Food and beverage giants are actively adapting their operations to address climate challenges, with big brands like Chipotle, Dunkin’, and Jim Beam navigating hurdles like ingredient sourcing and surging energy prices.
Droughts, wildfires, floods, and extreme temperatures have raised operating costs—from increased commodity prices to damaged infrastructure to the breakdown of HVAC systems stressed by new weather conditions, reports Yahoo Finance.
Chipotle, known for its reliance on fresh ingredients, has recognized the growing uncertainty in crop availability and is focused on establishing regionally diversified, long-term supplier relationships, said CFO Jack Hartung. The chain is also managing high electricity costs as extreme heat makes it harder to keep restaurants cool.
“We’re seeing our utility costs up,” Hartung said. “And also, when you have this kind of heat and you’re putting this much pressure on your HVAC, you have breakdowns as well.”
Mark Smucker, president and CEO of J.M. Smucker—the parent company of Folgers, Dunkin’, and Café Bustelo—said climate change will alter its coffee production operations. The company has launched its own sustainability goals and is investing in the search for resilient coffee varieties capable of withstanding climate-related challenges.
When it comes to executives charged with planning at large food companies, “if they’re wise, they’re looking at how we’re having wetter wet events, drier dry events,” said U.S. National Oceanic and Atmospheric Administration (NOAA) climatologist Adam Smith. “Really, the hydrologic cycle is being amplified, which means more volatility in your baseline expectation of commodities.”
Beverage producers have their own set of concerns. Beam Suntory—distiller and producer of brands like Jim Beam, Maker’s Mark, and Suntory—relies on access to high-quality water. Weather impacts, such as droughts in the southwestern United States, have rendered some regions unsuitable for production.
Consumers will also experience the impact of climate change on food systems as certain ingredients become scarce. A recent report reveals that in the United Kingdom, more than one-fifth of popular grocery items are at risk from climate breakdown, reports The Guardian.
As a populous island nation, the UK depends heavily on food imports. Consumers have already experienced disruptions this year to supplies of tomatoes, cucumbers, lettuce, peppers, and citrus fruits, due to droughts in Spain and Morocco. The new study by Christian Aid—Cooking up a storm: The climate threat to food supply chains in UK, Germany & Italy—shows that eight countries among the 25 biggest food exporters to the UK face high climate vulnerability. That means UK consumers may struggle to find items like bananas, grapes, avocados, cashews, cocoa, peas, canned tuna, and tea in the future.
“The UK may be an island but in an ever more interconnected world, we cannot escape the damage caused by climate change,” said Christian Aid CEO Patrick Watt.
“Farmers in some of the world’s poorest countries are now struggling to cope with droughts, storms and rising temperatures,” Watt added, noting that the UK’s carbon emissions record has contributed to the climate crisis.