What's Really in Your Coffee: The Uneven Fragility of Global Late Stage Capitalism
The Monday Blueprint 12.30.24 and Last Week's Market Report
My two to three coffee pot a day joyful habit is under attack on multiple fronts, and my daughter recently announced we need to boycott Starbucks because they’re stopping unions from organizing and somehow their investments are tied to the situation in Gaza. Full disclosure: Starbucks has been my long-time home brew!
Coffee isn’t the only thing under siege, of course.
I was aghast by the amount of lard my wife used to cook with in our first few years of marriage. I mean everything was cooked in lard—chicken, eggs, even grilled cheese sandwiches. Having come out of a commercial kitchen background all that lard, well I just thought was super unhealthy. She grew up on a hog farm, and her mother cooked with pork lard, so you know this is the way she learned to cook.
I was the one who introduced her to olive oil. Except right now, we’ve been married for over 25 years and olive oil has gotten expensive.
Most olive oil comes from Spain, the world's leading producer of olive oil, contributing just under half of all global production. During the 2022/2023 season, that meant Spain produced about 1.49 million metric tons of olive oil—approximately the weight of four Empire State buildings.
But also in 2023, Umair Irfan for Vox reported that “Spain experienced a searing early-season heat wave with temperatures topping 101 degrees Fahrenheit in Córdoba in the south of the country, followed up by more severe heat across the country in July and August. It led to more than 8,000 heat-related deaths, the second-highest toll in Europe behind Italy. The high temperatures worsened an ongoing drought, depleting water supplies […]. Intense wildfires ignited across the country, including the Canary Island of Tenerife and on the mainland in Gandia. The Asturias region in northern Spain suffered the single-largest wildfire in its history, torching more than 24,000 acres. Record rainfall in Toledo triggered flash floods that killed at least three people.”
The climate issues cut Spain’s 2023 autumn olive oil production in half.
Sam Meredith for CNBC reported back in May that consumers paid nearly double for olive oil and that some shops even rationed sales (the empty shelves and stockpiling bringing back Pandemic-era toilet paper vibes). Meredith warned “that if climate patterns persist, the olive oil industry could face long-term challenges affecting global supply chains."
“The climate you were born in no longer exists,” said Andreu Escrivà, an environmental scientist and author for Ayurella Horn-Muller. “Great swaths of the planet are drier [...] jeopardizing food production and water access for billions,” Horn-Muller stated.
Chocolate too has been a mainstay in my kitchen. It’s one of those ingredients that surprises you with versatility. I toss a square or two into chili—trust me, you wouldn’t think, but it adds a rich depth to that Tex-Mex spice. And don’t get me started on Hershey’s All Natural Chocolate Syrup because why drink plain milk when you can make it chocolate? It’s my wife’s go-to comfort food after a particularly bad workday. And in our house, when someone’s hormonal or just in need of a little self-care, chocolate becomes less luxury and more emergency supply.
West Africa, the heart of global cocoa production, accounts for nearly 70% of the world’s cocoa supply. Yet, the region faces mounting challenges as rising temperatures and unpredictable weather patterns disrupt the delicate balance required to grow cocoa. In Ghana and Côte d’Ivoire, two of the top cocoa producers, droughts linked to the El Niño phenomenon have left plantations parched, reducing yields and jeopardizing livelihoods.
El Niño is not the only issue. Shifting rainfall patterns and temperature extremes make cocoa farming increasingly unpredictable and less sustainable. Compounding these challenges is cocoa farming’s contribution to deforestation. By clearing forests, the industry has unintentionally worsened climate change, which in turn disrupts the very conditions necessary for cocoa cultivation, according to Nik Martin reporting for Deutsche Welle.
On top of all that weather stress, cocoa faces its own pandemic virus. The Cacao Swollen Shoot Virus attacks the vascular system of the plant, causing swelling and cracking of shoots, yellowing leaves, and stunted growth. At the least, the disease severely reduces harvests, and at the worse kills the tree.
And so. The search for sustainable chocolate is sparking a wave of creative alternatives. Supposedly, oats, sunflower seeds, and carob that mimic the taste and texture of traditional chocolate. Also, maybe acorns too—the little nuts that squirrels bury and forget where they put them.
While chocolate alternatives like acorns are being developed in the lab, olive oil faces its own, far less savory substitutes. Sam Meredith noted, “The [olive oil] scarcity has prompted counterfeit products to enter the market, deceiving consumers and undermining quality standards.” In fact, this wave of fraud has become so widespread that it’s been dubbed “liquid gold fraud.”
And it’s not just small-time operators skimming profits—this is organized crime at work. Entire supply chains are orchestrated and manipulated by organized crime syndicates, often referred to as the “Agromafia.” In Italy, it’s estimated that 50% of olive oils on supermarket shelves are unregulated fakes—low-quality oils labeled, bottled, and exported as extra virgin to unsuspecting markets around the world. Beyond Italy, that figure climbs, with studies concluding around 69% of exported European olive oil isn’t what it claims to be, reported Alicia Upton all the way back in 2021 for Bangers and Balls.
While the olive oil industry grapples with counterfeit products and organized crime, the underlying problem remains: climate change.
There seems to be some optimism on the horizon though. Katherine Donlevy, writing for The New York Post, highlight reports of improved harvests and Bertolli and Carbonell brands planning to slash grocery store prices in half. According to the Post article, the olive oil market, though not quite out of the woods yet, seems to be stabilizing.
Olive trees take years to mature, and as the global demand for olive oil continues to grow, any major setback—like crop failure or disease, too much rain or too little rain, whatever—ripples through the supply chain for seasons and seasons to come. Meaning, any modest olive oil recovery could be short-lived without significant investment in climate adaptation. The industry risks a perpetual boom-and-bust cycle. And the climate’s predictable unpredictability ensures the next crisis is less a mater of “if” and more of a question of “when.”
So as the olive oil industry fights to adapt to a changing climate, organized crime, and growing demand, it’s hard not to notice a pattern. The staples we take for granted—those quiet comforts of our kitchens—are increasingly fragile. If olive oil has become liquid gold, then chocolate is its bittersweet counterpart, struggling against its own storms of scarcity and substitution.
And coffee? Coffee is right there with them.
Workers at Starbucks locations across the U.S. have accused the company of union-busting, with claims of intimidation, harassment, and wrongful terminations of pro-union employees. The National Labor Relations Board has issued multiple complaints, and even a federal appeals court upheld findings that Starbucks illegally fired two Philadelphia baristas over union activities.
Former CEO Howard Schultz has been a central figure in these disputes. In a 2022 incident, Schultz told a barista to "go work for another company" after she criticized Starbucks' anti-union stance, a comment the NLRB deemed an illegal threat intended to discourage unionizing.
As of September 9, 2024, Brian Niccol serves as the Chairman and Chief Executive Officer (CEO) of Starbucks. Prior to joining Starbucks, Niccol was the Chairman and CEO of Chipotle Mexican Grill, where he led the company through a period of significant growth and transformation (Starbucks).
Niccol's appointment marks the third leadership change at Starbucks in three years, reflecting a period of notable transition for the company (The Times).
Since taking the helm, Niccol has initiated several strategic changes aimed at enhancing the customer experience and addressing operational challenges. These initiatives include simplifying the menu, reintroducing self-service condiment bars, and improving service efficiency to reduce wait times (People).
Additionally, Niccol has addressed pricing strategies, announcing a pause on price increases for the fiscal year to provide more transparent and consistent pricing for customers (People). Under his leadership, Starbucks is also focusing on creating a more inviting atmosphere in its stores by bringing back ceramic mugs for dine-in customers and enhancing seating comfort (Marketwatch). I’ve also heard rumors of bringing back the Sharpie and lovingly misspelling everyone’s names again.
But I’m unsure if Niccol’s efforts to revitalize Starbucks will be enough.
This past Christmas Eve, Starbucks workers made headlines with a massive strike. Over 10,000 baristas across more than 300 locations walked off the job, demanding better wages, improved working conditions, and respect for their right to unionize.
The strike, organized by Starbucks Workers United, was a sharp rebuke to the company’s approach to labor relations. Union leaders have criticized Starbucks’ economic offers, which they argue fall woefully short of addressing workers’ needs. As one union member bluntly put it, “You can’t pay the bills with a free latte.”
Then there’s the Gaza connection, which has added yet another layer of complexity to Starbucks’ already fraught labor and public relations issues, and has pushed my daughter over the edge with the “Dad don’t buy Starbucks for the house anymore” boycott.
The Gaza controversy heated up when Starbucks sued Starbucks Workers United, the union representing some of its employees, after the union made pro-Palestine statements. Starbucks alleged that the union was damaging its brand by implying the company supported one side of the conflict—a claim Starbucks has vehemently denied.
Caught in the crossfire of public opinion, Starbucks became a lightning rod for criticism from both pro-Israel and pro-Palestine groups. Each side has accused the company of taking an opposing stance, depending on their interpretation of the situation. For instance, pro-Israel advocates criticized Starbucks for perceived silence on the conflict, while pro-Palestine supporters accused it of indirect complicity due to its corporate structure and alleged financial ties.
Starbucks has repeatedly issued statements denying any involvement in political funding or activity. Instead, the company has emphasized its commitment to humanitarian aid, pointing to its donations to organizations like World Central Kitchen, which provides food and support to families in Gaza.
The entire ordeal has drawn comparisons to similar controversies faced by other major corporations, like McDonald’s and Google, which have also found themselves entangled in the polarized debates surrounding the Israel-Palestine conflict. McDonald’s, for instance, faced backlash when an Israel-based franchise provided free meals to the Israeli military, prompting accusations of partiality and spurring counterclaims from the opposing side. Likewise, Google employees circulated a petition against the company’s public letter supporting Israel, reflecting the internal and external pressures multinational corporations face in trying to navigate these politically charged waters.
Whether or not Starbucks can stay true to its apolitical stance—or if it even should—is a question Starbucks seems unable to escape. And in the meantime, as labor issues, boycotts, and debates rage on, one thing remains clear: coffee isn’t just a beverage; it’s a flashpoint for much larger cultural and political battles.
In fact, coffee is the second most traded commodity in the world after crude oil. Price shifts and shortages can have a big impact.
Brazil is the largest coffee producer globally and faced a severe drought in 2020, which severely impacted coffee-growing regions. The drought stressed coffee plants, reduced water availability, and decreased the quality and quantity of the harvest. In 2021, Brazil experienced its worst frost in nearly three decades, again devastating coffee plantations across key growing areas like Minas Gerais and São Paulo. Many trees were killed outright. Others so badly damaged they required years to recover. Drought and heat returned again in 202—record-breaking heatwaves stressed already fragile plants.
Just as olive oil seems to be making a comeback, coffee too seems be hitting the road to normalcy, but production remains below pre-202 levels.
But really, what is normal anymore? This is not the world we were born into. The weather has changed, creating a fragile equilibrium where production teeters on the edge, waiting for the next drought, flood, or frost.
So just as the crime bosses replace our olive oil with substitutes, just as chefs are trying to figure out how to make chocolate with acorns, we too look for coffee alternatives.
Red Bull and Monster pack caffeine levels similar to a cup of coffee—an 8.4-ounce can of Red Bull, for example, contains roughly 80 milligrams of caffeine, comparable to a 6-ounce brewed coffee. But the added boost from taurine, B vitamins, and sugars gives these beverages a distinct edge, especially for those seeking more than just caffeine. The quick energy drink jolt can lead to side effects like an elevated heart rate or spikes in blood pressure, and the high sugar content increases risks of weight gain, diabetes, and dental issues.
The energy drink market has exploded with global sales reaching $57 billion in 2020. This growth is driven by aggressive marketing targeting younger demographics, portraying energy drinks as modern, dynamic, and portable alternatives to coffee. Brands have leveraged esports, social media, and influencer sponsorships to cement their appeal, especially with Gen Z and Millennials.
Olive oil, chocolate, and coffee. These kitchen staples are under siege from climate change, economic instability, labor disputes, and even organized crime. The pressures force us to confront the fragility of things we’ve long taken for granted. But I’m not entirely sold on a Starbucks boycott. Sure, there’s the Gaza controversy—its complexity, its human tragedy is undeniable, and it’s probably impossible to untangle all the threads of corporate complicity or morality here.
And across the board the last few years have been filled with labor unrest. UPS drivers fought for a historic contract, averting a massive strike. Hollywood writers and actors finally returned to work after months of striking for fair pay and protections against AI. Nurses across staged walkouts, demanding safer conditions and better staffing. And the NYPD arrested Amazon workers during their strike as well. The brewing irony here, by the way, is that the cheapest place to buy Starbucks ground coffee right now is Amazon.
I can understand why boycotting Starbucks might feel like a satisfying stand, but is it the real answer? If every cup of coffee, every drizzle of olive oil, and every square of chocolate carries a history of complexity, maybe avoidance isn’t the solution. Do we stop buying olive oil because of the mafia? Do we abandon chocolate because struggling farmers can’t afford to uproot sick plants?
These aren’t just staples. They’re anchors to a world that we were born into yet no longer exists—a world where colonialism, exploitation, and systemic inequality were baked into supply chains long before climate change or globalized late stage capitalism deepened and exposed those inequities.
But this is the world we’re in now—fragile, uneven. And harder to imagine away.
LAST WEEK IN THE STOCK MARKET:
Big Tech Wobbles in a Year-End Chill, But 2024 Still Shines Bright
The stock market had a bit of a rough day Friday. Major players like the S&P 500, the Dow Jones, and the Nasdaq all fell—by 1.1%, 0.8%, and 1.5%, respectively. The report card grades were a little disappointing. But the bigger picture? It’s been a great year overall for stocks, with all three indices showing gains for the week despite the drop on Friday.
The dip was more like taking a breather than a disaster. Big tech companies—like Tesla, Nvidia, and Amazon—lost value because investors decided to cash in on the year’s gains or adjust their portfolios for the new year.
The Fed spent 2024 slowly lowering interest rates to help with inflation. They’ve done a decent job keeping inflation in check without crashing the economy (that’s called a “soft landing”), but prices from groceries to rent are still higher than they want.
Next year, the Fed will likely take its time with rate changes because Donald Trump and his policies—like potential tariffs on imported goods—could mess with prices again.
Big Themes to Watch:
Tech Stocks Are Wobbling. Even though this year has been amazing for big tech, some stocks dropped as people recalculated their worth. Tesla, for example, lost 5% of its value in just one day.
Crypto Is All Over the Place. Bitcoin, one of the biggest cryptocurrencies, dropped in value (down to $94,000).
Interest Rates Are a Big Deal. The Fed’s slow dance with interest rates affects things like loans, mortgages, and credit card debt. Lower rates make borrowing cheaper, but they can also encourage inflation (rising prices).
The last couple of days in 2024 will probably be calm. No big economic news is expected, and the markets will close for New Year’s Day. But January is going to be action-packed with Trump’s inauguration and a bunch of corporate earnings reports. The Fed will also have its first big meeting of 2025 at the end of January.