August 23, 2012

Euro Crisis Affecting Coffee Prices

CoffeeBeanCharm.jpg

According to the WSJ, the European economic crisis is killing a rich coffee tradition for some in Europe, especially the coffee drenched southern countries. With the economies of Spain and Italy falling off the cliff, spending on coffee is plummeting too, as habits change, and trips to the cafe multiple times a day disappear in an effort to save Euros.

The belt tightening is also having an effect on the coffee markets, as Europe is developing a taste for cheaper coffee blend that include more Robusta, the cheaper cousin of the Arabica variety. Prices have dropped this year for the more expensive Arabica, while stockpiles of Robusta have fallen and prices have climbed.

What's this mean for European single serve espresso machines? It might mean a shift to home made espresso, and a resurgence of the popular brands as people shift to cheaper home-sourced espressos versus the expensive cafes. It might also mean a colossal shift to make your own in the good old Moka style pot for a few pennies versus a few Euros at the cafe.

What's that mean for the US? If the trend continues, expect lower priced coffee in our Main Street cafes as Arabicas continue to slide in price, if they didn't buy ahead with contracts pegged to higher expected prices. Don't expect deep discounts though; those hard fought price increases of the past are hard to give up again once you are pocketing the difference. And if they do come, don't expect huge changes; the price of Arabica is only down 20%, and that is only a tiny fraction of the cost of your Latté.

Pictured - Coffee Bean Charm

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Posted by Scott Martin at August 23, 2012 7:47 AM
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