Will Climate Change Take Away Your Venti Mocha Frappuccino?
The Current Situation
Over the next 50 years, agricultural commodities are going to be heavily affected by global climate change. With coffee’s growing region stretched around the Earth’s equator, global climate change is already starting to have an impact on the coffee industry. As the world’s biggest seller of coffee, Starbucks is tracking global climate change very closely and putting in measures to protect its long-term business model. Research done by the International Center for Tropical Agriculture states that by 2050, 80% of the land used to grow the Arabica coffee bean, the main ingredient (read: raw material) of Starbucks coffee, will be unsuitable to crop. [1] The factors contributing to the downfall of suitable land for the Arabica coffee bean include infestation by pests, leaf rust, and land erosion due to rainfall. In 2012, more than 85% of several large Guatemalan coffee farmers’ yield was wiped out by leaf rust. [2] Two years later, coffee farmers in Chiapas, Mexico lost 60% of their yield also due to leaf rust. [1] The lower yield for coffee bean farmers and scarcity in supply of the Arabica coffee bean will increase price and significantly eat into Starbucks’ margins. Furthermore, if several of Starbucks key coffee bean suppliers go out of business, Starbucks will be forced to switch suppliers and establish new supply routes which could be very costly. The drop in crop yields would also discourage new farmers to cultivate coffee in the future. With the future of mass coffee production in serious doubt, Starbucks has taken actions to mitigate climate change. However, there are a few very important measures which Starbucks should also consider.
Actions Taken by Starbucks to Mitigate Climate Change
The first serious climate change prevention measure which Starbuck took was to work with Arabica coffee bean farmers to improve their ability to grow coffee in warmer climates. Following massive losses in coffee bean production from some of their South American suppliers, Starbucks distributed coffee plants that are more rust-resistant. In 2014, not only did Starbuck share its formula for breeding coffee plants with suppliers, but the company also donated 20 million seedlings to farmers. [1] To date, Starbucks has conducted 29 pilots (with 20 more in planned) with coffee-growing communities in regions with sensitive environments to improve coffee production as well as conserve and restore natural coffee plant habitats. [3] Helping the Arabica coffee bean farmers fight the effects of climate change now will be very beneficial to Starbucks in the future.
Starbucks itself tried to do its own part in reducing global greenhouse gas emissions, but it has failed so far. After vowing in 2008 to reduce energy use by 20%, Starbucks did slightly reduce carbon dioxide emissions by conserving energy, reducing waste, and increase recycling, and incorporating green design into the stores. However, by 2015, Starbucks’ carbon dioxide emissions had crept up to 1.34 million metric tons, mainly from energy used in stores and roasting plants. [3] Starbucks is part of a business coalition that has tried to push Congress to pass legislation on greenhouse gas emissions. If Starbucks wants Congress to take its pleas serious, the company needs to do its own part in reducing global greenhouse gas emissions.
[3]
Further Actions Starbucks Must Take
Starbucks’ number one priority should be to help their Arabica coffee bean farmers move their farms to higher ground to better cope with shifting climate change. Higher ground means less rain, fewer pests, and less leaf rust. However, coffee plants take roughly three years to yield a sellable bean, creating a long and costly transition. Starbucks should start this transition sooner rather than later as there is no benefit to late adaptation. Early adaptation to climate change through higher ground suppliers might result in fewer production wipeouts from suppliers such as the ones in Guatemala and Chiapas, Mexico. Starbucks should also look to move their suppliers further away from the equator where climate change is most prevalent. While tropical weather is a key component to coffee bean growing, moving a supplier as little as a hundred miles might make a huge different in crop yield.
Lastly, Starbucks should continue to do research into how to grow coffee beans in a way that make them less susceptible to pest infections and leaf rust. The future of mass coffee production might become victim of global climate change, and it would be extremely advantageous for Starbuck to pay for the R&D now to save its long-term business model in the future.
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Resources
- https://www.technologyreview.com/s/601404/starbucks-responds-to-climate-change-with-mixed-results/
- http://www.ibtimes.com/end-coffee-climate-change-poses-threat-starbucks-other-major-producers-2409422
- http://www.starbucks.ph/responsibility/environment/climate-change
- https://www.theguardian.com/business/2011/oct/13/starbucks-coffee-climate-change-threat
- http://voices.nationalgeographic.com/2013/11/04/will-climate-change-imperil-your-cup-of-starbucks/
- http://www.huffingtonpost.com/2011/10/16/starbucks-climate-change_n_1011222.html
HC, I had no idea that coffee beans have the potential to be significantly hurt by climate change, so as a heavy coffee drinker, your article was alarming!
I agree that helping their existing coffee bean farmers adapt to changing climate via relocation and improved beans should be Starbucks’ top priority. Starbucks has cultivated strong relationships with many of their suppliers and shown a commitment to investing in farming communities, so I believe helping out their loyal business partners would fit well with Starbucks’ existing ethical sourcing practices. [1] That said, I think the company should also further diversify its supplier base to mitigate the impacts of any geographic variability.
While I agree Starbucks can do more, I think it is somewhat misleading to claim that Starbucks has “failed” in its sustainability initiatives because the aggregate amount of company CO2 emissions has increased over the past few years. From 2008 to 2015, the number of Starbucks stores worldwide increased from 16.7k to 23.0k (38% growth), so growth in CO2 emissions is expected. [2] Unfortunately I cannot find data on 2008 CO2 emissions to make a direct growth comparison, but we can look at energy consumption per square foot at Starbucks stores over that time period. According to Starbucks’ 2015 global responsibility report, the Company has reduced energy consumption per square foot per store by 4.3% since 2008. [3] While this metric falls short of the Company’s 20% goal, they are still moving in the right direction, and the metric was hurt by greater per store customer traffic and greater food sales (which require refrigeration and potentially warming). [3]
Thanks for the insightful article!
[1] http://www.starbucks.com/responsibility/sourcing
[2] https://www.statista.com/statistics/266465/number-of-starbucks-stores-worldwide/
[3] http://www.starbucks.com/responsibility/global-report
HC, thanks for the very interesting read. Although I like your proposed solutions for Starbucks to combat climate change, I have two additional thoughts on how Starbucks can fight climate change even further.
First, the business model of Starbucks relies on an environmentally unfriendly idea. Starbucks encourages consumers to drive to their nearest café on the way to work instead of taking the extra 2 minutes to make coffee themselves at home. Furthermore, the fact that most consumers will order their coffee in a disposable cup from Starbucks rather than a re-usable cup. Due to the thing waterproofing material of a coffee cup makes the cup non-recyclable. As a result, a medium-sized coffee cup has a 0.25lbs of CO2 cost on the environment.[1]
Second, generalizing more broadly, I think your post on the Arabica strain of coffee bean is a great example of why we as a society should embrace genetically modified organisms (“GMO”s). As you may already know, in 2014, a breakthrough by a consortium of scientists completely sequenced the genome for a different very popular coffee bean strain (the Robusta strain) [2].
As a result, scientists were able to start experimenting with genetically modifying the coffee bean, specifically to combat the effects of climate change, such as making the beans more drought resistant. Needless to say, this could be a significant boost to coffee farmers around the world who depend on the cash crop for their basic livelihood. Additionally, it would allow existing coffee farmers to preserve their current way of life, instead of having to uproot their culture. Lastly, it would require less damage to the environment to use existing land that is already used to farming coffee, instead of potentially clearing out forests to create space for new coffee farms.
While there have been very vocal concerns about GMOs among consumers in the U.S. as well as European countries, the best science says that we have nothing to fear[3]. If we are not willing to put up with the fear mongering of climate change denialists, we should not put up with the scientifically unsound anti-GMO movement. GMOs are a useful technology that can be used to save our cup of joe.
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1. http://www.carbonrally.com/challenges/12-Paper-Coffee-Cups
2. https://www.washingtonpost.com/news/speaking-of-science/wp/2014/09/04/genetically-modified-coffee-could-be-just-around-the-corner/
3. http://www.forbes.com/sites/jonentine/2014/09/17/the-debate-about-gmo-safety-is-over-thanks-to-a-new-trillion-meal-study/#3bd20ba1ca93
Really interesting post!
I believe that Starbucks efforts to help coffee been farmers to adapt to climate change could be extrapolated to so many other industries. Big corporations have not only the money, but also the human capital that suppliers in developing economies need to design and deploy plans to combat these changes.
Also, it would be interesting to see if Starbucks could generate coffee bean sustainable purchasing best practices for other coffee stores to follow, similar to what Nike does with their raw materials suppliers.