United States Coffee Market Report: Retailers of fine coffee are now paying 12% more for their Starbucks packaged coffee as the company tries to protect its profits at a time of sharply rising coffee prices.
Earlier in the year Starbucks – which has 17,000 stores in 55 countries – had announced that it had bought all of the green coffee beans it needed for the year and was focusing on retaining market share by controlling costs and holding off on any new price increases as occurred in 2010 on coffee drinks though the company hasn’t increased packaged coffee prices since 2008.
Retailers of Starbucks coffee will now have a suggested retail price rise from $8.99 to $9.99 while the Seattle’s Best Coffee (also produced by Starbucks) will go from $6.99 to $7.99. Individual stores can decide how much of this price increase consumers will actually have to pay.
The rapid increase in the price of coffee beans during the latter half of 2010 and into 2011 is largely driven by the huge new demand coming from emerging markets including Brazil, India, China and Latin America.
Exacerbating the situation has been the huge infusions of money into coffee futures markets by hedge funds and speculative investors seeking high returns in anticipation of future higher coffee prices, and in the process helping to drive up prices even further.
The rapid rise in demand for coffee in emerging markets is largely for the higher grade Arabica coffee which is used by Starbucks and Peet’s and other fine coffee houses to make the popular espresso-based coffee drinks like Lattes and Cappuccinos.
Higher worldwide Arabica prices have caused virtually all of the major coffee companies to raise prices in the last year at least once, and some numerous times.
These companies include J.M. Smucker Company (which makes Dunkin’ Donuts and Folgers brands), Kraft (which makes Yuban and Maxwell House brands) and also Green Mountain Coffee Roasters which dominates the single serve coffee market with their Coffee K-Cups and also sells packaged coffee, all Arabica. Also increasing coffee prices was the Sara Lee Corp all have raised prices at least once in the last six months.
Spiraling commodity prices have also affected coffee shops for a range of products.
Coffee Market Watch: Starbucks Increases Coffee Prices In 2011 On Starbuck Packaged Coffee – New Starbucks Logo continued:
While the worldwide growth in coffee consumption is about two percent annually it is much faster in emerging markets ranging from about five percent annually in India to around twenty percent annually in China.
This is placing strong upward pressure on coffee prices and also the reason why Starbucks recently signed a deal to begin opening stores in India and also announced that they will be opening 1,000 new stores in China.
Despite the rising coffee prices consumers seem to be buying as much as ever. Coffee has historically shown to be very inelastic with respect to price increases, and thus the strong demand pressures are not likely to ease any time soon despite consumers having to pay more.
During the recent years of economic recession the United States and Europe were able to keep up their very high demand for Arabica coffee so a rebounding economy may place further pressure on supplies and thus more strong upward pressure on prices.
Starbucks Unveils New Logo in 2011 and Raises Prices on Starbuck Packaged Coffee continued:
Meanwhile worldwide supply has been down due to inclement weather as well as coffee disease and pests, and it will be some time before supply can catch up with demand even if there are bumper crops in 2011 and 2012, something that is not at this time predicted. Current estimates have global supplies for 2012 at about 5 million bags less than demand.
For Americans coffee prices are also higher due to the declining value of the United States dollar which has been gradually weakening due to U.S. economic concerns and the massive new debt taken on by the government in recent years.
New Starbucks Logo As Starbucks Increases Coffee Prices In 2011 Raising the Price On Starbuck Packaged Coffee
Starbucks recently celebrated its fortieth anniversary and as part of the celebration introduced a new Starbucks logo.
The company is seeking to increase its international appeal and is also ensuring that the Starbucks name will stand not just for coffee but for a whole range of products including a major entry into the single serve coffee market that will include single serve coffee machines.
Starbucks will soon start selling single serve brewing machines which can brew specialty coffee which means fine Arabica coffee including Coffee K-Cups. They will be doing this in partnership with Green Mountain Coffee Roasters.
What Does The New Starbucks Logo Look Like
As a tribute to the first coffee traders who were a seafaring bunch, the original Starbucks logo has a siren, or mermaid at its center. This design dates to the 16th century where it was seen on a Norse woodcut. The logo was adopted in 1971 at the founding of Starbucks Coffee, Tea and Spices which was located in Seattle, Washington at the Pike Place Market.
Last year Starbucks took in about $11 billion and served about 60 million customers. The company had its best fiscal quarter in its 40-year history and growth for 2011 is forecasted to be around sixteen percent followed by an eighteen percent growth in 2012.
Part of Starbucks recent success has been its new instant coffee products under the Via brand.
Thank You for Reading Starbucks Increases Coffee Prices In 2011 On Starbuck Packaged Coffee – New Starbucks Logo On Espresso Coffee Guide! Savor Your Coffee and Espresso!