The straw that broke the world’s back

 

Photo of ocean with a bundle of straws and the words "That's the last straw"

For three days, during the first week in July, a simple little plastic drinking straw dominated the headlines of nearly every media outlet against most other world news.

The headlines were not so much about the straw, but more about Starbucks’, the multi-billion-dollar company that announced that they would stop using straws by the year 2020.

Of course, the announcement, though coupled with the fact that Starbucks’ also committed $10 million to help develop recyclable, compostable cups for hot drinks, had a much larger impact beyond environmental.

Perhaps a case of the tail wagging the dog, but the plastic straw policy could have far-reaching impacts on other businesses, both national and local. There are also some key marketing lessons to be learned.

Marketing lesson #1, be honest with your customers.

The Starbucks’ announcement was as much about marketing as it is about the environment. And the coffee giant didn’t get to where it is today without knowing something about marketing.

But at the same time that Starbucks’ made their announcement, another world-famous brand made their own marketing announcement. Perhaps you also heard the news that IHOP was, in an effort to promote the fact that they did not just serve breakfast but also have a menu of world-class hamburgers, was changing its logo to IHOB.

Unlike Starbucks’ announcement, which was embraced by environmentalists around the globe, IHOP’s announcement was met with criticism and disdain by its customers, and the thought of changing the brand to IHOB went down like a stack soggy wheat cakes. IHOP also opened the door for its competitors to hijack some of the publicity to benefit their own brands.

Wendy’s sent a salvo across the bow with a Twitter post that read, “Can’t wait to try a burger from a place that decided pancakes were too hard.”

While Denny’s, Whataburger, Burger King, Chilies’, and many more chimed in to brag about their food, most of the distaste for the new brand came from loyal customers, especially when it was learned that the whole IHOB name change was a hoax.

Other than some online posts about the Twitter comments, IHOB’s (I mean IHOP’s) stunt spent a comparative five seconds in the news. After all, it was just a brand change; it was not like the restaurant, famous for serving pancakes from around the world, was offering to fight world hunger by donating pancake mix to third world countries or setting up pancake kitchens once a month in homeless areas across the country.

Marketing lesson #2, be positive with your message.

Whether Starbucks’ is being progressive or preparing for the future is not clear. However, estimates are that Starbucks’ will remove about one-billion single-use straws per year from the waste stream with this move. According to the organization for a Strawless Ocean, Americans use 500 million plastic straws each day.

McDonald’s had already announced in April that they were switching to paper straws in all of its U.K. locations and only hand straws out if requested.

Both of these plastic straw announcements have come on the heels of the European Union’s plans to completely ban plastic cutlery, straws, and other single-use products in an effort to clean up the oceans. In the U.S., Malibu, Davis, and San Luis Obispo, Calif.; along with Miami Beach and Ft. Myers, Fla.; and Seattle, WA, have already banned plastic straws.

Marketing lesson #3, change because it is right and not because you are told.

If Starbucks’ is successful in making the plastic straw ban equate to good economics and help reduce the growing plastic pollution problem, then it is likely that more environmentally concerned consumers will begin putting pressure on other business, both large and small, to follow the Starbucks’ lead.

In addition to pressure from environmental consumer groups, state and local governments in the U.S. and around the world are beginning to realize the need to reduce the amount of non-compostable waste. This is leading to more regulations such as the banning of plastic grocery bags and polystyrene clamshell containers used for food takeout.

Marketing Lesson #4, good is not enough, you need to show that you care.

With Starbucks’, McDonald’s, other large corporations, promoting their efforts to reduce their effect on the environment, the pressure is on other companies, including small ‘mom & pop’ businesses, to follow. However, changing vendors and products is a major undertaking and could greatly increase expenses.

The changeover from plastic straws at a $0.005 each to paper straws at $0.025 each is a huge increase. Basic nine-inch foam clamshell containers cost approximately $0.17 each while compostable takeout containers can cost $0.225 each (when bought in lots of 200 units).

The food industry businesses are not the only companies facing environmental scrutiny. Many manufacturers and service type companies are creating their own environmental and social responsibility programs as part of their corporate culture.

The business approach

Whether conforming to new regulations or changing the company’s environmental philosophy, the key ingredient is financial planning to prepare for the initial outlay of additional capital. At Business Finance Corporation, we specialize in helping companies over unforeseen financial bumps by helping them to capitalize on existing accounts receivable assets.

We want to be, Your Partner in Success.

David Cabral