< Back to news 30 January, 2015

Beacon keeps coffee price hike down.

Coffee prices could rise by as much as 15% in 2015 because of South American droughts, but Beacon is working to keep the price hike down for customers.

Mark Holness, Beacon drinks buyer states;

“We are working with our coffee providers to ensure the increases are managed as carefully as possible, in line with market trends, information and insight.

“Some coffee providers have quoted intended price increases of as much as 15%, but we have been working hard on your behalf to reduce this as much as possible – an anticipated increase of between 4-8% is expected to be in place from April this year.”

Over the last 5 years Beacon is proud to have shielded customers from the price increases that non Beacon customers may have experienced. Our main coffee suppliers have been able to keep costs at the same level, despite fluctuating raw material costs. Due to the way coffee is purchased in advance, many consumers will have had this increase on their radar for some time, however only now is it beginning to hit our pockets.

So, why the increase?
2014 saw one of the worst droughts for South America, which impacted the demand and supply balance of Arabica beans. Brazil's 290,000 growers produce around a third of the world's coffee, out-producing the country's nearest competitor, Vietnam, by more than three times. But 2014’s total yield was down 7.7 percent from 2013 and well below initial forecasts, the Ministry of Agriculture said earlier this month. Unlike many crops that are replanted and harvested each year, coffee is grown in a two-year cycle. So initial predictions for 2014, made before the drought took hold, had forecast a much stronger harvest. On top of this, many coffee providers purchase their beans a year ahead, which means we are now seeing the continuing impact of Arabica price increases.

Beacon will continue to share information as the issue develops, to allow you to mitigate these increases within your business as much as possible.