Major coffee roasters announce price hikes amid climate woes
BRAZIL – Major coffee roasters are set to increase prices in Brazil, citing climate-related disruptions that have adversely impacted crop outlook and driven up raw coffee costs.
Reports from Reuters on December 12 reveal that several key players in the coffee industry are preparing substantial price adjustments, with consumers expected to feel the effects in 2025.
Dutch coffee giant JDE Peet’s, the owner of brands like Douwe Egberts, plans to raise prices in Brazil by approximately 30 percenty.
According to traders and documents seen by Reuters, the company attributed the hike to “climate issues,” which have escalated the costs of roasted and ground coffee beans, instant coffee, and capsules.
Similarly, Brazilian coffee roaster 3 Corações, a joint venture between São Miguel and Israel’s Strauss, announced an 11 percent price increase set to take effect on January 1, 2024.
Documents shared with clients and viewed by Reuters suggest the company also blamed climate challenges for the rising prices.
In addition, 3 Corações cited increased demand, economic volatility, and the steady rise in green coffee prices as factors compelling it to pass costs onto consumers.
German coffee company Melitta has already implemented a 25 percent price hike as of December 3, also attributing the decision to climate-related factors.
Barclays analysts commented on the broader implications of rising coffee prices, noting potential pressure on sales volumes as companies raise prices to protect profitability.
In their latest note, analysts predicted that JDE Peet’s will achieve 2 percent organic sales growth and a 3.5 percent price hike in the second half of fiscal 2024, offset by a 1.5 percent decline in volumes in Europe.
For the LARMEA market (Latin America, Russia, Middle East, and Africa), which includes Brazil, Barclays expects pricing to increase by 16 percent and organic sales growth to reach 16.5 percent.
Despite the price hikes, volumes are anticipated to remain relatively stable, increasing by 0.5 percent.
The soaring costs of Arabica and Robusta coffee beans have further exacerbated the situation.
On December 10, Arabica coffee prices reached a record high of US$3.34 per pound on the Intercontinental Exchange (ICE).
Robusta beans also surged to an all-time high of US$5,565 per metric tonne in late November before settling at US$5,192.
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