Decline in Coffee Bean Prices Not Reflected at Coffee Shops

4 years 1 month 6 days ago Wednesday, November 06 2013 Nov 6, 2013 Wednesday, November 06, 2013 12:22:00 PM CST November 06, 2013 in News
By: Katie Link, KOMU 8 Reporter
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Decline in Coffee Bean Prices Not Reflected at Coffee Shops

COLUMBIA - Coffee bean prices hit a seven-year low this month. The drop in prices are a result of a surplus of popular Arabica coffee beans grown in Brazil and exported internationally. Due to improved growing conditions in the country and leftover beans from last year, Brazil has more coffee beans than the world needs. 

Despite the continued drop in price, consumers aren't seeing the full effects of lower prices.

This past spring, top brands of store-bought coffee beans like Folger's and Maxwell House decreased in price. However, the price of a cup of coffee sold at many local coffee shops has not gone down.

Andrew DuCharme manages Lakota Coffee in Columbia. He said a combination of other costs have limited his ability to drop prices.

"When you sit there and look at a latte, there's a lot of other costs that go into that," DuCharme said. "One is the cup, the lid, the espresso, the milk, the flavor shot like caramel or vanilla if you want to add a flavor shot. The price of our cups have gone up 20% over the last year, our milk has gone up about 20% over the past year, so some of our pricing has increased." 

Osama Yanis owns Coffee Zone in downtown Columbia. Since opening his shop in 1995, he's noticed a constant rise in coffee prices.

"In 1995, coffee was literally $3 a pound and now it's about $10 a pound," Yanis said. "We're unique because we've kept a cup of coffee at about $1.40 for ten years. Everybody downtown sells it for about $2 a cup so we like to undercut their prices." 

Despite the fact that brewing coffee at home could save money, Columbia resident Tracy Toler says the environment is what brings her back.

"I like coming and feeling like part of the community, hanging out, seeing people I know, meeting new people, and it's just a nice environment to spend some time in," Toler said. 

MariBeth Eiken frequents local coffee shops up to five times a week.

"We are a very local community. You see parents running the stores and someday their kids could be running it," Eiken said. "A lot of people say that when someone else makes something for you it tastes better. I have to agree with that. When someone else makes your coffee, it's the relationship you have with the person who made it. You form a little quasi-relationship with the barista so the coffee just tastes better."

According to the USDA, production of coffee beans will exceed demand once again this season, pushing coffee inventories to a five-year high. But DuCharme said a decrease in prices at local coffee shops won't be happening soon.

"If we're sitting here a year from now and prices have still been dropping I'll likely lower my prices because we're talking $0.20 to $0.25 a pound," DuCharme said. "But for now, I'm not going to decrease my prices and charge $12.90 instead of $12.95 a pound, that just doesn't make sense."

Americans drink an average of three cups of coffee a day, according to the National Coffee Association. The impact of price fluctuation on American's coffee habits however has yet to be seen.

 

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