Coffee Costs Continue To Climb Steadily


My wallet received some bad news recently. According to CNN, coffee prices are hovering at $3.00 per pound, which is the highest price in over thirty years, and as a freelance writer, I spend five days a week in a coffee shop, usually leaving a bit jittery from at least ten cups of joe. I was less than pleased to read that my already expensive habit is about to become even more expensive.

The reason for the increase has a lot to do with weather. Coffee growing regions have been hit with unseasonably bad weather and heavy rainfall this year – ruining the crop and driving up the price of the beans, not to mention the increase of people drinking coffee is bringing the demand higher than it has ever been before. CBS News even reports that over two billion cups of coffee are being consumed every single day.

“Increased coffee consumption in China, Brazil and India has also put a strain on existing coffee supplies,” said Ross Colbert, the global strategist for beverages at New York-based financial services provider Rabobank.

While this may seem like bad news for coffee shops, Reuters is predicting that coffee mecca Starbucks “is likely to report that higher prices for its prepared coffee drinks boosted sales at its core U.S. business this past quarter — even as higher food and gasoline costs cut into consumers’ disposable income.”

“Starbucks has been rolling out price increases to various markets since last year to offset a spike in coffee costs,” said RBC Capital Markets analyst Larry Miller.

While Starbucks is doing well, many independent shops and restaurants are taking a huge financial hit.  Unable to raise their prices higher unless they want to lose customers, many are just taking a large margin hit. With many of the nation’s coffee retailers and distributors gathering recently in Houston, Texas, at the Specialty Coffee Association of America’s annual symposium, you can bet the rising costs were certainly a topic of discussion.

~Kirsten Saladow