Starbucks and Packaging Recycling
Starbucks wants its cups to be 100% recyclable by 2012. That’s a great goal for a company that uses three billion cups annually.
So Starbucks has begun to gathered stakeholders from every step in their supply chain and beyond to discuss the matter. Cup Summit included suppliers, paperboard companies, municipalities, recyclers, waste haulers, manufacturers, and environmental NGOs.
While cross-channel discussions were reportedly a big eye opener, many are skeptical, which is typical of any ambitious undertaking.
Sourcing 100% recycled paperboard is relatively easy. The key issue is related to the recycling the used cups.
Regulations are the first obstacle. Starbucks must be able to get their cups as old corrugated cardboard (OCC) so they can be recycled in the first place. That’s the basic regulatory hurdle.
Then the next obstacle is that the cups must be recyclable at the local level. The communities must first recycle, and not all do. Understand that recycling has always been a numbers game. That is, is there enough of the used material to sell it in bulk to someone who will use the material as a raw material. So even if there is a market for a material, there may not be a market near enough to make the transaction economically viable. In simple terms, low volume of a material and transportation costs (both economic and for sustainablity-minded companies, carbon footprint) may be deal breakers.
Recycling old corrugated cardboard is widespread, so getting the cups to qualify is important. But keep in mind they are contaminated by the contents. For example, you can’t recycle pizza boxes because of the grease and cheese residue. On disposal, Starbucks’ cups held or still hold, coffee, tea, milk, sugar and other toppings which could preclude recycling.
This segues to the real elephant in the room (pardon my mixing of metaphors throughout), Starbucks’ customers. Most cups leave by the front door or the drive through and how do you control them? Influencing guest actions has been a real bugbear for amusement parks and hotels because even if these organizations provide recycling containers, they aren’t often used properly and often the recyclable material is tossed in the trash receptacle anyway.
So it’s very tough for organizations whose guests operate within their boundaries, but like I said, most Starbucks cups leave the premises and end up far from Starbucks’ control.
From where I sit, the initiative deserves credit. It’s ambitious, it’s worthwhile and to succeed it must be a game changer. Like Gazelle, this is one project I’ll be following going forward.
What do you think? Is the project feasible? What would have to change? Let me know!
Keep Your Waste Disposal Costs Under Control
Keep Your Waste Disposal Costs Under Control.
By Tim Johnson
Friday, 31st August 2007
Waste management is entrenched as the least exciting aspect of the lodging industry -
Aside from the obvious unpleasantness, waste disposal is a comparatively small expense and is often thought of as, “out of sight, out of mind.”
Even so, the nascent green lodging movement has taken trash and recycling from the loading dock and parking lot and into the executive offices. There, the movement has quickly established itself as a viable way to control costs, enhance guest satisfaction and improve occupancy.
While the economic benefits of going green are straightforward, the difficulty in executing a green lodging waste initiative boils down to the fact that it can be time consuming. While there are many resources advising hotel operators what to do, there are few resources who can actually step in and do it, saving managers time and money and helping them avoid missteps along the way. Consequently, this low hanging fruit is often ignored or abandoned after a couple of false starts.
To help stay on top of waste disposal costs, you need to do the following:
Remove Automatic Renewal Language In Your Contract
Standard waste vendor contracts include language that automatically extends existing rates and terms if certain notices aren’t properly given within a stated window of opportunity. Failing to give the proper notice means you forfeit your opportunity to improve rates and terms. To combat this, immediately send your vendor notice that you are canceling this language by certified letter, return receipt.
Don’t Rely on Competitive Bidding As Your Primary Cost Control
While competitive bidding may get you a decent price, it doesn’t guarantee you the exact service that you need. Haulers will ask what you have now and bid on that. Rarely will they spend the time to conduct a customized needs analysis for you. If you have an eight-yard dumpster, but really need a four-yard dumpster, getting a good price is meaningless because you’d still pay twice as much as you should.
Periodically Monitor the Waste Industry
Ask an administrative assistant to do an Internet search periodically. If a hotel operator had searched earlier this year, he’d be forewarned that the largest companies in the waste industry, like Waste Management Inc., and Allied Waste Systems, are focusing on return on capital, much of which is coming from price increases.
Don’t Buy Into the Myth Of ‘National Purchasing Leverage’
Waste disposal pricing, and the vendor’s costs, are largely a function of the distance from a property’s dumpster to the vendor’s nearest landfill. So while “purchasing leverage” does entail some discounting, it is really a misnomer for administrative simplification, where the hotel operator leaves money on the table in exchange for time. In particular, hotel operators who work with waste brokers sacrifice transparency and control because they no longer see the actual waste and recycling vendor invoices. This gives the waste broker the opportunity to operate with, and profit from, an additional margin.
Don’t Accept Price Increases Without Question
Waste vendors prepare for a percentage of their customers to refuse their price increases using actuarial techniques. Also, the sales managers instruct their staff not to lose any business over a price hike. So the next time you’re notified of a price increase, be sure to call them up and challenge it.
Be Clear on How Waste Bans and Laws Impact Your Costs and Liability
The bulk of a standard waste hauler agreement is language that limits their liability. Your vendor will not advise you nor guide you with respect to waste recycling requirements and regulations. You alone are responsible to ensure compliance and know that your hauler may provide services that expose your organization to financial risk and other penalties simply because it’s cheaper for them to operate that way.
Capture and Recycle All Valuable Commodities
There’s big money in selling cardboard, cans and plastic, so recycling service costs should be lower than those for solid waste. Managers should verify that the lower cost structure is passed along to them, not pocketed by the hauler. If there is space for one or more recycling containers, separating recyclables from waste should be carefully considered. Composting should also be considered for larger properties. Operators can reap community service and publicity benefits by considering local options for recycling like nonprofits and small businesses.
Identify and Correct Problems With Waste Collection Equipment
At larger properties, compactors are the equipment of choice. Like everything else, they require periodic maintenance, but it’s most often up to the hotel operator to ask for a checkup. Compactors should have working, accurate pressure gauges so staff can accurately monitor capacity. If you don’t have a pressure gauge, demand one from your vendor. In either case, it’s advisable to have an independent third party verify that the compactor’s pressure limit switches meet the manufacturer’s specifications. If they are lower than spec, you’ll pay for more frequent pickups, which makes your hauler more money.
Tim Johnson is president of Madison, Wisc.-based Midas Management Consulting LLC. Midas is a cost recovery and containment firm that specializes in no risk, performance-based expense reduction services for small and mid-sized businesses. Go to Midas Management Consulting or write to timjohnson@midasmanagementconsulting.com.
Eight Steps You Can Take to Keep Your Waste Disposal Costs Under Control
Originally from Sept. 10 2006
Eight Steps You Can Take to Keep Your Waste Disposal Costs Under Control
Waste management is entrenched as the least exciting aspect of the lodging industry. Aside from the obvious unpleasantness, waste disposal is a comparatively small expense and is often thought of as, “out of sight, out of mind.” Even so, the nascent green lodging movement has taken trash and recycling from the loading dock and parking lot and into the executive offices. There, the movement has quickly established itself as a viable way to control costs, enhance guest satisfaction and improve occupancy.
While the economic benefits of going green are straightforward, the difficulty in executing a green lodging waste initiative boils down to the fact that it can be time consuming. While there are many resources advising hotel operators what to do, there are few resources who can actually step in and do it, saving managers time and money and helping them avoid missteps along the way. Consequently, this low hanging fruit is often ignored or abandoned after a couple of false starts.
To help stay on top of waste disposal costs, you need to do the following:
Remove Automatic Renewal Language In Your Contract
Standard waste vendor contracts include language that automatically extends existing rates and terms if certain notices aren’t properly given within a stated window of opportunity. Failing to give the proper notice means you forfeit your opportunity to improve rates and terms. To combat this, immediately send your vendor notice that you are canceling this language by certified letter, return receipt.
Don’t Rely on Competitive Bidding As Your Primary Cost Control
While competitive bidding may get you a decent price, it doesn’t guarantee you the exact service that you need. Haulers will ask what you have now and bid on that. Rarely will they spend the time to conduct a customized needs analysis for you. If you have an eight-yard dumpster, but really need a four-yard dumpster, getting a good price is meaningless because you’d still pay twice as much as you should.
Periodically Monitor the Waste Industry
Ask an administrative assistant to do an Internet search periodically. If a hotel operator had searched earlier this year, he’d be forewarned that the largest companies in the waste industry, like Waste Management Inc., and Allied Waste Systems, are focusing on return on capital, much of which is coming from price increases.
Don’t Buy Into the Myth Of ‘National Purchasing Leverage’
Waste disposal pricing, and the vendor’s costs, are largely a function of the distance from a property’s dumpster to the vendor’s nearest landfill. So while “purchasing leverage” does entail some discounting, it is really a misnomer for administrative simplification, where the hotel operator leaves money on the table in exchange for time. In particular, hotel operators who work with waste brokers sacrifice transparency and control because they no longer see the actual waste and recycling vendor invoices. This gives the waste broker the opportunity to operate with, and profit from, an additional margin.
Don’t Accept Price Increases Without Question
Waste vendors prepare for a percentage of their customers to refuse their price increases using actuarial techniques. Also, the sales managers instruct their staff not to lose any business over a price hike. So the next time you’re notified of a price increase, be sure to call them up and challenge it.
Be Clear on How Waste Bans and Laws Impact Your Costs and Liability
The bulk of a standard waste hauler agreement is language that limits their liability. Your vendor will not advise you nor guide you with respect to waste recycling requirements and regulations. You alone are responsible to ensure compliance and know that your hauler may provide services that expose your organization to financial risk and other penalties simply because it’s cheaper for them to operate that way.
Capture and Recycle All Valuable Commodities
There’s big money in selling cardboard, cans and plastic, so recycling service costs should be lower than those for solid waste. Managers should verify that the lower cost structure is passed along to them, not pocketed by the hauler. If there is space for one or more recycling containers, separating recyclables from waste should be carefully considered. Composting should also be considered for larger properties. Operators can reap community service and publicity benefits by considering local options for recycling like nonprofits and small businesses.
Identify and Correct Problems With Waste Collection Equipment
At larger properties, compactors are the equipment of choice. Like everything else, they require periodic maintenance, but it’s most often up to the hotel operator to ask for a checkup. Compactors should have working, accurate pressure gauges so staff can accurately monitor capacity. If you don’t have a pressure gauge, demand one from your vendor. In either case, it’s advisable to have an independent third party verify that the compactor’s pressure limit switches meet the manufacturer’s specifications. If they are lower than spec, you’ll pay for more frequent pickups, which makes your hauler more money.
Tim Johnson is president of Madison, Wisc.-based Midas Management Consulting LLC. Midas is a cost recovery and containment firm that specializes in no risk, performance-based expense reduction services for small and mid-sized businesses. Go to Midas Management Consulting or write to timjohnson@midasmanagementconsulting.com.
