Make us your home page
Instagram

Coffee price hikes even outpace those for gasoline in past year

NEW YORK — People are paying more to fuel up these days — on coffee.

From high-end prepared drinks to store-brand ground beans, coffee price increases have outpaced even the hike in gasoline prices the past year.

J.M. Smucker, the maker of grocery store stalwart Folgers and of packaged varieties of Dunkin' Donuts coffee, said Tuesday that it is raising the price of most of its U.S. coffee products by 11 percent, its fourth increase in a year. And Kraft Foods, Peet's Coffee and Tea, and Starbucks also have recently raised their prices for brewed and packaged coffee.

A 1-pound can of ground coffee sold for $5.10 in April, up 40 percent from $3.64 the year before, according to the Department of Labor. By comparison, a gallon of regular gasoline averaged $3.83 in the United States on Tuesday, up 37 percent from a year earlier.

And, in contrast with expected stabilization in fuel prices, the coffee increases could continue for a while because the prices coffee companies pay for unroasted beans are still climbing — and fast. Coffee futures were trading for $2.61 per pound Tuesday, roughly double a year earlier.

Unlike many other discretionary items, coffee usually emerges from a recession relatively unscathed, economists say. That's because when money is tight, people may buy cheaper brands of coffee, but they won't give it up completely. Americans consumed 21.7 million 60-kilogram bags of coffee in 2008, during the depths of the recession, up from 21 million the year before, according to the International Coffee Organization.

Coffee is part of a bigger story about rising prices for household staples as diverse as food, clothing, diapers and batteries. In the most recent quarter, 89 percent of consumer product makers tracked by FactSet said they had raised some prices or planned to. But, even after food prices soared 5.5 percent in 2008, they leveled off in 2009 and 2010, rising 1.8 percent and 0.8 percent, helped by steadying meat and produce prices.

Smucker said Tuesday that its latest price increase includes Smucker's Millstone and Folgers Gourmet Selections packaged coffees. For the Dunkin' Donuts brand, the increase affects only packaged coffee sold in grocery, club, drug and general-merchandise stores. Items sold at Dunkin' Donuts shops are not Smucker products.

The company also raised coffee prices 10 percent in February, 9 percent in August and 4 percent in May.

Sara Lee Corp., which sells Maison du Café, L'Or and Café Pilao, said this winter that rising green coffee costs led it to raise its prices. Kraft, which sells Maxwell House coffee, cited rising coffee prices in a broad price hike it levied this winter. Peet's Coffee and Tea Inc. has raised its retail prices twice recently in response to raw costs.

And in March, Starbucks, the world's biggest coffee chain, raised the prices it charges retailers for packaged Starbucks and Seattle's Best coffee by 12 percent, citing higher bean costs. Starbucks left up to grocers and other retailers whether they passed along the increase to consumers. But it said it had locked in the prices it pays for beans the remainder of the fiscal year.

Up 40 percent

$5.10 Price of 1-pound can of ground coffee in April.

$3.64 Price of 1-pound can of ground coffee in April 2010.

U.S. Department of Labor

Coffee price hikes even outpace those for gasoline in past year 05/24/11 [Last modified: Tuesday, May 24, 2011 9:38pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Pinellas licensing board asks Sen. Jack Latvala for $500,000 loan

    Local Government

    The troubled Pinellas County agency that regulates contractors wants Sen. Jack Latvala to help it get a $500,000 lifeline from the state to stay afloat.

    State Sen . Jack Latvala, R- Clearwater, is being asked to help the Pinellas County Construction Licensing Board get $500,000 from the state so it can stay open beyond February.  [SCOTT KEELER   |   Times]
  2. In advertising, marketing diversity needs a boost in Tampa Bay, nationally

    Business

    TAMPA — Trimeka Benjamin was focused on a career in broadcast journalism when she entered Bethune-Cookman University.

    From left, Swim Digital marketing owner Trimeka Benjamin discusses the broad lack of diversity in advertising and marketing with 22 Squared copywriter Luke Sokolewicz, University of Tampa advertising/PR professor Jennifer Whelihan, Rumbo creative director George Zwierko and Nancy Vaughn of the White Book Agency. The group recently met at The Bunker in Ybor City.
  3. Tampa Club president seeks assessment fee from members

    News

    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  4. Under Republican health care bill, Florida must make up $7.5 billion

    Markets

    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  5. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]