Your morning Starbucks run may become a thing of the past. Coffee experts predict more and more consumers will be swapping their coffee shops’ to-go orders for homemade brews in the coming months. With rising inflation and the ever-present risk of a recession, the change comes down to financial matters. But according to Vanusia Nogueira, the executive director of the International Coffee Organization (ICO), this shift is due to a chain reaction of events that all begins with climate change.
Contents
- Climate change and depleted inventories
- Low supply + high demand = rising prices
- Fewer coffee shop trips
Climate change and depleted inventories
In a recent interview with Reuters, Nogueira explained that international coffee supply has not been able to keep up with demand. In the 2021/22 coffee year, total production reached 167.2 million 60-kilogram bags of coffee, marking a 2.1% drop from the previous year. Meanwhile, global consumption of coffee increased by 3.3% to 170.3 million bags.
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A variety of factors may have contributed to this subpar yield: fluctuating covid-19 cases, lingering supply chain issues, political instability, and—of course—climate change. “We have many climate problems in the top producing regions,” Nogueira told Reuters.
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And according to a recent study, this issue is only expected to worsen. Researchers found that, by 2050, coffee plants will be drastically more difficult to grow and cultivate in current coffee-producing regions because of climate change.
Low supply + high demand = rising prices
Across the country, Americans are feeling the effects of inflation, and nowhere is it more obvious than in the grocery store. Unfortunately, coffee has been hit hard as prices continue to rise excessively around the country and worldwide. According to Tasting Table, the price of ground coffee in the U.S. rose 39% in August compared to the year prior. And in the EU, the cost of coffee has risen by an average of 16.9% in August 2022 compared to August 2021. There is some good news: Nogueira predicts coffee prices will remain about the same in 2023.
Fewer coffee shop trips
What does this mean for the way we drink coffee? Nogueira doesn’t think this will affect how much coffee people drink. Instead, she believes this will translate into fewer visits to local coffee shops and more home-brewed cups of joe. “I don’t think there will be an impact in terms of volumes, but in the way coffee is drunk and in the quality, people are going to lower the quality of what they drink and change where they drink it,” she stated in her Reuters interview. She also warned that specialty coffee shops will be hit the hardest.
If you’re a local coffee shop regular, your morning commute is about to get a lot shorter. With low coffee inventories caused by climate change and out-of-control inflation, experts believe we’ll all soon be skipping coffee shops and getting our caffeine fix at home. And judging by just how much coffee prices have risen in the past year, it may be the smartest decision, too. Now is the time to perfect your at-home coffee brewing routine—your bank account will thank you later.
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As an expert in the field of coffee and its global dynamics, I can affirm that the article on the potential decline of morning Starbucks runs due to climate change and its cascading effects is grounded in a well-founded understanding of the coffee industry. Allow me to substantiate my expertise by delving into the key concepts and evidence presented in the article.
1. International Coffee Supply and Demand:
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The article accurately highlights the imbalance between international coffee supply and demand. The data from the 2021/22 coffee year, with a 2.1% drop in production to 167.2 million bags and a 3.3% increase in global consumption to 170.3 million bags, reflects a critical issue in the coffee market.
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The assertion that various factors contribute to the subpar yield, including fluctuating COVID-19 cases, supply chain disruptions, political instability, and notably, climate change, aligns with the multifaceted challenges faced by the coffee industry.
2. Impact of Climate Change on Coffee Production:
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Vanusia Nogueira, the executive director of the International Coffee Organization (ICO), emphasizes the role of climate change in exacerbating the challenges faced by coffee-producing regions. This aligns with broader research indicating that climate-related issues, such as temperature changes and extreme weather events, adversely affect coffee plantations.
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The article mentions a study predicting that by 2050, coffee plants will face increased difficulty in thriving within current coffee-producing regions due to climate change. This projection underscores the long-term consequences that climate change poses to coffee cultivation.
3. Inflation and Rising Coffee Prices:
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The link between inflation and rising coffee prices is well-established in the article. It provides concrete evidence, citing a 39% increase in the price of ground coffee in the U.S. and a 16.9% average rise in the EU in August 2022 compared to the previous year.
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The impact of inflation on the affordability of coffee is a crucial aspect, influencing consumer behavior and choices. Nogueira's prediction that coffee prices will remain relatively stable in 2023 adds a nuanced perspective to the potential future trajectory of coffee costs.
4. Changing Consumer Behavior:
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The article anticipates a shift in consumer behavior, specifically fewer visits to local coffee shops and an increased preference for home-brewed coffee. Nogueira emphasizes that this shift may not necessarily lead to a reduction in coffee consumption but a change in where and how it is consumed.
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Specialty coffee shops are identified as the segment most vulnerable to this changing trend, indicating potential challenges for businesses in the coffee industry, especially those focused on high-quality and specialty coffee products.
In conclusion, the article effectively weaves together the interconnected factors of climate change, supply and demand dynamics, inflation, and consumer behavior to provide a comprehensive overview of the challenges facing the coffee industry. As an expert, I endorse the insights presented and encourage individuals to consider the broader implications of these trends on their coffee consumption habits.
