Coffee prices have not been top of mind for most of us lately. But they’ve been perking away in the background. Creeping higher every day. Now, an industry insider is warning that coffee prices could rise by another 25 percent this year…
Coffee fans are still smiling… In spite of record high prices for their addiction of choice…
It’s an ever-present though, apparently, not overly aggravating issue. But it bears an update, con-sidering the authoritative source from which the latest unsettling news comes.
Top-level intel
No less a coffee sphere figure than Giuseppe Lavazza, head of the eponymous global coffee brand, warns coffee prices are heading nowhere but up.
“We have never seen such a spike in price as the trend right now,” Giuseppe Lavazza, who chairs the company, told The Guardian.
Last year, retail coffee prices rose 15 percent. At that time, Lavazza predicted they would come down over 2024. But, now, he’s admitting he was wrong. World commodity-market coffee prices recently hit a record $4,300 per tonne.
“The coffee supply chain is dramatically under pressure,” he said, in public comments reported by the Financial Times. “Coffee prices are not going down … [they’re] going to stay very high.”
Pressurizing factors
If you think your morning cuppa is solely dependent on weather and economic conditions in Latin America and Africa, you’ve got another think coming.
A combination of conditions including crop failures in major production areas including Brazil, Vietnam as well as Colombia, and shipping challenges caused by the Middle East conflict have pushed international coffee prices to stratospheric highs.
“We have faced very, very strong headwinds. I don’t see any reason why coffee prices will go down,” Lavazza says. He notes his company’s profits have plummeted as a result of continuing high raw product prices. Lavazza reported a profit of (US)$101.7 million in 2022. But 2023 profits fell to just (US)$73.6 million.
Coffee market still growing
In spite of price hikes, the global coffee market continues to grow. More new coffee shops are opening every month than are closing. Walk-in traffic at coffee vendors is also growing.
Industry observers note more folks are drinking more coffee since going back to work, in offices and other environments outside the home, since the COVID crisis abated.
My take
The word ‘habit’, when used in reference to coffee consumption, makes a broad, bold statement. There are obviously many folks who will do just about anything to get their morning fix. Regardless of price or avail-ability issues. And the word ‘fix’ seems all too appro-priate in that contest, given that caffeine has been shown to be just addictive as nicotine, alcohol or even heroin…
To paraphrase the US Postal Service motto, “Neither snow nor rain nor heat nor gloom of night stays these consumers from the swift acquisition of their appointed brew!”
~ Maggie J.