ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, February 26, 1997 TAG: 9702260033
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
COLUMN: Marketplace
SOURCE: MEGAN SCHNABEL
Not to start a run on the coffee aisle, but you should know that java prices are on the way up again.
Starting next week, you'll have to pay more for your daily fix of caffeine. The reason: Tight supplies from Latin America, during a season when coffee harvests normally are abundant, have driven up coffee bean prices in the commodity markets. Both Brazil and Colombia are expected to have smaller-than-normal crops this year.
And when the companies that make Folger's, Maxwell House and the other major brands have to pay more for their green coffee beans, you can bet the caffeine-craving masses will have to shell out more cash for their roasted blends, too.
Procter & Gamble Co. said it would raise the price of a 13-ounce can of Folger's coffee by 45 cents as of March 3. The company earlier had announced a 15-cent increase to take effect later in the month.
By the end of March, Philip Morris Cos. Inc. will raise prices for Maxwell House to match the Folger's increase.
With the price increase, a 13-ounce can of regular ground Folger's or Maxwell House will list at $2.71. They both topped out at $3.44 in 1994, the companies said.
Even unleaded coffee is going to be more expensive. The Maxwell House decaf brands, including Sanka, will go up 40 cents, to $3.41.
Nor will local brands be immune. Chris Stave, president of H&C Coffee Co. in Roanoke, said his costs have gone "through the roof." He said beans were going for $1.75 a pound last week. Jan. 1, that same coffee was selling for $1.15 a pound. Premium Colombian beans were priced higher still. He expects retail prices will go up from 80 cents to $1 a pound during the next month.
Smaller producers such as H&C Coffee may be hit even harder by any bean shortage. Unlike big companies, which store months' worth of beans in their warehouses, Stave said H&C buys coffee every couple of weeks, leaving the local company more at the mercy of the market.
Prices on some less-expensive brands may not go up as much as premium coffee, he said, because the lower-cost robusta beans used in many of these blends don't seem to be affected by the South American shortage. Robustas typically are mixed with more expensive arabica beans in these cheaper brands.
At the coffee shop, prices may be going up, too. Scott Elich, co-owner of Roanoke-based Mill Mountain Coffee & Tea, said he's not sure whether he'll have to raise the prices at his four locations, because he bought a batch of beans before prices started to rise.
In the almost seven years Mill Mountain has been open in downtown Roanoke, the store has raised its drink prices just once, he said: back in 1994, when a frost devastated the crop in Brazil. The cost of a cup of coffee went up by about a dime, he said.
According to the National Coffee Association in New York, about two thirds of the U.S. population drinks coffee. Not quite half the population - 49 percent - has at least one cup of coffee on any given day. That's up slightly from last year's 47 percent.
There's been a general decline in the percentage since the 1960s; in 1962, 75 percent of survey respondents said they had drunk coffee the previous day.
LENGTH: Medium: 69 lines ILLUSTRATION: PHOTO: WAYNE DEEL STAFF. 1. Alicia Woods dumps 135 pounds ofby CNBroasted H&C coffee into a cooling pan at the plant on Mary Linda
Drive in Northeast Roanoke. The local brand's retail prices are
expected to rise from 80 cents to $1 a pound during the next month.
2. H&C officials say coffee has gone up 60 cents a pound since the
first of the year. color.