Coffee Supply Chain Planning under Climate Change

Coffee is a valuable crop for many tropical countries and provides an export value estimated at US$30.1 billion in 2019 worldwide. Coffee trees are climate sensitive. Published studies show that climate change is projected to have a negative impact on suitable growing areas for coffee beans, so the coffee bean production is facing a rising risk. At the same time, the consumption of coffee is increasing in recent years, especially in Asian countries. Therefore, the sustainability of the coffee industry has become a concern shared by all participants along the coffee supply chains. Decision making in arabica coffee bean cultivation, which includes long-term shade management and short-term annual management practices (e.g., fertilization management and irrigation management), and logistics is focused in this study on a global scale. Two-stage stochastic programming is adopted to minimize the total cost, including cultivation cost, roasting cost, shortage cost, and logistics cost under different climate scenarios. A case study for a global coffee beverage company is presented with data collected from both practice and literature. The arabica coffee species distribution model by citation (Ovalle-Rivera et al., 2015) shows that the suitable harvesting area will decrease due to climate change in most of the coffee growing countries by 2050. This study tries to answer the questions of whether arabica coffee yield will meet the consumption demand in the future. To increase the arabica coffee yield, medium-level shade management is a possible long-term strategy while management practices may be changed based on weather. To have a substantiable coffee supply chain, the global coffee beverage companies have programs to help coffee farmers through technical assistance and financial support. In addition, local governments may also provide support to farmers, such as educational programs, working condition improvement, and medical service.