Starbucks has announced that it will be implementing an increase in the price of their retail packed coffees, those that are being sold in grocery and other retail stores. According to the company, a 12 percent increase on its coffee price will be implemented. Competitor companies J.M. Smucker and Kraft Foods earlier implemented price increases on their coffee products, as well.
As the price of unroasted coffee beans (green Arabica) has continuously risen, companies that are in the coffee business can no longer afford to hold their prices. To avoid being losses, it is inevitable that these companies increase the prices of their products.
Both J.M. Smucker and Kraft Foods implemented three price hikes last year. J.M. Smucker is the manufacturer and producer of Folgers coffee while Kraft Foods manufactures and produces Maxwell House coffee. Other coffee companies which have increased their prices include Green Mountain Coffee Roasters Incorporated, which implemented 10 percent to 15 percent increases on its Keurig brand; and Peet’s Coffee and Tea Incorporated, which increased the price of its coffee beans by 8 percent.
As for Starbucks, this will be the first price hike that the company will be implementing since March of 2008. The company started selling their retail packed coffee products in retail stores in 2008. The price increase will apply to both Starbucks and Seattle’s Best brands. Starbucks has stated that the decision to implement a price hike was in answer to the considerable and continuing increase of the price of coffee in the market.