Good to the Last Drop? The Effect of Climate Change on the Coffee Industry and Keurig Green Mountain

The coffee industry is facing increasing climate change pressures. Regions now known for their exotic coffees may not be able to sustainably produce in the future. Companies like Keurig Green Mountain are tasked with how to respond amidst climate change.

You hear the familiar beeping of your early morning alarm. Groggily, you hit the off switch and stumble out of bed. If you are like 76% of Americans, you know that what stands between you and a productive day is a good ole cup of joe.1 However, your morning caffeine fix may become in short supply in the near future due to climate change.

What’s the Weather Got to Do with my Brew?

Climate change is expected to have a dramatic impact on the agricultural industry due to changes in mean temperatures, precipitation, water availability, ranges of pests and diseases, and soil quality. Coffee – in particular – will be impacted by these changes as it is only grown in limited regions of the world. Current coffee growing regions may become unsuitable for coffee growing, potentially eliminating some blends of coffee and causing coffee production to have to move to higher elevations to achieve the right agricultural conditions.2

As a specific example of this altitudinal shift, Ovalle-Rivera et al studied the implications of climate change on Arabica coffee, one of the two most dominate types of coffee in production globally. The study examined 19 countries and 62,000 location points within these countries to determine the impact on suitability to grow coffee by 2050 if the climate continues to change. A summary of the results is shown below:

a. Mesoamerica, b.1 - b.2 South America, c.1 – c.2 Africa, d.1 – d.2 Pacific.
a. Mesoamerica, b.1 – b.2 South America, c.1 – c.2 Africa, d.1 – d.2 Pacific.

The study predicts decreases in suitability to grow Arabica coffee at both lower and higher altitudes, which could cause a shift in not only regions that produce coffee, but also the total supply available.3

 Another complicating factor is that the lead time for coffee production is 8 to 15 years, meaning that decisions must be made in anticipation of changes in climate.2

Sustainability at Keurig Green Mountain

Keurig Green Mountain is both a specialty coffee producer and a maker of single-serve coffee machines. As such, if supply decreases due to climate change, Keurig Green Mountain is impacted in both its product lines due to a decrease in demand for coffee machines and a decrease in product as a coffee producer. Given this impact, Keurig Green Mountain has developed three components to help both mitigate its part in climate change and respond to environmental changes:

Adaption – Responding to Climate Change and Preparing for the Future

One of the primary pieces of Keurig Green Mountain’s Adaption component is working with and training local farmers on how to respond to climate change, such as the importance of diversifying crops, improving crop yields, and assisting farms to cope with the recent outbreak of Coffee Rust disease. Moreover, Keurig Green Mountain is also investigating new types of coffee trees that may be less impacted by the warmer temperatures caused by climate change.4

Mitigation – Reducing Keurig Green Mountain’s Part in Climate Change

The focus of the Mitigation component is understanding Keurig Green Mountain’s energy consumption and greenhouse gas emissions throughout the entire production process, in addition to reducing its overall greenhouse gas emissions.5

Keurig Green Mountain Value ChainThe above represents the seven stages in Keurig Green Mountain’s value chain.6

Engagement – Collaborating and Partnering on Reducing Climate Change

Keurig Green Mountain is actively working with governments and NGOs to create policies to reduce overall emissions from companies. It is also partnering with other beverage manufacturers to realize synergies across the industry.5

What Else can be Done?

Reduce, Reuse, Recycle

Beyond adapting to climate change, Keurig Green Mountain should continue to focus on how it can reduce climate change. One example is the waste stemming from single-use K-cups. Although Keurig Green Mountain has just started producing recyclable K-cups, 100% of K-cups will not be recyclable until 2020.7 Furthermore, not every community accepts the material the recyclable K-cups are made from. I think Keurig Green Mountain should focus instead on producing better re-usable pods that will mitigate the recycling issue and may be able to be used in production before 2020.

Expand the Footprint

Based on the research by Laderach, Keurig Green Mountain needs to plan 8 to 15 years in advance which farmers in specific locations to partner with. Given the potential extreme changes in the environment, Keurig Green Mountain should consider looking into new regions – whether higher altitudes or different areas of the world – to form partnerships and begin growing coffee. Keurig Green Mountain does not have time to wait until the current farmers are unable to produce due to climate change. The world needs its good ole cup of Joe! (Word Count: 748)

 

Sources

  1. National Coffee Drinking Trends 2016. Rep. National Coffee Association, n.d. Web. 30 Oct. 2016.
  2. Laderach, Peter, et al.Predicted impact of climate change on coffee supply chains. Springer Berlin Heidelberg, 2011.
  3. Ovalle-Rivera O, Läderach P, Bunn C, Obersteiner M, Schroth G (2015) Projected Shifts in Coffea arabica Suitability among Major Global Producing Regions Due to Climate Change. PLoS ONE 1.
  4. “Our Stories.” – Adapting to a Warmer Climate. Keurig Green Mountain, 7 Dec. 2015. Web. 30 Oct. 2016.0(4): e0124155. doi:10.1371/journal.pone.0124155. Also used for featured image.
  5. “Sustainability.” Statement on Climate Change. Keurig Green Mountain, Mar. 2014. Web. 30 Oct. 2016.
  6. “Sustainability.” Understanding Our Impacts. Keurig Green Mountain, n.d. Web. 30 Oct. 2016.
  7. “Sustainability.” Reducing Product Waste. Keurig Green Mountain, n.d. Web. 30 Oct. 2016.

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5 thoughts on “Good to the Last Drop? The Effect of Climate Change on the Coffee Industry and Keurig Green Mountain

  1. I am not a coffee drinker, but I can imagine mass hysteria if the supply of coffee becomes threatened. I appreciate that Green Mountain is trying to focus on reducing their waste, but the reality is that it won’t be enough to make a measurable impact on climate change. If I was Green Mountain I would be looking at growing alternatives for coffee trees. Can coffee trees be grown in greenhouses? Are there microbes that that can be added to the plant to shorten the growing cycle? Green Mountain should continue their green initiatives but should also be putting contingency plans in place.

  2. It is not surprising to read that climate change has a huge impact on coffee industry. This is clearly an example of externalities arose from carbon emission and climate change. So far Keurig Green Mountain’s solution to climate change is still a bit passive: mitigate the impact of climate change through adaption. Therefore, I call for a more comprehensive mechanism through which the parties that are actually responsible for the climate change should pay for the externalities they create. Carbon tax could one of the solutions and governments should be more involved in designing the rules that reduce the impact of climate change.

  3. Kelly, thank you for bringing this very interesting topic to our attention. Adaption will indeed play an important role in Keurig Green Mountain’s future, as it will for other businesses dependent on farming and agriculture.

    I believe that crop diversification will be key to safeguarding the long-term sustainability of our food supply. We have become proficient at improving crop yields by focusing on one or two varieties of each plant, but this puts our food supply at risk by minimizing our ability to react to crop diseases or climate change. Your example of coffee is a great one; out of the over 120 varieties of coffee that exist, we are only drinking two of them. The same thing for bananas, the fruit with the highest per capita consumption in the world, where the entire supply is dependent on one variety, the Cavendish banana, after its other sibling, Gros Michel, was wiped out by disease in the 1950s. A mutated version of the same disease is now putting the Cavendish in danger as well, endangering multiple countries and businesses dependent on this crop.

    Moving forward, diversifying our crops in order to create climate-smart resilient ecosystems is one measure that can help ensure the nutrients necessary to feed an ever expanding global population.

  4. Kelly, that was a great article. Personally, I am not a coffee drinker, but this does not reduce the importance of the issue. The lead time of reaction is very big so they should react now. I appreciate their efforts to be environmentally friendly, I believe it will help their brand equity but I have serious doubts it will help them sustain their business.
    In my mind they have the following options:
    1) invest proactively coffee crops (lead time 8 years)
    2) invest in developing GMO coffee plants with shorter lead time
    3) diversifying crops as you already mentioned
    4) invest in identifying more potential options to sustain coffee crops
    Very interesting topic. Please keep us posted.

  5. Great post Kelly! As a religious coffee drinker, this is quite disturbing for me to read. I thought your post pulled out an interesting contrast between the impact of climate change on Keurig, vs. the impact of Keurig on climate change. I agree that they should focus on developing more sustainable pods, and while I think Maria makes a good point that this may not make much of a difference in the grand scheme of things, I think the fact that climate change is directly threatening their business makes for an interesting dynamic in which Keurig really has “skin in the game” with respect to sustainability goals.

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