Starbucks Boosts Coffee Prices Beverage Costs Hiked To Offset Sharp Increase In Price Of Coffee Beans

Starbucks Coffee Co., a leading operator of specialty coffee stores, is raising prices to reflect the rise in worldwide coffee prices.

The prices of most coffee beverages sold in its coffee shops rose 5 cents beginning Friday, while the price of whole beans rose 30 cents per pound, the company said.

“After carefully monitoring and evaluating coffee costs, we have made a decision to increase prices in order to reflect the higher cost of the green coffee we buy, roast and sell,” Starbucks said in a statement.

“We waited as long as we could to make this pricing decision, but coffee costs remained at a high level longer than expected.”

Before the price increases, Starbucks’ price for a tall regular coffee ranged from $1.05 to $1.30 in its North American markets. The price of a tall latte ranged from $1.75 to $2.55, spokesman Chris Gimbl said.

Starbucks would not disclose how much its costs for green coffee have risen, but Gimbl noted that prices on futures markets have gone up more than 80 percent since December.

That has been blamed on tight supplies at a time when Latin American stocks are normally abundant.

The tightness is not expected to be relieved by harvests in Brazil and Colombia, the world’s leading producers. Both are expected to have smaller-than-normal crops.

Ted Lingle, executive director of the Specialty Coffee Association of America, said he didn’t know whether other specialty coffee companies had also raised prices, but that he wasn’t surprised by Starbucks’ move.

“I think all of us have anticipated the price increases,” he said. “In fact, I’m a little surprised it came this late.”

The immediate outlook is for continued tight supplies, Lingle said. Brazil’s crop is expected to be about 20 percent smaller than last year’s 27 million bags, he said - and at a time when Brazil’s own coffee consumption is growing dramatically. Worldwide consumption also has been rising, he said.

Starbucks’ move followed announcements last month by Procter & Gamble Co. that it was raising the price of its popular Folgers coffee, and by Philip Morris Cos. Inc.’s Kraft foods unit that it was raising prices of its Maxwell House and Yuban brands.

Seattle-based Starbucks operates more than 1,100 stores in North America, Japan, Singapore and Hawaii.