BUSINESS MANAGEMENT

INTERNAL ASSESSMENT

HIGHER LEVEL

RESEARCH QUESTION :

To what extent has Starbucks enhanced its sustainability practices to meet

customers’ needs for environmentally friendly products?

KEY CONCEPT: SUSTAINABILITY

Exam Session: November 2024

WORD COUNT:1760

CANDIDATE NUMBER:

Authenticity Statement:

I declare this work to be my own and the final version. I have acknowledged each
use of the words or ideas of another person, whether written, oral, or visual.

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Table of contents

Introduction………………………………………………………………………………. 3
Objective and Methodology…………………………………………………………… 3
Research and Analysis………………………………………………………………….
7P’s of marketing mix..………… ….…………………………………………….. 4
Triple Bottom Line…………………………………………….………………..…. 6
Conclusion………………………………………………………………………………... 11
Bibliography……………………………………………………………………………….
Supporting Documents…………………………………………………………… 12
Other Sources………………………………………………………………...……13

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Introduction

In today's changing world, sustainability is a big concern for companies trying to

make money while being socially and environmentally responsible. Starbucks is a
famous global coffee chain known not only for its coffee but also for how it tries to do
things sustainably. As more people around the world become more aware of the
effects of their choices on the environment, Starbucks is making changes to be more
eco-friendly to meet this specific demand.

This internal assessment will look at Starbucks's efforts to be more sustainable.

Sustainability is all about meeting today's needs without hurting future generations'
ability to meet their needs. For Starbucks, this means setting big goals in how the
ingredients are being sourced, reducing waste, and working with communities all
while being a massive coffee company worldwide. In this IA, different parts of
Starbucks's sustainability journey are explored. A close look is taken at how well its
efforts are doing and the issues they are facing.

Objective and Methodology

The information is used from both internal(Starbucks) and external (article) sources
which provides a balanced point of view. Primary tools are the marketing mix model
which will cover Product, and another powerful framework called Triple Bottom Line
to assess Starbucks's sustainability across environmental, social, and economic
dimensions. The TBL framework shows factors like responsible resource use, ethical
supply chains, community welfare, and reaching the demand of customers.

The study looks at how well Starbucks is doing in making its products more
sustainable. This includes things like where they are sourcing their ingredients, using
packaging that can be reused, recycling programs, partnerships to reduce emissions
and waste, and water conservation projects.

The goal is to evaluate if Starbucks has gotten better at making sustainable products
over time and what are the areas of improvement to help the environment and

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society. When talking about sustainability here, it means Starbucks changing its
products and how it conducts business to reduce its impact on the environment.
During this study, some limits were faced. Firstly this research heavily relies on info
from secondary data since conducting primary data was not possible. The sources
used may have their own biases which could affect the accuracy of the findings.
Different sources and perspectives were used to face this issue. With these
challenges, the research took place with an effort to keep fairness and reliability.

Research and Analysis

7Ps

The 7 P’s of the marketing mix are product, price, place, promotion, people, process,
and physical evidence, where each “P” represents a key factor from product
offerings to customer engagement which needs to be taken care of for effective
marketing planning. It was created by E. Jerome McCarthy and published in 1960.1
This IA will use the most appropriate tool from this business tool, product.

Starbucks was founded in 1971 in Seattle, Washington as a coffee bean retailer.

Over the years, it has evolved into a global coffee giant. During its growth phase in
its product life cycle, Starbucks introduced successful campaigns like offering free
pastries to morning customers. Currently, Starbucks is in the market growth stage
expanding its product lines to include popular items like Frappuccino and iced
coffees. Their recent reinvention plan aims for continued growth in sales and
revenue.2

Product

1
Hanlon, A. (2023). How to Use the 7Ps Marketing Mix? - Smart Insights. [online] Smart Insights. Available at:
https://www.smartinsights.com/marketing-planning/marketing-models/how-to-use-the-7ps-marketing-mix/.
2
GradesFixer. (2020.). Analysis Of Starbucks’ Product Life Cycle: [Essay Example], 874 words. [online] Available
at: https://gradesfixer.com/free-essay-examples/analysis-of-starbucks-product-life-cycle/.

4
Starbucks prioritizes eco-friendly fair-trade coffee3, plant-based menus, and
recyclable packaging. Ongoing initiatives highlight environmental commitment, like
partnering with Conservation International to protect coffee landscapes (FY21),
backing the Dairy Net Zero for zero emissions, joining the Farm Powered Strategic
Alliance for regenerative agriculture, introducing Oatly oat milk nationally and joining
the Water Resilience Coalition for conservation4

Also, Starbucks Korea aims to cut its carbon footprint by 30% by 2025 and end
single-use cups3. Cup-borrowing programs as shown in the image, starting in Japan
and Seattle over five stores, promoting environmental methods. Reusable cup
discounts ($0.10) in Canada and the US reduce waste and ordering online via
mobile reduces the use and need for disposable cups and utensils which also
extends its commitment to sustainability. Starbucks is committed to sustainability
through programs that get customers involved in eco-friendly practices. For example,
the company started a “borrow a cup” program across 5 Seattle stores3. This lets
customers borrow reusable cups to use in the store as a replacement for single-use
cups5. As the picture shows, this makes it easy for customers to make a difference in
the world. Starbucks also partners with cup-sharing companies like Vessel to expand

3
Supporting document #2: 2022 Starbucks Global Environmental Social Impact Report. Available at:
[https://stories.starbucks.com/uploads/2023/04/2022-Starbucks-Global-Environmental-Social-Impact-
Report.pdf]
4
Supporting document #1: Starbucks 2020 Global Environmental and Social Impact Report. Available
at:
[https://stories.starbucks.com/uploads/2021/04/Starbucks-2020-Global-Environmental-and-Social-Imp
act-Report.pdf]
5
Supporting document #4: Starbucks Drives Further Innovation in Sustainability, Becomes First
National Coffee Retailer to Accept Reusable Cups for Every Visit. Available at:
[https://stories.starbucks.ca/en-ca/stories/2024/starbucks-drives-further-innovation-in-sustainability-be
comes-first-national-coffee-retailer-to-accept-reusable-cups-for-every-visit/]

5
its borrow-a-cup program. Through simple but meaningful changes that make
sustainability easy for customers, Starbucks delivers on its brand promise of an
eco-friendly experience.

Triple Bottom Line

The Triple Bottom Line(TBL) framework assesses a firm’s performance in three key
aspects: Planet (environmental sustainability), People (Social Responsibility), and
Profit (Economic Viability). One of the most important frameworks used for this
purpose is the model of the “triple bottom line” first introduced by John Elkington in
19946. Assessing how Starbucks has implemented each pillar of TBL provides
insight into how the company has enhanced its sustainability practices by offering
customers what they want - green products.

Planet

6 Gillis, A. and Stedman, C. (2021). What is Triple Bottom Line (TBL) and Why is it Important? [online] WhatIs.com. Available at:
https://www.techtarget.com/whatis/definition/triple-bottom-line-3BL.
7 EconPosts (2020). 07 advantages of the triple bottom line. [online] EconPosts. Available at:
https://www.econposts.com/business-management/07-advantages-of-the-triple-bottom-line/.

6
Concerning the sourcing of its ingredients, Starbucks has made efforts to ethically
trade 98.2%8 of its coffee by supporting fairness and providing small producers with
favorable prices which is better than last year which was 95%8. This focus on
sustainable sourcing aligns with the company’s intention to promote environmental
and social responsibility concerning supply chain networks.

To reduce its carbon footprint, Starbucks has begun programs like launching greener
stores, increasing energy use by powering 72% of global operations, and
implementing waste reduction9. These results show Starbucks's efforts to be more
eco-friendly.
Also, Starbucks is taking measures to limit single-use plastics through reusable cups
and gradual straw elimination10. This shows the company’s commitment to the
environment and efforts to reduce plastic waste. Starbucks focuses on water
conservation by implementing programs that lower the usage in its stores and
promote conservation in coffee-growing areas. For example, the firm joins the Water
Resilience Coalition to protect resources and promote these practice8. Saving water
allows Starbucks to reduce its water footprint and leaves a positive impact on areas
where it operates.

People

Starbucks shows a commitment to ethical sourcing through the fair trade movement.
The company specifies that the coffee growers are paid fairly, and it is clear and
sustainable about how the coffee is being obtained. Through the C.A.F.E Practices

8
Supporting document #2: 2022 Starbucks Global Environmental Social Impact Report. Available at:
[https://stories.starbucks.com/uploads/2023/04/2022-Starbucks-Global-Environmental-Social-Impact-
Report.pdf]
9
Supporting document #1: Starbucks 2020 Global Environmental and Social Impact Report. Available
at:
[https://stories.starbucks.com/uploads/2021/04/Starbucks-2020-Global-Environmental-and-Social-Imp
act-Report.pdf]
10
Supporting document #4: Starbucks Drives Further Innovation in Sustainability, Becomes First
National Coffee Retailer to Accept Reusable Cups for Every Visit. Available at:
[https://stories.starbucks.ca/en-ca/stories/2024/starbucks-drives-further-innovation-in-sustainability-be
comes-first-national-coffee-retailer-to-accept-reusable-cups-for-every-visit/]

7
program11, Starbucks expresses its willingness to build a better and stronger
relationship with its farmers and their communities by implementing sustainable
methods of farming12. This highlights that the company is capable of maintaining and
promoting the right way of doing business across the supply chain and thus ensuring
the fair distribution of coffee beans and other resources13. This continuous support
ensures the well-being of the farmers and promotes justice and fairness in society.

Also, Starbucks offers benefits like healthcare and education opportunities for staff
membership. It puts equal pay first which means the company takes care of the
workers. The management knows each of their employees has a high chance of
staying and getting more skilled for the business12. Through investing in its people,
the company provides an excellent environment to work in, showing that it can grow
fast given the situation of competition.

The Starbucks Foundation is used to partner with local community groups, while also
making donations to social causes. For example, the Foundation provided over $10
million in support of COVID-19 relief efforts14. This showcases their quick response
and strong commitment to collaborating with communities facing issues or
supporting important causes. These actions contribute to strengthening their positive
image as a socially responsible business11.

11
Supporting document #2: 2022 Starbucks Global Environmental Social Impact Report. Available at:
[https://stories.starbucks.com/uploads/2023/04/2022-Starbucks-Global-Environmental-Social-Impact-
Report.pdf]
12
Supporting document #3: www.linkedin.com. (2023). Sustainable Success: How Starbucks Transformed
Brand Equity. [online] Available at:
https://www.linkedin.com/pulse/sustainable-success-how-starbucks-transformed-brand-equity-hesham#:~:tex
t=Literature%20Review%3A&text=Ethical%20Sourcing%3A%20Starbucks%20prioritized%20ethical.
13
Supporting document #2 Starbucks (2023): 2022 Starbucks Global Environmental Social Impact
Report. Available at:
[https://stories.starbucks.com/uploads/2023/04/2022-Starbucks-Global-Environmental-Social-Impact-
Report.pdf]
14
Supporting document #1 (2021) : Starbucks 2020 Global Environmental and Social Impact Report.
Available
at:[https://stories.starbucks.com/uploads/2021/04/Starbucks-2020-Global-Environmental-and-Social-I
mpact-Report.pdf]

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Profit

Starbucks's sustainability goals go beyond the current environmental trends but are
strategic initiatives to keep the customers' taste for environment-friendly products.
Coming up with support processes like regenerative agriculture, forest conservation
of 100 million healthy coffee trees, water replenishment, waste management, and
sustainable operations15, the company is not only reducing its overall ecological
footprint but also placing itself as a leader in the sustainable industry. Consumers
today are more likely to buy products from environmentally conscious brands. This is
why sustainability is growing as an important factor in consumer decision-making.

Not only are these efforts environmentally friendly but also add to Starbucks's
profitability as well. Efforts such as cutting costs, and efficiency improvements16 not
only bring cost reduction but also contribute to better financial performance. The
provision of renewable power and waste usage(recycling) programs shows how
dedicated Starbucks is to both environmental sustainability and financial
responsibility.

15
Supporting document #2 Starbucks (2023): 2022 Starbucks Global Environmental Social Impact
Report. Available at:
[https://stories.starbucks.com/uploads/2023/04/2022-Starbucks-Global-Environmental-Social-Impact-
Report.pdf]
16
Supporting document #1 (2021): Starbucks 2020 Global Environmental and Social Impact Report.
Available at:
[https://stories.starbucks.com/uploads/2021/04/Starbucks-2020-Global-Environmental-and-Social-Imp
act-Report.pdf]

9
 17

Also, sustainability greatly impacts Starbucks's image and customer loyalty18. By

expanding its ecofriendly initiatives, the company shows its devotion to sustainable
practices and by doing so it addresses the customer's concerns which leads to
higher customer satisfaction and loyalty. From this, sustainable long-term profitability
can be gained as seen in their high sales above in the graph, and their achievements
of goals17 .In the graph, we can see an increase in revenue each year except for
2020 because of COVID lockdowns and restrictions but even after this situation,
Starbucks was able to grow more and increase its revenue hitting a peak each year.
This framework (TBL), includes environmental, social, and economic aspects, which
not only help meet customers' demand for eco-friendly products but also align with
Starbucks’s values and business strategy17.

17
Supporting document #5:MacroTrends (2022). Starbucks Revenue 2006-2019 | SBUX. [online]
Macrotrends.net. Available at: https://www.macrotrends.net/stocks/charts/SBUX/starbucks/revenue.
18
Supporting document #3
www.linkedin.com. (2023). Sustainable Success: How Starbucks Transformed Brand Equity. [online] Available at:
https://www.linkedin.com/pulse/sustainable-success-how-starbucks-transformed-brand-equity-hesham#:~:tex
t=Literature%20Review%3A&text=Ethical%20Sourcing%3A%20Starbucks%20prioritized%20ethical.

10
Conclusion

In conclusion, Starbucks has made very important changes to the way they operate
to satisfy their customers who are looking for greener products. According to the
Triple Bottom Line assessment, Starbucks is making some good changes
environmentally, socially, and economically. The product campaign of coffee
produced responsibly, cups that can be reused to eliminate wastage, and a
coordinated effort for water and emissions are proof that Starbucks wants its
business to put the earth in the bright light.

However, there's still a long journey if Starbucks aims to align with what eco-friendly
buyers may consider a necessity in the current market. Large-scale projects, such as
those completed in collaboration with farmers using methods that aim to improve
health and biodiversity, are not as popular yet as Starbucks’ ingredients. Such
initiatives should be furthered and implemented more quickly towards a greener
store goal of the company. And most importantly, accountable actions are more local
while the global realm for environmental damage is larger.

Starbucks aims to be more green. It's important to change how products are made
and stop causing damage to the environment. Using better ways to get ingredients
and reusing things will help. This will make Starbucks's goal real and make everyone
happy. In short, Starbucks is doing more for the earth but there is still a lot more to
do.

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Bibliography

Supporting document #1
Date published: April 2021
Source: Starbucks 2020 Global Environmental and Social Impact Report. Available
at:
[https://stories.starbucks.com/uploads/2021/04/Starbucks-2020-Global-Environment
al-and-Social-Impact-Report.pdf]

Supporting document #2
Date published: April 2023
Source: 2022 Starbucks Global Environmental Social Impact Report. Available at:
[https://stories.starbucks.com/uploads/2023/04/2022-Starbucks-Global-Environment
al-Social-Impact-Report.pdf]

Supporting document #3
www.linkedin.com. (2023). Sustainable Success: How Starbucks Transformed Brand
Equity. [online] Available at:
https://www.linkedin.com/pulse/sustainable-success-how-starbucks-transformed-bra
nd-equity-hesham#:~:text=Literature%20Review%3A&text=Ethical%20Sourcing%3A
%20Starbucks%20prioritized%20ethical.

Supporting document #4
Date published: 3 January 2024
Source: Starbucks Drives Further Innovation in Sustainability, Becomes First
National Coffee Retailer to Accept Reusable Cups for Every Visit. Available at:
[https://stories.starbucks.ca/en-ca/stories/2024/starbucks-drives-further-innovation-in
-sustainability-becomes-first-national-coffee-retailer-to-accept-reusable-cups-for-ever
y-visit/] (Accessed: 20 January 2024).

Supporting document #5:

MacroTrends (2022). Starbucks Revenue 2006-2019 | SBUX. [online]
Macrotrends.net. Available at:
https://www.macrotrends.net/stocks/charts/SBUX/starbucks/revenue.

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Others

Gradesfixer (2020). Analysis of Starbucks product life cycle. [Online] Available at:
https://gradesfixer.com/free-essay-examples/analysis-of-starbucks-product-life-cycle
.
Smart Insights (2023). How to use the 7Ps marketing mix. [Online] Available at:
https://www.smartinsights.com/marketing-planning/marketing-models/how-to-use-the
-7ps-marketing-mix/

TechTarget (2021). Triple bottom line (3BL) definition. [Online] Available at:
https://www.techtarget.com/whatis/definition/triple-bottom-line-3BL

EconPosts (2020). 7 advantages of the triple bottom line. [Online] Available at:
https://www.econposts.com/business-management/07-advantages-of-the-triple-botto
m-line/

13