Cost of coffee climbs as commodity prices rise

by Eric Schroeder
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CINCINNATI — The cost of a cup of coffee just went up thanks to pricing actions taken in the past week by Procter & Gamble Co., Kraft Foods Inc., Sara Lee Corp. and Green Mountain Coffee Roasters

P.&G. was the first to take action, raising the list price to retailers of its Folgers ground coffee by 12% last Friday. In doing so, the price of Folgers ground coffee increased 28c per 11.5-oz and 13-oz equivalent, to $2.56 from $2.28. Folgers instant coffee saw a 10c price increase per 8-oz serving.

The company cited the higher cost of green coffee beans as the key factor behind the price hike, its second significant pricing action in three months. In December, P.&G. implemented a 14% price increase for its Folgers roast and ground coffee, its biggest rise in a decade.

Northfield, Ill.-based Kraft, makers of Maxwell House coffee, followed suit the next day, raising the price of its Maxwell House roast and ground coffee by 12% for a 13-oz can, to $2.57 from $2.29. The company raised the list price of its Maxwell House instant coffee by 10c for an 8-oz jar, and hiked the price of its Yuban and Maxwell House Cafe Collection coffee pods, used in single-serving coffee makers, by 30c.

On Monday, Sara Lee announced a 28c hike on its 13-oz cans of Hills Brothers, Chock Full o’Nuts and MJB brands. The move follows an 8c increase in December. The company did not raise the price of its Douwe Egberts, Senseo or Hills Brothers Cappuccino brands.

Sara Lee spokeswoman Dawn Mann Charles said New York prices for coffee beans have risen more than 30% since December because of a smaller-than-expected Brazilian crop, along with higher demand by roasters who are replenishing low inventories.

Green Mountain Coffee Roasters, a manufacturer of specialty coffee, today announced it would raise its prices of roasted coffee by approximately 37c per lb effective March 21.

"The commodity price for coffee is now at a five-year high, and more than 25% higher than the 11-year average closing price recorded by the New York Board of Trade," said Scott McCreary, chief operating officer, Green Mountain Coffee.

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