More than a decade ago, Starbucks (NASDAQ:SBUX) bought its first coffee farm, in Costa Rica. Now the coffee giant has added two more to its portfolio.
The Seattle-based company said Thursday that it’s invested in another farm in Costa Rica and its first in Guatemala in the hopes of getting closer to its goal of protecting its coffee supply from climate change.
Rising temperatures, frosts in Brazil, three consecutive years of La Nina and other extreme weather have been hurting coffee production in recent years, putting pressure on supply. For Starbucks, which buys 3% of the world’s coffee, the shortages can mean scrambling to find Arabica beans — and higher prices for its customers. Consumer coffee prices have risen 18% over the last five years as of August, according to the Bureau of Labor Statistics.
“Frosts in Brazil have already impacted volumes of up to 50%, so we can have really severe impact in terms of product availability, and that is more and more regular in the whole Coffee Belt,” said Roberto Vega, Starbucks vice president of global coffee agronomy, research and development and sustainability.
The Coffee Belt refers to the equatorial region with the ideal conditions to grow coffee beans.
SBUX shares faded 65 cents to $95.84.