Starbucks is investing in two innovation farms

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and what Starbucks is doing to protect its coffee supply.

Transcript

00:00I'm Conway Gittins reporting from the New York Stock Exchange.

00:02Here's what we're watching on the street today.

00:04Stocks are trying to rebound in the wake

00:06of mixed economic data.

00:08The services sector picked up steam in September,

00:10although the Institute for Supply Management's Employment

00:13Index showed some weakness.

00:15In other signs from the labor market,

00:17weekly jobless claims edged up, but not

00:19enough to cause new worries.

00:22In other news, Starbucks is turning

00:23to farming as a way to limit future price

00:26shocks for coffee drinkers.

00:28The coffee chain is buying two more coffee farms,

00:30one in Costa Rica, the other in Guatemala,

00:32with plans to buy farms in Africa and Asia.

00:36Not only will the farms be used to produce coffee beans

00:39for your cup of morning joe, they

00:40will also be used as research and development sites.

00:43Starbucks is looking for ways to protect coffee crops

00:46from the ravages of climate change

00:48and increase the use of technology

00:50to lower production costs.

00:52The company also plans to study how

00:54it can grow coffee beans in adverse conditions

00:57and different elevations.

00:58Starbucks executive Roberto Vega told CNBC,

01:01it's going to be a learning process.

01:03Quote, we can develop new hybrids,

01:05but the fact that a hybrid works in one country

01:07and under certain conditions doesn't

01:09mean that it's going to be working everywhere.

01:12Starbucks buys 3% of all of the world's coffee production,

01:16and supply shortages lead to higher coffee prices,

01:20which ultimately hits you at the cash register.

01:23In just the past five years, consumer coffee prices

01:26have spiked 18% according to US government data.

01:29Customers have taken notice, leading to a sales

01:32slump at the coffee chain.

01:34That'll do it for your daily briefing from the New York

01:36Stock Exchange.

01:37I'm Conway Gittens with The Street.

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