Key Takeaways
- Starbucks announced that it has added two Central American “innovation farms” to its coffee bean sourcing network.
- The farms, in Guatemala and Costa Rica, are part of Starbucks’ plans to protect its supply chain from the growing effects of climate change, which can lead to increased prices for consumers.
- The coffee giant said it plans to invest in more farms in Africa and Asia in the future.
Starbucks (SBUX) added to its efforts to protect its supply chain from the effects of climate change Thursday, announcing the acquisition of two new Central American “innovation farms.”
The coffee giant, which said it buys 3% of the world’s coffee, noted the farms in Costa Rica and Guatemala will focus on growing hybrid varieties of coffee beans at different elevations and soil types, which Starbucks says “is a critical step in the research of new genetic material.”
Starbucks Aims ‘To Help Farmers Mitigate the Impacts of Climate Change’
Starbucks, which EVP of Global Coffee and Sustainability Michelle Burns said works with more than 450,000 farms that grow Arabica coffee, plans to share the information it learns about developing disease-resistant coffee with other producers.
“Our promise to those farmers and their communities is that we will always work to ensure a sustainable future of coffee for all,” Burns said. “Our solution is to develop on-farm interventions, share seeds, research and practices across the industry to help farmers mitigate the impacts of climate change.”
Climate change has made coffee more difficult to grow by shifting temperatures and rain patterns, which can reduce supply and increase prices for consumers. Starbucks said it has plans to invest in more farms across Africa and Asia as it works to grow its “coffee innovation network.”
New Starbucks Chief Executive Officer (CEO) Brian Niccol, who took over the top job last month, faces issues including recent struggles in the U.S. and China, and pressure from activist investors to improve sales and its stock price. Starbucks shares, which fell about 1% to $95.62 Thursday morning, are little changed on the year.