Who says there's no inflation? Coffee prices are still going through the roof. That affects purveyors of the almighty bean in its many forms, and Starbucks
Coffee prices have surged near 13-year highs, and companies such as J.M Smucker
These are tough times for the coffee crowd, since raising prices on a beloved product is a dangerous endeavor when so many consumers aren't feeling too flush.
Although Starbucks may lower the price of its 12-ounce brews, it will hike prices for large, labor-intensive drinks, and it's mulling an increase in the price of the packaged coffees it sells through grocers. Its packaged-foods division is a disproportionately profitable segment of the company.
It would have been nice if Starbucks hadn't had to increase the price of its caffeinated wares. If consumers got sticker-shock over what might feel like premium prices for not-so-premium coffees such as Maxwell House, Folgers, and so forth, then Starbucks might come out looking like more of a value. It could have been an opportunity for Starbucks to woo some customers to its side of the coffee aisle.
Still, it's not a surprising turn of events, and the rise in the price of green coffee will likely force other rivals such as Caribou
Do you think Starbucks customers will react badly to the price increases, or do you think they've heard coffee prices are spiking and understand that such costs often get passed to consumers? Will Americans give up their coffee if it just gets too blasted expensive? Discuss the situation in the comment boxes below.
Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.