Coffee Price 2011

Price of Coffee Increases Continue Amid Supply and Demand Pressures

UNITED STATES – In September of 2010 commodity prices hit a 13-year high and by that time the coffee price increases were beginning to appear on store shelves even though the coffee bean supply had not yet dwindled and the real cost increases had not materialized in the supplies of the big coffee sellers.

The speculation that led in large part to the price increases was a concern about the poor early coffee crops in South America and Central America, and also an expected increase in shipping costs as a result of the Gulf oil disaster. World coffee exports decreased more than 5% in July compared to one year earlier.

Announcements of price increases on store shelves came in quick succession including Green Mountain Coffee Roasters raising prices in North America from ten to fifteen percent in October on their popular Coffee K-Cups portion packs that work with their Keurig single serve brewing systems.

More than 85% of the business of Green Mountain Coffee Roasters was due to sales of their single-serve K-cups and associated brewing system, and these are sold under various brands including Newman’s Own Organics, Timothy’s Coffee, Tully’s Coffee, Caribou Coffee and Green Mountain.

Like the other top companies, Green Mountain stated that their price increases were due to the sustained nature of the increases on green coffee beans (unroasted coffee beans) during the previous months.

Already in August the J.M. Smucker Company (the parent company of Dunkin’ Donuts, Folgers and Millstone) raised prices about nine percent on its top coffee products and stated that their price hikes were due to sustained increases in the price of green coffee beans (unroasted coffee beans).

The price of Yuban and Maxwell House coffees under the parent company Kraft Foods went up about 9% in August including prices on ground coffee as well as instant coffee.

Starbucks Jumps on the Price Increase Bandwagon

In September Starbucks was still saying they were going to absorb the cost increases while closely monitoring the situation. Their price increases would come soon after, and not just in North America but worldwide including in China where they have an estimated 70% market share.

At the end of September in 2010 Peet’s Coffee & Tea announced an average eight percent price increase in its stores due to a thirty-five percent increase in the cost of green coffee beans (unroasted beans) since the beginning of 2010.

[Also see: Barista.]

Meanwhile prices on other coffee products also increased including supermarkets raising prices on containers of Folgers Classic Aroma Coffee by at least $1.00. As green coffee prices continue to rise under increasing demand and decreasing supply we can expect to see all of these prices continue to inch their way upward.

U.S. Government Takes Notice of Coffee Price Increases and Supply Pressures

The U.S. government also took notice of the situation and the Democratic Senator Charles Schumer of New York stated that he wanted to make it clear to Ron Kirk, the U.S. Trade Representative, that the powerhouse coffee growing countries such as Vietnam and Brazil should be warned not to stockpile crops as it would cause a further increase in coffee futures contracts (which had gone up 44% in June).

This came on the heels of word that these top exporters were indeed hoarding their stocks at a time when the stockpiles of the United States were already at a ten-year low.

Meanwhile inclement weather was threatening crops in South America and Central America including major crop damage in Columbia, Kenya was seeing higher prices due to real estate pressures and the price of the renown Kenya AA Coffee on the Nairobi Coffee Exchange was reaching new highs, and other factors were not boding well for the coming year(s) with respect to the price of coffee and the sustainability of the supply chain.

Emerging Markets for Premium Gourmet Coffee – Specialty Coffee Products

Add to these factors the emerging markets such as India and China as well as Brazil where many young professionals have begun to acquire a taste for a good hearty cup of premium gourmet coffee, whole bean fresh brewed coffee, or perhaps a specialty coffee drink such as a latte or cappuccino. There is a whole new generation of gourmet coffee lovers on the horizon!

These new markets are creating a much stronger demand for the Arabica coffee bean varietal while the already strong demand coming from Europe and the United States is showing no signs of waning even in the face of the economic downturn of recent years.

Even when times are tough people still want their cup of coffee just how they like it, each and every day. Retailers have the added concerns of increasing labor costs and rent which also has been cutting into their profits.

Also see: The Best Coffee In The World – Part II

The World’s Top Premium Gourmet Coffee Source

More great coffee information can be found in All About Coffee which covers all aspects of coffee from soil to sip.

This includes coffee plants and coffee cherry, and full descriptions of all of the world’s top gourmet coffee beans including Organic Coffee, Fair Trade Coffee, Bird Friendly Coffee and Shade-Grown Coffee.

Espresso and Coffee Brewing Equipment

Also included are full details about Coffee Makers (Automatic Drip Coffee Makers, Single Serve Coffee Makers, Pod Coffee Makers, Coffee Pods, Coffee K-Cups, T-Discs, and French Press, (also see Best Coffee Makers), and Espresso Machines (including Pod Espresso Machines) as well as Instant Coffee and Decaffeinated Coffee.

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