(FORTUNE Magazine) – THE OFFICE PAPER in your recycling bin could soon end up back on your desk--reincarnated as a Starbucks cup. In January the $6.4 billion coffee colossus unveiled the world's first recycled beverage cup made from 10% post-consumer fiber. That might sound like a small step, but it's actually the result of a ten-year odyssey littered with rejected designs and culminating in approval from the Food and Drug Administration. Without the FDA's okay, companies had been wary of letting recycled pulp come into direct contact with food or beverages. "Starbucks has cleared a huge hurdle," says Victoria Mills, a project manager at the nonprofit group Environmental Defense, which worked with Starbucks on the project. "We hope that other large chains follow suit."

Starbucks, which goes through 1.9 billion cups annually, plans to eventually increase the recycled-fiber content of its packaging. But even the current design will conserve five million pounds of paper a year, or approximately 78,000 trees. "We had our eyes on the prize of an earth-friendly cup," says Ben Packard, Starbucks' director of environmental affairs. "Ten percent is just the first step." And it was a halting and uncertain one, to be sure. Here's how Starbucks made the move.

1996 Starbucks wants to stop "double cupping," whereby customers get a second container as insulation. Environmental Defense and Starbucks hold a competition to solicit designs for a recycled cup that's thick enough to stand alone. Most are rejected because, among other reasons, they crumple easily or smell bad.

1997 The retailer starts using a 60%-recycled paper sleeve in place of the second cup.

1999 Several stores begin testing one of the contest entries, a two-layer cup with an outer layer made from 50% post-consumer fiber. But the cup is too flimsy and sometimes leaks.

2001 The coffee giant starts over. Working with pulpmaker Mississippi River Corp., paper mill MeadWestvaco, and Solo Cup, it creates an eco-friendly version of its cup that can be used with recycled sleeves.

2004 The recycled pulp gets the FDA's stamp of approval, clearing the way for other businesses to create similarly eco-minded packaging.

2006 In January the cup launches at select locations; by August all U.S. and some Canadian stores offer java and other hot beverages in eco-cups.

WEB LINK

Starbucks To find out about Starbucks' other environmentally friendly initiatives, like the Grounds for Your Garden program, visit the company's website at starbucks.com/aboutus/envaffairs, where you can download its annual corporate social responsibility report.

This article originally appeared in Business 2.0 magazine.

REPORTER ASSOCIATE Jenny Mero contributed to this article.