Coffee cravers overlook bean price surge for caffeine fix
SAN FRANCISCO — Doreen Cappelli is so hooked on her morning cappuccino that she says she’d pay a lot more to get it.
“I don’t drink wine and alcohol,” Cappelli, 52, said after buying the $ 3.25 drink at Blue Bottle Coffee at San Francisco’s Ferry Building. “Coffee is one of my pleasures in life. I would pay double.”
While prices probably won’t go up that much just yet, pressure is growing on the $ 80 billion U. S. coffee industry as the cost of arabica beans used in high- end brews skyrockets. Futures in New York jumped 87 per cent this year to $ 2.0665 US a pound. By May, they may reach $ 3, the highest since 2011, said Judy Ganes- Chase, an industry consultant in Panama City, Panama, who has been analyzing the market for three decades.
Arabica is off to its biggest rally to start a year in at least four decades after drought hurt crops in Brazil, the world’s top grower. Eventually, that will mean higher bean costs for Keurig Green Mountain Inc. and J. M. Smucker Co., maker of Folgers, the best- selling U. S. brand.
For now, sellers including Starbucks Corp., the largest coffee house chain, say they’re in no hurry to raise prices. Many have stockpiles of cheaper beans from before the rally. Even if they do start to charge more, history shows that’s no deterrent for American consumers, the biggest drinkers.
“I need it — it’s like crack,” said Lindsay Cooper as she stood in line for her morning cup at Philz Coffee in Mission Bay. “I feel like I’m exposing a deep, dark secret. Is there some sort of coffee rehab? If so, hopefully mine has coffee.”
In 2011, when futures doubled over 12 months to a 14- year high of $ 3.089 and retailers raised prices, U. S. consumption rose 1.2 per cent from 2010 to 2.916 billion pounds, according to the International Coffee Organization in London.