Brewing Sustainability

Keurig Canada’s Joseph Souaid is brewing a better world by making the coffee and beverage company greener

Keurig is widely known for revolutionizing the way Canadians drink their coffee. What might not be as recognizable are the company’s continued efforts to innovate and seek new ways to improve its environmental and social impact.

Joseph Souaid keeps that objective in mind as he leads the team charged with ensuring responsible sourcing and developing sustainable products, packaging, and business practices. “There are four values that Keurig has, and one of them is, ‘We brew a better world,’ and that’s always been a huge focus,” says Souaid, director of strategic procurement and sustainability for Keurig Canada, the Montréal-based business unit of the American company Keurig Green Mountain Inc.

Recyclability remains our priority, but repurposing is definitely better than sending the pods to a landfill.

While the company has been criticized by consumers—and even one of its cofounders—as being environmentally unfriendly, the producer of single-serve brewers and K-Cup beverage pods is working on several sustainability goals, including developing recyclable pods and water restoration projects.

Keurig home brewing systems came on the market in the early 2000s and have since changed the way people get their daily caffeine fix. Consumers can simply pop a plastic pod containing coffee grounds (and a built-in filter) into their machine, push a button, and get a single, freshly brewed cup of coffee.

Keurig’s Counts

1,350+

Employees across Canada

170+

Beverage varieties—includes coffee, tea, and beverages from thirty brands that can be brewed in Keurig systems

86%

Manufacturing waste diversion rate in 2014

64%

Traceable coffee

1M

Individuals Keurig hopes to engage in its supply chains to improve their livelihoods through projects focused on issues including water security and climate resilience

$4.5B

Global net sales in 2015

10.5B

Worldwide pod servings equivalent sold in 2015

550

Patents issued globally

Yet the simplicity of the system comes with a cost; billions of K-Cups end up in landfills each year since the pods are not recyclable or biodegradable. K-Cup pod inventor John Sylvan lamented this fact in a 2015 Atlantic article, saying he sometimes regrets that he ever created them.

Evaluating the environmental costs of coffee requires looking at the entire life cycle, Souaid explains. He notes that Keurig systems only use as much coffee and water as necessary to make a perfect cup of coffee, creating less waste in that aspect than traditional brewers. An estimated 12–15 percent of batch-brewed coffee is wasted both at home and in offices.

Still, the company takes environmental concerns to heart. It established a 2020 target to balance the volume of water used in its beverages by restoring the same amount of water for natural and community uses. It also pledged to offer completely recyclable K-Cup pods by 2020.

“It’s a complex challenge, and it doesn’t necessarily mean something that’s recyclable is going to be recycled,” Souaid says. “We’re working on the design of the pod with recycling and packaging industry experts.” The company is testing pod designs that allow consumers to easily separate the components for recycling. Keurig is also investing $5 million over five years in recycling solutions.

Three types of pods used for carafes and mugs, as well as larger quantities for office use, are already recyclable. Keurig also offers the My K-Cup Reusable Coffee Filter for its single-serve systems.

In Canada, Keurig offers K-Cup pod delivery services to offices. Souaid’s team has worked on take-back programs in which Keurig can reclaim used K-Cup pods from office customers and send them to various destinations to be repurposed. In Montréal, the pods are sent to a local cement kiln, where they’re used as fuel in the cement-making process. “It’s actually something that works quite well,” Souaid says. “It’s appreciated by our consumers. Recyclability remains our priority, but repurposing is definitely better than sending the pods to the landfill.”

Keurig Canada is targeting zero-waste-to-landfill certification at its owned and operated manufacturing and distribution facilities. Globally, the company achieved an 86 percent manufacturing-waste diversion rate in fiscal year 2014, up from 73 percent the previous year.

The company uses its purchasing power to hold suppliers accountable. Since 2007, it has enforced responsible sourcing guidelines to promote fair and respectable supplier working conditions. When requesting proposals, Keurig first asks potential suppliers whether they have a sustainability program that drives reduction in waste, energy, emissions, and waste water. Souaid then sends a team to visit and survey vendors to ensure their practices line up with company guidelines. “We’re very interested in chain of custody in terms of, do they know where the products are coming from,” he says.

Souaid implemented a negotiation training program when he joined Keurig Canada more than two years ago. In the program, he teaches his procurement professionals to zoom out and use a systemic approach—looking first at the whole forest rather than starting with the tree. They then work on tactics for negotiating in the tactical arena, creative arena (finding additional value and win-win situations), and strategic arena (building power and exerting influence).

“When we talk about brewing a better world, very often that actually requires having negotiating power,” he says. That translates to using the strength of Keurig’s business model and its position in the market to entice suppliers into working responsibly.  Sometimes that means requiring suppliers to make investments and do things they wouldn’t otherwise have done. While it may require up-front costs, implementing sustainable practices makes good business sense and is more cost effective in the long run, Souaid says.

Souaid and his team also engage the supplier base to develop new ways to reduce packaging, such as using thinner materials and packing more K-Cup pods per box. These changes drive materials and logistics savings, cutting down on costs and emissions.

“Those are the things we really try to focus on, because it brings a positive impact to the bottom line,” he says. “And it fits in perfectly with brewing a better world.”