Will Your Hot Cup of Coffee be Cheaper?

Published Date : Feb 18, 2016

According to Brazil’s largest coffee co-op Cooxupe, the country is expected to witness the biggest coffee harvest. This year, the country is producing bigger sized coffee beans than it had in the past two years when drought reduced the crop volume as well as bean size. Abundant rain has helped trees fill out young coffee fruit that would create a greater percentage of larger beans. Larger beans are highly priced across international markets, particularly Europe. According to consumer perception, bigger beans taste better. However, most of the experienced coffee tasters mention that there is no distinguishable difference in taste of a larger and a smaller bean. Cooxupe, the world’s largest coffee cooperative, is expected to handle 6 million 60-kg bags of coffee from the upcoming harvest season that starts in May. The coffee yield is anticipated to witness a 15% hike compared to that of the last harvest.   

Starbucks Pays Less for Coffee Beans

With Brazil expected to witness a big harvest this year, there will be an oversupply of beans which would lead to a drop in price. The type of coffee beans bought by Starbucks and served to customers is cheaper now. Last year, a pound of coffee was worth US$1.65. It is now at US$1.11. The 33% drop in the price of coffee beans is expected to lower further. But will it decrease the price of a hot cup of coffee at the Starbucks?

The answer is a disappointing no. For a coffee shop chain such as Starbucks, the price of coffee beans contributes only 20% of its overall cost. With the rise in minimum wage and the company paying tuition for more than 4,000 employees, the price of a hot cup of coffee served is unlikely to go down. However, brewing coffee beans at home with the help of an inexpensive coffee grinder will definitely help to enjoy the decrease in price of the coffee beans.