, keeping them from the landfill.

“Developing a plant-based liner that stands up to hot liquids and is commercially viable is incredibly hard, but we believe the solution is out there, not just for cups but for other exciting applications, like making straws greener, in the future,” says Rebecca Zimmer, director of global environmental impact.