Brewing Trouble: Global Coffee Price Surge Hits Consumers

Coffee prices are spiking globally due to raw arabica price increases, with consumer costs rising up to 25%. JDE Peet's and other roasters face retailer pushback on cost passing, resulting in stock shortages and price negotiations. Consumer behaviors shift as supermarket labels gain market share amid price hikes.

If you've noticed your favorite coffee beans missing from store shelves, rest assured they will be back soon, albeit at higher prices. Up to a 25% increase is on the horizon as roasters like Lavazza, Illy, Nestle, and JDE Peet's negotiate rising raw arabica costs with retailers.

JDE Peet's, a leading coffee roaster, reported a profit decline amid price hikes and retailer standoffs, notably in the Netherlands and Germany. Global arabica prices have soared over 20% due to a significant drought in Brazil, the largest producer, leading to market turbulence.

As coffee companies navigate rising costs, consumers increasingly favor supermarket private labels. Bargain hunting grows as prices climb, impacting sales volumes and forcing coffee roasters to decide between absorbing costs or passing hikes onto consumers.

(With inputs from agencies.)