Yesterday was International Coffee Day.
A day I didn’t even know existed until a few years ago.
In all fairness, International Coffee Day didn’t really even become official until 2015, after the International Coffee Organization launched it in 2015.
Today, it’s somewhat of a legitimate day of celebration with events happening all over the world.
Now before I go any further, I have to come clean: I’m a huge coffee fanatic. Some would even say snob.
I’m very particular about my coffee, just as some folks are very particular about wine.
Before I buy my beans, I want to know where they’re from, when they were harvested, how the “cherries” were processed (dry or wet method), and of course, who roasted them.
Roasting is not just a random process, you see. It’s an art form. And proper roasting, which is actually a very difficult skill to perfect, can make all the difference in the world – even if you’re working with the highest quality beans known to man.
For most folks who are more than happy with commodity beans or a Starbucks latte, this may sound absurd. But for me, coffee is one of those great joys in life. A gift from God for which I’m eternally grateful.
For me, coffee isn’t just about a morning pick-me-up. I don’t even care about the caffeine. It’s about the flavor, the texture, the body. It’s about the perfect balance of sweet and bitter. How it smells and how it feels when my serotonin receptors get a taste.
Yes, I’m that obsessed with coffee.
In fact, for a long time I even roasted my own beans. But I gave that up after I found a coffee supplier that not only had the best beans in the world, but knew exactly how to roast them properly.
Sure, I probably pay a bit more for my coffee than most folks, but it’s worth every penny.
Especially when you consider that some of the coffees I love so much may not even be around in another 50 years.
According to a recent study conducted by the Zurich University of Applied Sciences, changes in climate could slash the most suitable existing coffee lands by more than 50% by 2050.
Coffee Collapse
Coffee can’t just be grown anywhere. It requires very specific humidity and light levels. It requires very specific temperatures and rainfall.
As the climates in traditional coffee growing regions change, so does the suitability of the land for growing coffee.
We got a firsthand look at what rising temperatures in these regions can do to the coffee industry back in 2013, when a massive coffee rust crisis hit Central America, which resulted in the destruction of more than half of the planted areas in that region. It also wiped out more than 350,000 jobs.
Today, coffee rust has appeared in nearly every coffee growing region in the world, and it's becoming harder to prevent as rising temperatures actually help propagate the fungus.
But it’s not just coffee rust that’s pressuring coffee producers.
Overall, rising temperatures, extreme drought conditions in some areas and too much rainfall in others threatens the long-term sustainability of traditional coffee growing regions.
Of course, this doesn’t mean you’ll have to bid farewell to your morning cappuccino. Efforts to adapt to a changing climate are being made through various technological innovations.
For instance, Starbucks (NASDAQ: SBUX) recently announced that it has developed sIx new coffee tree varietals that can better withstand some of the more damaging effects of a changing climate – including coffee rust.
There are also a few companies that are using fermentation technologies to make a beanless coffee. One of which is Compound Foods, which last year, landed $4.5 million in funding. The company is also one of CULT Food Sciences (OTCBB: CULTF) holdings, which is currently our top food tech pick as it has exposure to the cellular agriculture, cultured meat, and precision fermentation sectors.
Some analysts have also pointed out that while some traditional coffee growing regions will see a decrease in production as a result of a changing climate, others could become more suitable for growing coffee. These would be regions that would generally be at higher elevations. Although it remains to be seen if farmers would uproot their families and businesses to new, more suitable farmland or just switch crops.
There has been no research on this, so it’s hard to know whether or not this would happen. I suspect this depends a lot on the price of coffee futures in a post climate world.
In any event, the coffee industry will undergo changes in the coming years, just as most industries that are vulnerable to the effects of climate change. How this will pan out is still anyone’s guess, but there will be opportunities for investors to capitalize on the technologies that it’ll make it possible for us to continue to enjoy what I believe is the true nectar of the Gods.
We’ll keep you posted.
