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Java jolt! Coffee prices are boiling over

The Brooklyn Paper
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Your daily cup of black coffee could soon leave you in the red.

Two big-time Brooklyn roasters have raised their wholesale prices by about $1 per pound after the cost of unroasted “green beans” tripled to roughly $3 per pound in a mere five months.

Porto Rico Coffee Roasters of Williamsburg and Gillies Coffee of Park Slope informed their thousands of customers — including scores of Brooklyn restaurants and coffee shops — that their prices would rise in the wake of the highest wholesale bean prices in 14 years.

“We are not responsible for the increases in the green coffee market, but we have done our best to use dollar-cost-averaging to bring our coffee prices up slowly,” said Porto Rico founder Peter Longo. “Truth be told, we see more increases on the horizon.”

The cause behind the rise in coffee prices is enough to give you a caffeine headache:

Coffee is traded on the futures market in U.S. currency and the dollar’s value has declined in recent years — and many coffee-producing countries have been holding onto their supply to create artificial scarcity.

But the most significant reason for the price jump has been increased demand in China, India, Russia and Brazil — countries with a growing middle class.

“The first thing that a growing middle class wants to do is smoke Marlboros, wear Levis and drink coffee,” said Gillies Coffee President Donald Schoenholt.

Schoenholt has marked up his per-pound prices for Columbia Supremo, a popular dark roast, from $6.22 to $7.53. But he claimed that he was eating some of his profit to not scare away customers.

“The worse thing to happen is volume of business goes down, then your unit overhead costs increases,” said Schoenholt. “You can overcome eating part of margin if you can get your volume high enough.”

So far, few Brooklyn coffee shops would admit to raising prices of lattes and espressos.

A barista at Gorilla Coffee in Park Slope said the shop increased the price of its drip coffee by a quarter, and reduced the size of its coffee beans in bags from 16 to 12 ounces two months ago, but there were no other increases on the horizon.

And managers at Ozzie’s Coffee in Park Slope, Heights Café in Brooklyn Heights, and Oslo Coffee in Williamsburg said that they would absorb any cost increases.

At Oslo, the cheapest packaged coffee is the house blend, “Thor,” which costs $12 per pound and the average espresso drink is about $3.

“I have pretty low overhead, so I have room to take a hit,” said Oslo’s John Bettancourt.

But Longo predicts that most restaurants and coffee bars will have to raise their prices — eventually.

“The only people who can absorb it are those who are already ripping off the public — those who have turned coffee into wine,” he said. “It’s not reality. It makes me crazy. There’s no reason for it.”

Updated 5:23 pm, July 9, 2018
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Reasonable discourse

tony fisher from crow hill says:
The outcome from all this will be a few key players in the coffee market. I think that most cafes have a hard enough time as it is. This just makes it harder. Maybe in 14 years the prices will come down.
March 9, 2011, 8:19 am
Joey from Clinton Hills says:
mormon conspiracy?
March 9, 2011, 11:31 am
adam from bedstuy says:
geeze louise my coffee/lb has zoomed up. wtf?!
March 9, 2011, 1:25 pm
OR from Yellow Hook says:
But we Looooove to pay more for Fair Trade Coffe because it makes us feeeeel good about ourselves, so why should this bother us?
March 9, 2011, 2:49 pm
common sense from bay ridge says:
Fair Trade = Pay Up Yankee
March 9, 2011, 5:01 pm
Coffee Nut from Across the Pond says:
Fairtrade's buying price is $1.31 per pound (IIRC) the market price is now in the $2.95 per pound region. Fairtrade's requirement is to meet this price not exceed it in the case of regular crop. They add 10c to Organic crops.
March 12, 2011, 2:15 am
Gregorio Schmit from Yellow Hook says:
learn to brew coffee at home...it is much more economical and the quality of coffee you can get is incredible. i am hooked on Underground Coffee Project's from Seattle. if you like smooth, strong body give it a go www.undergroundcoffeeproject.com
March 13, 2011, 12:09 pm
will from seattle says:
That closing quote screams of both ignorance and desperation. Mr. Longo must not have had a true Specialty Coffee experience yet. Once he tastes a properly grown, sourced, roasted and brewed cup, he'll never go back to commodity-level swill.

If we can readily accept that some teas are better than others, microbrewed beers better than mass-produced, why is it so hard for people to understand that there is a top-shelf coffee product that's worth a premium?

To muddy the argument a bit is another reason for the spike: coffee prices have been kept artificially low for a couple of decades (prices have not kept up with inflation). We're only just now beginning to pay the true cost.

In the news, there's been lop-sided reporting concerning this issue, on the side of the wholesaler, retailer and end consumer. Of course they're going to complain when prices go up... The under-represented coffee producers, however, are actually starting to see a profit (rather than having to scrape to get by and hope to break even). Producers have been getting the short end of the stick for too long. Prices going up means they'll finally start to see more of it... hopefully.
March 15, 2011, 2:43 pm

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