WEATHERING
THE STORM

Tom Blackwall and Chrishanth Ajitkumar explore how buyers can
navigate the increasingly volatile coffee and tea markets

The Big Idea:

The impacts of climate change are already being felt by growing communities, but the effects are increasingly reverberating down the supply chain. To weather climate-driven market volatility, tea and coffee buyers should take a long-term approach, by securing diversified supply networks, enhancing traceability and risk monitoring, and investing in supplier resilience.

WEATHERING THE STORM

Climate change is no longer a distant threat — it’s a daily reality for millions of farmers who grow the world’s tea and coffee.

Tea and coffee - deeply sensitive to climate - rely on consistent growing conditions, which are becoming increasingly rare. This is not only a major threat to growing communities but is also wreaking havoc in supply chains and leading to unprecedented market volatility that is only set to intensify over time, sending shockwaves across supply chains.

How climate change is impacting coffee supply chains

Coffee prices have been a rollercoaster over recent years. Between 2021 to 2025, the coffee world suffered a cumulative 996m kg deficit where, due to extreme weather events, supply has been unable to keep up with demand. From May 2021 to May 2025, the New York Arabica market increased 188% as droughts and high temperatures in Brazil (which accounts for 38% of world coffee production) had a dramatic negative impact on the prospects for upcoming harvests. Meanwhile, a drought in Vietnam pushed Robusta prices 262% higher during the same time period. The net result has been higher costs for brands and operators buying the coffee, and consumers feeling the pinch as well. While consumers have long seen coffee as an inflation-resistant treat, if prices continue to rise, this could have a long-term impact on demand.

How climate change is impacting tea supply chains

While the volatility of tea markets is less obviously dramatic than in coffee, climate change is having a similar impact. Increasingly unstable weather in the form of rising temperatures, heavy rainfall and drought is leading to shrinking growing regions and declining yields, and is also affecting quality. In fact, the Ethical Tea Partnership estimates that, by 2050, optimal tea-growing areas could decline by 26.2% in Kenya, 14% in Sri Lanka and 4.7% in China.

Rising temperatures, erratic rainfall,
and the spread of pests and diseases are disrupting production and lowering crop quality. This is jeopardizing harvests and threatening the long-term viability of coffee-growing communities that rely on stable ecosystems and predictable weather.”

Jeisson Alonso Quintero, Expocafe, Colombia

As a result of climate change, we have gone through several periods of drought, during which tea production has decreased in yield, significantly affecting the quality of the leaf.”

Anibal Rujodski, Tea Farmer, Misiones, Argentina

The inevitable consequence is that tea prices will become ever more volatile, with higher production costs and quality degradation potentially reducing availability, increasing competition and posing quality and regulatory risks.

The human cost of climate change

The human cost of climate change is inextricably bound up in its economic and supply-chain impacts. In both tea and coffee, climate change is having an enormous impact on the millions of people who rely on production for their livelihoods. The challenges posed by climate change not only threaten yield and quality, but also the economic sustainability of tea and coffee production as a whole, creating widespread insecurity for smallholder farmers. Adapting to climate change can be costly, and its impacts are therefore felt most severely by the most deprived communities. Joining together as a global industry, to ensure we are supporting and investing in these communities, isn’t only the right thing to do, it’s the only way we can protect the economic prosperity of our industry for the long-term.

Three ways brand owners and operators can weather the volatility

With market volatility here to stay due to climate change, how can brand owners and operators weather the storm? The answer lies in taking action today, for the beverages of tomorrow.

Here are three strategies to consider:

1. Explore long-term contracts and hedging. Work with a supplier who has the expertise and supply network to help you navigate market volatility. This might involve buying at the right time, establishing long-term contracts, and diversifying your supply network. As markets grow more and more volatile, it’s always a good idea not to put all your eggs in one basket.

2. Enhance traceability and risk monitoring. Does your current supplier have a robust, publicly stated approach to Supplier Risk Management, supply chain transparency and climate change mitigation? If not, now’s the time to review. Having a strong understanding of your climate-risk profile will support you to make strategic decisions about your supply chain.

3) Invest in supplier resilience today, and tomorrow. With the impacts of climate change already being felt, it’s critical the industry finds ways to empower growing communities to sustainably solve these challenges, and to offer economic security. This might look like paying premiums, investing in climate-change-specific initiatives, or establishing long-term contracts. Doing so will help to mitigate the immediate impacts and how they reverberate down the supply chain, putting long-term solutions in place.

How Finlays is Addressing Climate Change

With over 275 years in the beverage industry, Finlays sees climate resilience as essential to business success. That’s why our long-term strategy, Sustainable Future 2030, is science-led, collaborative, and regenerative, and aligns with a 2040 net-zero goal.

The human cost of climate change is inextricably bound up in its economic and supply-chain impacts.

Tom Blackwall & Chrishanth Ajitkumar

Key to this is our Supplier Relationship Management (SRM) program, which identifies climate risks and strengthens supply-chain resilience. By working closely with suppliers and using data-driven tools, we help map vulnerabilities such as changing rainfall and pest pressures, and co-develop mitigation strategies like regenerative farming, soil and water conservation, and crop diversification. This not only strengthens the adaptive capacity of suppliers but also embeds climate resilience into sourcing decisions, ensuring long-term supply continuity and supporting producer livelihoods.

Our approach centres on scientific research into climate-resilient tea and coffee varieties; investing in collaborative platforms such as World Coffee Research to share innovation; data and traceability to guide environmental decisions; and regenerative agriculture to restore ecosystems, sequester carbon, and improve soil health.

Climate change is no longer a distant threat - it’s a daily reality for millions of farmers who grow the world’s tea and coffee.”

While climate change poses an existential challenge to the beverage industry, there is a clear way forward.”

The pathway to resilience

While climate change poses an existential challenge to the beverage industry, there is a clear way forward.

Nahuel Tunon, Head of Sustainable Sourcing at The Fairtrade Foundation explains, “Despite steep climate challenges facing tea and coffee sectors, there is a promising pathway to resilience. Producers are already beginning to adopt innovative practices – such as agroforestry, climate-resilient crop varieties, and improved soil and water management.

Tea and coffee are not only everyday staples but also the economic backbone for millions worldwide. Building resilient supply chains requires investing in producer organizations and linking local farmer expertise with global climate insights, creating a virtuous cycle where secure incomes drive innovation and safeguard crop quality, biodiversity, and human health."

The final word from tea and coffee growers:

Jeisson Alonso Quintero, Coffee Farmer in Colombia

“Investing in farmer training, access to sustainable technologies, and transparent value chains enables producers to adapt while contributing to broader environmental goals. Equally important is ensuring fair prices and long-term partnerships with buyers who value sustainability. Ultimately, protecting the future of Colombian coffee means addressing climate change – not just as a risk, but also as a catalyst for transformation toward a more sustainable, inclusive, and resilient coffee sector.”

Anibal Rujodski, Tea Farmer in Misiones, Argentina

“Thanks to the support of Finlays, which provides us with training and assistance, we learned how to leverage green cover and protect native forests to mitigate climate change. They also cover the costs of implementing and certifying the Rainforest Alliance environmental standard, allowing us to continuously improve our crops”

Tom Blackwall

Head of Raw Materials, Finlays

Chrishanth Ajitkumar

Global Tea Manager, Finlays