Coffee industry faces severe challenges due to climate change

Corporate leaders need to take immediate action if they hope to secure the coffee supply in the face of climate change and other global challenges, according to Rick Peyser, the former sustainability manager at Keurig Green Mountain, who gave a lunchtime talk at MIT Sloan on Dec. 3.

“Enjoy your high-quality coffee while you can, because I think over the next decade or so it’s going to be challenged,” said Peyser, who spent 27 years at Keurig working to secure the coffee supply chain by focusing on growers.

Peyser’s talk, “Coffee, Climate Change, and Corporate Social Responsibility,” was sponsored by the Sustainability Initiative at MIT Sloan in collaboration with the MIT Food and Agriculture Club. The event was part of an effort to raise awareness of sustainability in food systems, a project made possible by a donation from Alex Borschow, SB ’06, MBA ’14.

Peyser, who now serves as senior relationship manager for coffee and cocoa at Lutheran World Relief, said roughly 100 million people around the world derive the bulk of their income from coffee. A large percentage experience months of extreme food scarcity every year.

Bettering the lives of farmers in places such as Mexico, Guatemala, and Nicaragua can benefit the bottom line for coffee companies, Peyser said. He described his role at Keurig as “[investing] in the supply chain so it would have long-term resiliency.”

After he surveyed farmers and discovered how difficult they found it to feed their families, Peyser spearheaded an effort to promote income diversification and to secure supplies of clean water.

Peyser said the coffee industry today faces two unprecedented challenges: the migration of young farmers to urban areas and climate change. Since coffee is grown in some of the poorest places in the world, many young people are seeking brighter futures elsewhere. The average age of coffee farmers is over 50.

“Who will harvest the next generation of specialty coffee?” Peyser asked.

At the same time, climate change is pushing the cultivation of high-quality arabica beans to higher elevations where temperatures are cooler but the soil is not as rich. Increases in temperature and humidity have also been blamed for outbreaks of coffee rust, a fungus that has wiped out 25 to 70 percent of production in many parts of South America. (For more information on the world’s rising temperatures, read “John Sterman on UN climate change negotiations.”)

Industry action can make a difference, Peyser said, noting that two years ago he visited a South American community that had lost roughly 85 percent of its income to coffee rust, yet no one had migrated. Thanks in part to Keurig’s food security project, every home had a thriving garden, food was plentiful, and the farmers were still growing coffee.

If companies want to be in business long term, they need to be proactive in securing supplies, Peyser said.

“It’s time for a reality check for many corporations,” he said.