Why your morning cup of coffee might be costing you more
PITTSBURGH (KDKA) - How much did that cup of coffee cost you this morning? It's certainly not hard to miss that the price has been steadily going up, but why is it happening and how much more will you wind up paying?
Whether it's buying from the grocery store or your local coffee shop, the impact of the increase in prices has been universal and inescapable.
Droughts in Vietnam and South America have driven down supplies and driven up prices. If you're in the coffee business, you're just holding on.
Coffee price rollercoaster
"At this point, I think it's everybody," said Jordan Nicholas, owner of Nicholas Coffee Company in Market Square. "We're all looking at each other - it's unprecedented territory."
Customers have been coming in through the now red doors of Nicholas Coffee Company for more than a century and the cost of coffee in the last decade is at the highest it's been.
Nicholas, like his father and grandfather before him, rides the price rollercoaster daily.
"The market since November 1 was up over 75, 80 cents, which with shrinkage, almost puts us at a $1 increase per pound," he explained.
Nicholas said coffee recently hit a price almost double from a year ago for a pound, but he said that's not all passed through to the consumer.
"We try to absorb as much as we can," he said. "We may not pass on the whole amount."
For example, that dollar increase over the past month is dinging your pocket more to the tune of 30-to-50 cents per pound.
"We can get away with not having to raise prices," Nicholas said. "That's the last thing we want to do - never we will have more business from raising prices."
Hoping for a coffee price correction
He also said that at some point there will probably be a price correction as well as a drop, and it's due, but for now, we're paying more drop by drop and month by month. However, it doesn't seem to impact people's willingness to fork over the money for that next cup.
While technically a coffee shortage, the type of beans from Vietnam are short, putting more pressure on the beans from South America, but Nicholas said it's not to the point of empty shelves. Brazil's farmers are just holding back supply to get higher prices.
As for a cup of coffee, it might mean a nickel more per cup than a month ago, it really has more impact on the sales per pound rather than cup.
