It looked like a plastics executive’s dream come true. There stood Jackie Prince, a scientist with the Environmental Defense Fund — the enemy — at a McDonald’s stove, flipping Big Macs. To industry thinking, it was just where she and her kind belonged, forever.
But in the end, it was bad news for plastics. Prince and two other EDF staffers worked in a McDonald’s for a day last summer as part of a joint EDF-McDonald’s task force searching for ways the fast-food chain — the sacred ark of the throw-away society — could reduce its 2 million-pound-per-day Niagara of waste.
The first answer came in November, when McDonald’s announced it would deep-six its signature polystyrene clamshell sandwich boxes. Then in April, McDonald’s released the task force’s sweeping 138-page report, which went well beyond clamshells. Among forty-odd other changes, the chain said it would recycle all its corrugated cardboard, use less paper in its napkins and test a refillable coffee mug.
In marketing terms, losing the clamshell paid off immediately. McDonald’s swept a January Advertising Age/Gallup poll as the most environmentally responsible fast-food chain, in consumers’ eyes, beating out Wendy’s, Kentucky Fried Chicken and Burger King. But the clamshell decision — and the company’s highly unorthodox alliance with the Environmental Defense Fund — didn’t seem to please many others. McDonald’s caves in, moaned Forbes, while the Naderite Multinational Monitor accused EDF of degrading environmentalism. The plastics industry launched a well-funded but dull-witted ad campaign extolling the virtues of polystyrene and attacking the clamshell move as environmentally unsound.
The task force’s proposals, which McDonald’s says could cut its waste by three-fourths, will fundamentally change many of the company’s operations. But the plan’s impact is being felt far beyond McDonald’s’ dumpsters. As a blueprint of a new way for corporations and environmentalists to deal with one another, it testifies to the new economic clout of environmental groups.
The strange marriage between EDF and McDonald’s dates to 1989, when the company’s general counsel, Shelby Yastrow, was scheduled to appear opposite EDF’s executive director, Fred Krupp, on a cable-TV show. Yastrow called Dan Sprehe, a legislative analyst with the company, and told him to check out Krupp’s group. “It’s hard to believe,” Sprehe says, “but nobody around here knew much about them two years ago.”
Founded by Long Island scientists in 1967 to fight local DDT spraying, EDF’s motto in the old days was Sue the Bastards! But since Krupp assumed leadership in 1984, EDF has promoted a kind of environmentalism that tries to satisfy economic needs as well as ecological concerns. Spend more than a half-hour with Krupp, a slightly nerdy but persuasive thirty-six-year-old, and he’ll launch into a spiel about Solving the Big Problems — global warming, rain-forest depletion, protecting Antarctica — by harnessing market forces and removing the incentives to plunder and pollute.
In an influential 1986 Wall Street Journal Op-Ed, Krupp called EDF’s approach the third stage of environmentalism; it followed the first stage, exemplified by the early Sierra Club and Teddy Roosevelt-style conservationists, and the second stage of lawyers and lobbyists, who passed the sweeping environmental laws of the Sixties and Seventies. Environmentalists in the third wave, as it is now known, have grown frustrated with the legislative process. When powerful economic interests collide with a small, vocal interest group, the result is often blood-soaked compromise and bad law. Bureaucrats then must write the rules to enforce the law, but they sometimes don’t get around to it for a while. When the new Clean Air Act was passed last year, EPA rule writers were still dawdling over the previous version, passed in 1977.
Alongside the standard lawyers and PhD’s, EDF’s staff featured economists before economists were environmentally cool. The group ghostwrote President Bush’s acid-rain bill, which introduced an innovative market mechanism to control pollution, and is now developing market-based distribution systems for water in the West.
It isn’t the kind of environmental group that McDonald’s is used to bumping into. McDonald’s had linked up once before with environmentalists, funding a booklet and a rain-forest poster with the World Wildlife Fund (the Sierra Club, among other groups, had spurned advances by McDonald’s). And on its own, McDonald’s had announced its intention to spend $100 million annually on products made from recycled materials and helped start a polystyrene-recycling plant.
But all those efforts had amounted to naught in the marketplace. By the late Eighties, more and more consumers were choosing products based on environmental criteria, and the McDonald’s clamshell had become a symbol of ecological evil. Schoolchildren vilified its beloved mascot, calling him Ronald McToxic, and mailed their McTrash back to the company — personally addressed to Yastrow. Consumer pressure was also being expressed in the Styrofoam-packaging bans popping up all over the place. With landfills running out of room, especially in the Northeast, the actual cost of disposing of garbage was rising as fast as the company’s PR bill. In addition, McDonald’s was entering the worst domestic sales slump in its thirty-five-year history.
Something had to be done, but what? For environmental information, McDonald’s usually turned to its suppliers – whose goal was to sell more packaging, not less. And its environmental-affairs department consisted primarily of general counsel Yastrow and assorted flacks, who defended Styrofoam on the creative grounds that it “aerates the soil.”
At Yastrow’s invitation, Krupp jetted out to company headquarters, nestled among prairie wetlands (and ringed by a McNature Trail) in Oak Brook, Illinois, for a chat with Yastrow and Ed Rensi, the head of U.S. operations. “One thing I told them,” says Krupp, “was that if McDonald’s wanted to be a leader on the environment, they weren’t going to get there by just giving money to environmental groups. The way to get there would be by changing their operations.”
What Krupp saw in McDonald’s was a golden opportunity to harness market forces on a grand scale. As the nation’s largest consumer of packaging, McDonald’s has market clout that approaches historic dimensions. In the Sixties, McDonald’s forced the dairy industry’s wholesale shift from steel cans and glass bottles to plastic and paper cartons because founder Ray Kroc couldn’t stand to waste the space between the round cans. And as Krupp well knew, McDonald’s thrives on change. “Beneath [a] cloak of uniformity hides a corporate culture that worships flexibility,” writes John F. Love in his thorough history of the company, McDonald’s: Behind the Arches. “Overnight, [managers] drop carefully laid plans that have been torpedoed by a shifting market.”
Over the spring and summer of 1990, McDonald’s and EDF hashed out me agreement that set up the joint task force. EDF insisted on its right to criticize the company and forbade McDonald’s to advertise the relationship (though EDF itself has been diligent in publicizing the task force). McDonald’s required the three EDF task-force members to work in a restaurant. The company wouldn’t be bound to adopt any of the task-force recommendations; issues such as rain-forest destruction, global warming and the high-consumption, highly disposable nature of McDonald’s’ business were off-limits. And either side could scuttle the project at any time.
Conditions set, the task force began work in August, focusing first on the fate of the clamshell. Its seven members spent long meetings debating various new wrappers and boxes submitted by suppliers. They even considered an edible wrapper, which McDonald’s operations director Keith Magnuson described as “a little chewy,” before settling on a layered tissue-and-plastic wrapper with insulating air bubbles.
But in late October, word reached EDF that a pro-clamshell faction within McDonald’s was attempting an end run around the task force. The company was about to renew its commitment to polystyrene. Krupp called Rensi and put the project on the line. The task force has come up with an alternative, he said. If the announcement were made, EDF would publicly blast it. The next Monday, Krupp flew to Oak Brook and made his pitch to senior management. Two days later, McDonald’s said goodbye to its beige, sky blue and pearly white boxes.
But the move to paper “wasn’t much of a switch,” says Jan Beyea, senior scientist with the National Audubon Society. “It sent the wrong message, that by switching to paper you’re doing the environment a favor. Paper is made with tremendous chemical and industrial processes.” The new wrapper, concedes Richard Denison, an EDF member of the task force, “is by no stretch of the imagination a recyclable material.” And besides, McDonald’s didn’t fully kick the polystyrene habit: Breakfast entrees are still encased in bad old plastic.
The real reason McDonald’s switched can be found in the company’s 1990 annual report, which states: “Although some scientific studies indicate that foam packaging is environmentally sound, customers just didn’t feel good about it.” Or as Yastrow put it: “That clamshell package was the symbol that everyone glommed onto. We knew if we got rid of that thing, it would be like pulling forty thorns out of our paw.”
But if the market force of consumer reaction provoked the dubious clamshell move, it also motivated more positive gains. The final plan, released in April, contains three dozen or so initiatives, of which customers will notice only a handful. Ketchup packets will get larger so customers will use fewer. Carryout bags will be made of recycled, unbleached paper. Napkins will be shrunk by a fifth (but refolded to appear the same size).
Most of the changes will take place behind the counter. In part, that’s by design: McDonald’s wouldn’t dare inconvenience its customers in the slightest way. But it’s also because more than eighty percent of trash at a McDonald’s comes from behind the counter, as the task force learned from a waste audit of franchises in Denver and Sycamore, Illinois. Bulk shipping containers and corrugated cardboard alone account for a third of the typical franchise’s garbage output. So the task force decided to recycle all the corrugated – eliminating, in one stroke, nearly 350 tons per day of landfill-destined trash. Then, to create demand for recycled corrugated, McDonald’s ordered its suppliers — the companies that sell everything from meat to coffee cups to McDonald’s — to use boxes with a minimum of thirty-five-percent-recycled content.
McDonald’s resisted the whole concept of reusables — plates and service — though EDF pushed hard for months. The chain rejected proposals for refillable cold cups and serving burgers on plates because customers tend to leave with their drinks and because hot-off-the-grill sandwiches go into the same wrapper for both takeout and eat-in customers. McDonald’s did agree to test reusable shipping pallets and a refillable coffee mug.
EDF also nudged McDonald’s into testing far-out waste-disposal techniques such as composting. Ten McDonald’s are sending coffee grounds, eggshells and food-coated paper to a Maine composting plant, where organic waste decays naturally into dirt that’s sold to farmers and landscapers. Such tests are just a tiny step toward dealing with food waste, which constitutes a third of the typical store’s trash. Every day, the average McDonald’s tosses out 81 pounds of unsold Big Macs, mushed fries and other perishable items, which adds up to a whopping 694,000 pounds of wasted food nationwide.
The task force ignored at least one other environmental disaster propagated by the McDonald’s system: cows. Their grazing habits cause erosion, their dung seeps into ground water and greenhouse gases pour from their nether regions. “The best thing McDonald’s could do,” says a scientist with a rival environmental group, “would be to get out of the business of marketing meat.”
Many environmentalists seem to have difficulty condoning the existence of McDonald’s. Few would be caught dead eating there. Greenpeace executive director Peter Bahouth says that if he were president of the company, he’d “shut the doors.” But Krupp, who occasionally eats at McDonald’s with his two children, doesn’t see it as black or white, McDonald’s or Mother Earth. EDF’s brand of environmentalism takes what it can get and counts even small steps as progress.
“We’re not ideologues on environmental issues,” says Krupp. The myth blocking progress “is the notion that all environmentalists should be trapped in one narrow set of tactics.” He says: “I think environmentalists would become more powerful, more forceful and achieve greater results if we deployed more tools in our tool kit. We should continue to aggressively lobby, aggressively litigate, aggressively criticize corporate malfeasance and promote stricter regulation. We also should be able to problem-solve with corporations.”
But Krupp’s willingness to talk with the capitalist enemy causes some environmentalists to curse him (usually off the record) as a kind of green Benedict Arnold, brown-nosing big business and the White House. Especially angry are grass-roots groups like the Citizen’s Clearinghouse for Hazardous Waste — founded by Love Canal survivor Lois Gibbs — which feels Krupp is stealing the credit for winning the clamshell war it started.
“He says, ‘All I did was call Ed Rensi, and that did it,’ ” Gibbs says, “but Ed did it because of three years of grass-roots work.” Says Krupp, “EDF was one of many voices that McDonald’s listened to.”
The rift between EDF and CCHW reflects a wider division among the greens, between talkers and fighters. EDF’s sit-down-and-chat methods don’t work for everyone. Three years ago Yastrow met with CCHW to discuss the group’s demands. Both sides say the meeting was a disaster. And Michael Fischer, who heads the graying-but-still-radical Sierra Club, doubts his group would be any good at third waving: “The future of EDF may be in the third wave, but damnit, it’s not the Sierra Club’s future.”
But the third-wave future is now for McDonald’s and for its wide-ranging network of suppliers, who are scrambling to meet recycling rules dictated not by the federal government but by one of their biggest customers. For years, corporate executives have argued that environmental considerations were a luxury they couldn’t afford. McDonald’s — confronted with skyrocketing actual and PR costs of garbage, and nudged and advised by EDF — has adopted a strategy based on the opposite notion. Environmental action was something it could ill afford not to do.
EDF took no money from McDonald’s. In the competitive world of environmental groups, however, result sequal donors, and EDF’s direct mail now boasts of slaying the clamshell. But donors are also customers, not only for McDonald’s but for Safeway, Anheuser-Busch, Procter & Gamble and hundreds of other firms now feeling the pressure of green consumerism. Krupp loves to talk about harnessing market forces, but it’s more than that. As the greening of McDonald’s shows, Krupp and the movement he represents have become a market force.