Keurig coffee lovers face price hike as bean costs remain high
If your daily routine has come to involve firing a k-cup of coffee into a Keurig brewer, we have two words: stock up.
As of Nov. 3, the single-serving cups will cost nine per cent more than their current price, which now already sits at about 65 cents and up for a serving.
“This price increase is in direct response to several factors affecting the cost environment,” Keurig Green Mountain, Inc, the maker of the wildly popular brewing machine, said in a statement on Thursday.
Keurig also owns many of the k-cup brands compatible with the machines, including Van Houtte, Timothy’s and its Keurig brand.
A 55 per cent jump in its wholesale costs for “green” coffee is at the root of the increase, Keurig Green Mountain said. But it also cited rising packaging, energy and transportation costs, as well.
Drought in Brazil
Drought is behind rising coffee bean prices.
Brazil is the largest producer of coffee beans on the planet and a shortage of rain this season is wreaking particular havoc on Brazillian coffee growers, and as a result world prices.
The drought threatens to see coffee prices rise at others, too—including at Tim Hortons.
The country’s biggest quick serve coffee provider said earlier this year its prices haven’t been affected by the rise in coffee bean prices. But Tims is only hedged for the balance of the year, and the Canadian company is already buying supply for next year, at higher prices.
“We’ve begun buying [coffee bean supply] for 2015 at higher prices reflective of current market conditions,” Cynthia Devine, Tim Hortons’ chief financial officer said in early May.
Other brands, such as Folgers and Dunkin’ Donuts, have already lifted their prices.
“We have been closely monitoring increasing costs, including the cost of green coffee,” John Whoriskey, president of U.S. sales at Keurig said.
“Many of our competitors already have implemented price increases in light of the reality of sustained input cost increases,” he said.
Keurig Green Mountain said Thursday the price hikes aren’t limited to its k-cups, but “all its traditional bagged, fractional packs, and bulk coffee products,” as well.
Keurig Green Moutain is the U.S.-based owner of Keurig Canada Inc., its Canadian arm.
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