Businesses exist for making money by matching their competencies and the needs of the market and creating value in the process. To continue creating value for the customers, businesses employ resources that the planet has to offer.

Since the dawn of industrialization, we have been constantly extracting resources from the planet. Converting what the mother nature has to offer into products that have benefitted billions of lives around the world.

But these products are not made to last forever.

They inherently come with an expiry date and once they complete useful lives, they’re replaced by more capable alternatives.

But where do they go when we no longer need them?

Humongous landfill sites.

While some countries have developed intelligent systems to recycle this waste, most of these dump sites are just growing in size. And in the process, the planet has reached a tipping point where if governments and businesses don’t act to preserve the environment then we’ll have look towards the stars for a new home.

Anticipating the catastrophic impacts of environmental pollution and global warming, two multi-billion-dollar brands have forged an alliance to contribute towards preserving the planet we call home.

For the past few years, there have been conversations going on between Starbucks and McDonald’s to eliminate all the items which are harmful to the environment and go for eco-friendly products. The good news is that the conversation took a positive leap and resulted in an extremely beneficial initiative. To overcome the challenge of harmful products recycling was one of the feasible solutions for both the brands and this is how it all began.

The nasty reality behind recycling

It is one thing to say that you’ll start a business next month. But to register a domain and list down your services means that you’re serious about starting a business. Same goes for recycling. It is one thing to say that you’re selling recyclable cups, but the real challenge is to recycle the cups.

“When I throw away a cup at Starbucks in Chicago, it may be getting recycled. But if you were in Des Moines, Iowa, and you put your Starbucks cup into a recycling bin at home, it may not be getting recycled.” Bridget Croke, vice president, Closed Loop Partners

Recycling is a universal concept, but the process varies from city to factory to a private and non-private firm. Some use polyethylene-coated paper others use soda-cups. There are countless ways in which you can recycle plastic. But if the system is not standardized it will be difficult for each brand to know the quality of the standard.

The need for more sustainable packaging

Starbucks in partnership with Closed Loop Partners initiated the NextGen Cup Consortium with $5 million. Later McDonald’s joined in by pitching $5 million to launch the NextGen Cup Consortium & Challenge. The Challenge kicks off in September and invites innovators, entrepreneurs, industry experts, and recyclers to submit their ideas for the next generation of recyclable and compostable cups.

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Only Starbucks & McDonalds can outsmart their consumption of cups and this is exactly what both the companies did.

The Unlikely Allies

At first, this might seem a strange combination. Two rivals teaming-up. But when there is a global problem out there, the solution needs to be grand enough to make a global impact.

For this reason, both Starbucks & McDonalds formed an alliance to form a better cup rather than innovating individually. Both the companies are making cups with the same fiber, even the packaging is somewhat the same. The real difference is the materials within that package. For now, the materials used are optimized for cost, not for the impact.

According to Marion Gross – the Chief Supply Chain Officer at McDonald’s:

“There are certain things we’d say that we’re not competitors on. The easiest example would be food safety. In food safety, there’s no competitive advantage. We all must come with solutions and make sure we’re watching out for the public’s interest. This is something that we see as kind of similar. It’s a societal issue, and there’s a way that we can come together, not as competitors, but as problem solvers. We can use our collective scale to make a difference.”

In an era where both McDonalds and Starbucks are competing against each other, they have been conversing on the environment for many years. This is a chance to make a difference. McDonald’s had been in conversation with Starbucks for the possibility to collaborate and solve the global environmental problem. All the talking came finally cemented to a solution around NextGen initiative.

“When they made their announcement, we thought this would be a great way for us to join something that would have a positive impact, and do it in a really big way,” says Gross. “Two big organizations coming together–and hopefully many more will join. We would love to see that because we think that together we can all make a difference here.” Says Marion Gross

The challenge was launched in September previous year and up till now received a whopping $1 million in funding. OpenIdeo will run the competition, while the accelerator companies will work closely with teams within McDonald’s and Starbucks to develop cup technologies that can handle the rigors of real-world use and scale.

To wrap things up

In business, there are individual problems and then there are global problems. To really make an impact it is wise to go for global problems from time to time just to make a real difference in the lives of people who use and share your products. The fusion done by Starbucks and McDonalds is a great example of how to collaborate without hurting the soul of an individual brand.