Starbucks adds two new coffee farms to address supply issues

Starbucks Corporation (NASDAQ:SBUX) announced on Thursday an expansion of its collaborative coffee innovation network through the addition of farms located in Guatemala and Costa Rica. Future farm investments in Africa and Asia are also planned.

The new farms in Costa Rica and Guatemala will both study hybrid coffee varieties under different elevations and soil conditions, which is a critical step in the research of new genetic material. The farm in Costa Rica, located next to Hacienda Alsacia, will also be designed to explore the use of mechanization, drones and other technologies to help support labor availability challenges that farmers in Latin America are facing. In Guatemala, one of Starbucks most important origins, the farm in the Antigua Valley will replicate a smallholder farming design with conditions that mirror challenges that many farms face today.

The company said the learning on the new farms aims to find solutions to increase productivity on farms, support increased profitability for farmers and build climate resilience.

Starbucks (SBUX) noted that it currently works with more than 450,000 farms that grow the highest quality Arabica coffee in the world. “

“Our promise to those farmers and their communities is that we will always work to ensure a sustainable future of coffee for all. Our solution is to develop on-farm interventions, share seeds, research and practices across the industry to help farmers mitigate the impacts of climate change.”

Starbucks (SBUX) buys about 3% of the world’s coffee, sourcing and roasting only Arabica coffee beans, a variety known for its rich and complex flavors. The coffee industry has seen rising temperatures cause drought, coffee leaf rust disease, and other related climate challenges that are impacting the availability, quality, and taste of coffee as it is known today.

Shares of Starbucks (SBUX) fell 0.3% in premarket trading on Thursday.