How will the 'latte levy' affect the guest experience?


How will the 'latte levy' affect the guest experience?

Disposable coffee cup

The so-called 'latte levy' has seen MPs call for a 25p tax on disposable cups, leading to an outright ban by 2023. A hospitality trade body has warned that this could leave operators struggling with hefty costs, but how will the tax affect the guest experience?

The UK is throwing away 2.5bn disposable cups a year, off the back of the thriving coffee industry – enough cups to circumnavigate the globe five and a half times. According to a report by the Environmental Audit Committee, there is an element of 'consumer confusion' where most people don't realise that in the UK, less than 1 in 400 (0.25%) of coffee cups are recycled' due to the plastic used in their design.

Big players in the industry such as Pret a Manger, Starbucks and Costa have taken steps to help reduce waste by offering discounts for guests who use reusable cups. However, a study by Cardiff University found that people aren't responding as hoped - research revealed that while a 25p charge on disposable cups increased the use of them, a discount on those same cups had no impact on usage.

A report released by Starbucks proved this to indeed be the case - the coffee giant has had a reusable cup incentive in place since 1998, with guests offered 25p off all drinks, although currently only 1.8% of their clientele take advantage of this offer. It's no secret that many reusable cups are bulky to carry, plus people will have to think ahead to take it with them, does the experience of picking up a takeaway coffee becomes much less grab and go?

So, how can operators seek to balance the guest experience with environmental concerns?

We've seen a few different strategies in practice.

BigHospitality reported that Pret a Manger will double its reusable cup discount from 25p to 50p in an effort to offer further incentive to guests who wish to help the environment. This was in response to an Instagram poll which saw 96% of 5,000 respondents vote 'yes' to the 50p discount. Other customer suggestions included setting up a loyalty scheme tied to reusable cups, as well as selling a branded reusable cup that was 'light, leak-proof and elegant'.

However, it's worth bearing in mind that Pret a Manger chief executive Clive Schlee mentioned in his blog that lots of customers also suggested charging for disposable cups in the same way as the government's 5p bag charge.

The Association of Licensed Multiple Retailers (ALMR) represents restaurants and cafes, as well as over 90% of the UK's managed pubs, it argues that ‘small and medium-sized businesses will be particularly vulnerable to cost increases and many of them will find it difficult to absorb this cost or even pass it onto customers’. The ALMR suggests the government should look at other ways to reduce waste.

As guests become increasingly environmentally conscious, we can expect to see more businesses addressing the question of how best to appease these concerns, without compromising the convenience guests have come to expect from coffee chains and independents alike.

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