Local customers to see increase in coffee prices

BY JON FRANK | APRIL 11, 2011 7:20 AM

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The price of a cup of Joe is on the rise.

Customers who frequent gourmet coffee shops in Iowa City and across America are paying more per cup for the caffeinated beverage as a variety of international trends send coffee-bean prices skyrocketing, according to the International Coffee Organization.

The average price for a cup of gourmet coffee brewed from Arabica beans — a gourmet type of bean used for specialty coffees — increased by about 8 cents to $2.24 from February to March, the organization reported, the highest it has been in decades.

The spike is due to increased international demand from developing nations, unsuitable weather patterns in countries that produce the majority of coffee beans, and limited farmland.

“There’s a lot of unrest in regards to current crop conditions,” said Brent Barker, a senior market strategist at the International Futures Group, an investment firm in Chicago. “Global coffee prices have doubled over the last year. It’s a situation where everybody is feeling the effects.”

Local coffee shops are feeling them, too.

In the last few months, several establishments have upped their prices to offset rising costs.

Java House, a gourmet coffee vendor with six locations in the Iowa City area, raised all of its house blends by a quarter in March.

“We saw the price increase as a necessary thing,” said Sam Caster, the assistant manager at the Java House, 2111⁄2 E. Washington St.

To contend with market pressures, Caster said, Java House expanded its menu, providing more options for customers, including “Conversation Brews,” more expensive types of coffee that offers patrons a higher quality beverage.

T-Spoons, another local gourmet coffee vendor, also raised its prices.

“Coffee, right now, is more expensive … than it ever has been,” said Jordan Collins, a shift manager at T-Spoons, 301 E. Market St. “[But] it hasn’t been to an extent where people are complaining.”

Fair Grounds Coffee, 345 S. Dubuque St., an organic coffee vendor in Iowa City, has yet to increase its prices. Management has taken several measures in recent years to delay price hikes and even switched to cheaper cups to combat cost increases, said Christine Alexander, the owner of Fair Grounds. But now, the store plans to bump its asking price for a cup up by a dime in May, she said.

“There’s a lot of competition for the beans that exist,” said Alexander, who pointed to increased demand and poor weather conditions in countries that grow coffee beans, such as Brazil, as reasons for the decision to raise prices.

Experts predict high international demand and shortfalls in crop yields will keep coffee-bean prices high for foreseeable future. As long as farmers continue to struggle with unpredictable weather patterns and other countries continue to acquire a taste for gourmet coffee, consumers will likely continue to carry a portion of the burden.

“It still translates into very little per cup for the customer,” said Tracy Ging, the deputy executive director for the Specialty Coffee Association of America. “I don’t think it’s going to drop back to where it was.”

University of Iowa senior Erin Weber, a frequent Java House customer, said she’s noticed the rising prices, but it won’t stop her from getting a cup.

“I’m still going to pay whatever for my coffee,” she said.

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