{"id":25173,"date":"2017-11-15T20:13:03","date_gmt":"2017-11-16T01:13:03","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/blue-bottle-coffee-riding-the-third-wave\/"},"modified":"2017-11-15T20:13:03","modified_gmt":"2017-11-16T01:13:03","slug":"blue-bottle-coffee-riding-the-third-wave","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/blue-bottle-coffee-riding-the-third-wave\/","title":{"rendered":"Blue Bottle Coffee: Riding the \u201cThird Wave\u201d"},"content":{"rendered":"

Oakland-born and San Francisco-raised, Blue Bottle is part of the third wave of coffee: hip, sustainable, and free trade. In September 2017, Nestle\u2014the 150-year-old Swiss food and beverage conglomerate\u2014purchased a majority stake in Blue Bottle Coffee at a rumored price tag of $500 million. Along with the new asset, Nestle acquired all the responsibilities associated with the third wave: improving their supply chain, managing concerns of self-proclaimed coffee connoisseurs, and addressing the effects of climate change within the coffee production industry. Conversely, Blue Bottle Coffee now has the opportunity, resources, and–arguably–responsibility to walk the talk of environmental sustainability.<\/p>\n

Scientists believe that within the next 30 years, major coffee-producing regions around the globe will experience the debilitating effects of climate change. Many farms from which Blue Bottle sources its coffee are located in poor, equatorial nations such as Brazil, Vietnam, Colombia, Indonesia, and Ethiopia. Coffee farmers in these countries are already battling unpredictable weather patterns and extreme climate conditions [1]. Climate change is a source of concern for Blue Bottle Coffee and Nestle for obvious reasons. As more countries experience weather volatility and extreme climate conditions, there will be inevitable strains on coffee production processes [1]. Additionally \u201cresearch suggest that the incidence of pests and diseases such as coffee berry borer, leaf miner, nematodes, coffee rust and others will increase as temperatures rise. The consequent need for more control will make coffee production both more complicated and expensive\u201d [2]. As these regions face the consequences of rising temperatures, water shortages, and intense climate conditions, Blue Bottle and Nestle will need to innovate and educate farmers, distributors, and other stakeholders in their supply chains.<\/p>\n

Promote sustainable coffee production practices<\/strong>
\n<\/em>In many coffee-producing regions, farmers utilize shade growing techniques. Shade grown coffee plants are cultivated under a canopy of trees, promoting symbiotic relationships between organisms. Many coffee producers are replacing this environmentally friendly practice with sun cultivation techniques to significantly increase yield [2]. This change in cultivation technique promotes deforestation and increased usage of pesticides and water, leading to soil erosion and loss of key organisms [2].<\/p>\n

Nestle has attempted to address these and other issues through The Nespresso AAA Sustainability Program. The AAA Sustainability Program, a collaboration between Nestle and the Rainforest Alliance, was founded in 2003. It currently supports 40,000 farmers in cultivating coffee more sustainably through education and innovative practices [5]. The AAA Sustainability Program is based on \u201csocial and environmental standards developed by the Sustainable Agriculture Network (SAN).\u201d These standards include measures to promote soil and water conservation, integrated waste management, ecosystem conservation, and wildlife protection. Nestle, by 2020, hopes to source over 80% of its coffee from farmers and cooperatives that participate in the AAA Sustainability Program [5]. Blue Bottle Coffee must take advantage of the AAA Sustainability Program and push Nestle to continue innovating as the it expands across the country [4].<\/p>\n

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Leverage farmers\u2019 cooperatives to meet sustainability standards<\/strong>
\n<\/em>Blue Bottle Coffee primarily imports single origin coffee. Their website describes single origin as follows:<\/p>\n

\u201cIn the simplest terms, a single origin is coffee defined by its provenance. We can trace the coffee back to one farm, farmer, season, harvest, or processing method\u2026a single origin is always rooted to a specific place and is as unadulterated as coffee can be.\u201d [3]<\/em><\/p>\n

Although Blue Bottle tends to focus on the aesthetic value of single origin coffee, it has many tangible benefits. Blue Bottle can build strong relationships with farmers and cooperatives and gain insight into farming practices implemented abroad. This provides Blue Bottle with immense influence. As they continue to \u201cnurture long-lasting relationships with farmers\u201d, they can in turn invest in education and promote sustainable coffee cultivation practices [3].<\/p>\n

Additional opportunities for Blue Bottle Coffee<\/strong>
\n<\/em>As Blue Bottle and Nestle realize synergies in their supply chains, it will be imperative that Blue Bottle remains true to the standards on which its brand was born: a transparent supply chain and a propensity towards environmental sustainability. Blue Bottle should participate in growing efforts to diversify the coffee gene pool. As rising temperatures decrease the amount of available land, Blue Bottle should invest in seed technology that can adapt to changing farmland and climate patterns [1]. Blue Bottle must align with organizations such as World Coffee Research that are developing new technologies to mitigate climate change.<\/p>\n

Challenges & concerns<\/strong>
\n<\/em>As Blue Bottle Coffee continues to expand under Nestle’s majority ownership, will it be able to maintain its independence and environmental sustainability standards? Additionally, as demand for coffee increases in new markets, how will major players in the coffee industry stay competitive and maintain rigorous environmental standards across the globe? Is it possible to do both effectively? [WC: 777]<\/p>\n

Citations<\/p>\n