Caffeine lovers may have heard the national and local media sound the alarm bells: Coffee prices are on the rise. It is a relatively easy to understand question of supply and demand. According to the wall street journal, coffee drinkers might end up paying more for their morning cup in the near future, as there will be less coffee available for purchase due to factors such as a historic drought in Brazil, a major coffee producing country. coffee, and shipping delays from other coffee producing countries, including Colombia and Vietnam. Much to the annoyance of coffee drinkers around the world, these factors could fuel an imperfect storm where prices “skyrocket” on the c-market, the global exchange where most coffee is bought and sold globally, warned. an expert from the WSJ.
But here in the San Francisco Bay Area, is it really necessary to start accumulating bags of single-origin Ecuadorean? Jeremy Brooks, green coffee sourcing and purchasing manager for Verve Coffee Roasters, says Not So Quick. Verve is based in Santa Cruz, but has a sunny cafe serving great lattes in Duboce Triangle, as well as locations in Palo Alto and LA.
Verve sources its supplies directly from farmers, so its coffee is always more expensive. And although Brooks claims that next month Verve will raise prices for the first time in five years, but that’s not due to rising coffee prices globally. Since Verve negotiates the purchase price for the majority of its coffees directly with producers, the price increase in the mainstream market will not impact the business. Plus, Verve is already paying a higher market price for the beans it buys there, he says.
Verve is raising prices, but not because of coffee, because of the shortage of paper. Small increases for beans and retail drinks – think of a 25 to 50 cent increase on a single drink and a $ 1 to $ 1.50 increase for a bag of beans – that customers will see in weeks. Rather, they are due to supply chain issues around other things, including paper, Brooks explains. Verve has struggled to source the products it uses to ship its products due to “major disruptions” with shipping. This means they pay more for corrugated paper and compostable cups and will pass some of those extra costs on to their customers.
And while he doesn’t predict that soaring coffee costs will be a problem in the long run, he does think it could trigger a larger market correction. Brooks says coffee prices have been “unbearably low” for the past three years, with market prices around $ 1 a pound, despite typically costing between $ 1.50 and $ 1 a pound. , $ 70 to produce a pound of coffee. “Over the past few years, they’ve definitely produced coffee at a price below the cost of production, which has led many growers to switch to different commodities,” he says. “So we hope that this will actually allow more coffee producers to see the value of staying in the industry. ”
In that sense, he says higher prices could be a good thing in the long run. “I hope other coffee companies can see that if we don’t just pay them what they need to keep growing the product, we will in fact be the ones to turn the coffee industry into a non-market. sustainable. It’s really up to us to make sure that we support these farmers.