Interview with Sylvain Charlebois
Fall is always a good time to create new habits, and coffee chains know this. These days, they are desperately trying to find any excuse to get you to drink their java. Many chains are using National or International Coffee Day as a reason to offer their coffee at a discount, or even for free. For restaurant operators, there is no better hook than coffee to get repeat business. But given what is on the horizon, offering free coffee may no longer be an option for businesses.
Coffee demand around the world is shifting. Europe still accounts for almost one third of the coffee consumed worldwide, but China has doubled its consumption in just the last five years. As for Canada, numbers remain robust, as more than 90 per cent of adult Canadians drink coffee. Another probable factor is the fact that several recent studies suggest coffee is a healthy choice.
Coffee is the most traded commodity in the world, after oil. Coffee is grown in more than 60 countries and allows 25 million families worldwide to make a living.Despite not being a staple in any diet, coffee is big business. But there is growing consensus among experts that climate change will severely affect coffee crops within approximately the next 80 years. By 2100, more than 50 per cent of the land used to grow coffee will no longer be arable. A combination of effects, resulting from higher temperatures and shifting rainfall patterns, will make the land where coffee is currently grown 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 is estimated that Ethiopia, the sixth largest producer in the world, could lose over 60 per cent of its production by 2050. This is only a generation away.
As climate conditions become critical, the livelihoods of millions of farmers are put at risk and production capacity is jeopardized. Other potential contributors to this predicted downfall are pests and diseases. These will migrate to regions where temperatures are adequate for survival, and most farmers won’t be ready. Many will simply choose to grow other crops. Others may attempt to increase their coffee production, but the quality will almost certainly be compromised.
Higher-quality coffee is grown in specific regions where the climate allows the beans to ripen at just the right time. Higher temperatures will undoubtedly affect coffee prices and quality. Thanks to the “Starbucks Effect,” the quality of the coffee we are now getting is much superior to that of just a decade ago. Good beans may become more difficult to procure in the future. Right now, coffee futures are valued at $1.28 per pound and are being exposed to downward pressures. At this rate, the record price of $3.39 per pound, set in 1977, could return in just a few years.
The coffee wars we are seeing are not just about gaining market shares and getting consumers hooked on java. They are also about how we connect with a crop that is under siege by climate change. Short of fighting climate change, we could be forced to alter our relationship with coffee. As current producing countries attempt to develop eco-friendly methods and embrace sustainable practices, Canada could be the next country where coffee is grown, not just roasted.
Within the next decade, with climate change and new technologies, producing coffee beans could be quite feasible in Canada.
So, if a coffee chain is offering free coffee, take it. It won’t be long before coffee could become a luxury. Okay, you may still be able to get free coffee, but not be the good stuff you’re getting now.
Interview with Sylvain Charlebois
Dr. Sylvain Charlebois
Dean, Faculty of Management
Dalhousie University
October 2017