The ROI of Climate Adaptation in Food and Beverage Companies

Andy Paterson • September 12th, 2025.

As climate risks accelerate, agricultural procurement companies across the food and beverage sector and other industries are starting to bear the costs. 

Most adaptation projects struggle to secure a budget because the ROI is hard to prove. Yet, without adaptation, companies risk multi-million-dollar losses from climate volatility. Some estimates say that the return on investment from adaptation spending could be as much as $21 for every dollar spent. 

With the weather becoming more erratic and climate trends impacting crop yields and prices, the ROI on weather intelligence and climate adaptation is becoming clearer and will increase over time. This article examines the costs of climate change for food and beverage companies and compares them with the costs of weather intelligence and other adaptation tools and strategies to determine the ROI of taking action on climate change adaptation. 

What are the Costs of Climate Risks for Food and Beverage Companies

The prices of key crops for the food and beverage sector are more volatile than ever. This volatility has already had real-world implications for food and beverage companies: 

• Cocoa, for example, had prices increase by 168% in 2024, the result of a drought in key growing regions. The price increases were the main reason the US confectionery company Mondelēz saw gross profits decrease by 32% in Q4 2024.
• Increasingly severe and frequent drought in key coffee-making regions like Brazil could increase prices by 50%, which Swiss food and beverage multinational Nestle estimated could cost them 0.8 billion CHF ($975 million).

As temperatures continue to climb, price variability is likely to increase for food and beverage companies, resulting in lower margins. Food and beverage companies under a 3°C warming scenario could expect to lose as much as 10% of EBITDA without any additional adaptation.

These numbers indicate that the cost of climate change is already being felt, and without adaptation, F&B companies could lose substantial revenue. For those who do adapt, they will hold a competitive advantage.

What is the ROI for Adaptation in Food and Beverage Agriculture Supply Chains

Research from the World Economic Forum in 2024 found that food and beverage companies are likely to benefit the most from climate adaptation investments, with an expected benefit-to-cost ratio of 19 times. In other words, for every dollar spent on adaptation for food and beverage companies, they would get $19 in return. 

How Can AI-Driven Weather Intelligence Help With Adaptation in F&B?

While there are multiple tools that can help food and beverage companies adapt to climate change, the best climate risk assessment and adaptation tool is weather intelligence. 

Weather intelligence helps food and beverage companies assess risks and adapt across their value chain. It enables them to understand the short and long-term effects of weather and climate disruptions. It’s return on investment is measured in:

• Optimizing resource inputs, such as pest control, irrigation, and fertilizer: Through accurate, highly localized weather tracking, growers can optimize the best time to apply pest controls, water, and fertilize. For example, fertilizing before a rainstorm can lead to costly reapplication due to run-off. 
• Picking the best varietals and adjusting planting and harvesting times for the best yield: Weather intelligence can help pick the best varietals and crops for both the current and future climates, and through accurate tracking of growing degree days, companies can accurately track plant growth stages and find the optimum time for harvesting, ensuring the best quality crop, and streamlining operations. 
• Improvement in spot price negotiations through early weather insights: Knowing whether prices will be impacted by a drought, storm, or other weather conditions can help lock in prices early.
• Reducing insurance or finance costs: Analyzing the cost-effectiveness of different adaptation measures would create new opportunities for financing and improved insurance premiums. ClimateAi’s recent partnership with NEC demonstrated that adaptation ROI can be quantified in real terms, showing, for example, how irrigation, crop variety changes, or altered planting times can lead to more resilient yields in cocoa and rice. The model provides financiers and insurers with the confidence to lower barriers to capital and offer improved terms to climate-resilient farmers and their customers.

How to Estimate Your Climate Adaptation ROI

The equation for calculating the ROI of climate adaptation is relatively straightforward. You take the Cost of Adaptation (Avoided Losses or Gains from Adaptation) /Cost of Adaptation​ × 100%, which will give you a reasonably accurate estimate for your ROI. 

One element of the equation is easy to obtain: the cost of adaptation, which includes the cost of the weather intelligence tool, the new seed variety, the smart irrigation system, remote sensing drones, or whatever adaptation tech you may need. 

The other element, the avoided losses or gains from adaptation, is harder to predict as it depends on a multitude of scenarios, like the speed of climate change, gaps in data, and how much of those avoided losses are attributable to the adaptation measure.

How Climate Adaptation ROI Can Be Hard To Quantify

The avoided losses or gains from adaptation are hard to measure as they can include multiple different warming scenarios, are hard to attribute, and have uncertain payoff terms.

Long-Term & Uncertain Payoffs

• Benefits often come years or decades after investment, tied to climate trends that in some cases may or may not occur.
• ROI is based on avoided damages, which are hard to prove against “what might have happened.”
• Short-term political and business cycles can clash with long-term adaptation gains.

Attribution & Measurement Challenges

• Avoided losses can be invisible: was resilience due to investments or just milder conditions than forecasted?
• Co-benefits (health, supply chain stability, community resilience) are hard to put a number on.
• Highly local and context-specific, no universal ROI formula.

Best Practices for Proving ROI of Climate Adaptation Measures Internally

Securing C-suite buy-in for weather intelligence and other adaptation solutions requires clear evidence that investments will deliver measurable returns. As the procurement teams we talk to often note: “We need to prove value because somebody has to dedicate time, and people are rightfully cautious about new tools and responsibilities.”

Here is how to show a positive ROI on adaptation and get internal support to implement and integrate these tools:

Establishing a Baseline

Before making the case to leadership, gather the right data. At a minimum, this should include:

• Historical disruption costs such as lost production runs, weather-related quality rejections, yield losses across key crops and regions, and subsequent price increases.
• Supply chain financial impacts like premiums for emergency sourcing, added logistics costs from weather delays, lost sales when supply demand can’t be met, and waste or disposal expenses for products that don’t meet quality standards.

These figures provide the foundation for showing losses over the years due to weather disruptions and will be the basis for demonstrating the ROI of adaptation.

Strategic Implementation

A phased, scaled approach to tools works best:

1. Start small and focused with a single high-risk crop or region, ideally over a 6–12 month timeframe to generate quick proof points.
2. Work with the company’s finance team to validate baseline data and balance it against the costs of new adaptation tools and actions to ensure alignment on ROI metrics and agree on success criteria.
3. Share wins with corporate reporting dashboards, quarterly reviews, and clear financial figures (e.g., “Knowing about this drought weeks before helped us lock in prices early and save $2.3M”).

Demonstrating Broader Value

The ROI story should go beyond immediate cost savings. Adaptation also delivers:

• Risk mitigation by shifting operations from reactive to predictive, diversifying sourcing, and ensuring supply continuity.
• Competitive advantage by securing supply when markets are tight, avoiding price premiums, and ensuring reliability for customers.

Typically, executives need to answer: “How is this going to change my work, and why should I add another tool?” Clearly demonstrating the cost of weather disruption in the past, using small-scale examples of adaptation tools first, and showing the co-benefits will help your company leaders see the ROI. 

There is no doubt that the food and beverage sector will face losses due to climate change without adaptation. However, quantifying the exact ROI of specific adaptation measures is difficult. 

For guidance on how we can help you see the ROI on each adaptation measure, reach out for a demo. 

ROI of Climate Adaptation FAQs