What Starbucks, KFC and others learned from testing reusable cups

Convincing consumers to feel good about opting for reusable cups comes down to two core best practices — it can’t cost them anything more than single-use alternatives and the process of returning the container after the beverage is consumed needs to be easy.

Those are the big takeaways from a three-month-long citywide test of reusable cups in Petaluma, California, from August to October, according to an analysis of the results.  

More than 220,000 cups were returned during the testing period, representing a return rate of 51 percent. That was just enough to make the environmental benefits of using the durable plastic cups worthwhile when considering the system necessary to make it possible, compared with single-use alternatives made from both plastic and paper, according to the project organizers. 

Awareness was high: 83 percent of the 60,000-resident community had heard of the program, according to a poll after it was over. Nearly the same percentage of respondents wanted the program to continue. 

“The best part was that this project got the whole community involved,” said Petaluma Mayor Kevin McDonnell, in a statement. “Deep public private partnerships including commerce and nonprofits collaborating, demonstrated that it is possible to launch an inclusive and accessible reuse system that supported our residents. People got into it, and it was the talk of the town.”

Brands and grants supported the costs

Coffee chains Starbucks and Dunkin’ Donuts and fast food brands including Burger King and KFC were among the 30 local restaurants in the 60,000-resident community that participated. During the program, these establishments substituted their usual single-use hot and cold cups with purple cups bearing the slogan, “Sip. Return. Repeat.” The price of the beverages was the same as with single-use cups.

The program was coordinated by NextGen Consortium, which is testing ways to reduce single-use packaging waste in food service. The initiative is managed by investment firm Closed Loop Partners and funded by a group of companies that included Delta Air Lines, McDonald’s, Starbucks and Yum! Brands (parent of KFC and Pizza Hut, among other brands). 

“It was surprising and encouraging to see how quickly people embraced new behaviors under the program,” said Carol Lobel, senior director of the Center for the Circular Economy at Closed Loop Partners.  

Preparing for the initiative took “a lot of prep work” by participating restaurants, including establishing procedures to collect the cups, training employees to explain the return process and creating communications to market the initiative, said Jon Hixson, chief sustainability officer at Yum! Brands. They also needed to be able to handle objections.

“Once our teams and customers became accustomed to the process, the program ran smoothly,” Hixson said.

NextGen Consortium covered the costs related to the program, including a barrage of marketing throughout the community, distributing cups among the participating restaurants, managing the return bins and coordinating the reverse logistics involved with collecting the cups, cleaning them and returning them to circulation.

That was critical for smaller, independent restaurants including Grand Central Petaluma, located outside the city’s walkable downtown district on the other side of the river that bisects the city. 

Grand Central has long offered a 50-cent discount on beverages for patrons bringing their own mugs. It boasted one of the highest return rates in the reusable cup program — 73 percent — but owner Natalie Vinueza was uncertain whether she would continue to participate should the program become available permanently. “I would be open to talking to someone if it was going to be cost-neutral,” she said. 

What participants learned

All the big brands in the collaboration have set goals for reusable packaging, so they’re inclined to keep testing. Starbucks, for example, has previously managed at least two dozen of its own reusable cup tests, and now offers that option for mobile and drive-through orders in the U.S. and Canada.

Other brands, including Yum! fast-food franchises, are closely watching state-level extended producer responsibility regulations — already in effect in California, Colorado, Maine, Minnesota and New Jersey — that make companies accountable for single-use packaging.

“We are excited to dive deeper into the data and learnings from Petaluma, as well as other markets, to help us better understand the role reusable packaging could play moving forward,” said Hixson.

Some of the Petaluma lessons:

• Bin location matters. About half of the cups were returned directly to restaurants, but the rest were returned to 60 bins scattered throughout the downtown district. Just one-quarter were returned to the location where the beverage was originally purchased.  
• Not everyone will return cups. About 24,000 cups were placed in recycling bins. Some people also kept the cups at home, so they could be reused there. 
• Downtown had the highest average return rates. Close to 60 percent of the cups purchased there were successfully returned. The area was also the focus of the most signage about the program. Generally speaking, the return rates were proportional to sales, according to Lobel.
• Not everyone likes purple. The color was chosen to distinguish collect bins for the reusable cups from trash or recycling collection points, and the marketing was closely aligned. Some Grand Central customers, however, equated the choice with politics — purple is a blend of red and blue. Patrons on the more extreme ends of the political spectrum reacted negatively, Vinueza said.
• Some consumers will opt out. Grand Central, one of the last places one can buy coffee before leaving town, discovered that some customers preferred cups they didn’t have to return. Others choose to take advantage of the cafe’s price break for bringing their own mug.     

What happens next

Since the program’s end in late October, the cups and bins have been in storage as the community considers how to continue, said Leslie Lukacs, executive director of Zero Waste Sonoma, a regional agency tasked with reducing waste to landfills. The sticking point is money. “A public agency can’t bear the cost alone,” she said. 

Zero Waste applied in December for a federal grant that could potentially extend the program, but that money is in question amid the Trump administration’s ongoing funding freeze. It will take private sector participation to make the math work, Lukacs said. 

NextGen is planning future tests in other midsize cities, with a more explicit focus on making reuse systems economically viable for small and large businesses. Closed Loop’s Lobel declined to provide more details. 

One of the biggest considerations is collection and cleaning. For the Petaluma project, the cups were transported to nearby Oakland for that part of the process.

[Join over 1,500 professionals transforming how we make, sell, and circulate products at Circularity, April 29-May 1, Denver.]