What will a ‘new standard for green retail’ mean for Starbucks’ results?

Discussion
Photo: Starbucks
Sep 17, 2018

Starbucks announced plans to have 10,000 “Greener Stores” — all powered by 100 percent renewable energy by 2025.

Announced last week at The Global Climate Action Summit, Starbucks, working with SCS Global Services and World Wildlife Fund (WWF), will develop an accredited program for designing, building and operating stores to set a “new standard for green retail.”

Stores in North America will be audited against the criteria, culminating in 10,000 “Greener Stores” by 2025. Building on the chain’s past efforts around LEED certification program, the framework will be open-sourced to support other retailers’ efforts.

The Starbucks Greener Stores framework will focus on:

  • Energy efficiency & water stewardship: Delivering 30 percent water savings and 25 percent energy savings over historic store design practices.
  • Renewable energy: Powering stores by 100 percent renewable energy through investments in solar and wind projects.
  • Healthy environment: Creating environments that promote wellness for associates and customers by addressing elements such as lighting, noise, air quality and temperature.
  • Responsible materials: Ensuring materials and products for stores are responsibly and sustainably sourced.
  • Waste diversion: Designing and operating stores to reduce waste.
  • Engagement: Inspiring a culture of sustainability by empowering employees to be informed, take action and engage in sustainability issues and practices.

Starbucks expects the program to reduce utility costs by an incremental $50 million over the next 10 years.

“Simply put, sustainable coffee, served sustainably is our aspiration,” said Kevin Johnson, president and CEO of Starbucks. “We know that designing and building green stores is not only responsible, it is cost effective as well.”

Stores over the years have been aggressively replacing outdated lighting and refrigeration systems and taking other steps to reap significant costs savings at the store-level.

Starbucks is not along in making their sustainability efforts known. In April, Apple reached a milestone of having all its global facilities, including stores, powered by renewable energy. Said Apple CEO Tim Cook at the time, “We’re committed to leaving the world better than we found it.”

DISCUSSION QUESTIONS: Do you see green store design and operations eventually becoming as important a priority to consumers as green products? Will cost savings, corporate responsibility or goodwill largely driving the investments in eco-friendly stores in the years ahead?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is good for the environment, good for customers, and good for Starbucks’ bottom line. "
"Business as usual, especially in agriculture and manufacturing, is absolutely no longer viable. Anything helps."
"This is a good move by Starbucks, but i wish they would’ve committed to more stores’ convergence. I mean, they’ve got 28,000+ units..."

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21 Comments on "What will a ‘new standard for green retail’ mean for Starbucks’ results?"


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Shep Hyken
BrainTrust

There is a percentage of customers that consciously choose to do business with “green companies.” Cause-minded companies can win a base of customers by appealing to what’s important to these customers. Starbucks may be the first major coffee chain to come out with a green initiative. Good for them. Maybe others will follow.

Neil Saunders
BrainTrust

This is good for the environment, good for customers, and good for Starbucks’ bottom line.

One particularly important aspect is store design and its impact on wellbeing. Starbucks’ older stores are, in my opinion, fairly grotty and leave a lot to be desired in terms of creating an atmosphere in which to work or linger. I have seen a lot of refurbished stores and these are much better in terms of the use of light and natural materials, noise levels, and general ambience.

Ricardo Belmar
BrainTrust
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
3 years 8 months ago

More and more consumers, especially younger generations, feel stronger and stronger about supporting “green” movements. Retailers like Starbucks that capitalize on this trend are smart to do so, not just because of the potential long-term cost savings for the business, but also for the consumer appeal all while helping to improve the environment we all live in. This will no doubt generate some goodwill for them, perhaps better than what they’ve felt from declaring an end to plastic straws. Starbucks, Apple and many others are part of a growing group of corporations that realize continuing on a non-friendly path regarding the environment will only result in the inevitable backlash and potential boycotts of their brand. As for any cost implication, both short-term and long-term, retailers should look to stores like Treehouse for a great example of how to execute a 100 percent “green” store.

Dr. Stephen Needel
BrainTrust

There will always be someone who thinks this is more important than the taste or price of the coffee and would switch to Starbucks. It’s unlikely that the goodwill will pay out, but good for them.

Bob Phibbs
BrainTrust

Gen Z absolutely looks at such things and it makes them feel good when choosing Starbucks as “their store.” But let’s be clear, Starbucks is doing this because it is part of their corporate goal just like Apple’s and just like Target providing gender-neutral bathrooms. Not everything is for marketing. And employees who work for those companies also feel it when corporate vision and action is in line with their hopes and world-view — and they stay longer.

Nikki Baird
BrainTrust
I just read a great article on Vox about how the utilities are looking at consumer perception of renewables (“Utilities have a problem: the public wants 100% renewable energy, and quick”). So it’s tempting to say, yeah, Starbucks is definitely on trend with this one. However, I find that aspirations run into reality really fast. For example, even today, I am still confounded by what I’m supposed to put in the “recycling” half of the trash can and what goes to landfill at a Starbucks, and I’ve stood behind many other customers also trying to figure that out, so I know I’m not alone! Goals are great, because they provide focused attention, but I think there also needs to be attention placed on how to jolt consumers themselves out of habitual behavior, like straws, and single-stream trash, and expecting arctic air conditioning plus open doors. Reality is not so cut-and-dried as goals, and it’s consumer behavior that’s just as important as corporate investments, when it comes to environmental impact: if Starbucks really wants to have… Read more »
Peter Charness
BrainTrust

In a world of multiple choices for most products and experiences, “doing the right thing” is a great differentiation, especially for Gen-Nexts. I hope more companies take this approach and just do it because it’s the right thing to do.

Art Suriano
Guest
I don’t see a retailer going green being a big win for any retailer now but I commend Starbucks for taking the initiative. Today we have the ongoing debate about what is hurting our planet and alternatives for cleaner energy. Unfortunately, the general public tunes much of it out and goes about their daily business. We complain when gas prices go up, but we still buy SUVs. The point is that Starbucks taking the lead is a great way to prove and show the benefits of what a green program can do. Hopefully, not only will Starbucks achieve great PR helping the general public become aware, but other businesses will follow. That will help green energy companies sell their products because of the success documented by the firms using them and in time consumer interest will change, and we will have a stronger demand for green products. Unfortunately change is slow but the more we can make consumers aware of green products and their benefits supported by businesses they know and respect using them, the… Read more »
Cathy Hotka
BrainTrust

Starbucks has been a champion of sustainability, including offering used coffee grounds to composters. Customers will applaud this effort and will challenge other outlets to try to do the same. And if “cost effective” evolves into actually saving money, others will certainly follow.

Tony Orlando
Guest

I’m sure some folks will go out of their way to support this effort and I’m all for better ways to go greener, but Starbucks has billions to spend and my local coffee shop, which I support, does not. I love the local coffee shop and the personal attention they give to their customers will keep me coming back, and the coffee is great, plus it costs less money than Starbucks. So for me I’ll stick with them and McDonald’s $1 coffee when I travel.

Brandon Rael
BrainTrust

In the age of social/environmental consciousness, and with the emergence of Generation Z, this is a very wise move by Starbucks. Aside from always being digitally connected, we have seen Gen X, Millennials and Gen Z gravitate towards companies that have a more significant social and economic agenda that contributes to society, outside of the pure profit and revenue game.

So this is truly a win-win situation, for the environment as well as Starbucks. Let’s all hope that many other companies follow suit and take this leap.

Joanna Rutter
Guest
3 years 8 months ago

You can’t run a global coffee empire if all the coffee is gone, especially if the reason it’s gone is because your own business practices contributed to sucking the little remaining life out of our poor, beat-up planet. It’s an imperative for all businesses now, and I can’t believe I actually have to keep typing this out: You’ve got to undo the damage you’re doing now in order to sell anything in the future — otherwise you, your product, your labor and your customer will all be gone! Business as usual, especially in agriculture and manufacturing, is absolutely no longer viable. Anything helps.

Rich Kizer
BrainTrust

I just had a conversation with a Starbucks Barista. She was very aware of the new program and told me (with pride) they are already saving much more than 20 Million with their current efforts! I believe these kinds of long-term moves will create a path to huge savings and profitability. Starbucks is creating a brand new highway (through these thoughts and actions) that many others will travel leading them to more profitable futures.

Dave Bruno
BrainTrust

Research consistently tells us that younger generations care more about sustainability and green choices than any generations that have come before. And good for them. As recent storms and climate news indicate, at some point none of us will have a choice but to make green products and brands a priority…

Ed Rosenbaum
Guest

Let’s hope Starbucks is starting a trend and others will join in. This can be a win/win for everyone: customer, retailer and environment. Maybe it will lead to some lowering of prices.

Lee Peterson
BrainTrust

Sustainability and permaculture will increasingly be the responsibility of companies and the people they employee as it is readily apparent that the government, being run by big money, is unable or unwilling to help. At least until DC gets swept away by the next massive hurricane or Nor’easter or blue wave. This is a good move by Starbucks.

Steve Montgomery
BrainTrust

There is no downside to becoming a greener company and a lot of upside. Some are electing to do it in the manner that Starbucks and Apple are, which is related directly to their locations. Others are enrolling in programs such as GreenPrint which allows customers to directly impact their carbon footprint. No matter which approach a company chooses I remain hopeful that they have the impact needed.

Seth Nagle
Guest

Consumers enjoy supporting companies and causes that are going green/becoming sustainable as long as it does not affect their experience with the product or brand. We all remember Pepsi’s biodegradable backlash: The snack bag that was too noisy.

Ryan Mathews
BrainTrust

I think they will be important, but I think authenticity is even more critical and that’s where Starbucks is in trouble. Building green stores is great, but what about the way you do business in those stores? While it may come as a shock to some RetailWire readers, Starbucks’s cups are not recyclable — although, in all fairness, the lids are. How many tens of thousands of cups does Starbucks sell every hour that will all eventually end up in landfills? I shudder to think about it. And, while Starbucks does sell inexpensive reusable cups for hot drinks they are only available in a size that fits “Tall” and “Grande” drinks — not “Venti” size beverages. So, the biggest cups are are non-recyclable. Practicing what you preach is great provided you are consistent about it.

Patricia Vekich Waldron
Staff

Love that Starbucks is considering their employees’ wellbeing in their green mandate!

David Naumann
BrainTrust
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
3 years 8 months ago

With global warming a big issue, many companies are becoming more environmentally responsible and consumers appreciate the commitment. While it may not directly drive more store traffic and sales, it certainly helps elevate a brand’s perception and customer loyalty.

I think we will start to see a lot more retailers and other companies follow the lead of Starbucks and Apple. The driving factor will be a combination of cost savings and corporate responsibility — it’s the right thing to do.

wpDiscuz
Braintrust
"This is good for the environment, good for customers, and good for Starbucks’ bottom line. "
"Business as usual, especially in agriculture and manufacturing, is absolutely no longer viable. Anything helps."
"This is a good move by Starbucks, but i wish they would’ve committed to more stores’ convergence. I mean, they’ve got 28,000+ units..."

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