Why Is My Coffee So Expensive - Part 2
My last blog was all about the reasoning behind the price of a specialty coffee drink. This new blog is about the backside of the behind. One more layer deep into the belly of the beast and how it affects the price and quality of the coffee in your cup.
First off, let's talk about Brazil. Brazil is the largest coffee producer on the planet and therefore acts as the "canary in the coal mine" for coffee pricing. If Brazil is having a bumper crop then the rest of the coffee producing countries have to deal with an abundance of coffee supply on the world market. As we all know from Economics 101, the greater the supply, the lower the demand, and the lower the price. That works out for the average consumer in the price of a cup of coffee.
Unfortunately Brazil had a little bit of an issue with frost in 2021. Unfortunately Brazil also had an issue with drought. There has been a spike in freight cost. There is a shipping container shortage. Strikes and blockades at ports. Covid! Now we all have an issue with price. Issues, issues, issues!
Due to these ugly conditions (BTW, frosts and droughts happen from time to time so not necessarily a climate change issue) Brazil's 2021 Arabica bag yield declined somewhere around 35% over 2020. This means there is less supply and more demand. Enter rising prices! Now the question is "How is this going to affect the price of my cup o' joe?"
Thankfully for the customer, prices should not rise to that same extent. Unfortunately for the coffee shop, we will have to absorb some or most of that cost and largely wait for the spike in price to settle down again. You may see prices rise slightly, but your favourite shop will be taking the biggest punch.
How long will this last, you ask? Given that some of the youngest plants killed by the frost will have to wait 4 years to yield viable cherries again, we might expect a couple of years to recover. Good news is, Brazil has had great rainfall this year so recovery should be quicker than that.
Coffee wakes us up. Coffee revs us up. Coffee is the centerpiece of so many social aspects of our lives, and it stimulates the ideas that carry societies forward. So if you want to keep your favourite shop open and thriving, skip the drivethru at the big chain and spoil yourself with a cup made with love and true artistry. Support your local shop.