Ft16 Oct 2019 12:40
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https://www.ft.com/content/fe536926-ec73-11e9-a240-3b065ef5fc55
McDonald’s and Starbucks are pouring millions of dollars into developing eco-friendly alternatives to disposable coffee cups while struggling to find products that can be mass produced, as a global crackdown on plastic gathers pace.
Six sustainable packaging businesses pitched their products before the two chains as well as venture investors at an event last month in New York, held during the UN general assembly meetings where the environment was high on the agenda.
Styled after the popular television show Shark Tank, which involves entrepreneurs pitching their products to investors, the event was part of a broader project that McDonald’s and Starbucks have contributed $15m to in partnership with Closed Loop Partners, which pursues sustainable investments.
The sums spent are a tiny fraction of the profits of $5.9bn and $4.5bn that McDonald’s and Starbucks reported respectively last year. Both companies said they have made additional investments in eco-friendly packaging from their research and development budgets, but declined to give a specific amounts
Despite their name, conventional paper cups for coffee, soup and other hot liquids are not easily recyclable as their inside lining is made of plastic to prevent leaks. Polystyrene foam cups are also not recyclable.
As soon as we scale up we will be price competitive
Henrik Bjornberg, chairman of Colombier
Packaging has become a risk to the fast-food industry which is under pressure from consumers and shareholders to curb the use of plastic. Earlier this year, the European Parliament approved a law to ban a range of single-use plastic items, including straws and drink stirrers, while France is scheduled to ban single-use plastic coffee cups in 2020. The Californian city of Berkeley is also set to introduce a 25-cent fee tax on disposable coffee cups.
Those companies that have bet on new products which tap into the growing environmental awareness of consumers have been rewarded. Bunge, one of the world’s oldest agribusinesses, has seen the value of its stake in plant-based burger maker Beyond Meat soar. Bunge’s venture capital arm invested before Beyond Meat’s flotation on the Nasdaq this year.
Venture capitalists are also pushing into the sustainable packaging sector. Abe Minkara, director of business development at Mark Cuban Companies, a collection of businesses owned by the eponymous investor, said he was interested in compostable products. “The material-based solutions are definitely going to be more scalable,” Mr Minkara said. “The
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