Increase in coffee prices some coffee shops plan to raise prices

Coffee drinkers may have to increase their consumer spending in the near future. Since the beginning of this year, Brazil, the world's largest coffee producer, has experienced severe drought and high temperatures, which has significantly reduced coffee production, driving up international coffee prices. As of June 9, ICE Arabica coffee futures had risen nearly 70 per cent. People in the coffee industry said that the "beans you play" market has begun to affect the domestic market, and some local coffee shops also plan to adjust their prices in the near future.

Some coffee shops plan to raise prices

In response to the global rise in raw materials caused by reduced production of coffee beans in Brazil, the food giant has begun to raise the price of finished coffee. According to media reports, in early June, Kraft Foods and J.M.Smucker Co, the largest maker of bagged coffee in the United States, successively announced that they would increase the retail price of their coffee products by about 10% on average. Whether the domestic chain brands of coffee will take any action or not will be concerned by consumers.

"We have received notice of the price increase from Jiejia headquarters, and from July, the prices of a series of products including coffee and tea will increase by more than 20%." Chongqing Brista Coffee training School said that rental costs and labor costs have continued to rise in recent years, and if coupled with the rise in raw material prices, the pressure on operators can be imagined, especially in chain coffee shops with large consumption of coffee beans. Coffee shops in the industry will also adjust prices at the same time, but taking into account the acceptance of consumers, will take a more moderate approach. For example, the price of a single cup of coffee remains the same, but the price of a refill increases.

Affected by the international market, the purchase price of coffee beans in Yunnan has also risen sharply since the beginning of this year. At the end of last year, the purchase price of coffee raw materials in Yunnan was only about 14 yuan / kg, but now it has risen to about 25 yuan / kg, an increase of nearly 80%. " Mr. Chen, head of a chain of coffee and milk tea shops with four branches in Chongqing, said he also plans to adjust coffee prices in the store at the end of June and early July, but not all kinds of coffee and caffeinated drinks will rise across the board. and adopt the way of launching new products and special drinks to play down the impact of the price increase on consumers.

People in charge of well-known international coffee brands, such as Starbucks, McCoffee of McDonald's and Pacific Coffee of China Resources, were told that they had not been notified of price increases for the time being. However, some people in the industry predict that the price of "big brands" is also very likely to rise this year.

The wholesale price of coffee beans has risen by about 25%.

Data show that Brazil's coffee bean production accounts for 40% of the global coffee production. A number of industry insiders pointed out that the reduction in coffee bean production in Brazil will certainly have an impact on the downstream market. In addition to chain cafes, the impact of individual stores has been inevitable. Since the beginning of this year, the wholesale price of coffee beans on the market has generally risen by more than 25%.

According to Ms. Huang, an industry insider, in fact, the main supply market for Brazilian coffee beans is not China. At home, coffee beans from Southeast Asia occupy a considerable market share. However, when there is a serious reduction in coffee production in Brazil, demand for coffee beans from other producing areas will rise because of scarcity, thus having a linkage effect on global coffee bean prices. At present, many chain coffee giants have formed their own raw material planting and supply bases, which have a greater ability to resist the rise in coffee bean prices. On the other hand, individual store operators, who mainly wholesale coffee beans on the market, are actually more affected.

"there is a big gap between the purchase price of coffee beans and the wholesale price, and the 25% increase in the wholesale price of coffee beans is not a small proportion." Ms. Huang said that the wholesale price of coffee beans with a purchase price of 14 yuan / kg will rise to about 40 yuan / kg after initial processing, packaging, logistics and other links. The wholesale price increases by 25%, which is equivalent to an increase in the cost of 10 yuan / kg.

Industry insiders do not have complete statistics. At present, there are about 500 cafes, large and small, in Chongqing, with individual stores accounting for more than 60%. Judging from the visits, individual store operators are hesitant on the issue of whether to respond to price increases. Mr. Wei, head of a coffee shop in Chongqing, said that small coffee shops tend to have a relatively fixed and limited customer base. However, due to the increasing number of small coffee shops in recent years, the competition between each other is also quite fierce, "the price increase is worried about losing regular customers, and if the price is not raised, profits can only be reduced, which is a difficult choice for operators."

The consumption of cafes is not low.

In recent years, with the international well-known coffee brands stationed in Chongqing, there are more and more personalized coffee shops in Chongqing, and many citizens have formed the habit of drinking coffee and going to cafes for leisure. For the coffee "rising sound" gradually, many people said that it is difficult to accept.

"at present, a cup of coffee in many cafes has been sold for about 30,40 yuan, making consumers feel pressured." Ms. Yao, a citizen, said that she often made an appointment with three or five friends to get together in a comfortable cafe, but with a few cups of coffee and some small cakes, four people often spent about 200 yuan, which was similar to eating out.

Mr. Wang, a citizen, is a designer. Having studied abroad, he has formed the habit of sitting in a cafe every day. He calculated that if you drink a cup of coffee worth 30 yuan a day, an increase of 20% is 36 yuan, and the cost of drinking coffee will increase by nearly 200 yuan a month. Drinking coffee is a way of public leisure, if the price is on the high side, it will have a great psychological impact on consumers, and it will make some people reduce their coffee consumption.

"the poor harvest of coffee beans in Brazil may not have that great impact on domestic cafes." Mr. Song, a coffee enthusiast, believes that there are many coffee beans in the world, and the market prices are also different. At present, domestic coffee consumption is still in the popular stage, customers do not have a deep understanding of the quality of coffee, many cafes have the phenomenon of impersonating ordinary beans as high-quality coffee, the profit is also relatively rich, we can adopt the way of self-digestion to avoid price increase.

The visit learned that the current coffee shop has gradually opened the gap in terms of consumption level, but even if the price is the lowest and can enjoy the refill service, a cup of coffee is about 20 yuan. In recent years, there have been many high-end coffee shops in the market, with the price of a cup of coffee above 35 yuan, which virtually raises the average consumption level.

Rising prices may not be the best solution.

"as a Poly drink, coffee is currently in the stage of market cultivation in the domestic market." Guan Xin, head of the Blue Mountain Dream Coffee Bar, believes that domestic coffee consumption has its own characteristics, and many consumers themselves do not necessarily like coffee, and coffee is not a necessity of life, and it may not be wise for operators to raise prices whenever there is a stir.

Guan Xin said that the stores under the Blue Mountain Dream Coffee Bar have no plans to raise prices at present. He analyzed that the production of coffee beans in Brazil has been greatly reduced due to the drought, which cannot change the current situation that the supply of coffee raw materials falls short of demand in the short term, so it is highly probable that the prices of coffee raw materials will only rise in the next few months. However, this kind of cost pressure caused by the weather is more of a temporary phenomenon. "consumers are very sensitive to prices, and for operators, it is necessary to judge that this wave of price increases is a long-term trend and it is difficult to return to previous prices." to consider price increases.

In fact, the price of coffee beans has been fluctuating. Mr. Lin, who is in charge of coffee, said that like agricultural products such as pork, the price of coffee beans also has a fluctuating curve. Generally speaking, there will be a rise, pullback and stable market in 2-3 years for many reasons, including market demand, climate and so on. For operators, in their own positioning should fully consider the risks caused by raw material price fluctuations, so as to achieve a stable production.

"at present, when opening cafes in China, the biggest cost pressure still comes from the rent and labor costs of the shops, so operators are also required to give reasonable consideration to driving spending power." Mr. Lin said that Brazilian coffee beans belong to the more popular varieties, not boutique coffee. To run a coffee shop, coffee products should also be opened up to enhance their ability to digest cost shocks.

In addition, many coffee operators said that they plan to increase the variety of non-coffee drinks, with pastries, fruits and other ways to drive customer consumption, so as to maintain a stable price positioning.