What's the buzz about global warming affecting world coffee supply?
- A study by Britain's Royal Botanical Gardens and published by Science Advances indicated that 60% of wild coffee species are under threat of extinction due to climate change. Thirteen species are considered critically endangered, and there is concern that more than half of all wild coffee species may be extinct within the next seven decades, according to the report.
- Arabica coffee, the most common source bean for coffee worldwide, is in a particularly acute situation due to its climate inflexibility. The wild strains of the plant are having their habitable range narrow significantly due to climate change, pests and deforestation.
- While Brazil and Vietnam combine to represent half of the world's coffee crop, Madagascar has the highest proportion of threatened species at 72%. But Ethiopia, which provides only 3% of the world’s coffee, is set to feel the greatest effects since the country relies on coffee for 60% of its export income.
While climate change's impact on the food industry is well documented, this latest study could have coffee makers scrambling to figure out how to meet growing consumer demand. American consumption of this caffeinated beverage has continued to increase annually since 2013, according to Statista. In 2017, the volume of coffee consumed in the U.S. amounted to approximately 25.02 million 60-kilogram bags — an increase from the past four years.
With coffee consumption showing no signs of slowing and if global temperatures continue to rise, it won't be long until the plants are affected and begin producing less and lower quality coffee for consumers — and pricier cups of gourmet coffee. Arabica coffee, in particular, is sensitive to any change in temperature and even just a change of 1 degree Celsius can hamper growth.
The extinction of some wild coffee plants will also make it very difficult for companies to experiment with new flavors. It is from the wild strains of coffee that farmers gather the biodiversity and genetic storehouses necessary to produce more robust plants and variety of tastes.
While warming climates are not yet affecting price or production, it is only a matter of time. Already, farmers are preparing by moving their farms higher into the mountains and considering ways to more effectively irrigate. Many are also planting trees with higher density in hopes of offsetting the inevitable reduction in production from each plant. When it comes to biodiversity, farmers have been interbreeding Arabica plants with Robusta coffee to help breed heartier plants that are capable of fruiting in warmer climates, according to the research.
At the same time, farmers are asking and receiving help from large CPG companies like Nestlé and JM Smucker. In 2010, Nestlé pledged $500 million to improve sustainability across Nescafe's supply chain, and more recently the Swiss company partnered with the World Bank's International Finance Corporation to invest $6 million to support coffee farmers in East Africa to combat the effects of climate change. Meanwhile, Smucker, who has Dunkin' brands and Folgers, does not have a dedicated coffee sustainability plan.
It is not a surprise that CPG companies are invested in what happens to the market because gourmet coffee has seen a wave of M&A and growth for these big manufacturers.