The rising cost of coffee hasn’t forced Northside coffee shop owners to increase their retail prices yet, but it has required them to make some adjustments to the way they do business.
In one year, the price of coffee, one of the largest traded commodities in the world, rose from an average of $1.27 per pound in April 2010 to more than $2.30 in April 2011. That translates to an increase of 82.2 percent.
Muddy Cup coffee shop owner Renee Tokar says that she hasn’t raised her prices yet because she wants to stay competitive. She tries to minimize waste by brewing coffee in small batches or focusing on other drink options such as smoothies and teas to offset the price increase.
But if prices continue to rise, Tokar might have to pass on the increase to her customers.
“Do I foresee [having to raise prices]? Probably. It’s not as dramatic as people are making it out to be. I might have to raise a coffee by five cents,” Tokar said.
Terra Jones, the owner of Amani Coffeehouse & Café, has also managed to avoid increasing her prices thus far. Amani began roasting its own coffee last year.
Jones’s strategy is to choose less pricey kinds of coffee to create blends. If she notices that the cost of beans from Costa Rica is getting high, for example, she’ll opt for a less expensive kind.
“There might come a time when we change the blend because the coffee is really expensive,” said Jones. “We never compromise taste or quality.”
With this method, Jones is confident that she will be able to keep her prices the same, even if the cost of coffee rises further.
“I think there are enough coffees to choose from to still have that flexibility,” she said.
Rising coffee prices have “absolutely” affected business at La Prima Espresso, a Strip District-based coffee distributor that raised its prices in September 2009, October 2010 and May 2011.
“We try to absorb the prices [but] it reduces our margins,” said president and owner Sam Patti.
“In most cases, it’s by 45 or 50 cents. To put it in perspective, a 45 cent increase is a penny per cup,” said Patti.
According to Ric Rhinehart, executive director of the Specialty Coffee Association of America, the rising cost of coffee can be attributed to the depreciation of the U.S. dollar, a rising demand for coffee compared to a stagnant supply and “tremendous liquidity in the U.S. financial markets.”
At the same time, Rhinehart still considers coffee to be a fantastic value.
“Coffee is still a largely hand crafted product, grown by dedicated small farmers, picked by hand most of the time and then processed, shipped to the U.S., roasted, ground and finally brewed, and still available to you at just a couple of dollars,” he said.
Jeanette Lee is a graduate student at Carnegie Mellon University studying Professional Writing and Investigative Journalism.