Signatory Name: Starbucks Coffee Company (Australia) Pty Ltd
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1 Signatory Name: Starbucks Coffee Company (Australia) Pty Ltd The question numbers in this report refer to the numbers in the report template. t all questions are displayed in this report. Status: Completed The content in this APC Annual Report is hereby endorsed by the Chief Executive Officer, or equivalent officer of the organisation. 5. Industry sector (please select 1 only): Brand Owner / Wholesaler / Retailer Packaging Manufacturer Waste Management Other - Commercial Organisation Community Group Industry Association Government Raw Material Supplier Other: 6. Industry type (please select 1 only): Food & Beverage Pharmaceutical / Personal Care / Medical Hardware Homewares Communications / Electronics Clothing / Footwear / Fashion Chemicals / Agriculture Fuel Large Retailer Tobacco Shipping Company Airline Other: 7. Please indicate your organisation's reporting period: Financial Year: 1 July June 2013 Calendar Year: 1 January December 2013
2 Goal 1: Design KPI 1: % of signatories with documented policies and procedures for evaluating and procuring packaging using the SPGs or equivalent. 8. Does your company have documented policies and procedures for evaluating and procuring packaging using the SPGs or equivalent? Provide details of policies and procedures Packaging Assessment Guideline for Starbucks Australia, Environmental Packaging Purchasing Guidelines, Global Packaging and Paper Environmental Purchasing Standard 9. Of the types of packaging existing at the beginning of the reporting period, what percentage had been reviewed using the Sustainable Packaging Guidelines (SPG) by the end of the reporting period? 10. Have any new types of packaging been introduced during the reporting period? 1 33 % If yes, of the new types of packaging introduced during the reporting period, what percentage have been reviewed using the Sustainable Packaging Guidelines (SPG) by the end of the reporting % 12. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 1 2. Review SPG guidelines and develop a set of criteria to evaluate all packaging against. Review all existing packaging, following the assessment schedule, for performance against the SPG guidelines and highlight opportunities. Large and small PET bottles (Q4 2013) Completed. Starbucks Australia created the "Packaging Assessment Guideline for Starbucks Australia" containing an evaluation procedure and criteria based on the SPG guidelines. Review completed on schedule. The conclusion of the packaging assessment of the plastic bottles is: The polymer bottle packaging utilised by Starbucks Australia has little impact on the environment. The exception is our 2L milk bottle. Starbucks Australia is conscious of this result and has initiated conversations with milk suppliers around the potential introduction of milk pouches to the stores in order to reduce the amount of raw materials used and the output of waste generated by our store operation. Despite most of the reviewed packaging coming from non-renewable sources, they are all recyclable through our outlets ensuring we reduce the impact to our immediate environment. Further assessment of existing packaging is on schedule.
3 13. Describe any constraints or opportunities that affected performance under this KPI Starbucks Australia has found that "greener" practices/options for locally sourced products are not always available in the Australian market or come with a higher price tag. Due to our size we are aware that our ability to influence introduction of these technologies is limited. Nevertheless we have started conversations with our milk suppliers, where our purchased volume of product is significant to their business, around introducing "milk pouches". This has proven to reduce the amount of raw materials in the production of the pack and as a result reduce waste in other countries such as Canada. Being part of an international company has always given Starbucks Australia access to the newest packaging practices. Whilst having little influence in the selection process as a market, we do benefit from the results. The environmental commitment that Starbucks has globally aligns with the objective of our action plan. In conclusion, Starbucks Australia has found that the polymer bottle packaging utilised in store has minimal impact on the environment. Despite most of the packaging materials coming from non-renewable sources, they are all recyclable through our outlets ensuring we reduce the impact to our immediate environment. Goal 2: Recycling KPI 3: % signatories applying on-site recovery systems for used packaging. 14. Do you have on-site recovery systems for recycling used packaging? at all facilities/ sites at some, but not all facilities/ sites 15. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 3 2. Review current waste disposal and recycling practices at all sites. Develop a waste and recycling plan that can be implemented across all sites. Review of current practices is under way and on schedule for completion. Have completed review of facilities available and still looking into how effectively these facilities are used at each site. Created "Waste Management and Recycling Plan for Starbucks Australia". Currently in process of implementing plan. 16. Describe any constraints or opportunities that affected performance under this KPI Starbucks Australia along with the global Starbucks organisation is committed to effectively and proactively reducing the amount of waste generated in all stores. Whilst obtaining information on the recycling facilities available at each location is relatively easy it has been more challenging to ascertain how each site uses these facilities in practice. This is due to both the geographic spread of all sites as well as the diversity of partners (employees) employed at each site. Whilst there are recycling facilities available at all sites, these facilities do not cover all types of packaging used in our sites, for example not all sites can recycle glass. When we look at introducing extra recycling facilities, we greatly depend on store location. In the case of stores based in shopping centres, we will be constrained by the facilities the landlord has available. Currently we don't have recycling collection available front of house at all sites but we are committed to meeting the global goal of having these facilities available in all sites by 2015.
4 KPI 4: Signatories implement formal policy of buying packaging made from recycled products. 17. Does your company have a formal policy of buying packaging made from recycled packaging? Please explain why not Creating a policy is part of our stated action plan as we recognise this is an opportunity. Implementation is on schedule with action plan. Whilst the policy is a work in progress, the Packaging Assessment Guidelines for Starbucks Australia and the Global Packaging and Paper Environmental Purchasing Standard do consider the material's "End of Life Hierarchy", meaning if it can be reused, recycled and avoid landfill. 18. Is this policy actively used? 19. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 4 Assess current packaging for proportion of recycled content used. Review has begun and is aligned with the review schedule for KPI So far 33% of packaging has been reviewed. Furthermore, we are currently redesigning our food offering. This includes the packaging and a big aim is to find an environmentally friendly solution that fits our monetary targets. 20. Describe any constraints or opportunities that affected performance under this KPI As Starbucks Australia is a small part of a much larger international organisation the influence we have over the selection of packaging materials is often limited. Whilst there is no formal buy recycled policy currently in place, all local sourced packaging is reviewed according to the Packaging Assessment Guidelines which take into account the recycled content of the product. As a global company Starbucks has committed to developing comprehensive recycling solutions for all our paper and plastic cups.
5 Goal 3: Product Stewardship KPI 6: % signatories with formal processes to work collaboratively on packaging design and / or recycling. 2 Does your company have formal processes in place for collaborating with other companies or organisations on improved packaging designs and/or recycling which aims to reduce or eliminate waste? Provide details of policies and procedures (including names of policies/ procedures) Starbucks Global Packaging & Paper Environmental Design Guidelines 22. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 6 When tendering for the supply of local items request that suppliers must quote for environmentally friendly options including biodegradable and recyclable content. During 2013 Starbucks Australia didn't tender for any service or products supply. Nevertheless in the annual review we conduct with our suppliers we requested an update on the current practices and how this affects and impacts the environment. As a result of this review we have decided on the services and products that will be tendered during In 2014 we will tender for the smallwares, stationery and small catering supplies. In the tender it is clearly stated that we are highly interested in environmentally friendly proposals whenever these are available. The tender closes on April 30th 2014 and we are expecting a high amount of environmentally friendly options that can replace the current less friendly options. 23. Describe any constraints or opportunities that affected performance under this KPI Due to the size of the supply chain operation in our Australian office unless we have a bad performing supplier we tend not to tender any service or product. This practice allow us to dedicate precious time and effort improving other areas that might require urgent attention. This has proven to be a great constraint on the amount of time we can focus to all desired activities. In saying this we have updated our tender documents by adding very clearly our desire to get environmentally friendly options quoted when these options exist. We have found that greener options are not always available, are limited or out of our price range. Our supplier selection criteria requires that we have the right balance between savings and service. This doesn't necessarily mean that we accept the proposal from the cheapest bidder but the one that will be able to support the needs of our business. As a result we expect to see a significant increase of greener products in the immediate future. KPI 7: % signatories showing other Product Stewardship outcomes. 24. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 7 Increase customer awareness of BYO mug/tumbler policy to increase take up and reduce number of disposable cups used in store. Work started towards this KPI and a strategy was developed to better communicate our offers and monetary advantages that buying and reusing mugs/tumblers brings. Due to an issue aligning this priority in the business this initiative as been delayed and is planned to be completed in winter 2014.
6 25. Since the beginning of the reporting period, has your company had any other outcomes related to product stewardship? If yes, please give examples of other product stewardship outcomes As a company our electricity usage was 41,608kw lower in 2013 compared to the prior year. This is equivalent to approximately 44 tonnes of carbon dioxide emissions. This saving was acheived through the installation of LED lighting at a number of sites as well adjusting the number of hours that outside signage is lit. 26. Describe any constraints or opportunities that affected performance under this KPI The communication and implementation of this KPI has been one of the more challenging tasks and has involved work from the supply chain and marketing functions working together. On one hand due to global supply and forecasting all of our merchandise forecasts need to be locked in place 20 weeks in advance and changes can only be made up 12 weeks out. Any changes that are made can only be +- 30% of the original forecast quantity. If we had tried to push out this messaging too quickly we would have run the risk of exhausting our stock before being able to replenish it and this wouldn't have allowed us to maximise the impact of the campaign. On the other hand as a business we have to prioritise the messages that we are communicating to our customers. Our Christmas campaign is the biggest and most anticipated of the year and planning begins early in the year. Our initial schedule for this KPI clashed with the Christmas campaign and for this reason we decided to change the launch date. In the 2014 winter campaign we will now launch the initiative that supports this KPI in stores. As part of the campaign we will be changing the way our products are highlighted and displayed in stores in order to make the tumblers more visible. Tumblers will be placed at eye level to ensure customers are able to see the offering and we will introduce dedicated signage in the merchandise area to highlight our offers, "receive a free beverage with the purchase of any tumbler" and "receive 40c off any beverage when you bring your own tumbler". KPI 8: Reductions in packaging items in the litter stream. 27. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 8 Increase usage of "for here" serveware in store by improving customer awareness through increased signage and display of serveware. During 2013 new crockery and cutlery was introduced into every store. This investment was made to improve the experience our customers have in store and encourage them to order their beverages "for here". In 2014 during our autumn campaign (starting the 1st of April) we will introduce new signage at the ordering counter where customers can clearly read in the menus and on the cup display when choosing their drink size the following message: "Staying In? Let us know and we'll serve your beverage in a ceramic mug." Along with adding this message the menu panels will also be updated to show beverages served in "for here" serveware rather than paper cups. This will be available from May 2014.
7 28. Describe any constraints or opportunities that affected performance under this KPI As with KPI 7 the initial schedule for this KPI coincided with our Christmas campaign and as the messaging didn't align it was moved to Our Christmas Campaign is the biggest campaign of the year and we try to bring the feeling of the season to every partner and customer that visits our stores. We start planning the campaign from February and a big part of this campaign are the take away Christmas cups! Customers, old and young love to have their drinks served in them as they have different designs every year and our store partners go the extra mile and write messages of hope, happiness and thanks on them to make this time of year extra special for everybody. In the history of Starbucks Australia this is the only campaign that has consistently year after year run out of stock of every item we bring into store (which makes it even harder to plan for). The campaign starts at the end of October and finishes the first week of January. During this time it is a huge challenge to try and grow the number of customers having their beverages "for here" as our stores are very busy and we can only offer a ceramic mug if there is space for them to sit down and enjoy their drink. In addition, our customers want to have their beverages in the take away cold/hot cup. We know this because our "wastage" of these items increases by 20% at this time of year as customer ask for extra cups for their collections, etc. Understanding all of the above, marketing and supply chain decided to introduce this initiative as part of the autumn campaign. This makes more sense as the proportion of customers enjoying hot beverages is higher and stores are quieter. This will give customers the chance to enjoy their beverages in our café environment. One of the big opportunities for Starbucks globally is to develop a solution for "for here" cold cups. Currently these drinks are served either in a customer's "cold" drink tumbler or a take away cup. Starbucks Australia doesn't have the authority to look for alternatives so we are choosing to focus our attention on the "hot" section of the business. Your Experiences This section lets you share with us any achievements, good news stories and areas of difficulties in making progress against your plan and the Covenant goals and KPIs. 29. Key achievements or good news stories Throughout the year we have been able to develop and implement guidelines and evaluation criteria to reduce the environmental impact of our packaging and have also begun the process of reviewing our current packaging. Whilst not necessarily a measurable result we have increased awareness across the business of the importance of waste management and reduction and we have made plans to fulfil our action plan goals. 30. Areas of difficulties in making progress against your plan, Covenant goals or KPIs As mentioned throughout this report the store support operation of Starbucks Australia is small. The supply chain operations team consists of two people one of which dedicates half their time to another role. During the majority of 2013 the team was reduced to only one person due to an extended period of leave. This is our main challenge as the amount of time and resources we can invest in any project is limited. Another area of difficulty is trying to incorporate our agreed targets into our daily tasks. We have made a point of always having our action plan on hand and working towards our stated goals even if the actions are not currently due. Another major difficulty is to get reliable information abut the materials that are used in packaging and being able to understand them. Both of us have an engineering background and we were shocked with the amount of information we have to learn and apply in order to be able to evaluate the packaging in our supply chain. Despite these difficulties Starbucks Australia is fully committed to improving the communities where we are located and we know that all the steps we are taking will make a difference.
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