{"id":21428,"date":"2017-11-13T15:16:07","date_gmt":"2017-11-13T20:16:07","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/starbucks\/"},"modified":"2017-11-13T15:16:07","modified_gmt":"2017-11-13T20:16:07","slug":"starbucks-how-to-save-our-coffee-from-climate-change","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/starbucks-how-to-save-our-coffee-from-climate-change\/","title":{"rendered":"Starbucks: How to Save Our Coffee from Climate Change"},"content":{"rendered":"

Coffee Tree is Naive<\/strong><\/p>\n

The coffee tree is notorious for being picky about its climate condition. It is a tropical evergreen that only grows between Tropics of Cancer and Capricorn where the average temperature is 15 to 24\u00baC, and also requires annual precipitation of 1,500mm to 3,000mm [1]. The increase in average temperature together with unprecedented weather patterns have deteriorated the growing condition, resulted in lower quality coffee, increase in diseases such as the coffee leaf rust, decrease in production yield, and most importantly, shrink in suitable land for coffee cultivation. Globally, it is estimated that 50% of the land currently used to grow coffee will become unsuitable for coffee production by 2050, resulting in drop in quantity and rise in prices [2].<\/p>\n

Why Climate Matters to Starbucks<\/strong><\/p>\n

Starbucks is one of the largest global coffee chain that operates over 25,000 stores worldwide, and in 2015 purchased 550 million lbs. of coffee bean, which accounts for approximately 5% of the coffee bean demands in the world [3] [4]. As coffee bean accounts for majority of the ingredients used at Starbucks, impact of climate change on coffee bean production is threatening Starbucks\u2019s supply chain and its business prospects in long term.<\/p>\n

Starbucks\u2019s Approach<\/strong><\/p>\n

Knowing the threat is approaching day by day, management of Starbucks has been taking number of actions from different angles to not only alleviate the impact, but also adapt to the climate change.<\/p>\n

First, Starbucks has been directly tackling the roots of the climate change \u2013 emission of greenhouse gas. The company has recently installed Energy Management Systems in 6,000 stores to optimize heating and cooling system to conserve energy [5]. The company has also been an active purchaser of renewable energy, achieving the goal of purchasing the renewable energy equivalent to the energy used at operating stores worldwide, and subsequently becoming top ten purchaser of renewable energy in the U.S [4]. At the same time, the company also targeting to reduce the energy consumption by 25% in comparison to 2008 by promoting innovation in store and equipment design. As for 2015, the company has only achieved reduction by 4.3%, given increase in number of customers, together with increase in food consumption. [3].<\/p>\n

Second, Starbucks has taken adaptation approach to climate change as well. In 2013, the Company purchased a 240-hectare coffee farm in Costa Rica to experiment coffee-growing practices and test coffee tree that survive under warmer temperature [6]. To accelerate the movement, the company started Every Bag Commitment campaign in 2015, not only to plant improved tree in Central America for every bag of coffee bought in the U,S. to combat the widespread coffee leaf rust, but also to provide financial support to farmers impacted by the disease to help them maintain their business [6].<\/p>\n

Lastly, Starbucks has not only been passively reacting to climate change, they have been trying to actively change the society\u2019s mindset about climate Change. Along with other consumer-facing companies, the company became the founding member of Business for Innovative Climate and Energy Policy, to encourage the government to take stronger measures and legislative actions to climate change [7]. It also provides the member companies with the knowledge to effectively engage with government on energy policies.<\/p>\n

What Should Starbucks Do? <\/strong><\/p>\n

While Starbucks has been taking numerous actions to counter the climate change, there are additional measures the company should take to better manage its global supply chain. First, Starbucks needs to strengthen its tie with government, and educate them to ensure it takes the correct approach towards the climate change. It is clear from President Trump\u2019s decision to withdraw U.S. from Paris Agreement that, the government is neglecting the environment. Starbucks must prevent such legislative actions from occurring in the future.<\/p>\n

Starbucks is currently focusing on improving the coffee trees, so it could adapt to the changing climate and temperature. However, over the medium-term, Starbucks should launch a program to conduct research to seek for areas that will newly become suitable for coffee production post climate change. Once such area is spotted, it could initiate the negotiation with local government and farmers to possibly converting the land for coffee use in the future to better accommodate for the climate change.<\/p>\n

One concern which Starbucks is facing is how to collaborate with its stakeholders to tackle the climate change together. As the industry leader, Starbucks is taking number of costly actions on its own to alleviate the impact. However, no matter how influential Starbucks is, the social inertia limits its ability. It is impossible for Starbucks to make changes on its own \u2013 the company needs support from rest of its supply chain partners, shareholders, consumers, government, and rival coffee chains. What should Starbucks do with each stakeholder to gain their buy-in to combat the climate change together?<\/p>\n

 <\/p>\n

Word Count<\/strong><\/p>\n

791<\/p>\n

 <\/p>\n

Sources<\/strong><\/p>\n

[1] “Where Coffee Grows”, Coffee and Health from the Institute for Scientific Information of Coffee<\/em> (2017),<\/p>\n

http:\/\/www.coffeeandhealth.org\/all-about-coffee\/where-coffee-grows\/<\/a><\/p>\n

[2] Byrnes, N., “Starbucks Responds to Climate Change, with Mixed Results”, MIT Technology Review<\/em> (May 9, 2016),<\/p>\n

https:\/\/www.technologyreview.com\/s\/601404\/starbucks-responds-to-climate-change-with-mixed-results\/<\/a><\/p>\n

[3] “Global Responsibility Report 2015”, Starbucks<\/em>\u00a0(May 24, 2016),<\/p>\n

https:\/\/globalassets.starbucks.com\/assets\/ee8121c1a6554399b554d126228d52ed.pdf<\/a><\/p>\n

[4] “Historical Data on the Global Coffee Trade”, International Coffee Organization<\/em> (2017),<\/p>\n

http:\/\/www.ico.org\/new_historical.asp<\/a><\/p>\n

[5] “Water and Energy”, Starbucks<\/em> (2017),<\/p>\n

https:\/\/www.starbucks.com\/responsibility\/environment\/water-and-energy<\/a><\/p>\n

[6] “Starbucks Expands $70 Million Ethical Sourcing Program With New Global Agronomy Center”, Business Wire<\/em> (March 18, 2013),<\/p>\n

http:\/\/www.businesswire.com\/news\/home\/20130318006738\/en\/Starbucks-Expands-70-Million-Ethical-Sourcing-Program<\/a><\/p>\n

[7] “Climate Change”, Starbucks<\/em> (2017),<\/p>\n

https:\/\/www.starbucks.com\/responsibility\/environment\/climate-change<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Do not ever take your cup of coffee for granted<\/p>\n","protected":false},"author":9545,"featured_media":21429,"comment_status":"open","ping_status":"closed","template":"","categories":[1218,614,612],"class_list":["post-21428","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-climate-change","category-coffee","category-starbucks","hck-taxonomy-organization-starbucks","hck-taxonomy-industry-food-and-beverage","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nStarbucks: How to Save Our Coffee from Climate Change - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/starbucks-how-to-save-our-coffee-from-climate-change\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Starbucks: How to Save Our Coffee from Climate Change - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Do not ever take your cup of coffee for granted\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/starbucks-how-to-save-our-coffee-from-climate-change\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/140606-strochlic-coffee-tease_qqytzr.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/starbucks-how-to-save-our-coffee-from-climate-change\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/starbucks-how-to-save-our-coffee-from-climate-change\\\/\",\"name\":\"Starbucks: How to Save Our Coffee from Climate Change - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/starbucks-how-to-save-our-coffee-from-climate-change\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/starbucks-how-to-save-our-coffee-from-climate-change\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/140606-strochlic-coffee-tease_qqytzr.jpg\",\"datePublished\":\"2017-11-13T20:16:07+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/starbucks-how-to-save-our-coffee-from-climate-change\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/starbucks-how-to-save-our-coffee-from-climate-change\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/starbucks-how-to-save-our-coffee-from-climate-change\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/140606-strochlic-coffee-tease_qqytzr.jpg\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/140606-strochlic-coffee-tease_qqytzr.jpg\",\"width\":2560,\"height\":1707,\"caption\":\"Costa Rican coffee farmer Isidro Corrales shows coffee beans affected by a tree-killing fungus known as roya in Perez Zeledon July 12, 2013. 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