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McDonald's & Starbucks Come Together to Save the Planet

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Although it’s clear that Starbucks (SBUX - Free Report) and McDonald’s (MCD - Free Report) are clear rivals, especially when it comes to quick coffee, they are now teaming up to create a recyclable cup that is part of the food industry’s effort of using less plastic in packaging.

Recently, Starbucks announced a new lid to replace their straws as part of a 2020 initiative to ban straws altogether. Starbucks strives to serve their customers in more sustainable ways, hence their decision of eliminating plastic straws. This initiative between McDonald’s and Starbucks will set an example for future fast food chains and help the public understand the need to eliminate and cut down their use of plastic.

So What Is the Initiative?

In March 2018, Starbucks and Closed Loop Partners started a collaboration to start the NextGen Consortium and Challenge. The NextGen challenge, which begins in September, invites innovators, companies, and other experts to submit their plans and ideas to develop materials that will replace today’s cups. The challenge will award the winner with a grant which could potentially help startups launch their ideas and ready solutions into the market.

 McDonald’s and Starbucks have both committed $5 million towards this initiative, which will help fund the infrastructure and any further ideas.

Similar to Starbucks, McDonald’s looks to make positive changes that will impact the planet and provide its customers with the most sustainable option. Currently 600 billion plastic and paper cups are distributed globally, with most of them ending up in the landfill. Therefore, with the NextGen Challenge, participants will focus on identifying recyclable and compostable solutions for cups.

Why a Collab with Closed Loop Partners?

Closed Loop Partners is a company in NYC, and they invest in sustainable consumer goods, recycling technologies and the development of the circular economy. Since its launch in 2015, they have invested in 38 projects and solutions across the US. The company’s Center for Circular Economy acts as a collaboration hub for innovators to test out their products and come up with new ideas, much like what is being done between McDonald’s and Starbucks.

What This Means for McDonald’s and Starbucks

It may seem odd that two of the largest competitors are teaming up for this initiative, but according to Fast Company, McDonald’s states the potential financial savings won’t be that significant, especially because the materials aren’t being optimized for cost, but instead for impact. Marion Gross, the chief supply chain officer of McDonald’s in the US, said that instead of competing, this is more of an opportunity to work together to solve a bigger issue for society. Both companies have a large consumer base and by working together they can use their collective efforts to make a difference.

It’s important to note that although this could lead to an increase in sales and support from consumers, both companies are more interested in the ethical factor of this initiative rather than the financial. This is a major step within the food industry, and with the efforts of these two giants, other fast food restaurants could eventually follow.

Similar Efforts Amongst Others

Just today, Adidas (ADDYY - Free Report) announced that it will only use recycled plastic to make their products by 2024. They plan to make their 2019 apparel line with around 41% of recycled polyester. Along with that, they expect an increase in sales for their Parley shoes, which are made from plastic waste. Compared to the 1 million sales for shoes in 2017 for Parley shoes, they expect the number to rise to 5 million pairs in the upcoming year.

Similarly, IKEA announced that it will eliminate all single-use plastic products from its stores and restaurants by 2020. IKEA's ban on its plastic products is part of a broader sustainable strategy that they are trying to implement among their stores.

Bottom Line

Efforts made by large companies like McDonald’s and Starbucks are leading other companies in other industries to follow a problem, which needs an immediate solution. The elimination of plastic in production is something which companies should pay attention to.

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