Friday, January 22, 2010

Seattle, First City of Disposable Plastic Thermos Containers

Well, Starbucks finally has its act together, if Wednesday’s earnings release is any indication.

At least, its financial act.

Starbucks’ environmental act still leaves a lot to be desired—particularly here in the U.S., where getting a Starbucks coffee in a ceramic mug is harder to accomplish than getting a three-pump, no-foam, half-decaf, non-fat, no-whip, extra-hot moca.

In the U.K., we should note, the situation is quite the opposite. There, instead of automatically serving coffee in a paper cup, Starbucks baristas prepare it in a mug. If you want the paper cup, you have to ask for it.

The environmental friendliness over there stems, no doubt, from the Italian espresso bar—where patrons come in, down a coffee while standing, and then head back out into the world—being ingrained in the European psyche.

Americans, on the other hand, are simply accustomed to getting their morning coffee in what amount to disposable thermos containers made of paper cups and plastic lids—capped off in the case of Starbucks by long green plastic swizzle sticks designed exclusively to plug the tiny hole in the lid—before heading for the office in their Tahoes, Escalades and Tacomas.

Still, you might think that a company based in Seattle—a city that has an “Office of Sustainability and Environment” and calls itself “a national leader in raising awareness and inspiring action on many environmental issues”—would be a little more focused than the average fast-food joint on reducing the detritus of paper cups and plastic caps and plastic cups and paper wraps and long green plastic swizzle sticks designed exclusively to plug the tiny hole in the lid that fill up the trash containers at every Starbucks we’ve ever been to.

But you’d be wrong: the average Starbucks, at least in the U.S., recycles as much as the average frat house after pub night.

Besides which, the domestic Starbucks operating manual for CEO Howard Schultz’s beloved “baristas” seems to devote no space whatsoever to ways of minimizing the use of those disposable paper and plastic thermos containers for customers who don't have to drive to the office in their Tahoes, if your editor’s recent interaction is any indication.

That interaction happened in a Philadelphia Starbucks, where we asked for a venti (large, in Starbucks parlance) skim latte in a mug, and then began to set up for an hour’s worth of work in between meetings.

After some efforts behind the counter, the barista called out that their one remaining venti mug—this is in a Starbucks in the city of Philadelphia—was chipped, and would I mind if he….

I didn’t quite catch his alternative above the noise of place, but usually they just put it in a smaller mug, which is no big deal, so I nodded and said “no problem.”

And what he did was this: he filled a smaller mug with three-quarters of a venti skim latte and put the rest—maybe an inch or so of coffee—in a venti paper cup with a plastic lid and a brown paper wrapper around it.

The only thing he didn’t do was stick a long plastic swizzle stick in the hole in the plastic lid.

And we are not making this up.

Jeff Matthews
I Am Not Making This Up

© 2009 NotMakingThisUp, LLC

The content contained in this blog represents only the opinions of Mr. Matthews, who also acts as an advisor: clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.


john said...

Geez, Jeff. If you care, do it yourself. It's not that difficult to travel with one (or both of these):

Anonymous said...

Shocking, but how about something on the healthcare conference or BRK meeting? You kinda left us hanging there...

Anonymous said...

And the takeaway for investors is what exactly, Jeff? You go from outstanding postings such as the one admonishing investors to think for themselves to this. The occasion is ostensibly that SBUX just reported earnings. Many of us, me included, are wondering why we didn't buy the premiere purveyor of a legally addictive substance, caffeine, when it was tee'd up for us at 9 or 10 bucks a share. And even Cramer back at ten bucks a share said he felt foolish in the middle of the economic crisis walking in and paying 4 bucks for a latte. So he was SELL, SELL, SELL!!! then. Now he's BUY, BUY, BUY -- at well over twenty. I'm sorry, but I do not consider this posting up to your usual standard. Your points about their environmental waste in the US v. the UK are well taken, but what other takeaways does this posting give us? Why not comment on Mason Hawkins insightful annual report just out? Mason talks about adhering to his bottom up approach in the middle of a macro-theme world (e.g. Mexico). He talks of buying when you are squirming and when you are all alone in your conviction. THAT articulation of Buffett's "you pay a heavy price for a cheery consensus" has value. I do not see how this entry has value for investors.

You write well. You write engagingly. But it reminds me of George Ball's clever memos to his brokers many years ago: very clever but ultimately more showing off of his cleverness than anything else. You need a copy editor who will tell you, cute but of no real consequence.

If I am missing your larger investment thesis by talking about SBUX's outrageous waste (please don't say your thesis is about saving the environment, because that's about like Miss America's saying she is for "world peace"), please enlighten me.

Jeff Matthews said...

As always, the non-anonymous commentators have the most useful commentary--thanks John.

As for Anonymous #1, well, we'll get there when we get there: both topics run deep.

And as for Anonymous #2, well, if you demand instant and relevant financial advice, you should subscribe to Grant's Interest Rate Observor or Value Line, or, as you say, read investors like Mason Hawkins who regularly publish their views to the world.

Why you're watching Cramer for investment advice is beyond me, and why you expect stock picks from this virtual column is an even deeper mystery.

Our readers know better.


Anonymous said...

Could it be that using mugs would cost more $$$ for SBUX? Nah.

They should simply add the mugs and charge a premium for the "disposable thermos." Of course, I'm not a big fan of SBUX and when I do go there, I drink my tea in the store, so the mug idea is very appealing to me.

I loved the London SBUX where I got real tea in a real mug.