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Jan. 25, 2020, 12:46 p.m. EST

Can Starbucks save the planet by cutting dairy? Activists and investors respond

Soy, oat and almond milk leave their own mark

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By Rachel Koning Beals


Connor Surdi for Starbucks
Starbucks CEO Kevin Johnson says the coffee chain will encourage consumers to choose milk made from almonds, coconuts, soy or oats, whose production is environmentally friendlier than dairy, some claim.

The biggest single move by Starbucks’s customers who want to go green might be to stick with black coffee.

Overall, dairy accounted for 21% of the company’s global carbon footprint in 2018, the latest year for which data is available. That’s a figure the company wants to reduce as part of a new, larger sustainability commitment released Tuesday. But even the dairy “fix” isn’t without a cost for Earth, a realization that may prompt greater support of sustainable farming all around (Starbucks is backing these efforts, as well) over substitutions at the counter.

With Tuesday’s pitch, “our aspiration is to become resource positive — storing more carbon than we emit, eliminating waste and providing more clean freshwater than we use,” CEO Kevin Johnson wrote on the Starbucks site .

Animal protein has been the highest contributor to carbon and water usage in the food category across the beverage and sandwich seller’s /zigman2/quotes/207508890/composite SBUX -2.76%  operations and supply chain, which has been mindful of responsible coffee bean-growing methods. As part of its stepped-up sustainability pledge, the company has recently included more almond, coconut and oat dairy-alternatives to cow and soy milk at its stores.

Now, Starbucks is considering adding plant-based meats to its menu as well, according to news issued Tuesday that sent shares of realistic meat-alternative Beyond Meat /zigman2/quotes/211617595/composite BYND -3.55%  already up nearly 45% over the past year, higher yet again. Starbucks shares, meanwhile, are up 43% over the past year.

Read: Beyond Meat’s stock is still rising, but the ride is getting a bit rough

And: People are willing to pay nearly twice as much for plant-based milk

Steamed milk and a light layer of foam

Starbucks already offers a 10-cent credit for customers who bring in their own cups and will test other incentives to encourage customers to waste less, but when it comes to behavior at the store, dairy and meat use remains a key area of exploration.

Don’t miss : Eating out, ice cream and booze may be worse for climate change than meat

CEO Johnson will encourage consumers to choose milk made from almonds, coconuts, soy or oats, whose production is environmentally friendlier than dairy, he said in a Bloomberg News interview . In North America, 15% to 20% of Starbucks customers already choose such options.

“Alternative milks will be a big part of the solution,” Johnson said in that interview. “The consumer-demand curve is already shifting.”

Starbucks, when asked by MarketWatch to expand on alternative-milk use, including these products’ own imperfect environmental record, said it had no further information to add at this time. Environmental activists, food and wildlife experts, as well as advocates for sustainable investors offered generally positive reactions to these moves by a retailer with as much global presence as Starbucks. Still, some were quick to point out that dairy and meat alternatives do carry their own climate-change risks.

“This is exactly the kind of leadership we need to see from businesses — an opportunity to invest in their own future while making their global customer base a partner in this sustainability journey,” Sheila Bonini, a senior vice president in private-sector engagement with World Wildlife Fund, said in a release.

WWF has previously issued research pointing to risks for deforestation from soybean growth. A request by MarketWatch for an expanded response from the WWF was not immediately answered.

/zigman2/quotes/207508890/composite
US : U.S.: Nasdaq
$ 82.19
-2.33 -2.76%
Volume: 9.40M
Feb. 25, 2020 4:00p
P/E Ratio
26.86
Dividend Yield
2.00%
Market Cap
$96.47 billion
Rev. per Employee
$86,863
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/zigman2/quotes/211617595/composite
US : U.S.: Nasdaq
$ 109.92
-4.04 -3.55%
Volume: 5.46M
Feb. 25, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$6.76 billion
Rev. per Employee
N/A
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