We examine how supply chain disruptions could be impacting your daily dose of delicious coffee and take a double shot at exploring whether the global industry could be slowly running out of steam. Will it be climate-enforced déjà brew for smallholders or is it already too latte?
GROUNDS FOR CONCERN
Across the world, coffee prices are surging year after year due to a disastrous combination of escalating factors.
This unsettling development arrives as a result of tighter supplies, extreme weather conditions, and shifting production trends, which continue to impact availability.
As one of the most widely consumed drinks on the planet, second only to water, with an estimated two billion cups drank daily, coffee’s immense popularity can be attributed to its versatility and ability to be enjoyed in a variety of different ways.
Whether your preference is a classic double espresso for an instant hit of unadulterated caffeine, a frothy chocolate-topped cappuccino, or even a refreshing iced coffee as the perfect summer alternative, the ever-expanding world of coffee offers something for all.
However, those who purchase their morning coffee from global corporations or independent local artisans, or have splashed out on an impressive home brewing station to grind beans and create the perfect cup in the comfort of their own kitchen, will undoubtedly have noticed the price of the tasty beverage sneaking higher and higher in recent years.
A FOREBODING FORECAST
One of the primary factors causing distress for the global coffee supply chain and driving price increases is the impact of climate change, which poses long-term risks to coffee production.
Rising temperatures and increasingly unpredictable weather patterns continue to threaten yields for coffee bean farmers and roasters, potentially reducing the amount of land suitable for growing coffee in the coming decades.
As one of the neediest crops to harvest, coffee beans are extremely sensitive to even the slightest changes in weather conditions, requiring every element of their environment to be at optimal levels in order to grow and thrive, meaning that because of global warming and environmental turmoil, the outlook is ominous.
Alarmingly, the Intergovernmental Panel on Climate Change (IPCC) predicts a significant drop in coffee yields and suitable coffee-growing land by 2050. Furthermore, nearly half of the land currently used to grow coffee could be deemed unusable by the mid-21st century due to changes in the global climate.
However, it’s not just the heat that poses a problem – it’s the rain, or lack thereof.
Coffee plants require a solid and consistent amount of rainfall, but they also need it to be predictable. Climate change is destroying the probability of this, causing more prolonged droughts in some areas and heavier, more intense rainfall in others.
Too little water, the plants wither away; too much, they can develop fungal diseases like coffee leaf rust and cherry rot.
Faced with a tricky dilemma, rainfall must ideally remain at the level to which these crops have become acclimatised for centuries.
THE RIPPLE EFFECT
The disastrous effects of climate change aren’t just bad news for the plants and coffee beans themselves; it’s a puzzle to solve for the people who grow them and for the entire coffee supply chain network.
Many coffee farmers within the industry are classed as smallholders, meaning they rely entirely on coffee crops for their livelihoods.
When climate change impacts their harvests, it affects their income and ability to support their families, and as many smallholders already live on the razor’s edge of sustainability, even the slightest dip in coffee production will bring potentially catastrophic implications.
Furthermore, as coffee yields drop and quality becomes inconsistent, the price of a daily macchiato or cortado could continue to skyrocket as these effects impact the entire coffee ecosystem.
In the near future, there is a very real possibility that local coffee shops have to close their doors permanently because they can’t afford to buy beans anymore.
Many unique, flavourful coffee strains from specific regions face the prospect of disappearing entirely because the climate is no longer suitable for growing them.
Without a doubt, the consequences of climate change for the coffee industry as a whole are potentially catastrophic as uncertainty continues to brew.
BREAKING DOWN THE COFFEE SUPPLY CHAIN
- Growers – The coffee supply chain kicks off with the coffee growers. Some operate large plantations and must rely on machine processing for harvesting, whilst others will be smaller in scale and tend to a farm of just a single acre of land.
- Processors – Growers sometimes process their own coffee, but where they don’t have the space or facilities to do this, they use the services of another processor.
- Exporters – Coffee is bought by exporters from multiple farms and sold to international buyers. This is an important part of the coffee supply chain for Colombia in particular, as 90 percent of the nation’s coffee is exported.
- Intermediaries – Several individuals and organisations usually support interactions between different parties in the supply chain and help with logistics. For example, they may connect growers with exporters and buyers, organise transport between farms and holding stations, pack coffee, and generally get things ready for international exports.
- Suppliers – A coffee supplier buys from exporters in the country of origin, such as Brazil, Ethiopia, or Colombia, and sells them to roasters in markets like the UK or US. They typically deal in large quantities and may have several long-term relationships with an existing customer base of roasters.
- Roasters – This is where green coffee beans are transformed into their final form. There’s a great level of skill involved in the process of roasting, and many roasteries will have their own house style or approach.
- Retailers – Coffee is sold in a variety of places such as cafés at the end of the supply chain.
