Why Volatile Coffee Prices Make It Harder To Secure Financial Stability


During the twenties, the demand for alcohol was high. People were fascinated with the introduction of this new good that altered their state of being. Well, today’s society demands something that does not decrease your awareness. In fact, this good does the opposite and serves as a stimulant: coffee. So why is coffee so popular? Is it due to the rise of the Starbucks franchise? The real truth is that because of caffeine’s effect on the human brain, working people all over the world use it as a way to continue their long day. Employees want to be able to be fully awake as they perform their assigned tasks in their communities.

Why Coffee Companies Raise Prices

Companies such as Starbucks and Coffee Bean are very aware of the consumer’s demand for their drinks. For this reason, these franchises have expanded significantly at a global level. If you drive two miles south from a Starbucks, you are bound to encounter a second branch. This is the main strategy used by these corporations to generate profit. Instead of adding gelato flavors to the menu, they want to make sure that you are at a close range so that you will not hesitate to go to them.

More so, the demand for coffee enables several franchises to raise their prices, because they know the public will eventually need coffee. In truth, this is a clever trick. Similar to airports, the stores inside these facilities know you cannot obtain food anywhere outside of the security gate, because you are forced to throw out your food. Hence, the food business located past the security gate raise their prices. They are fully aware that you will eventually require water or snacks while you wait a long time to board your plane.

Where Does American Coffee Come From?

American coffee is a professional staple, just like workplace pension. American coffee, in particular, is produced using beans from Vietnam and Brazil, not Columbia as many believe. Vietnam is the world’s largest grower of robusta, the coffee you typically purchase at your local grocery store. Brazil’s arabica production experienced a second year of drought in 2016. However, the country still managed to produce 43.2 million bags last year. If Vietnam is able to harvest 30 million bags next year, as predicted, hopefully this shortage will come to an end and bring prices down again.

How Rising Coffee Prices Affect You

How does the rise of coffee prices affect individuals? And how much? Shockingly, coffee prices affect people much more than one may think, especially if you use a courier service to have it delivered. Many individuals drink an average of at least one cup of coffee per day, while others tend to drink multiple cups per day. However, based on the average cup per day, the money invested in this demand accumulates over time.

For example, Starbucks’ popular caffe latte costs an average of $4.15 for a mid-sized cup. If a person was to consume this same product, as it is one of the most popular servings, the total cost per week would be $20.75, based on a 5 day working schedule. That would then result in $996 per year. Most people’s salaries are able to barely maintain their finances afloat. If you are needing to invest nearly a thousand dollars per year in keeping yourself awake in order to work, then there is surely something wrong. More so if you require more than one cup per day and often buy a tossed salad for lunch in addition to your caffeine fix.

What To Expect

So what can you expect for coffee prices in the coming months and years? According to experts in the agriculture business. Ratio analysis shows coffee bean inventory available for consumption will soon hit an eight year low in Brazil, the world’s largest coffee bean producer. Because of this, even the smallest weather problems could prove to be disastrous for coffee prices everywhere. High coffee demand coupled with falling arabica inventory will make for a very volatile couple of years when it comes to pricing coffee. That could be worrisome for some businesses, but higher prices and high demand may be beneficial for others.

Securing Financial Stability

At the end of the day, most people struggle to maintain financial stability. This is true even for those that own a successful wine franchise or other successful business. Having to pay bills for home loans, college tuition and medical bills is a heavy burden as it is. Not many people can afford to spent a significant additional portion of their income in something as simple as a drink. Therefore, the continuous increase of coffee pricing affects society more boldly than is apparent.

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