Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/33234
Coff ee prices highest in 34 years Weather, demand, speculation blamed for $3 barrier breach Coffee prices hit a 34-year high in late April, a situation that was variously blamed on bad weather, increased demand and commodity speculation. On May 4, prices cracked $3 a pound for the first time since 1977. Ric Rhinehart, executive director of the Specialty Coffee Association of America (SCAA), attributed the situation to supply barely keeping up Coffee Prices Cents per pound for Colombian mild arabicas, daily weighted average are largely rooted in Starbucks’ success in passing coffee price increases along to consumers. Coffee prices have doubled in the last seven months, and coffee stocks are at their lowest levels in 50 years, according to the International Coffee Association. 312.95 Chain loyalty weak in the morning Survey finds a.m. consumers often switch among major QSR chains Consumers who buy coffee and/or hot breakfast at major chain restaurants often switch among them, suggesting a lack of loyalty to any particular chain, according to a recent survey by QSRDNA , a marketing research and consulting firm. The survey broadly divided Source: Int’l Coff ee Organization with demand, especially for premium coffee. Rhinehart noted that due to the length of the growing cycle, it would probably take at least 18 months for prices to drop. Bad weather was cited as a major factor, especially in Colombia, the second-biggest exporter of arabica beans after Brazil. Heavy rains depleted the coffee harvest and drove stocks down to their lowest level in 34 years. Weather also hurt coffee harvests in Vietnam, Mexico and Indonesia. Speculation also reportedly came into play, driven by continued weakness in the dollar. Howard Schultz, founder and CEO of Starbucks, identified it as the main culprit. “We’re living at a time right now where financial speculation...[has] created a rush of very, very high prices,” Schultz told CNBC. “And not only coffee [but] corn, sugar, cotton and obviously oil, and unfortunately it has to hit the consumer.” On the other hand, high coffee prices don’t seem to be hurting Starbucks, which announced a revenue gain of 10.5 percent and earnings-per-share gain of 20.7 percent for the most recent quarter on a year-over-year basis. These numbers 6 | June 2011 • www.specialty-coffee.com more than 15,000 respondents into “loyals,” who bought coffee and/or breakfast from only one type of chain in the previous month, and “roamers,” who bought at two or more chains during that period. It analyzed consumption patterns for Starbucks, McDonald’s and Dunkin’ Donuts, finding that: • 41 percent of Starbucks breakfast customers are loyals, while 53 percent are roamers who also visited one or Mark Your Calendar July both of the other two chains; • 42 percent of Dunkin’ Donuts coffee/ breakfast consumers are loyals and 53 percent are roamers; • 62 percent of McDonalds customers did not visit another chain for coffee of breakfast during the previous month, giving McDonalds the most loyal customers of the three major chains surveyed. “The significance of these patterns became clear when we found that the roamers purchased a hot beverage and/ or breakfast nearly twice as often as loyals,” said Dave Jenkins, QSRDNA ’s co- founder. “During the average month, loyal customers of each of the three chains visited their favorite store 6.7 times, while the roamers averaged 13 visits per month. Capturing more of these sometime- customers to is key to winning the coffee/ breakfast battle.” For more on the QSRDNA study, access www.qsrdna.com. Dunkin’ Donuts goes public IPO filed May 4 for chain’s parent Dunkin’ Donuts is going public. Dunkin’ Brands, the chain’s parent company, which also owns ice- cream chain Baskin-Robbins, filed for an initial public offering (IPO) on May 4. The company specified a target of 8-10 Coffee Fest Hawaii, Hilton Waikoloa Village, Waikoloa, Hawaii, www.coffeefest.com 10-12 Fancy Food Show, Washington Convention Center, www.specialtyfood.com 18-21 Roaster’s Guild Retreat, Stonewall Resort, Roanoke, W.Va., http://roastersguild.org 11-15 Hong Kong International Tea Fair, Hong Kong, China, www.hktdc.com 8-10 Coffeena, Cologne, Germany, www.coffeena.biz 23-25 Coffee Fest Seattle, Washington State Convention Center, Seattle, Wash., www.coffeefest.com September August