Case Studies

Costa Coffee: An Almost Perfect CSR Strategy

4 months ago

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Costa Coffee: An Almost Perfect CSR Strategy

When working in CSR, the idea of identifying ‘best practice’ is frequently mentioned and encouraged. However, it’s often just as valuable to learn from companies that have just missed the mark. As this article will argue, Costa Coffee is one of those companies.

Costa Coffee

In terms of the number or stores, Costa are far and away the leading Coffee Shop company in the UK.

Their 2,389 outlets makes Starbucks’ 345 look pretty amateurish to say the least.

Because of their favourable position then, some may argue that they needn’t actually bother with CSR. After all, Starbucks are pretty unlikely to threaten their market dominance any time soon.

However, as you’d probably expect, I’d argue the exact opposite.

Firstly, their size means Costa have unarguably the biggest negative social and environmental impact, and also the most resources to do something about it.

Secondly, the UK coffee shop market is somewhat slumping, with a rise in artisan alternatives, lower high street footfalls and Brexit the main contributing factors. Such is the extent of the slump that Starbucks announced a recent fall in profits of 60%, making Costa’s 10% reduction look pretty good in comparison.

With these factors in mind, It’s entirely plausible that Costa could in fact minimise their losses and even create a market resurgence, using CSR as a vehicle for doing so.

Costa Coffee CSR | Jason Wicks

The 3 Stage Framework

Broadly speaking, you could certainly argue that this is what Costa have in some way tried to do. They’ve got a pretty robust CSR strategy and they’re far from being one trick ponies.

So, using the 3 stage framework that I introduced in my book and summarised in this post, let’s look at Costa in more detail.

Targeted

It’s crucial that CSR strategies address social and environmental issues that are relevant to the business and industry they operate in.

Costa have done this pretty well. Instead of getting too carried away with every social issue under the sun, they’ve focussed their time and effort on the ones that matter to them the most.

Basically, their strategy is split into environmental impact and quality of living/opportunities for coffee farmers.

Their environmental projects focus on the whole product lifecycle, from farming to coffee machines, to recycling of used coffee grounds (which anybody can ask for and be given for free).

Their farming projects are managed through their own charity, the ‘Costa Foundation’. They include a range of education and health programmes and help to reduce poverty traditionally associated with the regions.

All in all, it’s simple, it’s easy to understand, and it works.

You can read more about it here.

Targeted Score: 9/10

Very good, but I’d like a pledge to reduce emissions of each individual store, not just waste. 

Costa Coffee CSR | Jason Wicks

Integrated

I recently wrote a post on integrated CSR, and it makes up the second part of the framework.

Straight away, It’s difficult to fault Costa for this. Like Innocent Drinks, they’ve set up their own charity, and I think it works well as a model for impact.

They also have CSR messages on the back of some barista’s t-shirts, as well as on the windows of most stores.

Of course, integration is the hardest of the three characteristics to publicly observe, but I have little reason to doubt them.

Their CSR messages seem pretty sincere, and they don’t engage in any activities that drastically contradict them.

Integrated Score: 8/10

They don’t do much wrong, but CSR certainly feels like less of a big deal than it does with leading companies like Unilever.

Costa Coffee CSR | Jason Wicks

Communicated

As I’ve frequently mentioned, communication is the hardest of the three.

Because of that, it’s often the hurdle that most companies fall at.

On one hand, you don’t want to brag about what you’re doing. On the other, you need customers to know about your efforts and be impressed.

It’s a tough balance.

As a result, I think this is where Costa’s strategy falls down a bit.

Yes, they have some posters up on shop windows, but they could definitely go further.

As I highlighted in this article, CSR communication should be about leading the way on certain issues and educating/engaging the public. Costa take a slightly safer, more reactive approach.

Their use of social media for CSR is pretty limited, even though their post about reusable cups received way more shares than most.

Likewise, despite having a dedicated website for the Costa Foundation, I imagine very few people actually know about it.

Communicated Score: 5/10

For me, it’s a bit of  shame. They have all the components, they just need to shout about them a tad louder.

Summary

In short, Costa come pretty close to having a perfect CSR strategy. As the UK’s number one coffee shop, they certainly do enough to stop people boycotting them, but they could do more. Considering the negative reputation that Starbucks, their nearest competitor has, I think CSR could create a real ROI for Costa.

Some strategy highlights:

  • Donating 10p to the Costa Foundation for every cold drink sold over summer.
  • Giving customers 25p off if they bring in a reusable cup.
  • Running their roastery on 100% renewable electricity.
  • Recycling coffee sacks into carpet underlay.
  • Giving away coffee grounds to customers for free (if they ask).

Some improvement areas:

Overall Strategy Score: 23/30 – Good

Who shall I score next?

If you like this format of analysing a company’s CSR strategy, drop me a comment to tell me which business you’d like me to look at next!

Hi! I’m an author and blogger within the fields of social impact and responsible business. I believe that businesses can be a force for good in the world, and this website contains my thoughts on how that can work.

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  1. […] the same framework I used in my Costa Coffee post, here’s what I […]

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