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Name: Nawaf Alsalem

Instructor Name: Nate Hellmers

Course Name: English Composition 1201

Due Date: December 13, 2020

Environmental Sustainability Solutions by Starbucks and Customers’ Loyalty

Contrary to the popular proverb, “a rolling stone gathers no moss”, The Starbucks

Corporation gathers “moss” and keeps “rolling”. With more than 31,000 franchises worldwide, a

hundred million weekly customers, and 4 million partners, Starbucks is the hallmark of

commitment as well as creativity around the globe (Chang). Founded in 1971 in Seattle, The

American chain of coffeehouses named Starbucks is one of the largest chains and is known to be

the second-largest coffee chain in the United States of America. In addition to diversification,

global expansion, risk-taking for testing of products, technology, and employee relations,

Starbucks has also pushed its coffee chain into a lifestyle product by focusing on environmental

sustainability solutions. Starbucks is always loved by individuals during the day and night. With

the new policies in place, it attracts individuals and gains customer loyalty by providing them a

sensation of purpose fulfillment. At the heart of Starbuck’s mission lies the foundation of

inspiration and nurturing humans through a delicious cup of coffee. With environmental

sustainability, the company has put down a greater impact for further development. It is

noteworthy to mention that companies in a competitive market as Starbucks’ are having trouble

to maintain and attract further customers. Although loyalty is linked to the shared values of

customers and businesses’ mission, it is also an important determinant of success or failure.

Therefore, the environmental sustainability solutions by Starbucks are associated positively with
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customer loyalty. However, it is important to understand the background of Starbuck’s

approaches toward customer loyalty to fully understand the impact and intensity of environment

stability.

Starbucks aims to attract customers and build their loyalty through experience,

leadership, social responsibility, product, and technology which is discussed in the following

paragraphs. Starbucks defines its experience as the purpose of being. In 2007, the company grew

larger but as per the analysts, the experience faded. For example, the soft smell of coffee brewing

was not present in the store anymore and the customers seemed unhappy about the layouts of

cookie cutters. Therefore, the company stepped back and started working on quality to introduce

design elements specific to the brand (Bryson and Atwal). Even with ventures extended

throughout the country, the common elements such as community, comfort, and familiarity were

shared by all the stores alike. One of the creativities employed by Starbucks is the design of the

store or the localization of the brand to develop a meaningful connection with its customers. The

design stores of Starbucks are located strategically so that the designers are better able to

understand the communities. For example, the Times Square store gives a theatrical vibe and so

on. In addition to this, the drive-thru of Starbucks is also designed to provide a homey vibe to the

customers. While Starbucks is devoted to expanding the business, it is also equally focused on

attracting customer loyalty by dazzling customers. The company understands the needs and

demands of the customers and finds innovative measures to bring those needs to reality.

In addition to experience, the leadership at Starbucks has also played an important role in

gaining customer loyalty. Recently, Schultz stepped down as CEO and Kevin Johnson took

charge with a background of thirty-two years in technology. The pair of Schultz as executive

chairman and Johnson as CEO has been beneficial to the organization in terms of social
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initiatives and the retail expansion on a global level of new projects. These include Starbucks

Reserve Roasteries and Starbucks Reserve retail locations, for operational and technological

growth of the organization, while also reaffirming coffee. This leadership duo focuses on a

positive social influence in the communities served by the organization around the globe. By

bringing technology, strategies, and retails to further Starbucks ' business, the leadership focuses

on gaining customer loyalty (Herningsih et al.).

Starbucks is focused on the product as much as its focused on the other deriving factors

of customer loyalty. In today’s world, innovation is deemed trendy and companies bring

innovation to attract customers. For example, consumers are more focused on companies that

provide more Instagram-material menu. With the Starbucks project titled as Starbucks Reserve

Roasteries, new ideas can be tested and perfected before they reach out to the stores. The

products such as Nitro Cold Brew and Cascara Latte started off as a test in the Seattle lab, and

these have been paying off to the company ever since. Moreover, since 2013 the company has

also started to offer salads and sandwiches to expand into the food business. The company has

also refused to be available online to increase customer base and provide them with a place to

relax and to be the third place on the minds of customers when they want to feel at home (Novak

and Richmond).

While Starbucks does not seem inclined toward technology, analysts believe that the

company has technological innovation as a foundation of its operations. An experiment,

understand, and adapt the strategy of Starbucks make it endure change while also become perfect

in varying stages. The company was the first to launch a website in 1998 and the first company

to extend Wi-Fi to the buyers in the year 2002 making its stores a hangout place nearly two

decades ago. Now, with the mobile payment and Starbucks Reward approaches, the company
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accounts for 37% increased sales. That being said, Starbucks has increased its sales by pushing

forward in technological aspects as well as innovation. This has been possible through the

customer loyalty gained by the company. Due to these reasons, the company has already been

the most interesting place for millennials with promotions including Life and Bingo that allows

the loyalty members to play games as well as earn reward points and consequently free products.

Lastly, with the innovative artificial intelligence and inclusion of Amazon Alexa as well as My

Starbucks Barista, the company put its foot down on technology and innovation as a means to

gain customer loyalty (Hsiang and Rayz).

In addition to this, Starbucks has used social responsibility for the expansion of its

customer base as well as winning customer loyalty. This includes projects such as coffee

sustainability, community engagement, and greener retail. For coffee sustainability, the company

has initiated a Coffee and Farmer Equity Program. Under this, Starbucks commits to purchase a

one hundred percent ethically obtained coffee. Analysts have identified these social

responsibilities as the prime factors for gaining customer loyalty through the promotion of

environmental, social, and corporate protection. As compared to the peers, Starbucks ranks

higher and is the leader in promoting environmental sustainability within the operations of the

owners as well as individual elements of the supply chain. The CEO of Starbucks had recently

announced a more pronounced focus on sustainability in terms of giving to the planet more than

taking from it. Starbucks aims to do so by becoming resource positive, to store more amounts of

carbon than emitting, to eliminate the waste, and to provide cleaner freshwater than used during

processing. This aspiration has been announced as the strategy 2030 establishing the firm’s

commitment to the short as well as long term goals. While the company has placed policies in
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place, the test and learn approach is yet applicable before the formalization of these sustainability

targets, which is expected in 2021 (Kim, Yin and Lee).

There are five approaches, as stated below, through which Starbucks aims to promote

environmental sustainability. First, Starbucks aims to decrease its carbon emissions by cutting it

almost half in portion. Not only this, but the company also wants to decrease its waste output as

well as the harmful impact on freshwater simultaneously as it expands globally as well.

According to strategy 2030, Starbucks aims to do so by reducing the carbon emissions to half

(50%), reduce the amount of trash delivered to landfills from stores by 50%, and safeguard half

of the water that is presently operated for the production of coffee as well as various other

operations. Second, Starbucks aims to track the progress and assess it using science-based

approaches. The partnerships with Quantis and World Wildlife Fund, Starbucks aims to measure

the progress by making these projects as a baseline. It would result in transparent reporting of the

long- and short-term progress against the desired goals. Third, Starbucks aims to reuse plant-

based food as well as beverages. These are wide opportunities that the organization can use to

transform its strategy. For this purpose, the company has identified essential areas that can create

bigger impacts by the year 2030 which includes expanding the plant-based as well as menu

options that are more environmentally friendly. This also includes shifting to reusable packages

instead of single-use, investment in agricultural practices as well as innovative reforestation and

water-conserving approaches. The company also aims to bring about better waste management

practices in stores as well as communities and to develop operations that are environmentally

friendly which are aimed to be extending to supply chain to manufacturing. Fourth, Starbucks

has partnered with organizations as a means of investment to bring sustainability practices. These

include NextGen Cup Challenge, the Starbucks FoodShare program, and leadership in
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Leadership in Energy and Environmental Design (L.E.E.D) (Kim, Yin and Lee). In addition,

Starbucks has also invested in renewable energy and is working toward the elimination of plastic

straws by 2021. The company, through its partnership with Conservational International, has

made possible the sourcing of 99% of coffee in a principled approach using Coffee and Farmer

Equity (C.A.F.E) practices. This has reduced the carbon footprint of Starbucks in half. This has

been an impactful aspect of the challenges of today’s world. Lastly, Starbucks has its partners

mobilized for eco-friendly change in raising quantities. An online course titled as “Greener

Apron” on sustainability, as well as environmental stewardship, has housed over eighteen

thousand Starbucks partners. Individuals around the globe are being mobilized toward wildlife

and the environment. Such an approach by Starbucks guarantees customer loyalty as well as

better sustainability practices. Starbucks has established these goals in a manner that makes them

easily achievable while also making the partners and investors certain about the strategic

accomplishment in the foreseeable future (Morgeson III et al.).

These new initiative by Starbucks would cover the complete range of the global

operations and will serve as a climate-changing and beneficial approach for not only the

environment but also the business. The impact of these approaches is plenty and will be used as a

baseline for the success of the company. In the Environmental Baseline Report, Starbucks

detailed the intensity of its eco-friendly approaches. All of these approaches namely reducing

carbon footprint and waste rely on the usage of dairy products. This is because dairy products are

directly as well as indirectly related to more than 1/5th of the greenhouse gas emissions as well as

usage of water. According to this sustainability strategy, Starbucks aims to push its customers to

choose milk formulated from almond, soy, coconuts, and other items that are more eco-friendly

than dairy products. Fifteen to twenty percent of the Starbuck consumers in North America have
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chosen this causing a shift in the demand curve. In addition to this, Starbucks is also testing

drinks formulated with plant-based ingredients and a way to create whipped cream without a

popular greenhouse gas, nitrous oxide. Moreover, the company has also lowered the cost of these

alternatives thereby assisting the suppliers in boosting the outputs (Valuiskaya)

All the strategies proposed and kept in place by Starbucks are sure to cultivate loyalty in

the customer’s heart. However, cultivating the emotion in the existing customers is easier than

recruiting new customers and retaining the current ones based on consumer loyalty. Research has

shown that customers of any business spend 67% more in their third year of being loyal to the

business than new recruits. However, with sustainability and the approaches proposed by

Starbucks, the task is easier as it provides a sense of accomplishment to the current as well as

new customers (Valuiskaya). This is because these days, globalization, commoditization, and

market saturation involve sustainable values as a success element which is made possible by

gaining a loyal customer base.

In order to have the customers loyal, it is important to develop sustainability that is in

alignment with the values of customers. Customers need to think like the brands and have shared

values for a long-lasting relationship. For Starbucks, this value is sustainability. Research shows

that more than 2/3rd of the customers consider sustainability when they purchase their products in

today’s world. In addition, forty-seven percent of consumers are more likely to pay more for a

product that is sustainable, and more than 1/3rd of the consumers will pay 25% more, and the

numbers are predicted to rise further. The current generation, Gen Z, has new buying behavior

with 68% who purchase more eco-friendly products. Gen Z is also more concerned about

environmental sustainability than any of the previous generations (Bazi, Filieri and Gorton).

According to a recent survey, customers return to brands for the quality of the product as well as
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the sustainable practices of the business. More than 68% of customers claim that they are

motivated to be loyal to a business if they find shared values (Elsbach and Pieper). To drive

loyalty, it is important to emotionally connect with customers. This emotional connection

determines a fine customer experience. The sustainability as approached by Starbucks addresses

the sensitivity of issues rendered serious by modern customers. By designing approaches that

elevate customer experience, Starbucks aims to not only gauge the loyalty of the consumers but

also in the provision of a unified emotional ground toward customers to foster their commitment

to the brand.

Environment sustainability has been proven to help customers in advocating the brands.

This advocation is an important aspect as far as customer loyalty is concerned. The consumers

who are referred to brands via recommendation are more likely to be loyal to the brand having a

sixteen percent more value. They are further thrice as likely to refer more customers to the brand.

Sustainability has an undeniable role in the occurrence of these events. Developing as well as

displaying shared values increased the emotional connection and thus customer experience and

seventy-two percent of the consumers will have an increased positive experience if they are able

to advocate or share their experience with more people (Bazi, Filieri and Gorton). Therefore,

integrating sustainability raises the chance of customers being brand advocates. Starbucks is sure

to reap these benefits through its sustainable approaches by making the brand desirable through

the display of shared values as well as brand advocacy.

The association between sustainability and customer loyalty has been deemed inseparable

in current research. It is evident that these include the concepts of corporate social responsibility

by displaying the integration of environmental aspects in the operations of the business as well as

the interactions with the stakeholders. Based on this, environmental sustainability also displays
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itself as a part of marketing as well as to identify the positive features of the brand. Starbucks has

manifested its plan, and the empowered customers conduct background research to advocate for

the green practices of the company (Nadeem et al.). It helps in developing brand image and

therefore loyalty of individuals to the brand. For a brand as huge as Starbucks, it is important to

have an eco-friendly image. Research shows that brands that are perceived as ethical and eco-

friendly reap more benefits of customer loyalty. This positive relationship is manifested by the

brand image. Moreover, research also suggests that in various parts of the world, consumers

believe purchasing more greener products result in the fulfillment of their duties as good citizens.

This increases their loyalty, thereof (Nadeem et al.).

In addition to this, sustainability enables the consumers to hold their personal values and

contribute more. It is a vicious cycle and is deemed valuable once put in place by brands. While

more brands offer sustainability, the knowledge is increasing even more about a concept termed

as greenwashing. According to this companies give an incorrect impression of environmental

sustainability as a means to boost sales. Whereas, on the other hand, customers lookout for

authentic brands that uphold these shared values and not only promote these practices as a way

of boosting sales. For example, the reduction of single-use plastic. Before the COVID-19

pandemic, 8/10 customers were willing to reduce plastic waste (Bazi, Filieri and Gorton). The

numbers have not changed, in a post-pandemic survey, eighty-five percent of the consumers

revealed that they are willing to reduce plastic utensils as well as using more life-long purchase

bags. Since Starbucks has already developed the said approach, the organization is more likely to

gain customer loyalty. This is because the company can support the idea of the customers while

also fostering a stronger connection with them. For example, switching to high-end paper straws

instead of plastic straws strategy by Starbucks as well as the high-standard design of packaging
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for coffee. This matches with the personal commitment of the customers and therefore will boost

the sales and increase customer loyalty. Similarly, the usage of recyclable materials for

packaging by Starbucks is a smart move as it will also ensure the customer’s value of reusing

materials instead of contaminating the environment with unnecessary waste. For Starbucks, this

support to the needs of their customer’s personal value and choices will display shared value and

will ensure customer loyalty (Rampengan, Tumbuan and Gunawan).

Greener or environment sustainable practices ensure a green image, trust, and satisfaction

in the customers. All of these ultimately result in increased customer loyalty. Customer loyalty is

influenced positively by a green image of an organization. Starbucks has developed that through

its ever-increased environment-friendly approaches throughout the years. With the design of

green products for the customers, Starbucks has gained the trust of their consumers while also

ensuring brand advocacy. The company has also set forward to reduce the use of products that

cause damage to the environment. The green marketing strategy of Starbucks will prove well for

the business as it will ensure a good reputation and develop a competitive advantage. This will

further customer loyalty as well as recruiting new consumers (Rampengan, Tumbuan and

Gunawan). It should also be noted here that going green and environmental stability are different

as the latter is a holistic approach encompassing the former. In addition, this sustainable practice

enhances the marketing of a company. The consumers in today’s world are more concerned

about the environment. Such an approach by Starbucks will enable the strengthening of its

reputation around the globe. Since the company has also highlighted these approaches to the

public, consumers will be more attracted whether new or current ones. This, in turn, results in

increased sales and therefore increased business while also enabling the company to seek

government contracts. In addition to marketing and profitability, these actions by Starbucks can
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produce various significant differences. Implementation of these changes by Starbucks will not

only result in a carbon footprint but also reduce the amount of toxins released in our atmosphere

and damage atmospheric layers, thus reducing pollution. It will help in the sustainability of

improved water as well as air quality, lesser landfills, and increased renewable energy resources

(Chang).

In conclusion, green principles and environmental sustainability are more than trends.

They ensure profitability, competitiveness, and efficiency of organizations instead of being a task

to accomplish. Starbucks has realized that the short-and long-term benefits to finances as well as

customer base are through environmentally friendly practices. Considering the volatile

environment of today’s world, sustainability is the only strategy that attracts future and potential

customers as well as investors that approach growth and retain the current customer base.

Development of such approaches adds to the longevity of the company which is a prerequisite to

long-lasting customer loyalty as well as devoted revenue. As per the strategy 2030, Starbucks is

determined to emotionally connect with the customers using shared values and focused

environment sustainability to develop a positive connection that is profitable and increases the

global expansion of the business (Rampengan, Tumbuan and Gunawan). While environmental

sustainability boosts customer in the short and long term, it also increases the possibility of

environmental awareness in the future. With new leadership, globalization, the inclusion of

technology, innovation, digitalization, and environment-friendly approaches, Starbucks is

developing itself as a leading organization to connect to current as well as new customer base

while ensuring customer loyalty.

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