Rising coffee prices give consumers wake-up call

An expected increase in coffee could be hard to swallow for the caffeine crazed. Regardless of whether it's brewed at home or grabbed at the corner coffee shop, consumers can expect to pay more for a cup of coffee in the coming months.

Experts predict environmental factors will push coffee prices toward a 50 percent increase, making a 90-cent cup jump to about $1.35, says a report from Knight Ridder News Service.

Droughts in Brazil and Vietnam -- not to mention the lingering effects of December's tsunami -- along with a persistent high demand are pushing coffee prices to new four-year highs.

Andy Baranovic, an owner of the Sidewalk Sandwich Co. in downtown Cape Girardeau, said that his cost for Sumatra coffee is going up. Sumatra and other Indonesian coffees popular in the United States are going up because of damage by the recent tsunami.

Baranovic said he would do what he could to avoid passing it on to the customer.

"I can eat it to a point," he said. "But even I have my limits, then I'll have to raise my prices."

But he doesn't think that would hurt sales.

"When people want their coffee, they're going to get their coffee," Baranovic said. "Maybe they won't splurge as much, but I think coffee will still be popular."

One of his regular customers, Cheri Huckstep, a local nurse practitioner, agreed.

"I don't care," she said, laughing. "Money is no object. I have to have coffee every day. I love it and I don't care how much it costs. Other people need their cigarettes, I need my coffee and I think coffee is better for you."

Others may not be so accepting. Americans now consume an average of 3.4 cups of coffee a day, up from three cups in 2003, so any price increase could be a financial hit.

Grace Parry, owner of Grace Cafe in Cape Girardeau, said she was concerned about coffee prices when the tsunami happened.

"I'm not really sure if it will affect me locally for awhile," she said. "I can avoid getting those coffees, too. I can choose not to buy them if the price goes up that high. I'll look for other alternatives."

Ed Radetic, who owns Fresco, which also sells coffee in Cape Girardeau. He said he received a letter last week from their roaster in California that they were going to raise prices by no more than 12 percent.

"But I probably won't pass it on," Radetic said. "When you look at 12 percent, you're talking about 2 cents a cup. It's not as critical that we do that when you're retailing a cup of coffee."

Those at grocery stores may notice an increase in coffee, too.

On Monday, Kraft Foods Inc. said it has increased the price of its Maxwell House roast and ground coffee by 12 percent for a 13-ounce can to cover rising raw materials costs.

The week before, Procter & Gamble Co. boosted prices for its Folgers ground coffee, also citing the need to cover the higher cost of green, or unroasted, coffee beans.

After P&G's move, analysts say other companies will likely do the same.

Kraft said the suggested list price of the Maxwell House 13-ounce can was raised from $2.29 to the new $2.57. Retailers, however, determine the prices charged at stores. Kraft also increased the price the price of its Maxwell House instant coffee by 10 cents for an 8-ounce jar.

P&G said that it raised the suggested list price of its Folgers ground coffee by 28 cents for cans with 11.5 ounces to 13 ounces, depending upon the blend, from $2.28 to $2.56.

Sara Lee Corp. has raised prices on all roasted, ground, 13-ounce cans under the Hills Brothers name. Starbucks may also be forced to raise prices again after the Seattle-based coffee chain raised prices last October by an average of 11 cents a cup.

smoyers@semissourian.com

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