What the Latte Levy Means for Your Business

What the Latte Levy Means for Your Business

James Sandrini 19th January 2018

We currently throw away 2.5bn – yes, billion – coffee cups every year. Approximately 99% of those are not strictly recyclable due to the small amount of plastic present in their design.

Oh, and we’re culling about 1 million trees and consuming 800 million gallons of water to produce them.

Coffee is our national drug of choice. It is the pep in your step. But it’s also a major part of our plastic binge-lead environmental crisis.

MPs have proposed a 25p surcharge on disposable coffee cups, and a total ban should recycling not improve by 2023: the ‘Latte Levy’ (presumably ‘Flat White Fee’ and ‘Espresso Excise’ did not poll well). In 2015, a 5p tax on plastic bags came into force across the UK. Within 6 months, plastic bag usage had decreased by 80% in national supermarkets. As a by-product, this has cut litter clean-up costs and directed millions to charities, as most retailers have distributed at least a part of their share to a good cause.

So we can assume the levy, particularly considering the value of the charge at roughly 10% of the cost of each purchase, will change customer behaviour.

While not enacted yet, the Latte Levy is coming. Here’s what you can do to maintain a caffeine high:

Start Early

While you might have a few months – maybe even years – reprieve, your customers and your team are paying attention to this now. There will be questions. They will want to know what your stance is. Act now and you can steal a march on your competitors and engage your audience.

Be Transparent

Every brand is striving to be ‘authentic’ and ‘human’ in 2018 (if you’re not, seek help). And nothing speaks to these attributes than vulnerability. Tell your guests what you do now, what you’re planning to do and why you’re doing it. Bring them into the story. Ask them for input. You might ask:

– Which charity to share the Latte Levy with

– How much they would pay for a reusable cup

– Where they currently dispose of their cups

Ask. Listen. Act.

Aid Reuse

Rather than pay the surcharge, many folks will buy – or be given – reusable cups. You can design something brilliant and useful and sell it to them for a small fee, saving them money over just a few visits. You might even tie it into your loyalty programme.

But be aware that, as tote bags have become the ubiquitous branded item, so the reusable coffee cup market is just about to boom. And it won’t just be coffee specialists giving them away.

Don’t believe me? Think about how many coffees people drink per year. In public. In front of their friends. Now, wouldn’t you design something to be their must-have accessory whenever they are out and about and craving coffee (so, always)? Exactly.

So, design something great and charge cost price for it. Trust me. Greater reliance on reusable cups also means more washing up. You could leave that to the guest, sure, or you could offer to do that in-house and gain another mark of ‘they actually care.’ I vote the latter.

Incentivise Drinking In-store

We’re trained to think that in-store dining & drinking are more expensive than grabbing and going. This is born from a tax variance, but the stigma has stuck.

How many of your customers currently order for takeaway when they actually want to drink in? I bet a fair few. And haven’t you been looking for a way to engage your customers further and increase dwell time? Well, you found it. You might not change the cost of the in-store experience (although you could), but you can add value – table service, a free something-or-other. Get creative and help turn one-time customers into long-term loyalists.

Order Cups That Can Actually Be Recycled

Investment tip: Buy stock in Frugalpac. While you can.

Go Further

Collaborate with a local environmental group; recycle your coffee grounds (properly); add more prominent recycling bins. Embrace the change, create a point of difference from your competition, and prove to your guests that you care about the planet. They’ll thank you for it.

What else can we do? How will the Latte Levy affect your business?  What are you already doing to help? Tell me in the comments below.