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AN INSIDE Coffee Prices Set to Soar LOOK HAMILTON SPECTATOR Canadians will be paying more for or the cost of beans and cups of coffee In previous years stockpiles of store bought coffee in the New Year, could rise anywhere from 30 to 50 per coffee in Brazil were released to relieve as a shrinking global supply and cent by 2012. pressure when the market became too increasing demand continues to push Coffee closed on the U.S. futures tight, but those supplies were depleted up the price. market for (U.S.) $2.175 a pound [Note: this year, said Hackett. A recent spate of extreme weather like most global markets, the market for He said because of the massive in Colombia paired with a growing coffee uses U.S. Dollars and U.S. units.], profits large companies like Star- taste for higher quality beans and a about double the cost reported the bucks make selling coffee most can diminished global stockpile could same time last year. That price is well afford to eat cost increases until result in a 30 to 50 per cent spike in below historic highs of (U.S.) $3.35 per prices stabilize. prices, according to one U.S. analyst. pound reported in 1977. Ken Hardy, a professor emeri- On Wednesday Kraft Canada Hackett said based on current tus of marketing for the Richard Ivey confirmed that the company's Max- price increases a conservative esti- School of Business, said the smaller well House and Nabob Roast & mate would be (U.S.) $4 per pound by increase like the one from Kraft are Ground coffees will go up in price on the end of 2011. unlikely to impact consumer habits. January 30, 2011, the price of roast Caffeine addicts should try to Hardy, a board member for and ground coffees will go up 7 to 10 relax. Tim Hortons has no immediate Williams Coffee Pub, noted that coffee per cent. Distributors were informed plans to charge more. is a central part of our social habits of the boost a few weeks ago, the com- "Typically, Tim Hortons books its and a slight price hike won't deter us pany said. coffee contracts for at least six months from buying. Kraft Canada said the increase at a time, which protects its restaurant C He said if the price for over the "stems from the significant increase owners and customers from jumps counter coffee was going to rise in in world prices for green coffee." in worldwide future markets," said a Canada, the cycle would start with The company boosted prices twice spokesperson in an email Tim Hortons. on popular coffee brand products Starbucks said no one was avail- "I think they are the dominant in 2010, the last increasing roast able to comment. buyer and dominant retail chain ... and ground coffee by as much asb The shortage is being caused by they would be the price setter for most 12 percent and instant coffee by several factors, but poor weather in coffees." 16 percent. Colombia is key, he said. If prices do rise above $4 and a South of the border Kraft Torrential rainstorms have resulted hefty price hike is passed down to Foods Inc. cited the same cause was in loss of life and heavy damage to the consumers people may start rethink- behind Wednesday's boost for current crop. Last year production was ing how much they drink and from Maxwell House and Yuban coffees, down 35 per cent and it was hoped they where, he said. with roast and ground coffee prices up would recoup those losses in 2010, said Some companies, like Starbucks, 12 per cent and instant coffee prices Hackett. don't have a great deal of room to Colombia is the largest producer manoeuvre, he said. up about 4 per cent. Shawn Hackett, president of of high-quality, mild washed Arabica. "They are already near the ceiling Hackett Financial Advisors, Inc., "That is your Starbucks kind of cof- of price tolerance." a brokerage firm specializing in fee," said Hackett. "The shortest sup- Source: Reprinted with permission - Torstar Synd agricultural commodities in Boynton ply is in that kind of coffee which is in the highest demand." cation Services. Florida, predicts "actual coffee prices" S.
