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Brazil’s massive drought will reach your local Starbucks tomorrow morning

Reuters/Mike Blake
Drought in Brazil, consequences everywhere.
By Max Nisen
Published Last updated This article is more than 2 years old.

Green coffee prices have risen rapidly this year, affecting a number of retail brands. US consumers are going to feel it a lot more acutely once Starbucks raises its prices tomorrow. While price rises have already kicked in for other companies, it’s mostly been store products rather than the daily cup of coffee. Starbucks serves many thousands of people on a daily basis, so tomorrow will be the first time many are directly affected by the shortage.

The cafe price increase is relatively minor, about 10 to 15 cents for medium and large brewed coffees, and as much as 15 to 20 cents for lattes and mochas in some places, according to Bloomberg. Beans and ground coffee will go up by a more substantial 8% on average, or about a dollar on a bag of coffee. While the increase in Starbucks cafes starts tomorrow, prices of bagged coffee sold in other stores will rise July 21st.

So why the price hike? Starbucks said that ”many different factors,” including labor and rental, determine its prices, but this is likely the inevitable result of a massive increase in the price of Arabica coffee, due mainly to a drought in Brazil. Starbucks at first wanted to wait things out, but prices have stayed so high for the past six months that it it’s had to pass some of the cost on to consumers.

Prices are still high, but have moderated at least a bit after other big exporters like Guatemala increased output:


There’s one piece of good news for consumers, given the fact that it’s finally full summer: Starbucks won’t be increasing the price of its cold frappuccinos.

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