A 17% price hike for Starbucks beans

New price increases for packaged coffee are driving the cost of a cup out of sight. Here's how to survive this national disaster.

By doubleace May 25, 2011 2:18PM

This post comes from Lynn Mucken at MSN Money.

 

Focus! We have a problem here. Coffee prices are going up, faster than your eyelids after a cup of Starbucks French Roast at 6 a.m.

 

J.M. Smucker, which makes that American classic, Folgers, as well as the Millstone and Dunkin' Donuts brands, says it's increasing prices by 11%. At the same time, high-end Starbucks announced a 17% price hike for bagged coffee sold at its stores.

According to the Department of Labor, a 1-pound can of ground coffee already sold for $5.10 in April, up 40% in a year. By comparison, the average cost of a gallon of regular gasoline today is $3.81, up just 37% from a year earlier.

 

Yes, I know, the suffering is not comparable. We can always walk, or bike, or carpool. We cannot do without our coffee. 

 

Just look at the numbers:

 

Americans of coffee-drinking age average 416 eight-ounce cups of coffee a year, with 60- to 69-year-olds being the biggest consumers and those 25 to 29 drinking the least (they'll get off the Red Bull soon). They drink it at home (82% of their consumption) and work (17%) and on the way between home and work (9%).

 

What's more, coffee is good for you. Post continues after video.

The Harvard School of Public Health announced recently that heavy coffee drinkers -- six or more cups a day -- had a 20% lower chance of getting prostate cancer than non-drinkers. That figure jumped to 60% for the most-lethal forms of prostate cancer. (It was still 27% if you drank just one to three cups a day.)

 

Previous medical studies showed that coffee reduces the chances of getting type 2 diabetes, gallstones, colon cancer, liver damage and Parkinson's disease. It also improves cognitive function and increases endurance in long-duration physical activities.

With benefits like that, coffee should, like fluoride, be distributed free, though probably not through the same water system.

 

OK, there is a tiny downside to coffee. Caffeine, coffee's main ingredient, is considered mildly addictive. I guess that something that gives you a screaming headache if you go without it for 24 hours is a bit addictive. But just have another cup and be more careful next time.

 

The other negatives -- increased heart rate and increased blood pressure -- look like pretty good tradeoffs considering the benefits.


And those hyper types who jabber away after a couple of cups? Seems like they were more than a little weird even without the coffee.

 

Almost forgot; this is a personal-finance blog post (three cups by 8:36 this morning -- scary). OK, here's the advice:


Wait it out. This is usual supply-and-demand factor. Harvests of high-grade arabica beans were bad in Colombia, Indonesia, Mexico and Vietnam. At the same time, there is a growing taste for upmarket coffee in China, Brazil, India and Indonesia. 


In the meantime, if you can't handle paying $16.24 for a pound bag of Starbucks' finest, you can go back to Folgers. Here's a better idea: Give up all those vegetables.

 

More from MSN Money:

VIDEO ON MSN MONEY

37Comments
May 25, 2011 3:44PM
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Oh yeah - - when times are tough turn to starbucks so they can reach deeper into our pockets.

their coffee is far to expensive in the first place and most of it tastes like crap.

May 25, 2011 3:22PM
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So who is this the fault for this one?

1) Bush

2) Obama

3) Wall Street

4) Speculators

5) Other

May 25, 2011 5:30PM
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I never liked starbucks.  Frankly I really liked speedway gas station coffee.  However I no longer drink coffee.  I am saving money, losing weight and no longer have headaches.  You don't need coffee to function. 

May 25, 2011 11:29PM
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A friend took me to Starbucks for my first and last time ever.  I saw all the g o o k  they put in it was like a soda shop back in the 50's.  I ordered mine black.  I like it black and you'd think I asked for a martini shaken.  It tasted terrible black so no wonder they cram all the g o o k in it.  My black coffee I make on an open fire while camping well now THAT IS GOOD coffee.  About 30 cents a cup.

People who pay for starbucks must have money to burn.

May 25, 2011 10:35PM
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Anyone that buys coffee from Starbucks is an idiot.  Don't complain about your taxes, the national debt or any increases in gasoline if you are buying coffee from Starbucks.  You are as dumb as dirt.  Just go to a gas station and get a cup of coffee.........better yet, brew one at home.  Starbucks is just a f"n yuppie business that is taking all the ****es to the cleaners.   Hey, a $4 cup of coffee? You are ****es........................   My wife is one of you...........so she is an idiot too.   You should buy all the informercilal products too...................IDIOTS!!!
May 25, 2011 9:37PM
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Its sad that the 4 or 5 huge conglomerates that set coffee prices in New York still only pay two cents a Kilo from growers in Bangladesh and other poor countries . The people sort the beans for five cents an hour.  Greed and oppression at its best
May 25, 2011 9:15PM
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Don't know if its a good idea to be increasing the price of a cup of coffee at SB's right now. Not in this economy. Its pretty much like running down the street holding a pair of scissors to your own throat. Starbucks coffee is already pretty pricey, even in bags on the grocery store shelf.
May 25, 2011 7:07PM
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Let's make sure we fill the investor's pockets at the consumer's expense even more than the already inflated price of their coffee.
May 25, 2011 10:14PM
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Exactly.  Don't buy that stale garbage from Starbucks or the grocery store.  Buy from a local roaster or get a home coffee roaster and do it yourself.  You will save a lot of money and the taste is fantastic!
May 25, 2011 9:59PM
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I am a small micro coffee roaster in Florida. I'm pretty sure I'm paying alot more for my gree coffee than Starbucks and I roast it a hell of alot better. I charge less than they do because I need coffee to move. Coffee is at its BEST up to TWO WEEKS after roasting. By the time it makes it out of their warehouse its probably already going stale, then it sits on another shelf. Notice they do not put a Roast Date on the bags, just expiration dates, sure its safe to drink but the life is gone. Don't even talk about ground coffee from Folgers,Dunkin, and McDonalds Premium Roast. They use cheap fillers, low grade Robusta and Arabica beans. Ground coffee is best when used immediately after grinding it. Support your local coffee roaster and stop buying soul-less, stale coffee with no roast date on the bag.
May 26, 2011 6:02AM
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Beans, beans, they're good for your heart,

The more you eat, the more you fart,

The more you fart, the better you'll feel,

So eat some beans at every meal!

May 25, 2011 5:49PM
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??? somewhat rambling and incoherent story.  Headline leads me to believe it will focus on cost, supply/demand and other issues pertaining to the price of coffee...two thirds of it is devoted to health effects associated with coffee.  Two blurbs in the intro and one in the conclusion discuss actual pricing issues.  It is difficult to pull out the whimsy!

May 25, 2011 11:53PM
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I have reduced my spending at Starbucks about 80 percent less a month than I use to, and I spent more than a little.  They have had several price increases and they only continue to encourage me to seek feeding my coffee habit elsewhere, and trust me there are alot of other options.
May 25, 2011 10:35PM
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I never bought Starbuck's coffee before, guess for sure, I never will now!Thinking
May 26, 2011 1:06AM
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  Ha, you think a 17% hike is a lot? Wait till you see what you will be paying for that crap in August of thisyear. Inflation is just getting rolling thanks to the dumbos in Washington who can't balance the books!
May 25, 2011 10:12PM
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Wife got a $10 giftcard from a freind. Came home with a muffin and a cookie! You all look cool sitting in their stores as we are on our way to work!
May 25, 2011 6:59PM
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I could quit drinking coffee, but I have to buy gas to commute. Inflation needs to be put into check by the Fed before it gets out of control.
May 26, 2011 9:07AM
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One more reason to make your coffee at home. 

 

$2.50 per cup per day per 5 day work week = $650 savings per year in after tax dollars. 

 

While we're at it why not look into how much smoking, and Mcdonalds take from your after tax dollars. 

 

$5.00 pack of smokes per day = $1825 per year in aftre tax dollars.

$7.00 at Mcdonalds per day per work week = $1825 in after tax dollars.

 

bottom line:   Give yourself a raise.   Make your own coffee, quit smoking, and brownbag your healthier lunch to save $4300 per year in after tax dollars!

May 25, 2011 6:17PM
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Only the 'trendy" morons drink that swill from $tarbucks. Only those with no tastebuds drink canned worm dirt. I'll stick with whole bean, & grind my cup one at a time.
May 26, 2011 3:17AM
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I'm glad the company is successful but now they are getting greedy just like like the fuel companies, they exploit other countries and overcharge working americans. Sad but true, they probably pay 10 cents a pound or less and they say is 5 dollars or more. They always try to stick it to us, the problem is that we support it than we complaint when people star getting richer, now what stop giving them business like we did with blockbusters, overpriced movies.
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