U.S. retail coffee prices rose as much as 50% in Q4 -report
By Marcelo Teixeira
NEW YORK, Jan 31 (Reuters) - Retail prices in the United States for roast and ground coffee, the most popular type sold, rose as much as 50% in the fourth quarter of 2022 from a year earlier, as companies tried to offset higher costs, a report said on Tuesday.
The increase of 50% was seen for Folgers, one of the market leaders, and led to a reduction of 17% in volumes sold, although the company managed to increase revenues from those sales due to the higher prices, according to a report by the research arm of Rabobank with data from IRI.
Other well-known coffee brands also increased roast and ground prices sharply in the period. Maxwell House boosted them 35% and Starbucks around 15%, the report said, as they tried to maintain revenue despite higher costs with coffee beans, labor, energy and packaging.
"I have been a beverage analyst for 16 years and have never seen price increases this large," said Jim Watson, executive director, Beverages Research at RaboResearch.
Watson said the roast and ground category saw industry's the highest price increases, mostly because green coffee is a higher percentage of total cost than in other coffee categories.
Green coffee prices surged last year to the highest in 11 years after frosts sharply reduced production in top grower Brazil.
Overall in the United States, prices for coffee in all categories increased on average nearly 20% in the last quarter year-on-year. Volumes sold fell around 5% as a result.
Watson does not see the fall in volumes as too bad considering the scale of price increases.
He sees cost pressures remaining high in 2023.
"Our green coffee forecasts show a slight decline from current prices, which are below 2022 levels, but well-above the previous 10 years".
The United States is the world's largest coffee consumer and importer. (Reporting by Marcelo Teixeira; Editing by David Gregorio)
