Thursday, February 21, 2008

YUM wrapper controversy

(article found on LinkedIn and was originally wrote for the News & Observer)

Activists chide Yum over wrappers

by John Murawski, Staff Writer

The alliance has previously staged demonstrations at office supply stores and protested at company shareholder meetings. Those tactics helped its cause.

They also helped win concessions in recent years to increase recycled paper sales by Staples, Office Depot and OfficeMax, as well as commitments to use paper from managed forests.

The 12-year-old nonprofit, an alliance of about 70 environmental groups in the South, plans a similar campaign against Yum, Goldberg said.

Attempts to reach Yum officials by phone and e-mail were unsuccessful. Printing on some Yum products, for instance KFC paper bags, says the items are 100 percent recycled.

But the rising cost of paper and food is putting pressure on the company. Paper and food costs climbed 12 percent at Yum in the fourth quarter, straining profit margins, the company said when it released earnings last week.

"As chains look at becoming more green, it becomes more expensive," said food industry analyst Darren Tristano at Technomic in Chicago. "The restaurant business is a business of small [profit] margins."

In response to public concerns, some fast food restaurants have taken steps to limit their effect on the environment.

McDonald's phased out styrofoam containers nearly two decades ago and uses some packaging, bags and napkins made from recycled paper. Starbucks is switching to coffee cups partially made from recycled material.

The Dogwood Alliance staged its demonstration at Taco Bell not far from the Riegelwood Paper Mill owned by International Paper, a major source of wrappers for restaurants that Yum owns. The alliance says the wrappers are made from trees grown on pine plantations that were once biodiverse forests.

Many tree plantations

About 20 percent of all forests in the South are tree plantations grown for lumber or paper production, according to the U.S. Forest Service. The land area dedicated to tree plantations has grown to 43 million acres in 13 states, but not all the spread encroaches on pristine woodlands.

At least part of the increase is the result of a federal program to encourage farmers to convert marginal agricultural land to tree production.

But a significant portion of the plantation land was formerly natural forests, said Will McDow, the Southern Forest Projects manager for Environmental Defense.

Goldberg said the Dogwood Alliance's goal is to win a commitment from Yum to stop using the tree plantations that are replacing natural forests. Yum would have to negotiate such a commitment from its suppliers, including International Paper, based in Memphis, Tenn. International Paper would then have to work to change the cultivation practices used by the small landowners who sell to the company.

International Paper upholds ecological cultivation standards, said Bob Stegemann, the company's director of sustainability strategies. For instance, it requires tree plantations to practice reforestation instead of stripping the land bare.

Dogwood's demands

But the Dogwood Alliance says that single-species plantations are destroying biologically diverse natural habitats. The organization advocates selectively harvesting mature trees that grow naturally.

A year after contacting Yum, the Dogwood Alliance last fall contacted another International Paper customer, McDonald's, about making food wrappers and containers more ecologically correct. But Goldberg said the Dogwood Alliance hasn't made any progress with McDonald's yet. The Asheville organization wants to leverage the clout of the golden arches to influence International Paper to change regional forestry practices.

"They've done a lot with cups and napkins and reducing the size of packaging" Goldberg said. "They're a good change agent."

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