Your Morning Cup of Coffee Is in Danger. Can the Industry Adapt in Time?

Howard Schultz wants to know if I drink coffee. The Starbucks boss is sitting on a balcony overlooking the company’s leafy farm in the Costa Rican province of Alajuela, where I’m told the coffee–harvested and roasted on-site–is a must-try. Like more than 60% of Americans, I drink coffee at least once a day, and sometimes I indulge twice or even three times. The Costa Rican blend Schultz pours me has a special taste that mixes citrus and chocolate flavors.

But the future of my cup of Costa Rican Arabica is not guaranteed, Schultz says. After nearly four decades at Starbucks, he is leaving at the end of June, and in the role of executive chairman for almost 15 months, he has been looking past Starbucks’ day-to-day operations to its long-term challenges and opportunities. Climate change ranks high among them. As temperatures rise and droughts intensify, good coffee will become increasingly difficult to grow and expensive to buy. Since governments are reacting slowly to the problem, companies like Starbucks have stepped in to save themselves, reaching to the bottom of their supply chains to ensure reliable access to their product. “Make no mistake,” Schultz tells me, “climate change is going to play a bigger role in affecting the quality and integrity of coffee.”

This farm, with its verdant vistas and a trickling waterfall, seems far removed from the rising sea levels, blistering heat and destructive storms that characterize climate change. But global warming is exactly why Starbucks bought the 600-acre plot in 2013, and why Schultz makes the 3,500-mile trip from Seattle a few times a year as he has done on this March day. The farm is Starbucks’ field laboratory into the threats posed to coffee by climate change and its testing facility for how it can adapt to the challenge. Schultz hopes that the research here will inform agricultural practices for millions of farmers across the globe, including the ones that supply the company. “We have to be in the soil, growing coffee, to understand firsthand how to rectify and fix the situation,” he says.

Study after study has laid out the threat climate change poses to the coffee industry. Rising temperatures will bring drought, increase the range of diseases and kill large swaths of the insects that pollinate coffee plants. About half of the land around the world currently used to produce high-quality coffee could be unproductive by 2050, according to a recent study in the journal Climatic Change. Another paper, in the journal Proceedings of the National Academy of Sciences, suggests that that number could be as high as 88% in Latin America.

While rising temperatures have caught many industries flat-footed, coffee companies have responded in force, bolstering their presence on the ground in coffee-growing countries like Costa Rica, Ethiopia and Indonesia. Instead of just purchasing coffee, they work with small farms to help them adapt to changing conditions, providing seeds, monitoring production and suggesting new agricultural practices. “Everybody talks about climate, but the only sector that’s actually doing something at scale is the coffee industry,” M. Sanjayan, the CEO of Conservation International, tells me as we tour the Starbucks farm in Alajuela.

Not that the industry sees a choice. Declining supplies and a growing coffee-drinking population mean climate change could turn a daily pick-me-up into a high-priced luxury, threatening the continued growth of the industry’s customer base. Addressing that challenge was an important facet of Schultz’s job in his final years at Starbucks. “It’s not only about the environment,” he says of his work on climate change. “It’s also to procure high-quality coffee, to get the best possible yield, at the best possible price.”

During our visit to the Starbucks farm, Schultz stops at the company’s Costa Rican farmer support center. The structure is designed to accommodate crops brought in fresh from the field, but still maintains the gloss of a corporate office for the high-level executives who cycle through on occasion. Schultz greets Carlos Mario Rodriguez, director of global agronomy at Starbucks, with a big smile and a familiar handshake. In this building, Rodriguez meets with local farmers, offering them different seed varieties developed on-site and advising them on how to protect their yield in the face of a changing climate.

When he’s not teaching planters, Rodriguez, the former head of Costa Rica’s national coffee institute, spends his days among the coffee trees on the property, surveying experiments designed to develop the perfect coffee bean–one that can survive drought and heat while also meeting the company’s quality standards. On the farm, he stops to show me one 4,300-sq.-ft. field where he says 50 new coffee varietals are being tested for their climate resilience as well as taste.

Rodriguez and his research are the vanguard of Starbucks’ efforts to adapt. Beginning in 2013, Starbucks decided to invest in growing its footprint in coffee-producing countries. It now has support centers in nine countries–a number Schultz said could triple in the coming years–and a 10-year, $500 million investment fund that supports sustainability programs, such as adaptation training for farmers and testing new coffee varieties.

All this work on the ground in Costa Rica may sound obvious. Companies in sectors from energy to technology invest in research and development to better their products. But the coffee behemoth’s focus on local farms represents a seismic shift. Selling coffee to consumers has always been a separate business from growing the beans. And because an estimated 25 million people farm coffee around the globe, big coffee companies have typically found suppliers in whichever place experienced a strong harvest that year. If one country’s yield suffered, the companies simply looked elsewhere.

But with climate change, that supply chain is no longer assured. Arabica coffee–the variety found at Starbucks, Dunkin’ Donuts, McDonald’s and pretty much every other American retailer–grows in a narrow region of the tropics known as the Coffee Belt, which stretches from Central America to sub-Saharan Africa to Asia. Conditions must be just right or a harvest is lost. In the past, some areas occasionally experienced off years because of a bad storm or a temperature fluctuation.

Researchers say that in the future such challenges will be constant. Farmers in some regions will be able to adapt by growing at higher elevations, but in others there is nowhere else to go. Entire regions risk becoming unable to continue producing Arabica coffee, and Schultz and others say there’s no way to make the more resilient Robusta variety, which is sometimes blended with Arabica to make instant coffee, palatable to the broad coffee-drinking public.

Scientists also warn that climate change increases the likelihood of disease, including the dreaded la roya, or stem rust. That disease cut coffee production in Central America by about 15% in the 2012–13 growing year. Due in large part to rust, the price of a pound of coffee for consumers in the U.S. jumped roughly 33% between ’11 and ’13. “Climate change is good,” says William Corrales Cruz, a small-coffee-farm owner in the Costa Rican region of Naranjo. “If you sell rust.”

Starbucks says it is eager to share the lessons it learns about adaptive farming with coffee growers around the globe. For big coffee companies buying from a variety of small suppliers, the argument goes, there’s no value in trying to gain a competitive advantage by hoarding trade secrets. Improving all coffee growers’ ability to survive climate change benefits the entire industry, Schultz says. The company’s network of farmer support centers distributes free seeds, teaches new adaptation methods and serves as a resource for farmers who are eager to learn how to adapt, regardless of whether they do business with Starbucks. “It may be hard for people to understand why we are sharing all this information,” says Schultz. “If we don’t, there’s going to be tremendous adverse pressure on the coffee industry.”

Starbucks will find plenty of interest in the results of its research. Dwindling supply is a big problem for an industry that projects global coffee demand to double by 2050, driven by population increases and a growing coffee-addicted middle class in Asia, Africa and elsewhere. As a result, nearly every major coffee retailer is paying closer attention to the source of its beans than ever before. The companies whose products touch nearly every American household–think Starbucks, Keurig Green Mountain, J.M. Smucker and countless others–have installed themselves at the ground level of the coffee supply chain in a way unimaginable even a generation ago. Small farmers now interact directly with big-name coffee retailers after years of dealing with local traders only.

“In the beginning, it was scary,” says Sara Bogantes Vargas, a regional coordinator for the industry-funded World Coffee Research (WCR), of the farmers’ reaction to seeing the Starbucks farm in their backyard. But Bogantes Vargas says the planters quickly came to welcome the industry’s help. WCR, for which Bogantes Vargas travels around Central America to meet with farmers, is a consortium supported by dozens of major coffee retailers, distributors and exporters. The institute pumps millions of dollars into lab research and coffee field trials every year.

The scale is enormous. WCR’s $18 million coffee-monitoring program, for example, covers 1,100 farms in 20 countries. It includes on-the-ground training for farmers, technical assistance throughout the trials and supply-chain analysis. In each of those farms, located from Peru to Kenya, WCR has taken over a small portion of farmers’ land for an experiment testing coffee varieties and various adaptive farming methods. WCR and partner agronomists plant different coffee hybrids, take soil samples and test techniques like planting trees for shade. Like the research conducted by Starbucks, the results will be shared with the public, WCR says.

Individual retailers have invested in fighting climate change’s effect on their business as well. In El Salvador, Honduras and Nicaragua, Keurig has funded a program to teach farmers how to implement new agricultural practices tailored for times when water availability is limited. The program is an integral piece of the nearly $10 million the company spends annually to support farmers. “When there are climate challenges in particular locations, we have the ability to source from other places,” says Colleen Popkin, senior sustainability manager at Keurig. “Farmers don’t have that flexibility … and those farmers are part of our long-term growth trajectory.”

Illycaffè takes a similar approach through what the company has termed the University of Coffee, a program with some 30,000 participants around the world. The initiative began in 1999 in Italy as a forum for a range of coffee professionals from baristas to growers looking to improve their business, and since then has focused on helping farmers learn practices that will be sustainable in the face of a changing climate. The initiative trains thousands of farmers a year in more than 20 countries. Training farmers sits at the “very center of our strategy,” says Andrea Illy, chairman of Illycaffè, who estimates that the coffee industry spends more than $100 million each year to adapt. But Illy says that number needs to multiply. “There is a huge gap,” he says. “The best educated guess is that in order to adapt to climate change, we would need as an overall industry to invest something like $1 billion per year to rejuvenate plantations, develop new varieties, improve equipment, even migrate some coffee plantations.”

The sweet fragrance wafting through the air in the Costa Rican region of Naranjo, about 25 miles from the Starbucks farm, is unmistakable. Bogantes Vargas and I are walking through a large coffee farm an hour’s drive from San José, the country’s capital, looking at blossoming flowers on coffee trees. As sweet as it smells, the odor from the plants is also unsettling. It’s early March, and the plants here should not bloom for weeks, Bogantes Vargas says. The harvest from a plant that blooms too early could be lost for an entire season.

In Costa Rica, farmers say climate change has already made it difficult to predict harvest conditions. “One year it’s too short, one year it’s too long,” says Corrales Cruz of the rainy season. The nation’s coffee industry is suffering as a result. Fifteen years ago the average coffee farm in Costa Rica produced about 14.5 bags of coffee per acre. Today that number is down to fewer than 10 bags per acre.

It’s a harbinger for the coffee industry, and a sign of the seriousness of its adaptation challenge: climate change is happening now, and it is happening fast. Remaking the complex system of trees, plants and wildlife that allow for coffee to thrive in a particular place takes careful consideration over an extended period of time. “Changes we make today,” says Peter Läderach, a climate-change specialist at the Colombia-based International Center for Tropical Agriculture, “may only be yielding fruits in five or 10 years.”

And no matter how much money the industry pumps into research, or how many boots companies put on the ground for retraining, the future of coffee remains at the mercy of a global population that continues to pump greenhouse gases into the atmosphere. Average temperatures are expected to rise by more than 5.5°F by 2100 even if countries follow through on their commitments to reduce global warming, according to data from the U.N. Environmental Programme. That’s far short of the U.N. goal of keeping temperature rise below 3.6°F.

All this has stark implications for the future of coffee. Which may be why Schultz, back at the Starbucks farm, segues unprompted into a discussion of government policy as we chat in a conference room overlooking the farm. He tells me that the U.S. needs to work to mitigate climate change and return to the Paris Agreement, which the Trump Administration announced in 2017 that it would leave. “We have to remove ourselves from the politics,” he says, “and do everything we can to preserve and enhance our industry and our company.” (Schultz, who is often discussed as a potential Democratic presidential candidate, stressed that he remains a private citizen despite at times sounding ready for the campaign trail.)

As we leave the Starbucks farm, Bogantes Vargas, the daughter of a coffee farmer, points out the old coffee plantations that have closed as a result of years of water shortages. Some have been converted into resort homes for foreigners. Others lie abandoned. The fields, lush in some places but brown in others, are a reminder that Schultz, the coffee industry and the authorities charged with stopping climate change need to move fast.