"Boss, the coffee tastes different"... 'Crispy Peach' instead of white peach, trout instead of flatfish [1 Degree Economy] ②

Coffee bean prices surge 80%... Ethiopia replaces Brazil
Trout instead of flatfish, Chungju instead of Cheongdo... Even production regions are changing
Turning crisis into opportunity with data
Smart agriculture is the key... national strategies must also change

The global climate crisis is reshaping even the landscape of our dining tables. In major agricultural regions, unpredictable weather is leading to poor harvests, and companies are busy reorganizing their supply chains. "Climate management," which now determines not only production costs but also the very survival of companies, has emerged as a key concept in the food industry.

A cafe employee is grinding coffee beans.

According to industry sources on June 2, Brazil, the world's largest producer of Arabica coffee beans, saw its output drop by 20% last year due to the worst drought and wildfires in 70 years. Vietnam, a major producer of Robusta beans, also experienced a more than 40% decrease in harvests as a result of ongoing drought, heatwaves, and typhoon damage. As a result, the price of Arabica beans on the New York ICE Futures Exchange soared by 83.7% in one year, while the price of Robusta beans on the London exchange rose by 36.5%. The increase in coffee bean costs has led domestic companies to raise their prices as well.

Coffee bean prices surge 80%... Ethiopia replaces Brazil

Korean companies are also working on countermeasures. One domestic company, faced with soaring Brazilian bean prices, searched extensively for new sourcing options. The company selected Ethiopia as an alternative sourcing country and is currently conducting its first transactions with local suppliers. Ethiopian beans, priced at $5?6 per kilogram, are more affordable than Brazilian beans, which cost $8?9 per kilogram, offering a competitive edge in pricing.

Similarly, as cocoa production in Cote d'Ivoire and Ghana declined due to climate impacts, companies turned to Ecuador. Ecuador's cocoa exports increased by 11.7% last year, thanks to sustainable farming practices and quality control.

Large food service companies are also accelerating supply chain restructuring. Samsung Welstory diversified its olive oil import sources from Italy to Spain and Turkiye, and replaced Philippine pineapples, which suffered production disruptions due to El Nino, with Thai pineapples. The company is also considering importing bananas from Vietnam in addition to the Philippines. A Samsung Welstory representative emphasized, "Climate risk is not just a matter of cost, but a question of supply chain sustainability."

Trout instead of flatfish, Chungju instead of Cheongdo... Even production regions are changing

This supply chain restructuring is not limited to imported food ingredients. Changes are also underway in domestic food distribution. When high water temperatures damaged flatfish and rockfish farms, Emart began sourcing trout raised at inland cold-water farms in Geumsan, Chungnam. Trout, which thrive in water temperatures of 10?15 degrees Celsius, are less affected by climate change. As domestic hairtail catches declined, Emart also increased imports of hairtail from Senegal. Changes are being seen in peach varieties as well. Emart is expanding its offering of "Crispy Peach" (Asaki), which is more resistant to summer heatwaves and monsoons, as an alternative to the traditional yellow and white peaches.

Lotte Mart relocated its raspberry sourcing from Cheongdo, North Gyeongsang Province, to Chungju, North Chungcheong Province, to avoid the effects of high temperatures. The new location, near the high-altitude Woraksan Mountain, offers a climate with large temperature differences between day and night. The company also secured 100,000 watermelons two months in advance to prepare for early heatwaves.

Rising sea temperatures have also put seaweed farming at risk. In response, Daesang has established a land-based aquaculture facility in Goheung, Jeonnam, and begun trial production. Unlike traditional wintertime ocean farming, land-based aquaculture enables year-round production. Daesang has also identified cultured meat as a future growth engine. Cultured meat is attracting attention as an eco-friendly technology, as it dramatically reduces greenhouse gas emissions, land use, and water consumption compared to conventional meat production.

Turning crisis into opportunity with data

Weather forecasting has become more than just a reference?it is now a source of competitive advantage for companies. To adapt to climate change, companies need not only weather predictions but also procurement strategies based on data.

The agri-food supply chain platform "Tridge" is a leading startup valued at 3.6 trillion won. Tridge analyzes data on prices, weather, and trade flows for more than 6,500 items worldwide using artificial intelligence (AI), providing supply chain information. Over 590,000 companies in more than 200 countries use the platform, which has handled a cumulative total of 12.8 billion transactions. Local staff stationed in over 40 countries support farm inspections, supplier verification, logistics, and customs clearance, enabling "data-driven trade."

Shin Hosik, CEO of Tridge, stated, "Weather changes are no longer temporary fluctuations but structural risks shaking the entire global supply chain," and emphasized, "The food and beverage industry is directly exposed to climate change, making 'adaptation' strategies essential." He added, "Currently, more than 90% of global climate finance is focused on carbon reduction, and technological responses to the procurement crises faced by companies are still lacking. In an era where supply chain crises have become the norm rather than the exception, procurement strategies must be solved with data."

Smart agriculture is the key?national strategies must also change

The solution is being sought from the very foundation of agricultural production methods. According to a recent report by the Korea Rural Economic Institute (KREI), smart farms in Korea recorded an increase in profits of about 127.6 billion won in 2023 alone, and the production inducement effect, including related industries, reached 710.4 billion won. Smart farms, which can ensure stable productivity and quality control, are drawing attention as climate-resilient agriculture that is less affected by extreme weather events such as heatwaves and heavy rainfall. However, some point out that, since the initial investment is high and it takes a long time to turn a profit, consulting at the farm level, diversification of crops, and training of specialized personnel must be implemented in parallel.

While smart agriculture is driving changes in production methods, food security is a national strategy to protect that foundation. According to KREI, Korea's grain self-sufficiency rate is only 20.2%, and for legumes, it is just 8.8%. In contrast, Japan has a grain self-sufficiency rate of 31.1% and the United States 72.9%; for legumes, the rates are 10.4% and 52.0%, respectively. KimSanghyo, a research fellow, emphasized, "In this era of climate crisis, trade crises are directly linked to food crises," and added, "Major countries such as the United States, China, and Japan have already begun strategic shifts, including restricting grain exports, expanding reserves, and strengthening protections for domestic agriculture."