Luckin Coffee's price rise at Starbucks is due to inflation and rising costs! Coffee futures prices carry chain coffee price increase pots.

There has been a spate of news about coffee price increases in major coffee chains in the past two days, mainly because Starbucks quietly raised its prices two days ago. Ruixing and tims, who have already raised prices in the past few months, have also moved out together.

Although Kevin Johnson, CEO of Starbucks, said on February 2nd that Starbucks would raise its prices several times in the coming months, there was no mention at the time whether these price increases would include the Chinese market because the Chinese Starbucks market itself was already priced very high. Originally, the price of Starbucks drinks in China is nearly twice that of Starbucks drinks in the United States. according to reason, the existing domestic pricing and existing labor force can maintain the overall operation of the company. At a time when everyone is still speculating that the price in the Chinese market will not rise, the sudden and silent price increase seems to be just a general rise and a bit of a surprise.

Coincidentally, after Starbucks announced the price increase, Luckin Coffee and Tims Hortons, who had quietly increased their prices the month before, were also moved to the table overnight. Everyone said that the price of the major coffee chains rose because of the loss of Brazilian coffee beans, resulting in a shortage of Arabica coffee beans on the ICE exchange, so the price of Arabica coffee beans soared madly, which caused the cost of many coffee beans to rise. Coffee shops also have to raise prices to maintain profits. Until these two days, Nicolas Rueda, head of Cecafe, Brazil's coffee export agency, "can't stand it"! He said that Brazilian coffee beans have not been used up, although the stock is less, but there is still enough for everyone to use!

Nicolas Rueda said: the harvest of Brazilian Arabica coffee beans in the 2021 season has been very difficult, either frost or drought, which directly led to a 25% reduction in total Brazilian Arabica coffee bean production in 2021 compared with 2020, with only 47 million bags (60kg/ bags). At the same time, due to the epidemic, the relevant mode of transportation has also slowed the transport of coffee beans from Brazil, which has also led to a reduction in stocks of ICE Arabica coffee beans. But this does not mean that ICE has run out of Brazilian Arabica coffee beans, because the 2020 harvest is very objective, coupled with the current shortage of containers, so it is possible to accumulate a large stock in ICE's warehouse. Although Brazil's Arabica coffee beans were lost in 2021, there are still enough Brazilian Arabica coffee beans in ICE's warehouse. As for such a sharp increase in prices, Brazilian coffee beans can not be completely blamed! A large part of the reason is the transportation problem. In addition to the slow transportation caused by the shortage of containers and the provision of transportation costs, resulting in a shortage of coffee beans in various countries and an increase in the cost of coffee beans, the main reasons for the price increases of the major coffee shop chains, it is also due to inflation + other costs (manpower, rent, etc.) increase.

In the two years since the outbreak, all major industries have been hit hard, and the beverage industry is no exception. For these coffee chains, the rent of many stores, the wages of employees, the challenges of supply chain and personnel training are all very high costs. The instability of the epidemic makes it impossible for these chain enterprises to accurately judge the economic development in the later stage, and they can only raise prices uninterruptedly in advance to prevent the possible impact in the later stage. Luckin Coffee's price increase occurred in early December last year, and the Tims price increase occurred in early January this year, both before Arabica coffee beans "runaway soaring" to a 10-year high. For this reason, the price increases of the two coffee chains are even greater due to the adjustment of operating conditions.

Objectively speaking, it is understandable that Starbucks also raised its price this time. After all, the cost of beans has gone up, and so have other costs, so he can only adjust the price of drinks accordingly. The last time Starbucks in China raised its prices was in 2018. It took almost four years to increase by 1-2 yuan, which can only be regarded as a general rise. In the past few days to choose a sudden price increase, even if this general rise, it is also so "dazzling". Photo Source: Internet

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