The rising cost of coffee
Published Thursday, November 20, 2014 5:38PM EST
Last Updated Thursday, November 20, 2014 6:51PM EST
It’s getting more expensive to get your morning coffee fix.
Tim Hortons has announced it is raising the price of a cup of coffee by an average of 10 cents, starting Wednesday.
It’s also raising price of a breakfast sandwich by 10 cents in all provinces outside Ontario.
"We have been able to hold our pricing stable since spring of 2011, however due to rising operational costs there will be a moderate increase," spokeswoman Michelle Robichaud said in an email.
Most coffee drinkers outside the Tim Hortons in Ottawa’s Rideau Cetnre are taking it in stride. “That line-up will still be coming out the door whether it’s 10 cents or 30 cents more,” says Angel Loyer.
And it’s not just Tim Hortons.
Second Cup is also raising its prices next week. “On Monday, November 24, we will be making a modest increase to select beverages and sizes. This increase is a direct result of recent wage increases and ingredient costs,” Vanda Provato, Vice President of Marketing, said in an email.
It’s the latest in a trend of rising coffee prices. Some analysts say it has long been expected. "And is really in line with what's been seen at Dunkin Donuts and Starbucks, both of whom raised their price by about 2% over the summer. So what Tim Horton's has done is not really unusual," says Stephen Anderson, a senior analyst with Miller Tabak.
Blame it, at least in part, on Brazil – the source of some 40% of the world’s coffee beans. This year’s crop suffered a major drought, causing futures prices to spike from around $1.10 U.S. a pound last fall to over $2.20 in October. “Everyone involved in the coffee industry, in one way or another, is affected by that price increase,” says Ian Clark, Director of Coffee at Ottawa’s Bridgehead chain of coffee shops.
Bridgehead is holding its prices steady, for now. Clark says the jury is still out on Brazil’s final coffee output. And coffee futures are notoriously volatile. “For our part we’re watching to see what the market does,” he says.