I have to wonder though how much longer can I hold onto a habit like that in this economy. Fortunately I use the rewards card wisely and rack up on frequent customer freebies. Now, the news that the price of coffee has hit a 33 year high, hovering around $3 a pound or up to $7 for premium imports has me wondering how much more my drink is going to cost me and will I be able to afford it.
That’s the big topic of discussion at the Specialty Coffee Association of America's annual symposium in Houston, Texas meeting this week. The winter weather this year was particularly harsh on many coffee producing countries like Columbia. The last time the price per pound was so high was 1977 when Brazil, one of the world’s largest suppliers of coffee, was struck with weather that wiped out most of their crops.
Aside from the weather, Brazil is again affecting coffee prices. As Richard Carlson, chairman of the Tucson, Arizona-based Spectrum Economics explains it, "The fundamental thing that is going on is that Brazil is dramatically more prosperous. Their currency is going up, their wages are going up and they are the world's largest producer of coffee." The economy there doesn’t show signs of slowing so Carlson sees that as an indicator prices won’t be dropping soon.
An increase of coffee drinkers in China, Brazil and India is also affecting the chain of supply and demand. Big coffee names like Starbucks, Folgers and Maxwell House have already raised prices. Smaller companies have been struggling to keep their prices consistent. Coffee shop owners have been taking a hit where it hurts, in the profits, to keep customers coming back.
"We've been hit hard for close to a year now," the owner of Kean Coffee houses in Southern California, Martin Diedrich summed up what many in the industry are encountering, "I can't always ask what I need to because I get push back from my guests, from my customers. So I have to take a margin hit."
In the battle of the beans it’s going to be hard for some mom and pop shops to stay competitive. They will need to focus on other less costly amenities and offering an excellent overall experience. What it really brews down to though is who they have hooked. Me. My name is Heather and I’m a coffee-aholic. Can I get another shot please?
By Heather Fairchild - Heather is a multimedia developer with experience in web, film, photography and animation as well as traditional fine arts like painting and sculpting. In addition to writing for FinancialJobBankBlog.com, she is co-founder of design and promotion company, BlackChip Solutions with fellow Nexxt blogger, Staci Dennis. Heather’s spare time consists of making puppets, teaching Sunday School, building Legos and doing science experiments with her children.
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