A storm is brewing at the breakfast table. The price of coffee is going up.
The world benchmark for the global price of Arabica coffee has more than doubled what it was a year ago, as of Friday.
Rising costs are partially due to climate issues in top-producing countries, like Brazil and Vietnam.
“We have been advising clients to raise prices for some time,” said Brian Phillips, who sources products for roasters across the country as the Director of Sourcing and Sales with Anthem Coffee Imports.
Phillips adds that labor shortages have also impacted prices, and the high cost of fertilizers, partially triggered by the war in Ukraine.
“Coffee alone, we have been seeing increases of about 15 to 25 cents per cup for small roasters,” he said. “If not even a little bit more in larger markets with little higher overhead for rent. In the Midwest, that’s what we’ve been seeing.”
Costs for consumers have already been rising, but experts warn it will take time for the spike in the price of ingredients to trickle down to customers.
In the last year, federal data shows a 2.5% increase in the price of roasted coffee and a 7% increase in the price of instant coffee.
Phillips also warns we’re seeing more “shrinkflation,” where producers are shrinking package sizes while maintaining similar prices.
“The price looks similar, but you’re obviously paying more cost per unit, so you don’t notice it right away,” he said.
These numbers are expected to rise, experts say, as roasters carry those high ingredient costs down to customers.
“As we’ve kind of adapted to climate change and seen how there’s more volatility and all kinds of weather globally, things like coffee and olive oil and chocolate have long been on this list of things that are likely going to increase in price,” said Tyler Schipper, an associate economics professor with the University of St. Thomas.
Output has dropped in Brazil as a result of drought and high temperatures. Vietnam is forecast to recover some of its output, but remains below record exports seen a few years ago, after below-average rain and temperatures.
Economic analysts warn even as environmental woes clear up, prices may stay high.
“A lot of producers are going to be hesitant to lower their prices just because it’s been a good year because they’re trying to insure themselves against the next bad year,” Schipper said.
Locally, the co-founder of Santo Coffee Co. told KIRO 7 he’s seen prices rise on his ingredients.
“It’s not outrageous,” Mikhail Ghyvoronsky said. “But it definitely is an increase and when you’re ordering hundreds of pounds of week it adds up very fast.”
Ghyvoronsky said the cafe utilizes beans from Columbia, which has helped them avoid some of the volatility in pricing, but they are still dealing with price hikes and struggles related to inflation.
“Sometimes I just ask… will it ever stop?” he said.
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