Will Coffee Cravers Ignore a Bean Price Surge?
While many large coffee sellers like Starbucks have a year or more supply of coffee beans stockpiled away, there is concern consumers will soon see a price hike for their favorite morning ritual because of the current drought situation in Brazil. But will that stop them from buying?
According to Bloomberg, probably not. Seems U.S. coffee drinkers are “very ritualistic.”
Says Paul Christopher, the St. Louis-based chief international strategist at Wells Fargo Advisors, “There’s very low price-elasticity-of-demand for coffee. Would people who like coffee regularly substitute tea, or soda, if prices rise? The answer is ‘No.’”
One coffee lover equates grabbing a Cup of Joe to a social activity, one that doesn’t cost that much, especially compared to what an alcoholic beverage costs.
When you grab a cup of coffee out, do you consider the price before ordering? Do you consider coffee a worthy splurge, no matter the cost? (You know how WE feel, but we would like to hear from you!)
Read Bloomberg article here.