Your morning jolt of java is about to get more expensive -- if it hasn't already.
Bad weather, bad crops and bearish commodity traders have piled on prices that already were the highest in decades to the point retailers say they have no choice but to pass the cost on to you.
Starbucks, along with the makers of Maxwell House and Folgers, among others, raised some prices in the fall. And last week Starbucks announced plans to raise prices it charges retailers for packaged coffee by up to 12 percent to cope with higher costs for beans.
Sandy Pilkington, owner of the Art of Coffee in Cocoa Beach, said she received notice in January that coffee bean prices were going up, mainly because of transportation costs. The end result was that she was forced to up her prices, including $1 more for a pound of ground coffee.
"It's trickle down," Pilkington said. "Because of the increase in prices, it gets passed on to the little guy."
The coffee price increases
come as the sluggish economy has yet to rebound to the point where consumer are running out and purchasing premium and gourmet coffees and drinks like they were when Starbucks and others coffee shops were popping up seemingly on every street corner.
Since 2008, Starbucks has shuttered some of its locations and slowed its growth. Independent stalwarts like Wahoo Coffee in the Cocoa Beach area closed in 2009 and Indian River Coffee closed its main Wickham Road location in Melbourne last November, after closing a Suntree operation earlier. It now operates at Sarno and Croton roads in Melbourne.
The East Coffee & Tea Co. in Indian Harbour Beach shuttered its doors about five months ago.
For those shops that remain in business, the coffee price increases just make it that much tougher to do business.
Dottie Sauter, owner of the Lazy Bean Coffee Company in the Merritt Square Mall, took two price increases from her coffee supplier, the latest last week. Most of it was due to transportation costs. She's not changing prices for a cup of brewed coffee but like Pilkington, Sauter has been forced to tack on about $1 to a pound of ground coffee, taking it to $10.89.
"I'm at a disadvantage because of five vendors that I use for the business. Since Feb. 22 through March 15, every one of them made a price increase and added a fuel charge," Sauter said. "My menu board hasn't changed, so as a small business operator, I eat those increases."
Dirk Gunderson, a sales manager for coffee roaster Mother's Parkers of Canada, said the industry's higher prices began with a bad crop in Columbia and has been complicated by speculators and by a growing middle class in certain regions of the world "where they're now using more of the coffee that they used to export."
An initial stream of steady increases eventually led most of the world to buy coffee on the spot market, Gunderson said: "Everybody then was advised to buy short, so any time there was even a slight dip in the market, everybody would jump in and things would go right back up again."
Gunderson estimates that a $1 per pound increase in the price of coffee beans adds roughly 10 to 12 cents per cup to retailers' costs. Most initially chose to eat the added expense. But we appear to be past that now, he said.----
