Coffee’s Perfect Storm

Lloyd Bernhardt is the President and CEO of Ethical Bean Coffee.

You may be seeing some changes to the price of your coffee in the next few months and the reasons for it are well beyond inflation. President and CEO Lloyd Bernhardt sat down to answer a few questions concerning price increases.

Besides environmental factors, what other factors are at play contributing to higher coffee prices?

 

The coffee industry is experiencing the perfect “brewed” storm. There are definitely some supply and demand challenges, but there are some financial and political factors at play that are more damaging, and in some cases devastating globally.

Due to a weak US economy, large funds are speculating on food commodities and coffee is included in this. Those with beans are reluctant to sell, hedging their bets for even higher and higher prices. In its most serious form, commodity speculation on food has driven up such a high price increase on food goods that some global communities can’t even afford the basics, let alone coffee. What many don’t know is that this speculation is non-regulated, and the outcome is devastating. Demonstrations, riots and violent protests are now breaking out in places like Tunisia, Algeria and Egypt because of the exorbitant cost of food. This simply should not be allowed.

How dire of a situation is this and how much of an increase in price will the market see?

 

Right now the cost of “green”, these are un-roasted coffee beans in their natural state, have doubled in price and the coffee industry is close to a 30 year high. Coffee roasters and producers thought that the market would balance itself out but we now believe that it’s not going rectify itself for some time. Everyone will have to raise prices at some point.

How will this increase affect a regular cup of coffee?

Canadians are the 9th largest consumer of coffee in the world. 63% of us drink, on average, two and a half cups of coffee per day – more than the US. Coffee drinkers will likely see a rise in coffee prices at cafes and on store shelves that will be about four to five cents per cup.

Ethical Bean prides itself in purchasing beans of the highest quality (Fair Trade Certified and organic) which are obviously more expensive, will you continue to do this despite such high prices?

 

We won’t be changing how we purchase. We still hold tightly to Fair Trade certified organic coffee – that is at the heart of what we do.  What will have to change however is our price. We will be raising the cost of our coffee to reflect what’s happening in the global market. When it’s higher we’ll be high, and when it’s lower, we will be low.

What options does Ethical Bean have to still be competitive in the market despite this economic challenge?

 

This aforementioned commodity trading and the negative impact it is having globally is beyond our control. Simply put we will have to ride it out.  For Ethical Bean Coffee it will be business as usual but we will be working within a price increase. We are continually monitoring the market but have strategies and partnerships to ride out this storm.

What advice do you have for consumers and retailers as they prepare for a rise in price?

 

Unfortunately consumers will have to get used to higher coffee prices. It’s uncomfortable. But sadly due to these unregulated food commodity speculations, poor people and their families are being affected. We feel it’s important to understand how the impact of financial gain through the markets directly influences the social, political and economical well being of the less fortunate.

Read the official news release.

One Response to Coffee’s Perfect Storm

  1. Coffee is part of most people’s everyday life. Sure enough increase in price will truly affect us. :(a

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