Fall is always a good time to create new habits, including coffee consumption. And coffee chains are always looking for ways to get you to drink their java. But the coffee industry faces big changes.
For restaurant operators, there’s no better hook than coffee to get repeat business. Most recently, many chains used International Coffee Day (Oct. 1) as an excuse to offer coffee at a discount or for free.
But offering free coffee may soon not be an option for businesses, as the result of a number of factors.
Coffee demand around the world is shifting. Europe still accounts for almost one-third of the coffee consumed worldwide. And more than 90 per cent of adult Canadians drink coffee. But China has doubled its consumption in just the last five years.
In addition, several recent studies suggest coffee is a healthy choice, ramping up consumption further.
So as demand grows, more pressure is put on coffee-producing countries.
Coffee is the most traded commodity in the world after oil. It’s grown in more than 60 countries and provides a living for 25 million families. Brazil is by far the largest producer, followed by Vietnam and Colombia.
And 2017 could be a record year: world production is expected to exceed 153 million 60-kg bags of coffee, according to the United States Department of Agriculture. Coffee futures are down as a result but we are far from seeing a bumper crop. Production has been modestly shifting over the past few years.
With good rainfalls in Brazil and favourable weather patterns in other countries, nature has so far spared coffee growers. But their luck may be running out.
Despite not being a staple in any diet, coffee is big business. The sector is worth over US$100 billion at the farmgate and about US$10 billion to the retail sector.
But there’s growing expert consensus that climate change will severely affect coffee crops within the next 80 years. By 2100, more than 50 per cent of the land used to grow coffee will no longer be arable. Higher temperatures and shifting rainfall patterns will make the land where coffee now grows unsuitable for its production. According to the National Academy of Sciences, in Latin America alone more than 90 per cent of the land used for coffee production could suffer this fate. It’s estimated that Ethiopia, the sixth largest coffee producer in the world, could lose more than 60 per cent of its production by 2050. That’s only a generation away.
As climate conditions become critical and production falls, the livelihoods of millions of farmers will be put at risk.
The circumstances could be exacerbated by other factors, like pests and diseases. With climate change, pest management and disease control become serious issues for farmers who can’t afford to protect their crops. More than 80 per cent of coffee growers are peasant farmers.
Pests and diseases migrate to regions where temperatures allow survival. Most farmers won’t be ready and many will simply choose to grow other crops less vulnerable to climate change. Others may try to increase their coffee production but the quality will almost certainly be compromised.
Higher temperatures will also affect the quality of coffee. Higher-quality coffee is grown in regions where the climate allows the beans to ripen at just the right time. Arabica coffee (75 per cent of the world’s production), for example, is always just a few degrees away from becoming sub-par. This will undoubtedly affect coffee prices and quality for us all.
Thanks to the “Starbucks effect,” the quality of the coffee we get across the board is much superior to that of just a decade ago. But good beans may become more difficult to procure in the future.
Coffee futures are now valued at $1.28 per pound but the record price of $3.39 per pound, set in 1977, could return in just a few years.
The retail coffee wars we’re now experiencing aren’t just about gaining market share and hooking consumers on java. They’re also about how we connect with a crop that’s under siege from climate change.
But if we don’t curtail climate change, we could be forced to alter our relationship with coffee.
As producing countries seek eco-friendly methods and embrace sustainable practices, Canada could be the next country where coffee is grown, not just roasted. Within a decade, with climate change and new technologies, producing coffee beans could be quite feasible here. If Elon Musk thinks we can start colonizing Mars by 2022, why can’t we grow coffee in Canada?
So if a coffee chain offers you free coffee, take it. Coffee could soon enough be a luxury (okay, you’ll probably still find free coffee, but not the good stuff you get now).
Sylvain Charlebois is Senior Fellow with the Atlantic Institute for Market Studies, dean of the Faculty of Management and a professor in the Faculty of Agriculture at Dalhousie University, and author of Food Safety, Risk Intelligence and Benchmarking, published by Wiley-Blackwell (2017).
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