Monday, February 21, 2011

Coffee cost going up as bean prices hit 14 year high

DALLAS — Most menus do not yet reflect it, but customers will soon pay more for a cup of coffee.

"The prices haven't been this high for 14 years," said Bob Baker, owner of White Rock Coffee.

The commodity price for coffee has almost doubled since last summer, Baker said, from $1.40 per pound to $2.72.

But instead of raising costs to customers, he is trying to offset it by looking for better deals on things like paper towels and even insurance.

"Well, we haven't raised our prices at all," Baker said. "We're going to have to at some point, but we're going to try to keep our prices stable."

Industry experts said several reasons are behind the increase. Bad weather has led to bad harvests for several years in popular producing countries like Brazil, Colombia and Vietnam.

Plus, worldwide demand is going up. More people are drinking coffee.

Brazil is now keeping and consuming a larger portion of the coffee it used to export.

Finally, speculators are driving up the cost as well.

Addison Coffee Roasters buys from around the world, roasts the beans on-premises, then sells them to local specialty shops along with all four Central Market locations in North Texas.

The wholesaler said it finally had to make small increases in prices, but did so cautiously so as not to drive away clients or their customers.

"Folgers, Dunkin Donuts, a lot of the big players have announced increases over the last couple months, and I can guarantee you there are more coming," said Richard Duncan of Addison Coffee Roasters.

Wholesalers and retailers both said it will be challenging to continue absorbing costs.

Prices are predicted to remain high for a couple of years, and no one disputes that you will soon be paying more.

What's less clear is just how much — and how soon.

(Source: http://www.wfaa.com/news/business/Cup-of-coffee-to-get-pricier-as-beans-hit-14-year-high-116514848.html?gallery=y&img=0&c=y)

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