The Chicago-based burger chain said on Tuesday that it is joining forces with the Seattle-based coffee giant to develop a recyclable or a compostable cup.
The two are doing so through the NextGen Cup Consortium and Challenge, which was created by Closed Loop Partners, an investment firm that focuses on sustainable consumer goods. McDonald’s and Starbucks are founding members of the group.
McDonald’s is committing $5 million to the consortium, bringing the total to $10 million, coming along with the $5 million Starbucks had already committed.
The challenge starts in September, and invites innovators, industry experts, entrepreneurs and recyclers to submit their ideas for recyclable or compostable cups. The consortium will award up to $1 million in funding based on key milestones, and up to seven of those receiving awards will enter a six-month accelerator program to scale their ideas.
“McDonald’s is committed to using our scale for good to. Make positive changes that impact our planet and the communities we serve,” Marion Gross, McDonald’s chief supply chain officer, said in a statement.
“A better cup will benefit the entire industry, and we invite others to join us as we move these efforts forward,” Colleen Chapman, vice president of global social impact for Starbucks, said in a statement.
The partnership is not small potatoes. McDonald’s and Starbucks are the two biggest restaurant chains in the U.S.
McDonald’s alone generates $91 billion in global sales and operates 37,000 locations worldwide. Starbucks generated $28.5 billion in global system sales last year and operates more than 27,000 locations, according to Technomic Ignite data.
Both chains operate massive beverage businesses, and their efforts to improve on the sustainability of cups could have major implications for the restaurant industry. Starbucks is the world’s largest coffee chain. McDonald’s is also a huge coffee chain, in addition to the company’s considerable soft drink sales.
The two companies have recently taken the lead in an effort to improve the sustainability those beverage containers. McDonald’s earlier this year announced plans to find a successor to plastic straws, saying it would test paper straws in the U.S. as it moves toward paper in the U.K. and Ireland.
NextGen is an advisory council that includes leaders among environmental groups, academic leaders, municipalities and representatives from the paper and plastic industries. The NextGen Cup Challenge will be launched in September. The effort has received more than 1,000 inquiries from companies and people interested in participating.
“There has never been a greater need to tackle the ways in which we source and recover materials,” Erin Simon, director of sustainability research and development and material science at the World Wildlife Fund. She called McDonald’s participation “a strong step forward in building momentum” for brands to work together on solutions.