Why Your Cup of Coffee is Getting More Expensive: A Coffee Roastery’s Perspective
If you’ve noticed that your favorite cup of coffee is costing more lately, you’re not alone. The rising cost of living has impacted almost every part of our lives, and coffee is no exception. But beyond inflation and day-to-day expenses, there are specific challenges within the coffee industry that are driving up prices, especially for coffee roasteries like ours. Let’s dive into the factors behind this rise in costs and what we’re doing to keep your coffee as affordable as possible.
The Usual Suspects: Inflation, Wages, and Rising Costs
When we think of price increases, some common reasons come to mind. Coffee, like most goods, is affected by the rising cost of living.
Factors such as:
1.Inflation: The general increase in prices affects everything from production to distribution.
2.Wage Increase: As wages rise, especially in industries related to coffee production, so do the operational costs.
3.Electricity Costs: Running a roastery or a café is energy-intensive. With increasing electricity prices, this too adds to the cost of producing your coffee.
4.Consumables: Items like milk, takeaway cups, lids, and packaging materials have also seen price hikes.
While these factors affect many industries, coffee has additional unique challenges that make it more vulnerable to price swings.
A Spike in Coffee Bean Prices
Did you know that coffee has its own trading index? It’s called the Coffee C Futures Contract, also known as the C-Market, and it’s traded on the Intercontinental Exchange (ICE). This index tracks the price of Arabica coffee beans, which are the foundation for most specialty coffees worldwide. As the benchmark for global coffee prices, any changes in this index directly impact how much roasteries pay for their green coffee beans.
In recent months, the price of green coffee beans has surged by 30-40%, reaching some of the highest peaks in years. This steep increase has been felt by coffee producers, suppliers, and, ultimately, by roasteries like ours.
Why Have Coffee Prices Gone Up?
We’ve spoken with our coffee suppliers to understand why the cost of green beans has risen so dramatically. The main reasons they shared include:
1. Climate Change and Weather Disruptions
Coffee production is incredibly sensitive to climate. Major coffee-producing countries like Brazil have been hit hard by extreme weather events in recent years, from devastating frosts to prolonged droughts. These conditions have slashed coffee yields, driving up prices globally. As climate change continues to impact coffee-growing regions, this challenge will likely persist.
2. Supply Chain Disruptions
Global events, including wars and geopolitical tensions, have caused disruptions in shipping routes. Increased transportation costs, coupled with port congestion and supply chain bottlenecks, have further inflated the price of coffee. These disruptions make it more expensive and challenging to get coffee from farm to cup.
The Impact on Coffee Roasteries
As a coffee roastery, we feel the impact of these price increases directly. The cost of green beans is one of the most significant factors in our production costs. To ensure we have a steady supply, we sign contracts with our coffee suppliers based on the C-Market price. As prices rise, these contracts reflect the increase, which ultimately affects how much we have to charge for our roasted beans.
While we might still be working off older, lower-priced contracts this year, the coffee we roast in 2024 and beyond will be affected by today’s high prices. That means roasted coffee beans will likely see price increases in the coming months.
What This Means for Coffee Lovers
For those of you who love your daily brew, here’s the bottom line: Expect to pay more for your cup of coffee and roasted beans in the near future. This increase isn’t just due to the general rise in the cost of living, but to specific global factors affecting the coffee industry as a whole.
What Are We Doing to Keep Prices Affordable?
At Mighty Wonders Coffee, we understand the importance of providing you with great coffee at a fair price. Here’s what we’re doing to minimize the impact of rising costs:
1. Negotiating Better Deals: We’re in regular discussions with our suppliers, working hard to secure the best possible prices for the beans we buy.
2. Bulk Buying Partnerships: We’ve partnered with other coffee roasteries to pool resources and purchase in bulk. This helps us reduce costs and maintain more stable prices for our customers.
Despite the challenges, we remain committed to delivering high-quality, specialty coffee to you. We value your loyalty and appreciate your understanding as we navigate these global challenges together. Rest assured; we’ll continue to strive for excellence in every cup while keeping your coffee experience as affordable as possible.
Thank you for supporting us, and here’s to many more cups of delicious coffee ahead!
